Information Technology Will Lower the Price of College, or Else...

Journalist Fareed Zakaria discusses the true cost of American higher education and the structural changes that must take place to correct an unsustainable trend.

Fareed Zakaria: The problem of the cost of college is an enormous one and it’s real. And frankly it’s true whether you’re a liberal arts grad, you’re an engineering graduate because you’re still facing those issues of debt and is it worth it. So I have a few things to say about that. First is the data still shows that a college education is worth the investment. That is your earnings will be higher over your lifetime because you have a college degree and they will be significantly higher than the cost of that college degree over the lifetime. Point one. Two, there isn’t that much difference in the lifetime earnings of an engineering graduate and a non-engineering graduate. The engineering graduates start out higher, but it equalizes after a while. Point three, the real change that one has to hope is happening is that the cost of college is going down and that it will therefore allow people to be more experimental, to follow their passions, to pursue what they want to. And the cost of college is going down because information technology and the information revolution are finally hitting colleges, finally hitting education. Education is a field remarkably unchanged basically in, you know, several thousand years.

And if you think about the way the ancient Greeks taught at schools — a guy would stand up in front of a classroom, teach a bunch of people; they would listen and that’s really what a college seminar is even today, right. But now it’s changing because online education is going to massively change the way in which education is delivered, but also the way it is priced. And if that happens my hope is that it will produce a huge expansion of liberal education for everybody, but it will also allow people to be more risk-seeking in terms of their educational choices. If you’re paying, you know, a thousand dollars for 20 online courses, then it’s not as difficult to say I’m just going to follow my passion, get really good at this, perfect it, do really well, and whether it’s English or history or philosophy or physics or chemistry, you will do it in a way that really reflects who you are and your intellectual curiosity. And you’re probably going to be better at it if you do something you’re passionate about.

If universities cannot get their cost structures under control, we have a problem no matter what. And the problem is frankly beyond the issue of liberal education. It’s STEM, or engineering. It is just that it is getting to the point where it is unaffordable. We have a problem with two areas of our economy. We have wrung inflation out of every other aspect of the economy in the last 40 years. The two areas where costs have risen several times the rate of inflation for 40 years now are health care and education. And they share some similar characteristics. In both cases, the consumer tends to be somewhat price-insensitive because they view this as something that you can’t put a monetary value on. The customer is not the person actually paying. Often there’s a federal government or governmental involvement with lots of third-party payments. So the price signals are complicated and muted. The consumer is not as price-sensitive and that allows for enormous amounts of cost distortion and frankly inflation. So I think that in both areas you’re going to see information technology begin to change that dynamic. And if it doesn’t happen, look, you can’t have education rise at three times the rate of inflation for another 30 years. That is simply unsustainable.


 

 

It's no secret that the inflated cost of American higher education is a major problem that needs to be addressed. The cost of college cannot be allowed to continue to rise at three times the rate of inflation for another 30 years. That is simply unsustainable. In this video, journalist Fareed Zakaria addresses three key points related to the true cost of American higher education. First, it's still a good investment despite the price. Second, it's a myth that there's a huge difference in the lifetime earnings of an engineering graduate and a non-engineering graduate. Third, if the cost of college goes down, it will allow for a new era of experimentation in education. Paramount to Zakaria's third point is that it's taken far too long for information technology and the information revolution to tackle higher education. Major structural changes rooted in new technologies must be allowed to happen because the alternative is a total collapse of the education system.

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As you vote, keep in mind that we are looking for a winner with the most engaging social venture pitch - an idea you would want to invest in.

Lumina Foundation and Big Think have partnered to bring this entrepreneurial competition to life, and we hope you'll participate! We have narrowed down the competition to four finalists and will be announcing an audience's choice award and a judges' choice award in May.

The creator of the winning video — chosen by Big Think's audience, the Lumina Foundation, and an independent panel of experts (bios below) — will be flown to New York for a taping in the Big Think studio as a way to further promote their vision for a new, disruptive idea in post-secondary education.

Thank you to all of the contestants who spent time submitting applications, and best of luck to our final four competitors.

Finalist: Greater Commons - Todd McLeod

Greater Commons, founded by Todd McLeod and Andrew Cull, is an organization that helps people live happier, more successful and fulfilling lives through agile learning. The current education system is inefficient and exclusionary, in which many students who end up earning a degree, if at all, enter a career not related to their field of study. Greater Commons solves this problem and gap in post-high school secondary education in a variety of ways. Passionately and diligently, Great Commons helps others obtain skills, knowledge, wisdom, motivation, and inspiration so that they may live better lives.

Finalist: PeerFoward - Keith Frome

PeerForward is an organization dedicated to increasing the education and career success rates of students in low-income schools and communities by mobilizing the power of positive peer influence. PeerForward works with partner schools to select influential students as a part of a team, systemizing the "peer effect." Research in the fields of sociology of schools, social-emotional learning, adult-youth partnerships, and civic education demonstrates that students can have a positive effect on the academic outcomes of their peers. PeerForward is unique through its systemic solutions to post-secondary education.

Finalist: Cogniss - Leon Young

Cogniss combines technology and best practice knowledge to enable anyone to innovate and share solutions that advance lifelong learning. Cogniss is the only platform to integrate neuroscience, through which it solves the problem of access by providing a low-code platform that enables both developers and non-developers to build sophisticated education apps fast, and at a much lower cost. It addresses the uneven quality of edtech solutions by embedding research-based learning design into its software. App creators can choose from a rich set of artificial intelligence, game, social and data analytics, and gamification to build their perfect customized solution.

Finalist: Practera - Nikki James

Practera's mission is to create a world where everyone can learn through experience. Today's workplaces are increasingly dynamic and diverse, however, costly and time-consuming experiential learning is not always able to offer the right opportunities at scale. Many students graduate without developing the essential skills for their chosen career. Practera's team of educators and technologists see this problem as an opportunity to transform the educational experience landscape, through a CPL pedagogical framework and opportunities to apply students' strengths through active feedback.

Thank you to our judges!

Our expert judges are Lorna Davis, Dan Rosensweig, and Stuart Yasgur.

Lorna Davis is the Senior Advisor to Danone CEO and is a Global Ambassador for the B Corp movement. Lorna has now joined B-Lab, the non-for-profit that supports the B Corporation movement on an assignment to support the journey of large multi nationals on the path to using business as a force of good.

Dan Rosensweig joined Chegg in 2010 with a vision for transforming the popular textbook rental service into a leading provider of digital learning services for high school and college students. As Chairman and CEO of Chegg, Dan commits the company to fulfilling its mission of putting students first and helping them save time, save money and get smarter.

Stuart Yasgur leads Ashoka's Social Financial Services globally. At Ashoka, Stuart works with others to initiate efforts that have mobilized more than $500 million in funding for social entrepreneurs, engaged the G20 through the Toronto, Seoul and Los Cabos summits and helped form partnerships with leading financial institutions and corporations.

Again, thank you to our incredible expert judges.