Home Book Reviews Higher Education in the Digital Age by William Bowen

Higher Education in the Digital Age by William Bowen


Higher Education in the Digital AgeBill Bowen is an economist, president emeritus of Princeton University and the Andrew W. Mellon Foundation, as well as founding chairman of ITHAKA.  His most recent book, Higher Education in the Digital Age, received much advanced press so I pre-ordered a copy through Amazon.

Stanford University President John Hennessy invited Bowen to deliver the 2012 Tanner Lectures given last October.  Higher Education in the Digital Age is a revised publication of the lectures given.  The book is organized in a way to explore two current topics in higher education: 1) the cost disease and productivity concept in higher education and 2) whether the deployment of technology and online learning in particular can cure the cost disease.  Stanford arranged for formal responses to the lectures with participation by President Hennessy, Andrew Delbanco of Columbia University, Daphne Koller of Stanford University and Coursera, and Howard Gardner of Harvard University.  Those responses and Bowen’s comments are included as part of the book.

Bill Bowen’s expertise relating to the cost of higher education does not originate from his role as president at Princeton.  As an economics professor in the mid 1960’s, he was commissioned by the Carnegie Commission on the Future of Higher Education to direct a study that was reported as The Economics of the Major Private Universities.  Bowen documented the tendency of institutional cost per student at major private universities to rise faster than costs in general over the long term.  This finding was referred to as Bowen’s Law.  Bowen states that these trends are because of the “effects of relationships that are deeply embedded in the economic order.”  During the same general time period, Bowen also worked with William J. Baumol on a study of the performing arts that documented that in some industries such as the performing arts and education, there is less opportunity to increase productivity by substituting capital for labor.  Therefore, labor costs in these sectors will rise faster than labor costs in all the other sectors.  This finding is also referred to as Baumol’s Disease or the Baumol Effect.

In the first chapter about the cost disease, Bowen reminds the readers that productivity is defined as “the ratio of outputs to the inputs used to produce them.” He states that it’s frustrating to try to measure these at one institution much less multiple institutions.  He also reminds the readers that improvements in productivity can be due to enhancements in outputs or decreases in the denominator.  Information Technology has been influential in higher ed over the past few decades but in few ways that show up in the measurements of productivity or cost per student.  Bowen argues that productivity needs to be improved in two ways: 1) focusing more efforts on reducing costs (the denominator) and 2) through new ways of increasing the student learning component by raising completion rates and decreasing time-to-degree.  Bowen states that much of the affordability discussion revolves around the increases in public institution tuition.  Over the 30-year period from 1982-2013, the increase in tuition for in-state students at public institutions rose from $2,423 to $8,655 or 257% according to data from the College Board.  At the same time, other data shows that household income has shrunken to the levels of 15 years ago.  The combination of these factors has led to a large increase in student debt.  Bowen states that it appears to him “that people are fed up with rising costs, and especially rising student charges, however understandable the reasons for them may be.” Curing this cost disease will not be easy but it is in the best interests of even the elite and well-funded institutions like Princeton and Stanford to stay on top of these issues.

Prospects for an Online Fix is the title of the appropriately named Part 2.  Bowen leads off Part 2 with a summary of a lecture that he gave at Oxford University in 2000.  At that time, he was somewhat skeptical of the ability of online education to assist in lowering the total costs of higher education.  He states that today, he “is a convert.” Greater speeds in computers, the Internet, expanded access to the Internet, and greater sophistication in mobile devices are among the items that have contributed to his conversion.

As you might expect a researcher of Bowen’s stature would do, he and his research assistant reviewed all of the studies of online teaching’s effectiveness and he could not find one that utilized randomized trials as well as a large pool of students.  As a result, his ITHAKA organization conducted a study of the learning outcomes associated with the use of a Carnegie Mellon-developed online statistics course that was taught in a hybrid-online mode and compared with the results of students who took the same course face-to-face.  The researchers found 1) no statistical differences in learning outcomes between students in the two classroom formats and 2) the finding was not only consistent across the three campuses included in the study but also across subgroups of the diverse population.  With this finding, Bowen believes it is easier to substantiate that costs could be decreased with lower facility costs, capital costs, indirect costs, simplification of course scheduling, etc.  He further states that “if more students can be educated and if time-to-degree can be reduced without increases in costs, productivity could increase substantially.”

Bowen further poses that “the economies of scale offered by sophisticated software that incorporates features of well-developed platforms, including elaborate feedback loops and instructive peer-to-peer interactions” should be made widely available and shared in order to reduce the costs of online education.  Collaboration among many institutions should be encouraged and a repository for some of the authoring tools should be created and maintained.  While Bowen is enthusiastic about the ability of MOOCs to create efficiencies through scale, he also states that there is no evidence that they can produce good learning outcomes for a diverse population of 18-22 year olds.

The author also posits that there is a political aspect to higher education’s cost.  He states “we must recognize that if higher education does not begin to slow the rate of increase in college costs, our nation’s higher education system will lose the public support on which it so heavily depends.” Bowen believes that the higher education system needs to show progress toward lowering costs and that online education is one way to do so.  He recommends a portfolio approach to developing online curriculum, ideally similar to Carnegie Mellon’s Open Learning Initiative courses.  As technologies improve and institutions learn more about the effectiveness of certain tools toward learning, all institutions will gain from the collaborative approaches to developing curriculum.  He also recommends that institutions focus on values as well as knowledge and that they spend more time than usual deciding how to focus on values.   Lastly, Bowen states that online learning by itself is not a fix for the cost disease but that “it can be part of an answer” and that it is clear that “online systems have great potential.”

I enjoyed reading Bill Bowen’s book.  Died-in-the-wool defenders of traditional education will likely be unnerved that Bowen has analyzed online learning and believes it has the potential to reduce the costs of higher education.  Will the industry follow up on his recommendations or will it wake up too late one day and realize that the world changed and left them sitting by the wayside?  Only time will tell.



Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In July 2016, he retired as APUS president and continued as CEO of APEI. In September 2017, he was reappointed APUS president after the resignation of Dr. Karan Powell. In September 2019, Angela Selden was named CEO of APEI, succeeding Dr. Boston who will remain APUS president until his planned retirement in June 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. During his tenure, APUS grew to over 100,000 students, 200 degree and certificate programs, and approximately 90,000 alumni. In addition to his service as a board member of APUS and APEI, Dr. Boston is a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, a board member of the Presidents’ Forum, and a board member of Hondros College of Nursing and Fidelis, Inc. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus.


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