Higher Ed Commoditization

Joshua Kim reviewed Now and Then Reader's 'Why American Newspapers Gave Away the Future' by Richard J. Tofel in today's edition of Inside Higher Ed.  In his review, Kim looks at what higher education can learn from the mistakes that the newspaper industry made as they adapted to the offerings of the digital world.

In the news world, newspapers neglected to make investments in the reporters and editors that were the traditional comparative advantage of print media, and could have provided the service (in-depth reporting) that could have motivated readers to keep paying for content. In higher ed, we should be sure to invest in our greatest resource - our faculty - as we depend on the teaching and research that they produce to bring in students and research dollars. 

Read more: http://www.insidehighered.com/blogs/technology-and-learning/4-higher-ed-lessons-why-american-newspapers-gave-away-future#ixzz1qcVbGhaX
Inside Higher Ed 

The questions Kim asks are particularly resonant with yesterday's news that Santa Monica College plans to implement a tiered-pricing plan for their classes. Students trying to get in to the most popular classes, will pay more to gain access to the courses they need.    The changes are proposed in response to over-enrollment in the College at a time when budget cuts have reduced faculty and thus capacity. David Blaine of the American Association of Community Colleges is quoted in yesterday's New York Times article on the plan:

But the impetus behind it, he said, is clear. “In many cases, and California most prominently, amid the recession there was a huge spike in enrollment concurrent with budget cuts,” Mr. Baime said. “The colleges have just maxed out in terms of how many students they can serve.”

The fact that this new structure, the first of its kind, is being implemented at a community college level as opposed to a private university is particularly concerning and raises the questions of the responsibility of community colleges, in general.  It seems  logical conclusion that the two-tiered pricing system will exclude students who cannot afford to pay for the higher classes. Just as it is with the rest of the commodities we're offered in all aspects of daily life, choices will have to be made by those on tighter budgets; and, in most cases, the lower cost, and subsequently lower-value option will be chosen.

Clearly, if Santa Monica College's new system gets approved by state regulators, it be replicated in other schools, both private and public.   Since demand raises prices across all realm of products, be it nanny services or haircuts, the cost of higher education will continue to rise.

But what if Santa Monica College's pricing system has the reverse effect?  Could an ad hoc pricing structure further commoditize education services driving students to look for alternate learning resources and subsequently bring the prices down.  As Kim points out, just as the newspaper industry faced competition from websites in the early 2000s, today's traditional higher ed institutions are already facing growing "competition" from places like Udacity, Khan Academy and others.   Despite the anger voiced by protesters at Santa Monica College, there are more and more learning opportunities available everyday. Widespread acceptance of a tiered pricing structure could potentially fuel further competition and with that, improve the quality of the product. Not necessarily in the form of a new gym or student union, which  Richard B. Schwartz points out in "Is a College Education Still Worth the Price?" has become a troubling priority for many institutions, but in the form of a better education. For all.