In February, Clayton Christensen, Michael Horn, Louis Caldera, and Louis Soares published a research report entitled “Disrupting College: How Disruptive Innovation Can Deliver Quality and Affordability to Postsecondary Education.” The report was sponsored by the Center for American Progress and Innosight Institute. Christensen is a Harvard Business School professor noted for his study of disruptive innovations that influence industries and a few years ago, he and his colleagues penned a book entitled Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns which I reviewed on my blog.
In this report, Christensen and his co-authors (hereafter abbreviated as Christensen) discuss the potential for online education to be a disruptive influence on higher education with a total cost of education per student 40 percent less than the traditional universities (when you combine the state and federal subsidies with the cost of tuition).
Probably the most relevant parts of Christensen’s paper are the recommendations at the back for policymakers and traditional universities. Christensen says that state and federal officials must “honestly ask and answer” two questions. The first question is “is the traditional universities’ business model sustainable?” Christensen believes that there are few traditional universities that can answer yes to this question, particularly given the evidence that online education represents a scalable disruptive technology. The second question is “is the primary stewardship to facilitate the best possible postsecondary education and training for the people in their state or whether they are appointed to be caretakers of the specific institutions that have historically provided higher education.” If the answer is the former, then officials must include the disrupters in their partnership to ensure that as many as possible receive higher education. If the answer is the latter, then low cost universities must be framed as “competitors and enemies.”
Christensen recommends that policymakers must remove the barriers to allowing low cost disruptors to gain share and cites Indiana’s partnership with Western Governors University that comes at no cost to the state because Western Governors is self-funded on tuition alone. He and his co-authors also recommend that policymakers should encourage the move toward competency-based and next-generation learning models and not focus on traditional inputs such as seat time that lock in the traditional measure of a credit hour. Christensen also states that we need to move beyond measuring degree attainment as a standard of achievement. He states that focusing policy on degree attainment versus learning will have the impact of deflating the value of a degree and force people to focus more time and money on achieving advanced degrees which is not necessarily in the country’s best interest.
Christensen states that accreditation is a barrier but also states that it is not productive to fight accrediting bodies. Instead, he recommends finding pathways around accreditation barriers. As president of an institution that has worked hard to earn our accreditation, I am not sure that I agree with all of his recommendations with regards to accreditation but also understand why disrupters who have not achieved accreditation view it as a barrier. I believe that accrediting bodies are an easy target when policymakers and disrupters choose not to understand the bigger picture, particularly when the accrediting bodies are not always transparent about their processes and policies.
The federal financial aid system is complex and many researchers avoid writing about it in great detail, choosing to focus on the macro issues instead. Christensen and his co-authors not only state that the “all-or-nothing access to federal funds for institutions does not compel students to make rational quality-cost trade-offs” but they recommend an alternative system that would provide access to funding based on quality and student satisfaction measures relative to cost. They call their new system the Quality-Value (QV) Index and propose measuring four items: job placement, increase in graduates’ earnings relative to the institution’s tuition cost, whether alumni would choose to repeat the experience, and whether students are able to repay their loans. Colleges would have access to these new funds based on a sliding scale relative to the QV Index. A ranking in the top 25 percent would allow colleges to draw 100 percent of their revenue from Title IV programs, ranking between 50 and 75 would allow them to draw 90 percent from Title IV, a ranking between 25-50 would allow them to draw 75 percent, and a ranking between 0-25 would allow them to draw 50 percent from Title IV. I find this proposed system much more creative than the proposed gainful employment regulations and much more appropriate to implement across the board in higher education regardless of the sector. The only metric that I would alter would be the cohort default rate as currently measured since it measures repayment over three years versus looking at the higher percentage of loans that are eventually repaid and looks at overall defaults with no weighting on the dollars involved.
As mentioned earlier, Christensen provides recommendations for traditional university leaders as well as online university leaders. First, Christensen recommends that the correct business model must be applied for the task. He states that online universities are organized to optimize the flow of students rather than the faculty’s ability to do their research. The authors also recommend that traditional universities develop a strategy of focus and to choose in what area they will be excellent, thus reducing complexity that allows a reduction in costs.
Lastly, Christensen and his co-authors recommend that administrators at traditional universities frame online learning as a long-term innovation that will allow them to use it to disrupt the traditional classroom experience. Peer-to-peer teaching employed in many asynchronous online classes allows for students to learn more deeply because they have to adapt the material to fit their individual experiences and cognitive abilities.
The authors state that their intention was not to study higher education as a whole but to examine the industry’s challenges as “problems of managing innovation effectively.” I think that their lens is a worthy examination that policymakers should consider when looking at the funding challenges that are occurring in many states. Higher education is complex, but as the authors point out, complexity increases costs and a focus on teaching and outcomes can point the way to a reduction in costs allowing for a more affordable tuition for students.