• September 2, 2014

To Reach the New Market for Education, Colleges Have Some Learning to Do

To Reach the New Market for Education, 
Colleges Have Some Learning to Do 1

Gwenda Kaczor for The Chronicle

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close To Reach the New Market for Education, 
Colleges Have Some Learning to Do 1

Gwenda Kaczor for The Chronicle

A few weeks ago, I moderated a panel discussion at the South by Southwest education conference, in Austin, Tex. Known as SXSWedu, the gathering is in only its fourth year and already draws some 6,500 entrepreneurs, educators, investors, and policy makers, easily surpassing the attendance at many of the annual meetings held by the various higher-education associations.

Many of the education providers who showed up in Austin were relatively new players in the field. They don’t yet have the brand names of traditional colleges that have built their reputation over generations by offering degrees and certificates through the factory-model, one-size-fits-all delivery method of modern higher education.

But what these new entrants have been able to do relatively quickly is divide the massive higher-education market into segments based on what students want and need, and then create offerings that appeal to only a slice or two of the overall market. Such a lean approach, of not trying to serve everyone, is definitely cheaper, and often better, for meeting student demands.

The assorted segments of college students are not homogenous, yet they are largely served that way by traditional institutions. Many colleges are struggling financially because they still cater to the typical market of 18-year-old high-school graduates, a shrinking demographic. Such students accounted for 36 percent of the U.S. population in 1964, at the end of the baby boom, but today make up 24 percent and by 2050 will be just 21 percent of the country.

To accommodate older students, most colleges increased their graduate and certificate offerings in the past two decades. But those programs largely mirrored the structure of their undergraduate curricula, requiring students to dedicate a year or more of their lives to classroom instruction and thousands of additional dollars to gain credentials. Now enrollment growth of American students in graduate programs is essentially flat, while the online market, which many colleges gravitated toward in order to capture time-pressed adults, is saturated.

Entering this fray are the new crop of education providers that were present at SXSWedu: Khan Academy, General Assembly, Skillshare, Lynda.com, and Dev Bootcamp, among many others. This gang outsmarted traditional colleges in recent years by focusing on what John Katzman, founder of the Princeton Review, calls "just-in-time" education. "The real key in a world in which people are changing jobs all the time is short-term learning that is very connected to the next job you are going to get," he said during the SXSWedu panel I moderated, on how to ease the transition from college to the work force.

Katzman is now CEO of Noodle, which is attempting to become the Google and Amazon for education by aggregating education options from around the world into one search-and-recommendation engine. "People think K-12 is seamlessly tied to higher ed, which is seamlessly tied to the work force. It’s never been true. It’s silly to pursue it," Katzman said. "If you start with a good liberal-arts education but understand there are Dev Bootcamps, Skillshares, and other programs that you will be doing for the rest of your life as careers change, I think you can have your cake and eat it, too."

The market for just-in-time education is growing, especially with recent college graduates struggling to gain footholds in their careers. A study last fall by Georgetown University’s Center on Education and the Workforce found that the average age of financial independence for today’s college graduates, when they first earn the median wage, is 30. That’s up from 26 years old in 1980.

As a result, twenty-somethings these days continue to seek out formal learning opportunities, as they move from job to job, well after they earn their bachelor’s degrees. But this learning happens in small chunks, not in the structured—and lengthy—degree and certificate programs that colleges typically offer.

Some of the biggest players in this market are hardly household names, yet they are already attracting millions of students. The Khan Academy serves 10 million people a month with 5,000 videos. Lynda​.com has more than four million paying members for its how-to tutorials online. General Assembly, which offers skills courses of one day to 12 weeks in length in nine cities, serves mostly college graduates in their 20s and early 30s.

Jake Schwartz, a co-founder of General Assembly, is the product of a liberal-arts education, at Yale University. Six years after he graduated, he went to business school, at the University of Pennsylvania. "It cost me hundreds of thousands of dollars and two years of my life," he said. General Assembly offers an alternative, "a place to come to get direction and become a member of a community, perhaps multiple times throughout a career. We’re trying to build a lifelong model of learning."

Given that the primary mission of colleges is education, they should be well positioned to offer just-in-time learning, particularly to alumni who just plunked down tens of thousands of dollars in tuition for bachelor’s degrees that have left them underemployed or unemployed.

Too many colleges still see their alumni as a source of revenue for the annual fund or attendees at reunions, not as lifelong learners who might need, and be willing to pay for, additional education. Teresa Sullivan, president of the University of Virginia, told me that one of the advantages of offering MOOCs through Coursera "is that it’s a great way to reach out to alumni."

One problem the University of Virginia and the dozens of other institutions face in offering MOOCs through third-party providers like Coursera, however, is the dilution of their established brands. The millions of students signing up for the courses are doing so not through the university but through the two-year-old provider, which aggregates the courses and delivers them under its own name. The university that actually provides the course is sometimes an afterthought for students, many of whom often choose classes on the basis of their content, not the institution offering them.

Traditional higher education tends to dismiss new entrants to the field in the belief that a college’s brand name resonates with consumers. In an age of democratized education, when learning happens everywhere, any day, throughout a person’s life, having a good brand name is no longer good enough. The growth of just-in-time-learning providers shows that today’s students who need access to quick snippets of education might not care as much about the brand names they gravitated toward when they were 18 years old.

Lifelong learning has moved from a buzzword to reality, yet colleges still think of higher education as something that happens at one time in a person’s life, in one place. For colleges to prove the lifetime value of their expensive style of education in a world of increasing options, they need to start extending different styles of learning, to different segments of students, beyond commencement day.

Jeffrey Selingo is a contributing editor at The Chronicle and professor of practice at Arizona State University.

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