After centuries of little change, the basic “sage on a stage” business model of higher education is beginning to undergo a radical transformation. Buffeted by high tuition costs and loan debt, students and their parents are seeking better value for money. Meanwhile technological change spearheaded by online education and such innovations as “massive open online courses” (MOOCs) is shaking up the economics of educational information and teaching. And new business models, introducing such approaches as competency based degrees and blends of online and campus-based learning, are reducing costs and offering more customized degrees.
Thanks to these developments, the cost of acquiring the skills needed to be successful in the future economy is likely to fall sharply. That will be good for the economy. It will also open up opportunities for skill-based economic advancement for the many Americans who today cannot afford college without incurring crushing debt.
For this transformation to achieve its full potential, however, three things are needed.