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Section 4: Exploit Technology to Reduce Costs

Chapter 16: Move More Classes Online

Abstract: Calls to increase on-line education often lead to two objections: First, the costs of on-line education are really not lower than traditional education. Second, an increased reliance upon on-line education will lower the overall quality of American higher education. The evidence, however, casts some doubt on the strength of these objections. It is true that, offered to small numbers of students, on-line courses are not necessarily cheap. Yet the for-profit schools have clearly demonstrated that there are enormous economies of scale, and major companies have turned from loss to profit (e.g, Bridgepoint Education, Higher Education Holdings) as scale expands. Some companies (e.g., StraighterLine) are able to offer online courses for $99 a month plus $39 per course enrolled. A full semester of courses can be obtained for well under $1,500. Regarding quality, recent analysis done for the U.S. Department of Education suggests that on-line education is not inferior at all to traditional learning—indeed, the contrary is the case. Combining on-line instruction with a small amount of live in-person support is particularly effective. To be sure, not all instruction can be offered effectively on-line, but large numbers of high enrollment introductory courses in most major disciplines are ready for effective transition towards broad on-line course offerings.

Regarding costs, most analysis of the issue fails to account for the considerable capital costs associated with traditional instruction, costs that virtually disappear with on-line courses. They fail to take into account the savings that can occur from reduced commuting and room and board costs when students can take courses from their home, a particular advantage for those in lightly populated rural areas.

Among those fighting on-line instruction are faculty at many schools (sometimes successfully sabotaging new on-line programs), accrediting and governmental regulatory groups (by imposing costly licensing requirements), and some faculty unions. Fortunately, enrollments are rising rapidly in spite of all this, given the cost advantages, convenience, and high quality of many online offerings.  In addition to formal degrees offered by such schools as the University of Phoenix, Kaplan University, Ashford University, the University of Maryland University College, or Western Governors University, there are efforts to extend learning via the internet by making course materials available for free on-line (the MIT Open Courseware project is particularly commendable).
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Chapter 17: Reduce the Cost of Textbooks

Abstract: The price of college textbooks has soared over the years. Once an instructor selects a textbook, the publisher has a monopoly position as the only provider of the text, and in recent years they have taken advantage of this to raise prices to the triple digits for many texts.  Fortunately, modern technology has helped break down this monopoly.

On-line booksellers increasingly sell used copies of books to students at lower prices than local bookstores. More professors are opting for electronic books, and the development of devices such as the Kindle and the iPad are likely to further the revolution in electronic publishing that also has hit the traditional textbook market. Finally, bookstores and publishers are reviving an old idea—textbook rentals—as a means to lower enormous textbook costs.

As technology changes, universities may wish to reconsider the operation of campus bookstores, something that usually is best left to private entrepreneurs. State laws to control textbook prices and other regulatory approaches to the problem may do more harm than good, although colleges should encourage faculty to select texts in a way that allows students alternative means of purchase, which inevitably leads to lower costs.
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Chapter 18: Digitize Academic Libraries

Abstract: The largest building on most great research university campuses is the main library, for no other reason than the warehousing of millions of books takes up enormous amounts of space. Aside from books, libraries spend vast amounts subscribing to thousands of academic journals (usually at a subscription price of several hundred dollars annually). Many books are read or even looked at only rarely, and it is hard to justify their purchase on any cost-benefit basis. The capital costs of library buildings are likewise immense.

The revolution in information technology should radically revise the concept of the university library. The electronic purchase of books should substitute for traditional acquisition of hard copies. Consortia of universities can band together to reduce costs. Organizations like OhioLink are state-wide networks of libraries that in effect create a single library to serve vast numbers of students.

By far, however, the greatest promise comes from digitization of books and periodicals. The rise in the cost of academic journal subscriptions has been the leading cost driver for university libraries. As a result, the end of paper academic journals may be near as libraries seek cheaper electronic alternatives. For years, institutions like JSTOR have permitted scholars to access vast amounts of materials in scholarly journals from their office. The most interesting elaboration of this concept is the Google Library Book Project, a vast effort to digitize almost all major printed works, including the collections of such premier libraries as the New York Public Library, Harvard University, the University of Michigan, and Stanford.

To be sure, there are many issues involved. There is, of course, the issue of intellectual property rights. A physical library may well still be a good place for students to gather to study, to work on computers, and occasionally to use printed works. Most university and college libraries have undergone vast physical changes to accommodate the changes in technology. In the long run, however, does every campus need to have a physical repository of printed volumes? Cannot virtually all of the research and teaching functions be done electronically?  This does not mean a complete elimination of libraries, perhaps, but changes their nature and downsizes their physical presence.
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Chapter 19: Outsource Email Services

Abstract: In the course of a generation, email has become the dominant mode of communication, both on campus and between academic personnel and the outside world. Analysis of email costs have suggested that full costs only run $25 per month per user, which for a university with 15,000 students and 2,500 employees is $750,000 for the employees alone, and as much as several million dollars a year for all users, including students. Specialists in information technology services, companies like Google and Microsoft, can usually significantly undercut the costs of in-house systems of email delivery, potentially saving large sums of money. The savings come in the form of lower storage and staffing costs, and reduced costs for servers, archiving and filtering messages.

The email issue is an application of a broader principle. Colleges and universities are in the business of creating and disseminating information, but not in the business of developing and managing the technology that allows for low cost communication of data and images over long distances. There are extremely successful companies who have learned how to do these things relatively cheaply and reliably. That is why universities should typically not only outsource email services, but also other electronically based services utilizing information technology, such as preparation of payrolls.
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Chapter 20: Utilize Course Management Tools

Abstract: The typical professor still teaches pretty much the way Socrates did 2,400 years ago, talking to a group of students in a lecture-discussion session. To be sure, the use of blackboards, PowerPoint, and perhaps some internet-based visuals has jazzed things up a bit. But as Carol Twigg and others have suggested, we have merely added some new technology onto old approaches to teaching. Yet as Michael Clifford has said, today’s students are inhabitants of a new information age, while many of the instructors are merely “immigrants” to new technologies, just learning to assimilate what students already know. Much of this, of course, is a generation gap issue that may close in time (although the technology continuously changes as well).

There are a vast number of new technologies available to revamp the learning experience, many of them involving interactive contact between the subject matter and the student, as opposed to mere absorption of content from a single instructor. The listing below is more illustrative than comprehensive, but a few examples will make the point. New learning or course management systems can help instructors manage their class and communicate with students; Blackboard is the market leader in this field, although there are important open source competitors.  Electronic clicker devices are used in growing numbers of classes, allowing instructors to obtain instant feedback from students. The instructor can ask the student a multiple choice question in class on a concept, and if a large percent of students click the wrong answer, the professor can modify his planned presentation to deal with the learning deficiency.

Interactive (so-called Web 2.0) approaches include wiki pages, blogs, video and note sharing. Students can interact with each other and instructors. Student blogging has proved effective in some courses, both to improve writing skills and to discern student knowledge and comprehension of key concepts.  Even YouTube and related video approaches are being used. If, as some think, “the best way to learn is to teach,” student-made presentations in the style of YouTube may offer, in some cases, opportunities to enhance learning.

In embracing technology, schools need to carefully evaluate new approaches. Are students learning more? Are costs rising or falling? Would it not be better to move to a relatively interactive on-line form of instruction than try to augment traditional instruction with new technology? The technology should be adopted only if it improves service quality (more learning, better educated students), lowers costs, or does both. To this point, the evidence of significant cost reduction from new technology is lacking.
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Acknowledgements