It’s no secret that fewer students enroll in college every year. Since 2010, college enrollment has seen an 11% downswing while the average tuition has continued to climb. Consequently, many marginal students and first-generation students have chosen to forgo the opportunity of going to college for the sake of their savings. While the data clearly shows that college graduates benefit from higher average salaries (see Table 1), who can blame them? Can you really expect a 17-year-old high school student to understand the complexities of paying off hundreds of thousands of dollars for a longer period than they’ve been alive? We need not delve further into valuing a college education; for the sake of argument, we can say with confidence that the value of a higher education has come into question.
To read more about how the value of higher education is coming into question, read here and a rebuttal to the former here.
It’s Not Always About the Money
The reasons outlined above are purely financial, so how does EdTech fit into the picture? A cursory Google search of the title of this substack article will yield a plethora of articles affirming the notion that EdTech will save American higher education. Digital initiatives and student success software are certainly a great help for institutions, but what about all of the learning that goes on outside of university settings?
Online learning outside of classrooms has become increasingly popular in recent years. 49% of students worldwide have used online learning, and 63% of students in the US use online learning technologies daily. Online learning has grown 900% since it was born out of the dot-com bubble. Academic institutions do not hold the same grip on the market as they once did when our parents went to school. Massive open online courses (MOOCs) have taken a foothold in the market. E-learning companies like Coursera, Udacity, and Skillshare are all at or near valuations over $1 billion in an industry valued near $400 billion.
These platforms offer focused, accessible learning at a price point that is close to free. Online classrooms and virtual lessons empower learners to take courses asynchronously and on topics specific to their interests. The specificity of this education is not offered as prominently in undergraduate education; students must, in many instances, complete a general education before being able to take their major-specific courses. This does have its pros, but not every student needs to take this path, especially those who have already chosen not to pursue a college degree for financial reasons.
Prominent Players
There are a few platforms solely focused on bringing high-quality information and courses to learners. Most notably, on YouTube, thousands of videos exist pertaining to just about any topic imaginable. Many such videos were designed around courses and are completely free to the public. Making use of these videos is edX. They offer an extensive catalog of online courses teaching skills like programming, machine learning, writing, or just about anything else of interest.
The possibilities for new companies are endless, and within our sourcing efforts, we are exposed to numerous alternatives to the classroom setting. However, there is much more to the industry than attractive learning alternatives.
EdTech for Institutions
While the EdTech industry continues to find new ways to get learners involved for a low cost outside of the classroom, it is also important to understand how colleges interact with companies in this broad space. Thus far, we have touched on how companies looking to promote learning in new ways are making it possible for students with less financial abilities to advance their learning and avoid the debt that many are currently inheriting. This battle for validation is not the only relationship the EdTech industry has with colleges. There is a side that significantly benefits universities, so much to the point that it had to be regulated.
Earlier this year, the US Department of Education issued a new set of requirements and responsibilities for third-party services and institutions. Simply put, colleges collaborate with EdTech companies that provide different services to support various online programs. The DOE highlighted that in one area, recruiting, the practices of these companies were adding to the student loan debt crisis. Once again, can you really blame the 17-year-old? Not always. But you can blame companies that are convincing students to avoid traditional university study by enrolling in online programs with a university name attached.
There is significant evidence to support the idea that online learning and EdTech companies do enhance student productivity and experience at universities. It is important to understand how companies and universities are using their reach to attract new students to the point of regulation, which also does not benefit their desire for higher enrollment.
Set in Stone
As the American job market evolves, so too will the expectations of employers. We have seen a shift thus far in the need for credentials from employers. Many are transitioning to the belief that if someone has the skills to do a job, a formal degree is not necessary. EdTech platforms do provide certifications in many skills at fractions of the price of higher education institutions.
There is no doubt that a college degree is worthwhile, and a strong network from college is worth its weight in gold. However, the rise of online education, especially at the price point at which it is offered, shows there is still plenty of room disruption. Without some potentially major overhauls to its structure, the American higher education system could be in serious trouble. AI has just gotten the ball rolling, and a whole new educational landscape may be right around the corner.