This is the fourth in a series on the economics of higher education. The first three posts in this series can be found here:

Higher Education and Covid-19
Why Emergency Cost Cutting in Higher Ed is So Damaging
Should Colleges Merge?

Internet technologies have changed higher education in a number of ways, but they have not yet disrupted the core business of placing 20 undergraduates in a classroom to learn calculus or writing. As long as I have been in this business, there have been folks predicting that higher education is the next industry to be transformed by digital technologies. Why have we not seen this transformation already? Will the mass movement online because of Covid-19 finally push education online? These are pivotal questions for higher education. Pivotal because the whole business model hinges on the answer.

First, it is worth noting that online education has grown, and it is now a huge part of the higher education landscape. While the number of traditional degrees has stagnated, online education has grown, and even prior to the quarantine it was normal for students to have taken at least one or two fully online classes. Despite a huge cost and convenience advantage, though, online college programs have not replaced traditional brick and mortar education. I don’t think that is an accident.

Classrooms Work

In-person education has lots of advantages. My friend Peter Boumgarden and his colleague Abram Van Engen write about the importance of a physical classroom for building relationships for learning.

When we moved online this March, we threw ourselves into the new mode, trying to use every tool available … Some of it worked masterfully; some of it flopped spectacularly.

But what was evident from the start—and only increased over time—was a palpable sense of thinning. The thick relationships that had grown up in our classroom began dissipating. Though everyone’s heads could be arrayed in close up across the screen, the disconnect from the previous environment meant it was surprisingly more difficult to gauge responses. And over time, more and more of those heads disappeared. While students stayed involved, individual screens gradually went dark, another and another each week, the video muted and a mere name flickering across the box. The usual problems naturally arose—faulty technology, failing wifi, fluttering monitors, and muted students—but even when things seemed on track, the environment remained radically altered. There was no classroom to hold us together.

They go on to build on writing by Agnes Collard in observing the following:

In some way, of course, Zoom offers a listener just as much as a classroom. So what is the difference? The difference, it seems to us, turns on the communal aspect of attentiveness crafted by coming together in a shared space. When the speaker is in the same room with you, maybe even right beside you, the sense of listening—and the importance of speaking—each become elevated. “Ordering thoughts is such hard work,” Callard goes on to say, “it takes effort to rise to the occasion, and being listened to by someone who can really listen is precisely the occasion worth rising to.”

This has been my experience as well. Even fairly well-crafted online education is inferior to in-person learning in a number of ways. My students reflected on the change in their work between the first half and the second half of last term and told me that the same amount of work felt far more onerous when it was all done on their laptops. The best students performed pretty well in the end, but my less accomplished students lost a lot when in-person meetings ended.

In short, I fully expect that students will recognize the difference between online and in-person learning, and be willing to pay for the latter. While online programs will continue to eat away at the margins, for the near term there will continue to be a substantial market for a traditional college classroom experience.

Colleges are more than classrooms

The other reason why the college experience is not likely to be replaced by online education is that colleges do so much more for students than offer classes. Boumgarden again, in a newsletter, reflects on the bundle of services offered by colleges. He offers the following list:

  • Educational products and services
  • Peer learning
  • Educational support
  • Degree signaling
  • Social networks
  • Social development

Boumgarden is skeptical that online programs can offer many of these services in a similar fashion. I agree. Colleges and universities offer a curated coming-of-age experience in a rich environment. Real competition would need to take the form of a collection of options that hit at least a majority of these services well. Prestigious online degree programs from top universities would hit two or three of these. They could certainly produce high-quality classes, and they might be able to manage some peer learning and degree signaling.

How do they keep standards high while also encouraging success? It would be very difficult to offer the support for students that would be needed to keep graduation rates reasonably high. It could so easily devolve into a detached sink-or-swim mental exercise for many talented young people.

What does the future hold?

The kind of techno-optimism (or pessimism) that drives the prediction that higher education will be replaced by online models is wrong in a very particular way. Electronically-mediated interactions are just not the same as in-person interactions, and electronically-mediated education has a very different character than in-person education. Quick plug: we delved into this deeply in our book about technology in Christian primary and secondary schools.

So here is my prediction: online education will continue to grow where it already has advantages: as a competitor for community colleges, for distance learning in graduate programs, and as a supplement to traditional in-person education. The competition from online programs will cut at the margins of the industry, but 20 years from now, the new online technologies will mostly have been absorbed by existing institutions, so that most colleges have both online and in-person offerings that complement one another.

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