The components of a university
In about five years, if not sooner, the entire education complex is going to face the same existential crisis that journalism and newspapers are going through right now. Their product will be unbundled from the unified package in which it is conventionally sold, and will be served a-la-carte and free over the net.
For journalism the package was the newspaper, a collection of articles. For colleges, the package is the degree, a collection of courses.
Of course, with Khan Academy and Udacity and OCW and many others, the courses are free. This, among others, is a major part of the argument of growing anti-college brigade who say that you’re better off not going to college, saving your money and not getting saddled with debt, and instead getting work experience for those four years, perhaps moonlighting with online courses.
Degrees
Colleges retort with: “we certify you! A degree is a stamp of some sort of minimum competence.”
But on the demand side, employers (at least in software) have almost completely soured on degrees. Their hiring decisions are based completely on how well you do on the interview, not on what degree you got from which college. And the interview focuses completely on the thing you’re being hired to do (e.g. programming). You would be amazed how many people with CS degrees simply cannot write programs.
Cost structure
The thing is: colleges are stuck in a death spiral of costs increasing, and increasing costs turning off applicants.
Why are costs high? Because it takes a lot of people, and they have salaries and health benefits, and retirement plans. But also because of the resortification of colleges. Larger fractions of funds are going towards building lavish facilities and buildings and recreation centers and dorms that are not dorms but fully furnished apartments. Those are now the baseline for attracting applicants.
Return to basics
So what will become of colleges?
I like to expand the question to encompass the thing that contains the college: the university. University and college have been synonymous for a long time, but a college is only one component of a university, which is a much broader institution.
It not only disseminates knowledge, but also creates and curates it. It’s the dissemination part that is being unbundled and dis-intermediated. That is the part that can be put online, for free.
The fact still remains though, that colleges survive on the money from undergraduate tuitions. And that is exactly the part that is beginning to go away.
Just like newspapers, the money from new sources of revenue will never come up to the level from the sources that are going away.
So what gives?
Remember that universities started out as essentially learning monasteries. You went there if you had a thirst for knowledge, but there wasn’t a pre-packaged “degree” to be had.
Likely, universities will go back to their smaller, simpler roots, concentrating more on unstructured knowledge creation.