Society and Culture, Education

Want more $10K-BAs? Competition is critical

Image Credit: Shutterstock

Image Credit: Shutterstock

In today’s Grey Lady, AEI President Arthur Brooks uses his own college experience to make a powerful case for affordable higher education. Arthur describes his quest to earn a bachelor’s degree while working as a peseta-pinching musician in Spain. He writes:

Fortunately, there was a solution — an institution called Thomas Edison State College in Trenton, N.J. This is a virtual college with no residence requirements. It banks credits acquired through inexpensive correspondence courses from any accredited college or university in America.

I took classes by mail from the University of Washington, the University of Wyoming, and other schools with the lowest-priced correspondence courses I could find. My degree required the same number of credits and type of classes that any student at a traditional university would take. I took the same exams (proctored at local libraries and graded by graduate students) as in-person students. But I never met a teacher, never sat in a classroom, and to this day have never laid eyes on my beloved alma mater.

And the whole degree, including the third-hand books and a sticker for the car, cost me about $10,000 in today’s dollars.

As Arthur points out, the $10K-BA has thankfully found its way into our national dialogue, thanks in large part to the challenge Texas Governor Rick Perry issued to his universities in 2011. Since Perry’s announcement, Rick Scott has called on Florida’s state colleges and universities to come up with $10K plans, and a California state legislator introduced a $10K-BA bill just after the New Year. Others have jumped on “competency-based degrees” as the way of the future, where students earn credit by proving what they have learned rather than how much time they spend in a course. Policymakers in Tennessee, Missouri, Indiana, Texas, and Washington have invited competency-based Western Governors University (WGU) to set up state branches, while Wisconsin’s Scott Walker has sought to develop a homegrown version.

All of this entrepreneurial energy around making higher education affordable is a welcome sign, especially as tuition prices at traditional campuses have continued to devour the purchasing power of middle and low-income families.

But it’s important to note that these new efforts, while a step in the right direction, are unlikely to pressure the rest of the system into keeping their prices low. That’s because they are rarely competing for the same students, and are often limited in the number of students they can serve at that price. To improve affordability on a broader scale, policymakers must move from a “top-down” approach (“if you build low-cost options, some will come and pay less”) to a “market cultivation” one (“if we lower barriers to entry and encourage competition, providers will work to keep prices low and maintain quality”).

The top-down approach isn’t wrong-headed, but its impact on the market is limited. Low-cost distance learning options like Thomas Edison and its brethren (Empire State College in New York, Charter Oak State in Connecticut, and non-profit Excelsior College, to name a few) have not competed with their brick and mortar peers so much as they’ve carved off an underserved slice of the market (ie: musicians living in Spain, or working adults more generally). The same seems true of WGU’s state branches. Even when some of these upstarts have sought to compete more forcefully, regulatory barriers have often hampered their ability to do so (see the kerfuffle over Excelsior College’s online nursing program).

Texas’ $10K-BAs also seem more likely to fill a niche than to upset the apple cart. If you look closely at the initiatives, you see more cost-shuffling than innovation: Most of the existing plans rely on a combination of college credit earned in high school and special scholarships to get to the $10K price, and only for a limited number of students. By my count, just two of the eight $10K pathways featured in this handy Texas Tribune guide actually use new modes of credentialing and delivery to reach the goal. The students who want to study particular subjects, are gifted enough to earn college credit while in high school, and are lucky enough to get into these programs will pay a lower price. Others will be out of luck.

The point is not to dismiss or downplay these $10K efforts, or the pioneering work of Thomas Edison State College and its brethren. On the contrary, they prove what’s possible when it comes to providing affordable opportunity where there was none before. And the $10K figure, derided by many, provides an important rhetorical anchor for discussions of higher education reform.

However, lessons from other heavily regulated sectors like air travel, telecom, and trucking suggest that the creation of a vibrant market—made possible by lowering barriers to entry and ensuring that consumers have clear information about the cost and quality of products—is the key to improving affordability while maintaining quality. The opportunities for higher education innovation have already arrived, but policymakers can do their part to ensure that the prerequisites for a healthy market are in place. If they do, soon we’ll be talking about the hundreds or thousands of $10K-BA programs out there, not just the handful that exist today.

One thought on “Want more $10K-BAs? Competition is critical

  1. I would assert that there is no shortage of educational providers who will provide you with a degree for cheap.

    so the “competition” is already there.

    but perhaps there is some slight misunderstanding with respect to competition being only about price – and not quality.

    Even then, as a buyer of education, is quite free to decide what mixture of price and quality they want from the offerings from the market.

    Isn’t trying to make the University of Texas or Florida offer a 10K product a lot like trying to make Ford or Chevy offer a 10K product?

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