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In a recent blog post by Mark Cuban he questions the future of colleges if they continue to operate on the same business model as they have for the past century. Cuban makes valuable points that should be paid attention to in this blog. For one, tuition rates have continued to increase in the worst recession this country has ever seen. A student can pay anywhere from $10,000 per year to $50,000 per year to attend a four-year college of his or her choice. And with the depressed job market, he or she isn’t guaranteed a job upon graduation, leading many students to pursue graduate degrees, thus adding on more student debt.
There’s been no real way to combat the rising cost of education until recently when MOOCs gained popularity. Coursera, edX, and Udacity have brought education to the masses at no charge. Globally, students can access courses from the world’s most renowned institutions. Unfortunately, MOOCs have some negative points like their low completion rates (some speculate around 2%), their lack of accreditation, and the inability for a student to gain a degree or diploma.
The Minerva Project provides another opportunity for students who want to get an Ivy League degree without the high cost of tuition. As an education start-up, the Minerva Project will provide the same education as Harvard or Stanford but at half the cost. By eliminating the college campus, Minerva will significantly decrease overhead and carry those savings to the student.
Colleges and universities must act now to change their existing business models. By doing a bit of research, colleges can significantly change their practices and avoid the risk of closing their doors permanently. As Cuban suggests, colleges should welcome the opportunity to teach online classes thus decreasing their overhead costs and increasing their student reach. Or, partner with community colleges to offer general education classes at a significantly lower cost requiring less space and instructor salaries for the college. And now, some colleges are even choosing to partner with MOOCs to offer general education requirements at a much lower cost to the student.
I recently read an article about Lamar University. Lamar, on the verge of bankruptcy, asked one of its most prestigious alumni to donate a significant amount of money to support the college. The alumnus, Randy Best, suggested that instead of a one-time donation he would ramp up Lamar’s online course offerings thus increasing revenue. In five years, Lamar has become one of the fastest growing universities in the nation and now has more online students than on-campus students.
Maybe colleges should take a lesson from Lamar and Randy Best. Rather than doing the same thing over and over, discover new paths to fight off their demise.