Albers School of Business and Economics
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  • The Cost of Higher Education

    Seattle University Magazine asked me to write an article on changes taking place in higher education.  It was published in the Winter, 2013 edition under the title, "The Cost of Higher Education."  If you have not read the magazine, the article is printed below.  I even received some nice emails from alumni on the article!

     

    Compared to other sectors of our economy, higher education has not changed that much.  How we do things is not all that different now than it was thirty years ago when I started my career in higher education.  We have continuously refined and improved upon what we do, but the basic framework has persisted.  That seems like it is about to change. 

     

    Two forces are coming together to force our hand.  One is the continuing improvement in technology that facilitates on-line instruction.  On-line instruction is not new.  It has been around for several decades, but what is different is that it is getting better.

     

    The second force is the high cost of higher education, whether it is private or public.  Private universities have been consistently raising tuition faster than the rate of inflation.  That is not sustainable.  Public higher education, perhaps underpriced at one time, has increased sharply in cost due to financial pressures experienced by state governments.  This story is familiar to every family trying to send their children off to college.

     

    Clayton Christensen, a management professor at Harvard, has made a name for himself with his research on "Disruptive Innovation," a model he uses to explain why companies at the top of many sectors have found themselves all the sudden struggling to survive.   Whether it is explaining the demise of Blockbuster, Kodak, Digital, or Borders, each was the victim of a disruptive innovation.  Sometimes it is the development of a new technology or process.  Sometimes it is the development of a new product that overtakes an existing product. 

     

    Christensen has finally applied his insights to his own industry, higher education, which is presented in his co-authored book, The Innovative University.  Christensen argues that universities will need to re-engineer themselves to assure on-going relevance.

     

    Across our programs in the Albers School, we expect these trends to appear in different ways.  Perhaps the slowest to be impacted is our undergraduate business degree, which by its nature has a strong formative character to it.  Where we think it is showing up first is in our MBA program.  Our program is strong and highly rated, but tuition and fees are high for the average student.  And while we have always prided ourselves on the flexibility of our program and the ability to accommodate working professionals, it still takes a lot of time and requires many visits to campus.  Overlaying all of that is a steady drumbeat of commentaries critical of the value of the MBA.  Of course, we don't agree with that, but that talk is on the street.

     

    To keep our program relevant, we need to reign in the financial cost and increase accessibility.  That means identifying what is really needed in an MBA and delivering that in an even more convenient format.  We need to design different ways for students to complete prerequisites, cut some of the coursework, and move to "hybrid" models of teaching, where lectures seldom take place when classes meet.  Instead, lectures are reviewed by students outside of class and class time is used for higher order activities.  To the extent that students (and employers, perhaps) question the value of the MBA, they may have more interest in certificate programs.

     

    There is no way to know for certain how "Disruptive Innovation" will impact higher education, but it would be foolish to assume it will not.  New developments are taking place very quickly and we must stay alert and ready to respond.

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