Apocalypse Soon?

Off and on over the last four years I’ve been speculating in this space about the future of the educational enterprise at colleges and universities like George Mason where I work. Mason is a so-called “mass market university” that has a large enrollment (over 30,000), an amazingly diverse student body, and offers most academic programs available in higher education today (with the big exception of health programs other than nursing). There are hundreds of state funded universities like ours around the U.S., and many more privately funded institutions that, while smaller, are quite similar to us.

All of the mass market institutions in the U.S. are in big trouble. The sky isn’t falling, but there are definitely cracks in the firmament.

Why are we in trouble? The answer is both simple and very complicated. The simple answer is that institutions with much better brands than ours have thrown themselves head first into the MOOC swamp and already we are seeing signs that in the coming year or two many, if not most (or even all) of these institutions will find ways to offer academic credit for what are now free courses. Once that happens, our students are going to vote with their feet (or fingers on keyboards) and will start taking increasing numbers of courses from these institutions–both because these courses are convenient, and because they are from institutions with better brands.

When that happens, we can expect that more and more of our students will be presenting us with transcripts from Stanford, Penn, Michigan, the University of Virginia, and other similarly better known competitors, and demanding that we accept these courses toward our degrees. Right now our rules make it all but impossible for our students to actually do this, but we can expect a groundswell of demands for change in our “study elsewhere” policy, the relevant passage of which reads:

Students who apply for admission to Mason usually do not seek simultaneous enrollment at another collegiate institution. In those unique situations when a student does seek concurrent enrollment, the student must obtain advance written approval from their academic dean. This process permits a student to enroll elsewhere in a suitable course unavailable at Mason. Catalog numbers and descriptions of courses to be taken elsewhere must be submitted with the request for approval. Students must submit an official transcript for all such course work to the Office of the University Registrar. Note that while credit may be approved for transfer and a minimum grade must be achieved, grades themselves do not compute into any Mason GPA. Students who enroll elsewhere without advance written permission while enrolled at Mason may not receive transfer credit for course work taken at other institutions.

Can you imagine that every time one of our students wants to take a MOOC course from a name brand competitor they have to submit a signed form to the dean’s office for review? Trust me, I was an Associate Dean, and I know that such a procedure is unsustainable.

Or, can you imagine that one of our students takes a course from, say, Stanford University, earns an “A” and presents that transcript for transfer of credit and is told, “Sorry, you can’t do that.” That too is unsustainable.

So, before long, we are going to have to accommodate ourselves to the notion that we may lose 15, 30, or more credits per student to online competitors. We already give up close to half our tuition revenue each year to the local community colleges, because half of our undergraduates transfer to us after completing their AA degree elsewhere. And our “native” students (those enrolling as freshmen) are coming in with credits in hand from AP, IB, and other college equivalent programs. If we end up giving up another 15 or 30 credits to online competitors, there will be such a large hole in our budget that we can’t continue to operate as we do.

How big would such a hole be? Around $10.5 million per year if our first time freshmen end up taking 15 credits from online competitors in their first two years.

To arrive at that figure, I consulted our official enrollment census for Fall 2012, which says that our first time freshmen took 40,087 credits, or essentially 15 credits (14.88) per student. About 20% of our total enrollment is paying out of state tuition, so if we assume that the freshmen class is also 20% out of state, then those freshmen are generating $21,775,258 in tuition this fall for their 15 credits. If those same freshmen end up taking 15 credits online elsewhere during their first two years, that’s a $21 million dollar hole blown in our budget, or $10.5 million a year. For an institution with an endowment worth less than $60 million, that’s a loss we can’t live with.

Why not dive into the MOOC swamp with our competitors you might ask? The simple answer is that we don’t have the brand to compete there and, with our tiny endowment, we can’t afford to give up all but a tiny sliver of our tuition revenue to the platform providers (as Coursera’s contract with its participating universities stipulates). That door is closed to us.

The news is no better elsewhere. A recent report by the accounting/consulting firm Ernst & Young on Australian higher education argues that not one of Australia’s universities can survive to 2025 with their current business models. The report’s authors argue that, among other things, all of Australia’s universities have to make substantial cuts in non-instructional/research staff to refocus their overall staffing on income producers (faculty). I don’t know, but suspect, that the same could be said of many American institutions of higher education. Certainly at Mason we’ve seen a substantial increase in the size of our administrative staff over the decade that I’ve been here.

The Ernst & Young report argues that there are three models that universities might follow to survive to and beyond 2025:

  1. Stay with the status quo, but significantly streamline their operations;
  2. Become a “niche dominator,” i.e., stop trying to be all things to all students and focus on one or a few niches where they have a chance of winning greater market share;
  3. Become “transformers” in which they redefine what it means to be who they are, create new markets for their products, and outsource much of their operations.

As much as I dislike the business-speak of these proposals, one cannot deny that we have to take seriously the fact that we can’t stand pat as disintermediation rolls over our industry.

Mason is hosting a conference called The Future of Higher Education this Friday and Saturday (largely restricted to an internal audience). I’ll be interested to see just how much time we spend on the hard realities of the situation we are facing. I’ll be live blogging the conference, so stay tuned to see what we do and don’t discuss.

12 thoughts on “Apocalypse Soon?

  1. Sherman Dorn

    My brief answer is to expect the further differentiation of degrees. E.g.:

    1) The Bachelor of General Studies is the degree for swirlers and others who accumulate hours at multiple institutions and want to put them together for a credential. USF already has one of these critters, and while it’s very small currently, there is a niche market for these, especially for people who have followed spouses and partners through several parts of the country and never been in one place long enough to acquire residence hours or a solid major.

    2) The certificate (or whatever quasi-degree between an AA and BA people invent first) will be the vocational degree of choice, probably corresponding to the current density of MOOCs in technical fields.

    3) The standard degree will be for those willing to meet the residential-hours requirement of a university. The demands for accepting credits can be handled in various ways, such as “you can take up to X hours as a substitute for our curriculum, and the rest of as electives,” which will allow students to get credit for the courses they MOST want credit for, but not for everything, and a bachelor of general studies will allow institutions to say something like, “Well, if you want more credits accepted, then you’re looking at the bachelor of general studies rather than our liberal-arts degree.”

  2. Esperanza Román

    Great post. There is a lot of discussion right now about this very topic (http://theconversation.edu.au/the-end-of-universities-dont-count-on-it-10350 for a couple of references that you probably already know). For this reason, I am also looking forward to the Forum on Friday and Saturday at GMU. Hopefully, the forum will provide for plenty opportunities for a real dialogue among all of us who are interested in innovation in higher education.

    In the meanwhile, I am sharing here some ideas that I had while reading your post and while preparing a paper for a conference I will be attending in Spain precisely about trends in e-learning in a few weeks:

    1. Elite universities that are offering MOOCs right now have an established brand, but not as providers of online education. For instance, many Coursera-based offerings are just lectures with videos. There are plenty of criticism out there, i.e., http://openresearch.wordpress.com/2012/03/27/dear-coursera-and-udacity-dont-congratulate-yourself-too-much/ Hopefully, they will get better with the time.
    2. I agree that it is very appealing to take a class from a professor at the MIT or Stanford, but how many of those elite professors are really willing to teach MOOCs? In what disciplines? At what level? To what cost? Will all professors be willing to teach massive courses and abandon their traditional scholarship and academic commitments?
    3. Will elite MOOCs be still free when offered for college credit?
    4. How will MOOCs providers resolve the question of courses in which prerequisites may be needed? Self-reporting?
    5. As far as GMU goes, there is a strict policy at GMU regarding how many courses you can transfer from another institution and how many you have to take at GMU. Also, transfer courses do not count towards our students’ GPA.

    I think that is all for now. Probably, I will come up with more ideas in the next days.

    Looking forward to seeing you on Friday,

  3. Les Schmidt

    Mills, IMHO, you are spot on in your analysis. In contradistinction from the past, today we possess:
    1) the means – a highly connected student population and, the devices to freely distribute rich, engaging educational experiences
    2) the motive – cost pressures, the crying need for a 21st Century skilled/knowledgeable work force, global competitive pressure, changing student expectations (flexibility, immediacy, etc.), and out-of-date (150 year old) paradigms in higher education that no longer make sense.

    The only question now is do we have the will to disrupt what is and reach into the future…

  4. Esperanza Román

    Hi, Less.

    I completely agree with the means and motives you mention, but, IMHO, there are other things that may be still missing in the picture. Particularly, I am concerned whether students are ready to play a significant role in the disruption of the university world as we know it :).

    Mark David Milliron´s An Open Letter to Students: You’re the Game Changer in Next-Generation Learning is very enlightening in this regard. It is not only about students having the technology and the urge to get information immediately, but also about students willing to play an active role in their education and their learning.

    BTW, where are students in all these debates and forums?…

  5. Mills Post author

    Thanks everyone for your comments. In response to Esperanza’s second comment, I’ll be very interested to see how many Mason students show up for our conference this week and of those who do come, how many will speak up?

    One possible result of what I’ve described above is that a large number of universities like Mason end up becoming “upper division” campuses, by which I mean we offer only the 3rd and 4th years of the undergraduate education, plus graduate studies in a variety of disciplines. If that happens, Mason is going to be sorry we have built so many residence halls over the past decade — residence halls that cannot be converted to condos for a variety of reasons, so we’re stuck with them as residence halls. We, and other campuses in our same boat, will also have to go through a massive downsizing of administration and faculty.

    In my own department, for instance, we would probably have to give up at least 10, if not 15 tenured faculty positions to respond to the revenue lost from not teaching several thousand freshmen and sophomores each semester. Given the nature of our contracts, the university would either have to find a way to finance a massive one-off buy out, or we would not fill a position following retirements for something like two decades (or a combination of the two). There would also be substantial dislocation for our non-tenure track colleagues. Most of them would be cut loose by the university in summary fashion to deal with the rapid declines in our tuition revenues.

    Finally, this sort of labor force contraction, if it occurs (and I think it will) means we and lots of institutions like us, will be forced to cut back substantially on our doctoral program enrollments, or recast our programs so that we are preparing more of our students for the non-academic workforce given that there will be so many fewer of the traditional faculty positions we have now.

  6. Mike

    I’m purely speculating, but the big name schools might have a grand agenda with their online courses. Someday, for a nominal fee, anybody with a connection will be able take these courses. Maybe in order to get credit with George Mason you have to pay a nominal fee for that! GM can stop he bleeding with this policy. If the end price is cheaper for the student, then they’ll pay. GM covers some costs to keep chugging along and big schools have successfully figured out a way to generate more revenue. If GM wants to compete in the online market, then they will need to have a plan in place to execute. College is too important for young adults and their parents to just let a fine institution like GM go under.

  7. Robert Talbert (@RobertTalbert)

    I might be too sun-shiney here, but I just don’t think that those of us in traditional “mass market” universities have anything to worry about from MOOCs. I’ve finished two MOOCs myself and am currently on my third one (two through Coursera and one through Udacity). I’ve found them to be good for acquiring some basic facility with content that is easy to assess (like computer science) but when it comes to the two critical components of education — human relationships and authentic assessment of student work — I don’t think MOOCs are catching up to what brick-and-mortar universities offer. And yes, I am including the discussion forums on MOOCs in this, which are active but IMO don’t have a lot of information content.

    I think in this sense all of us in traditional universities are “niche dominators” where our niche is a focus on relationships — relationships between human beings, relationships between concepts within a subject, and relationships among different subjects.

  8. Lesley Smith

    Thanks very much indeed for the thought-provoking piece. But I wonder whether the future of university education could lie in another direction, in providing the kind of education that only an intense co-presence of students and scholars can generate? What can we, as scholars and students, do in a learning space that cannot be done anywhere else? What can we do in an intense online learning environment, in terms of interaction, collaboration, original research together, transnational problem-solving at grassroots (and above) levels, etc., that simply cannot be achieved through watching lectures online, passing some tests, and perhaps getting some feedback from an alumnus/a volunteer on one’s work. What can we achieve when our students are working in our communities (near and far) as scholar-researchers, innovators and incubators, in close collaboration with more experience scholars as both partners and mentors. Taking a nearly thousand-year-old vision of education online and free doesn’t make it any less a nearly thousand-year-old vision of education.

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