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Higher Education Policy and Practice

Tectonic Shift Coming in Course Pricing

On May 4th, Richard DeMillo’s article, So You’ve Got Technology; So What? in the Digital Campus published by Chronicle of Higher Education boldly claimed that new technology is ready to blast apart the traditional pricing model of higher education.  In the same publication, another article, One Instructor, 2,670 Students reports how John Boyer an instructor at Virginia Tech is using current technology to offer super-sized classes.  He is even looking at new technology that would enroll 600 to 3,000 students in face-to-face instruction.  On May 3rd, the Chronicle also reported that Harvard and MIT are investing $60 million in a new platform for free online courses. These reports suggest that the pace of new technology is accelerating and is ready to have profound effects on pricing courses and even upon the traditional structure of higher education that has successfully resisted change for centuries.

Richard De Millo, Director of the Center for 21st Century University at the Georgia Institute of Technology, believes that course pricing is entering an era where courses will be treated as inexpensive commodities similar to what has happened with cell phone services, toll road electronic passes, e-books, and the replacement of secretaries and clerks with electronic software.  If courses become electronic commodities that are offered free or inexpensively, this would necessarily drive down course prices well below current levels.  The typical course pricing model, based on an average class size of twenty to thirty students, would no longer be viable.  Since most colleges use course sets organized around academic major as their fundamental revenue unit, course commodification could strike at the very heart of a college’s financial stability.

What does this mean for traditional colleges? 

De Millo claims that piecemeal responses by colleges to the challenges of new technology waste resources?  He suggests that the best solution is to break the traditional college paradigm and build a new paradigm.  His assertion that technology will soon change course pricing also implies that the administrative and support structures must be altered if colleges expect to compete under these new market conditions.

The question for small traditional colleges is how can they respond to the rapidly emerging electronic model of higher education?  There is a way for traditional colleges to test the waters without completely abandoning their existing model.  The approach involves redesigning continuing education to take advantage of the new on-line pricing models and administrative systems.  The work is complex and arduous.  Most private colleges will find that redesigning their continuing education systems will place huge demands on their limited time and energy resources.

There are myriad options available to colleges such as, course bundling from other colleges coupled with on-line courses to produce a certified degree, certifications using a set of on-line courses with the certificates building toward a degree, customized degrees or certificate programs with sets of courses that meet the needs of a particular student or set of students, or degree partnerships with several colleges with similar missions in different locations throughout the country.  Low priced eLearning courses gives entrepreneurial presidents’ tremendous flexibility and leverage to strengthen the competitive position of their institution.

Stevens Strategy is here to help you adapt to the challenges and opportunities presented by technology.  We have the capability to assemble a team to work with you on developing:

  • Instructional and administrative models using the latest technology
  • Policies and procedures to support the new instructional and administrative models
  • Documents for soliciting RFPs for building the new instructional delivery and administrative systems
  • Implementation checklists
  • Operational performance tests
  • On-going performance assessment

Contact John Stevens, President of Stevens Strategy, at JStevens@StevensStrategy.com to discuss your interests, concerns, and plans for adapting to the new learning technologies.

Michael Townsley, PhD

Senior Consultant, Stevens Strategy

About the Author: Mike Townsley, Ph.D.

Michael Townsley has more than 20 years of experience in academic services, financial systems, budgets, marketing strategy, payment plans, IT administration, ancillary operations, and site management. Mike is Senior Consultant with Stevens Strategy and former President of Pennsylvania Institute of Technology. During his 20 years … (Read More)

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