The Cost of Graduation

From Ian I got to this Observer article. The story is that university education is becoming less attractive as the costs increase and the salaries for graduates don’t correspondingly increase. The net result is that universities might be in an increasingly competitive game as western universities progressively lose their edge in the world wide market and as students look for more cost efficient alternative.

(…) more and more A-level students ask about alternatives to university, said the author of the research, Peter Brown, director of Gabbitas Educational Consultants. (…) we are seeing Chinese universities [are also] more financially attractive.

Asian universities stand to win big. In the western world, the first university to offer high quality, but significantly cheaper university education, by essentially cutting down on the fat and keeping what really matters, is going to win big time.

We are at a pivotal point where it might be good timing for a radical rethinking of university education.

Did I mention that you can listen to Stanford lectures on your ipod? See http://itunes.stanford.edu/. Chances are good that Stanford will be among the winners.

7 thoughts on “The Cost of Graduation”

  1. It’s interesting you mention Stanford, which is one of the most expensive universities. In the US, public universities’ costs are typically a fraction of private universities’. I have a feeling that The Observer article’s point is very UK-specific. Certainly, the lifetime earnings differences between high-school and college grads seems extremely small by US standards. And isn’t a university education almost free across much of the rest of Western Europe? What’s the variation in educational costs in Canada?

    As far as education podcasts are concerned, you might check out D’Arcy Norman’s Intro to podcasting video. He points out that lectures really need synchronized audio and visuals. Podcasts like the Stanford ones (and many, many other schools have them) are good for marketing and other, narrow functions, but not so much for actual education. Of course, for students who want certification without all that troublesome, time-consuming education…

  2. It’s interesting you mention Stanford, which is one of the most expensive universities. In the US, public universities’ costs are typically a fraction of private universities’. I have a feeling that The Observer article’s point is very UK-specific. Certainly, the lifetime earnings differences between high-school and college grads seems extremely small by US standards. And isn’t a university education almost free across much of the rest of Western Europe? What’s the variation in educational costs in Canada?

    In Canada, tuition goes from about 2,000 dollars (UQAM) to maybe 5,000 dollars (Acadia). These are rough numbers. But that’s not, by far, the actual cost. There are many hidden expenses. For foreign students, the costs are always above the 10,000 dollars threshold.

    Note that even if tuition is zero, the cost can still be high, and can even be increasing. Think about lost income, textbooks, computers, travel and so on.

    What the Observer says is that the salary differential, over a life time, is 100,000 pounds and that’s the highest in the world. That’s about 2,200 pounds a year over 45 years or about 5,000 dollars a year. Seems about right.

    Anyhow, it puts over what you might spend for an education. Would you spend 50,000 so that after 45 or 35 years, you’d have 100,000? I don’t think so. I think you shouldn’t invest much more than 20,000 pounds if you expect a 100,000 pounds reward over your lifetime. Hence, each year of a 4 years degree shouldn’t cost you more than 5,000 pounds or 10,000 dollars a year.

    Ah! But you see, a foreign student who comes to Canada is going to spend more than 10,000 dollars a year in tuition alone. How is he ever going to make this back?

    Basically, we can’t go much higher.

    Podcasts like the Stanford ones (and many, many other schools have them) are good for marketing and other, narrow functions, but not so much for actual education.

    You have no idea how much I agree with you.

    But Stanford and the other big schools are taking up the fight. They are being creative and looking for solutions. They are looking for alternative ways to provide an education. Possibly cheaper ways. Many schools aren’t doing this. Conservative schools are up for a rude awakening. Especially those who took for granted the influx of foreign students.

    Anyhow, showing someone a video stream is a terrible way to teach. I agree.

  3. It seems that college expenses in the US are about 3-4 times that in Canada. So, a university education should be even more attractive, from a purely financial viewpoint, than in the US.

    My biggest issue is with the following statement, “What the Observer says is that the salary differential, over a life time, is 100,000 pounds and that’s the highest in the world.” That’s clearly nonsense. I’m lazy, but was still able to find this About.com article linking to this US Census report that indicates the average college graduate earns US$900,000 (in “present value” dollars) more than the average high school graduate over a lifetime — almost double. For that difference, even paying three or four times as much as one does in Canada is reasonable.

    This doesn’t mean that a college education is for everyone; I think some people have gone overboard in suggesting that everyone must have a college education.

    On the other topic, I think that technologies like podcasts can help to make the learning experience more fun, and can act to supplement in-person experiences and provide a certain level of convenience to students. None of these are bad things. But it takes a lot of effort to produce a good educational podcast, even without visuals. With visuals, you suddenly need a full-time production staff. The same goes for most web-mediated distance learning. And then there’s the cost of periodically updating everything. I’m skeptical that this will result in cheaper education. Most of what I’ve heard of in this realm is “self sustaining” education: university courses offered without state of institutional tuition subsidy, usually offered to professionals whose employers are footing the bill. In other words, they’re more expensive. The only other model I’ve heard appeals to “economies of scale”, and to me sounds like the old “if everyone in China bought just one shoe…”

  4. It seems that college expenses in the US are about 3-4 times that in Canada. So, a university education should be even more attractive, from a purely financial viewpoint, than in the US.

    Maybe, but you won’t see many canadian engineers making US$100 which is, supposedly, the average salary for an American engineer. So, you can’t compare raw figures like this.

    the average college graduate earns US$900,000 (in “present value” dollars) more than the average high school graduate over a lifetime

    This “study” (which looks more like propaganda than a serious study to me), does it compare kids with the same economic background, with the same IQ results and the same initial disposable income and the same parental support and of the same ethnic origin? You wouldn’t dare comparing the average black and hispanic dropout with the white Stanford graduate, would you?

    Given US$100k at age 20, what if I invest it in my own business instead of going to university, or what if I keep $50k for starting a business and go for a technical diploma, given the same initial social standing and the same IQ tests, how would I fare over my lifetime?

    Doesn’t matter. What seems to be true right now, at least in Canada, is that the percentage of high school graduates going to university is not increasing. The number of high school graduates is also not increasing. But the number of foreign students is likely to go down, especially Asian students. Hence, universities will face fierce competition.

    The same goes for most web-mediated distance learning. And then there’s the cost of periodically updating everything. I’m skeptical that this will result in cheaper education. The same goes for most web-mediated distance learning. And then there’s the cost of periodically updating everything. I’m skeptical that this will result in cheaper education.

    It doesn’t. And that’s a real shame that people would assume that night classes or distance classes or web-mediated classes are cheaper. They aren’t!!!

    Web-mediated education, if anything, is more expensive. However, it can reach students you wouldn’t reach otherwise. Students can take the course 24/7, 365 days a year (if you’ve got all the support for it). So, the reason it is still around, is that it allows universities to tap into a market they couldn’t tap otherwise, thus, while the profits are lower per students, they wouldn’t have these students otherwise. The same hold true for night classes and so on.

    In theory, if you could offer a web-mediated course to 100,000 people, it would be much more profitable than classroom teaching, but we are not there yet.

    No, when I wrote “radical rethinking of university education”, I meant just that: doing something we are not doing right now.

    When I was working on my Ph.D., university libraries were in a funding crisis. Major cuts made them less and less interesting and there was a big struggle in the air. The struggle is now over. I haven’t set foot in a university library in 3 years and their main purpose, in my mind, is to provide a quite place for students to study. The web finished off the libraries. Except for some oldies, there isn’t a research article I can’t get to faster on my home PC than I could at the library. End of story.

    You’ll argue that the same thing can’t happen to teaching. Maybe. Maybe not.

    An colleague of mine, Stephen Downes, once argue for a self-study universities. He might have an essay about it somewhere. Before you say that this is a silly idea, you’ve got to hear fully what he had to say. Basically, prof. should be doing research full time and students could learn just by being around the prof and self-study. Teaching, either classroom-based or web-mediated, is obselete and can be replaced by tools putting students in touch, and guiding them toward the material with the prof. being around mostly to monitor from a distance and ensure that the degrees are worth their salt.

    You might not buy it, maybe I don’t, but don’t call me crazy yet!

  5. This “study” (which looks more like propaganda than a serious study to me), does it compare kids with the same economic background, with the same IQ results and the same initial disposable income and the same parental support and of the same ethnic origin?

    It looks like overall averages. And, actually, this seems consistent with other things I read and personal, anecdotal experience.

    Given US$100k at age 20, what if I invest it in my own business instead of going to university, or what if I keep $50k for starting a business and go for a technical diploma, given the same initial social standing and the same IQ tests, how would I fare over my lifetime?

    But few people have the entire cost of college in their pockets up front, so this comparison isn’t very realistic. And the more money they do have in their pockets, I would guess the more likely they are to go to college. So, we’re really comparing the money they might have made working for those four years with the debt they would accumulate during college.

    In theory, if you could offer a web-mediated course to 100,000 people, it would be much more profitable than classroom teaching, but we are not there yet.

    Especially considering that excelling in such a course is much harder than one offered in-person. Realistically, I doubt I would have done well in distance learning courses as an undergraduate, and I would immodestly place myself among those students who were able to learn regardless of the quality of teaching (that’s mostly what elite schools are selecting for). Yet the population being targeted for distance learning is likely that who can most benefit from in-person learning.

    An colleague of mine, Stephen Downes, once argue for a self-study universities.

    Isn’t this an approximation to the traditional approach in Britain?

  6. Yet the population being targeted for distance learning is likely that who can most benefit from in-person learning.

    Rather than “in-person”, you should say “face-to-face”, because the two of us communicate (quite well too) but we only met once.

    I don’t think it is true that weaker students benefit more from face-to-face. What we know, rather, is that there are some students who lack the motivation to go through a course if they don’t have to attend synchronous classes. These are not necessarily the weak students, they are the “hard to motivate” students, and that’s not quite the same thing. I would argue that this class of students are those who should probably not attend university, and should go get technical degrees, because if you can’t motivate yourself to work and learn on your own, how are you going to fare as an engineer, a doctor or a teacher? But these people are not “weak” in the academic sense. They may still get good results, as long as someone is there with them pressuring them.

    Isn’t this an approximation to the traditional approach in Britain?

    I don’t know this model. Maybe it is.

  7. hi,
    any one please let me know how much would it cost to as tution fee for an average community college

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