Business Schools

The 'No-Frills' College of the Future


Tuition hikes are making college increasingly unaffordable. In the search for solutions, some schools are thinking outside the box

The 2009-10 academic year was one of the most fiscally challenging ever for many state universities and private colleges, and there is little indication that things are going to ease up for them this fall. So far, at least 43 states have implemented cuts this year to public colleges and universities, which has translated into large tuition increases to make up for the lost funding, according to an August report from the Center on Budget and Policy Priorities, a nonpartisan think tank in Washington, D.C. Meanwhile, nearly all private colleges and universities are struggling with shrinking endowments, and more students than ever need financial aid to afford tuition, according to the National Association of Independent Colleges and Universities (NAICU), a trade group in Washington, D.C. Tuition at private schools is up 4.5 percent this year, NAICU said. The problems that many of these institutions are struggling with are not likely to go away soon, since tuition increases can replace only a small portion of their revenue losses, says Jane Wellman, executive director of the Delta Project, a Washington, D.C.-based nonprofit research group. From 2008 to 2011, private and public universities have seen a drop in revenue of 15 percent to 20 percent, Wellman says, and those funding sources appear unlikely to return in the near future. "We've seen tough times in higher education before, but it typically touches public institutions more than private colleges and community colleges more than the elites. This one is touching everybody," she says. "Revenue is down, and student demand is higher than it has ever been before, so the pain is pretty severe." To deal with this new financial reality, schools are going to have to make permanent changes in how they spend their money and allocate student aid, says Wellman. In the past few years, some schools have begun to experiment with ways to cut costs, such as pooling their buying clout to negotiate better deals on everything from computer hardware to maintenance supplies and exploring alternative revenue streams from patents on university research to real estate deals. Now they're making more lasting changes in the way they deliver education and allocate resources, in the hope that those changes will result in more permanent savings for students and families. What follows is a progress report on some of the more innovative ideas: Three-Year College Degrees

Until now, the three-year college degree has been more popular in Europe, but in the past two years about a half-dozen private colleges and universities in the U.S. have launched three-year degree programs, says Tony Pals, a spokesman for NAICU. Last year four schools launched three-year programs, and this fall two Ohio institutions, the University of Akron and Ursuline College in Cleveland, are starting their own. "They will be watched closely by other colleges as well as policymakers," says Pals, adding that several other colleges are currently studying the feasibility of offering three-year degree programs. Public universities are also expressing interest in the idea. Last year the Rhode Island legislature approved a bill that allows Rhode Island College and the University of Rhode Island to offer students a streamlined three-year degree option. Other public universities may also consider an accelerated degree, as they grapple with enrollment caps and surging student enrollment, says Joni Finney, professor of education at the University of Pennsylvania in Philadelphia and vice-president of the National Center for Public Policy and Higher Education, a nonprofit group in San Jose. "It's an option that makes sense for public schools because it would reduce the cost to students, reduce the cost to the institution, and create room for other well-prepared students to go into those spots," she says. Still, she adds, very few of the schools that have implemented the programs so far have done major redesign of their curriculum. "Most of the three-year degree programs I've looked at," she says, "are just four years crammed into three." One of the more high-profile private schools to offer such a program is Hartwick College, a liberal arts school in Oneonta, N.Y., which launched its three-year bachelor's degree program last fall. The program allows students to shave a year off their degree and save $43,975, the cost of tuition and fees and room and board for a year, says Hartwick President Margaret Drugovich. To complete the degree, which is available in 24 of the college's 31 programs, students must add one additional class to their course load each semester as well as take classes during the college's optional January term. This fall, 29 of the 500 incoming freshman have signed up for the accelerated program, up from 18 in 2009, she says. "Students and families want the opportunity to get a high-quality education at a lower cost, so this is one way we've been creative and figured out a way to make it affordable," says Drugovich, adding that the school did not realize any savings as a result of the program. According to the most recent data from the U.S. Education Dept., 4.2 percent of U.S. undergraduates in 2001 completed their bachelor's degree within three years, 57.3 percent graduated within four years, and 38.5 percent took more than four years to graduate. It remains to be seen whether a three-year degree is a model that will appeal to a wide swath of students, says Pals. "There is a very small percentage of students who choose to do a three-year degree," he says, "but given the economic downturn and the ever-growing concern among consumers about the growing cost of college, that could very well start changing." The Online Option

Online players such as the University of Phoenix (APOL) and Walden University have dominated the distance-learning sector for years, but now some of the more selective among traditional brick-and-mortar universities are starting to explore the possibility of offering more undergraduate classes, and perhaps eventually degrees, online. "The for-profits have gotten ahead by moving online first, so the public and private universities are catching up with them now," says Gerald DiGiusto, a senior analyst and research manager at Eduventures, a market research firm in Boston. One institution hoping to make an inroad in online education is the University of California system, which is launching an ambitious pilot next year that will create online for-credit courses it says will be up to the standards of the more "high-end, selective" universities in the country, says Daniel Greenstein, U.C.'s vice-provost for academic planning, programs, and coordination. The pilot will include nearly 30 introductory-level classes, such as Freshman Composition or Introductory Psychology, Greenstein says. "The aim is really to explore the extent to which online learning can be integrated into the undergraduate curriculum of an elite research university," he says. The university will be spending about $3.5 million on the project and expects to roll out the courses to students as early as the fall of 2011. If the pilot succeeds, the school hopes to become an online education leader among top-ranked schools and envisions offering online textbooks, delivering the classes to students at other universities, and perhaps eventually offering an online bachelor's degree, says Greenstein. Like many public universities across the country, the University of California system has seen a large cut in public financial support in the past few years and is struggling with many over-enrolled classes, forcing students to take longer to complete their degrees. More than 80 percent of the students who entered the system in 2001-02 graduated in six years, according to the 2010 annual accountability report released by the University of California. That's one reason why the school is looking for alternatives for students, says Greenstein. "If we can make our courses more readily available to students so they can get their degree in a timely way," he says, "than that will be a huge victory." Welcome to the Math Lab

In the past decade, about 100 universities and colleges across the country have worked closely with the National Center for Academic Transformation (NCAT), a small nonprofit in Saratoga Springs, N.Y., to help them improve student-learning results by rethinking how they deliver courses. One of the ways NCAT achieves this is by helping the schools weave technology more seamlessly into their curriculums, which has allowed many of these schools to accommodate more students while also reducing the schools' cost of instruction, says Kevin Carey, policy director at the Education Sector, which recently published a paper on NCAT's efforts. Education Sector is an education policy think tank in Washington, D.C. "I think there are a lot of opportunities for colleges to increase their own productivity and to spend more wisely than they have in the past by using information technology," Carey says. Universities participating in pilot projects led by the NCAT have redesigned many of their large-enrollment introductory courses, such as pre-calculus, psychology, Spanish, and statistics, according to NCAT's website. One of the more popular course redesign models promoted by NCAT reduces the number of in-class meetings and increases computer lab time. Virginia Tech, a large public university in Blacksburg, Va., was one of NCAT's first success stories. The school underwent a redesign of its lower-level math classes that led to students doing some or all of their coursework in an on-campus computer lab called the Virginia Tech Math Emporium, where teaching assistants, instructors, and professors are on duty 80 hours a week to help students, allowing for more individual interaction. By revamping the curriculum of a 2,000-student linear algebra class, the school was able to reduce the cost of delivering the course from $182,000 to $42,000, without hurting student learning results, according to the Education Sector paper. Other schools have reported similar successes; of the 30 two-year and four-year institutions that underwent course redesigns from 1999 to 2004, all cut costs 37 percent, on average, ranging from 15 percent to 77 percent, according to a report on the NCAT website. Collectively, the redesigns affected more than 50,000 students nationwide and resulted in a savings of $3.1 million in operating expenses each year, NCAT says. In the past three years, NCAT has worked with the State University of New York System, the University System of Maryland, and the Arizona Board of Regents to help them transform courses. While NCAT's pilots have primarily been success stories, it could take years before these types of course redesigns are implemented on a larger scale at universities across the country, Carey says. "In a lot of ways, we are still scratching the surface in terms of what technology can do," he says. College Without the Frills

A stripped-down bachelor's degree that offers students the same education at about half the price is an idea that has gained traction at a handful of schools across the country in the past few years. In many ways it duplicates a well-traveled academic path that many college students have created on their own: two years at a low-cost community college, followed by a few more at a four-year institution. Southern New Hampshire University, a private school in Manchester, developed an alternative to the traditional four-year college degree in the fall of 2008 called the SNHU Advantage Program, which offers students the option of taking their first two years of school at an off-campus office building equipped with classrooms and computer labs. Rather than paying $36,000 for tuition, room, and board at the main campus, students in the Advantage program pay just $10,000 a year and can earn 36 credits a year, says Karen Goodman, director of the SNHU program. At the end of the two years, students receive an associate's degree in liberal arts and have the option of transferring their credits easily to the main campus, where they can go on to get a bachelor's degree, Goodman says. The program was designed for students seeking a lower-cost alternative to the full-time day program, as well as a classroom experience offering smaller classes and more support, she says. "I consider it a meat-and-potatoes type of education," she says. "You come in and get your work done and leave. It's that whole no-frills concept." The program has been a success for the school; so far, 87 students have gone through the program, and of those, about 75 percent have transferred to the university's full-time day program. Applications to the Advantage program were up about 10 percent this year, and 22 students will be entering the program this fall, says Goodman. Other universities are exploring similar programs. Last year, Pennsylvania's State Board of Education proposed creating a "no-frills" public-college alternative. Arizona State University is looking at launching new programs that will offer students the chance to get a bachelor's degree for significantly less than what students currently pay for in-state tuition and fees, says Michael Crow, Arizona State's president. Tuition for new in-state residents taking more than seven credit hours is $4,067, according to the school's website. The new program, which Crow says he hopes to launch in the next year or two, will offer students three or four degrees, such as business communications and liberal arts studies, and the curriculum will place an emphasis on technology and "outcome-based learning," he says. "We're not giving up on quality, but by using technology and every innovation we can bring to bear, we think we can offer students these degrees for 40 percent to 50 percent less," says Crow. "To do that, we have to be absolutely, unequivocally innovative."


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