Matching Cost to Value in Higher Education

 For liberal arts colleges and universities to survive in the future they must learn how to understand the value for students of what they offer, and how to appropriately match cost to value. Simply speaking of the value of a "liberal arts education," or even the value of particular majors and even classes isn't adequate.

A modern liberal arts university offers at least six discreet kinds of value to its students:

1. The value of the campus experience; being resident on campus or near campus and experiencing all the kinds of interactions to campus has  available.
2. The formation of new social networks through all the varied campus activities, including but not limited to participation in classes.
3. The classroom experience, whether face to face or digitally mediated.
4. The acquisition of skills and knowledge in class.
5. Affirmation of intelligence and skill in the form of grades.
6. A credential  that is socially recognized, brings prestige, and is a pathway to employment. 

Most liberal arts universities, including my own, bundle these sources of value into what is seen as a single experience. However, that the bundle is expensive in terms of both time and cost. For this reason liberal arts universities and colleges find themselves chasing a diminishing number of potential students. This is particularly true of graduate schools like my own, where most of the potential student population cannot be residential.  

The usual approach to broadening the reach of recruiting is to offer a wider variety of degree programs, with the program structures introducing flexibility and increasing the potential market. But this doesn’t directly address the key problem of the bundled experience. 

In addition to offering new degree programs, universities need to consciously unbundle the university experience, marketing and selling different aspects to different student-consumers at prices related to the individual rather than collective value of these experiences. Moreover, they must come to a realistic valuing of each part of the bundle. Most place a high value on the face to face interaction of professor and students. But as the move to online education is proving, students place a higher value on the acquisition of skills and knowledge and pre-eminently obtaining the appropriate credential. 

Value aside, here is what an unbundled look at the offerings of a liberal arts university or graduate school might look like:

1. For example, a school could offer 2, 3, 4, 5, and 6 through cohort systems of learning, which is typical of many graduate business schools and law schools that have no residential facilities. 
2. 3 and 4 could be offered to auditors at a much lower cost, while attaining 5 and 6 would then have an additional cost. I used this method decades ago in extension education programs in Malaysia with success, and it is the method now used by Stanford and MIT and other universities in their MOOC offering.
3. Schools can offer 2, 4, 5, and 6 through asynchronous online courses using programmed learning methods. 
4. And some schools already offer just 6 through giving credit for “life lessons” and some appropriate examination. 

The key to all of this for graduate schools  that are struggling financially is that these various methods realize in income the value in discreet portions of the bundle, allowing for much greater revenue without additional costs or programs. 

1. Working to offer an on campus program of community life for students living off campus (not least by making affordable parking available) allows for students seeking the full bundle.
2. Offering hybrid courses in a cohort system allows students to realize 2, 3, 4, 5, and 6  without burdening students with a weekly presence on campus. 
3. Offering a full range of courses by hybrid, allows students to realize 3, 4, 5, and 6 without participating in the regimentation of a cohort.
4. Offering asynchronous online courses offers students 2, 4, 5, and/or 6 in varying combinations and at different price points. 
5. Relatively low cost audits allows students to realize 3 and 4 without burdening the school with the additional cost of running separate seminars. Note that additional students in the classroom do not increase costs but do increase revenue. Nor can it be argued that auditors detract from the classroom experience, given that classes rarely reach maximum allowed enrollment in any case. Should the class reach that enrollment the of course auditors would not be allowed.

What this requires of the school, and instructors, is to adapt its admissions, fees, and forms of pedagogy to match student expectations while offering the best possible instruction to each type of student. 

What this requires of us are some questions:

1. What are the essentials of a campus community, and how do we provide these without increasing costs? 
2. How do we best enhance cohort style learning in the hybrid courses?
3. How do we structure non-cohort hybrid courses to best obtain the desired pedagogical outcomes? Can we embed what is being taught in some community of which the student is a part? 
4. How do we best manage F2F classes with auditors present? 
5. How do we offer asynchronous, online courses that actually meet the pedagogical goals for the course? 
6. And how do we distinguish between courses in which this is possible and those in which a synchronous engagement with a class and teacher is necessary whether online or F2F?