Global Strategies: "Universities Won't Go Bankrupt, But They Might ...

?Affluent people need to spend their money on something, and spending it on their kids' education is more reasonable than draping themselves in diamonds.? ? Matthew Yglesias

I have recently posted twice on the intersection of online learning and higher ed in Oregon (here, here). I hope the 2013 Oregon legislature takes up the online education issue, or, at least, gets the Oregon Education Investment Board to do so. Now blogger Matthew Yglesias has some thoughts in his post ?Universities Won?t Go Bankrupt, But They Might Lose Money? (here):

But here's what I think Caplan is right about?we should think of there being two separate tracks, one about the development of online learning tools and one about the business model of traditional colleges and these things have only a tenuous relationship to one another. It's long been possible to buy some textbooks and try to teach yourself some material. When I wanted to learn the basics of economics, that's exactly what I did?read intro textbooks. Supplementing those textbooks with audio or video recordings has been possible since at least the 1980s given the technologies of the US Postal Service, the Walkman, and the VCR. The Internet and modern digital technology obviously represents something of an advance over that previous paradigm, but it's not an earth-shattering leap. It was possible for a determined and intelligent individual to teach himself lots of stuff in 1992 and it's a bit easier and cheaper now in 2012 and should be even easier and cheaper in 2022.

?And:

The ability of colleges to secure revenue from people to derive revenue from offering a four-year residential edutainment service to people aged 18-25 seems to me like a completely different question. Sidwell Friends costs $34,000 a year in tuition not because anyone thinks the education it provides is so incredibly valuable, but simply because there are enough families in the area who can afford that much. Affluent people need to spend their money on something, and spending it on their kids' education is more reasonable than draping themselves in diamonds. Nobody wants to drive to a party in a Rolls Royce and explain to their friends that they have such a fancy car because they sent Billy upstairs to watch web videos rather than shelling out for?Princeton. I'm not sure the signaling/learning controversy is even the relevant frame for this dynamic. The big economic pressure on colleges right now is that median household income has been falling. Obviously if people get poorer and poorer they can't keep paying more and more for college. But online education is irrelevant to that dynamic, and conversely I don't think it's even slightly necessary for online education to "disrupt" incumbent colleges to make a valuable contribution to the world. People learn things outside a formal education setting all the time, and it's great that it's getting easier and cheaper to do so.

One hopes? state governments are not ?affluent people needing to spend their money on something,? so state governments need to make their human capital investment decisions differently.

Source: http://daveporter.typepad.com/global_strategies/2012/12/universities-wont-go-bankrupt-but-they-might-lose-money.html

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