Higher Education: Turning a Painful Reality Into a Thriving Digital Business

In Innovation, Internet Business Models on November 1, 2010 at 8:00 am
The Chronicle of Higher Education recently released an interactive tool, Tuition Over Time, 1999-2010, which utilizes data from the annual “Trends in College Pricing” reports from the College Board and allows users to compare tuitions and fees on an institution-by-institution basis back to 1999.

From the introduction to the College Board’s 2010 report:

The recession has pushed large numbers of people who would otherwise be working full-time at secure jobs into postsecondary education. . . . Trends in College Pricing 2010 describes the unwelcome increases in published college prices these circumstances have generated and adds the more encouraging information about how much students actually pay after considering increases in available grant aid.

Image by Fibonacci Blue on flickr

The rise in prices is uncontested, and the National Center for Public Policy and Higher Education (NCPPHE) argues that, despite increases in financial aid, affordability of higher education is now in decline. According to Patrick M. Callan, NCPPHE President:

Student financial assistance from all these sources has increased to $45 billion, or an increase of 140% since 1991. But these increases have not been large enough to keep pace with the increased costs of college attendance, particularly not with tuition. . . . Between 1991 and 2005 Federal Pell Grant funding increased by 84%. But the average Pell Grant currently covers only 48% of tuition at these institutions, a decline in purchasing power despite increased federal investment.

Notwithstanding the complex socio-economic and institutional challenges this raises, the situation can be summarized in simpler terms through a business lens:

Increased social need for access to high-quality post-secondary education to support social well-being and global competitiveness + Declining affordability which further limits access to education and achievement, particularly for low-income populations = opportunity

Community colleges can play an important role in unlocking this opportunity, along with for-profit partners.

On October 5, the White House held its first “Summit on Community Colleges,” led by Dr. Jill Biden — wife of Vice President Joseph Biden and a community college instructor for 17 years. Opening remarks came from President Obama, who described his plan to foster an additional 5 million community college graduates by 2020 and emphasized the role that two-year institutions can play in developing the U.S. work force of the future. The President also introduced “Completion by Design,” a competitive grant program funded by the Bill & Melinda Gates Foundation designed to improve community college graduation rates by making a five-year, $35 million investment in multi-campus community college systems in nine target states with large low-income populations (Arizona, California, Florida, Georgia, Ohio, New York, North Carolina, Texas, and Washington).

Financial strategies for using community colleges for costs savings and as a stepping-stone through which to earn a four-year degree are well established. From a 2008 piece in the Community College Review entitled, “Save $80K by First Attending Community College“:

Families are turning towards the financially savvy decision of starting on the higher education path first at a two-year community college. Many universities, both public and private, have articulation agreements with local community colleges. Therefore, attending a community college for two years before transferring to a four-year institution can save significant amounts of money.

This bricks-and-mortar strategy gains further traction in the hands of digital entrepreneurs. Schools for online learning have adapted this concept by building out national networks that connect associates programs — which benefit from flexibility, geographical range, and cost efficiency in a digital environment — to four-year completion tracks in students’ locations, with pre-negotiated acceptance for those perform to acceptance criteria.

Read the rest of this post on The Scholarly Kitchen.


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