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The High Cost of College: Is Tech Part of the Problem or the Solution?

With students drowning in debt, CT examines the role of technology in the overall cost of a college education--and its potential for reversing a pricing model that is unsustainable.

Illustration by James Steinberg

The news these days is filled with headlines lamenting the high cost of college. Tuition and board at top schools now exceed $50,000 per year. Upon graduation, the average student is $25,250 in the red, according to a report from the Project on Student Debt, while the total of the nation's college debt now exceeds $1 trillion. So what exactly is the role of technology in all of this? Has technology managed to keep costs from rising even faster, or are schools guilty of using technology--whether they're issuing students iPads or offering premium movies in residences--as one more weapon in an institutional arms race?

It's a complex question for which there is no simple answer. In the arena of teaching and learning, however, it does appear that technology has--for the time being, at least--increased the cost of education. That's the conclusion of economists Robert Archibald and David Feldman in their book, Why Does College Cost So Much? (Oxford University Press, 2010). In their view, the increase in spending is not part of some frivolous splurge, but stems from a fundamental need to provide a relevant education in a tech-oriented world.

"We argue that the changes in higher education have been largely cost increasing, and that they have been driven by the needs of students and employers in the contemporary labor market," they write. "In plain language, our product is different today in important ways, and being up-to-date has raised cost."

Put another way, if schools want to provide their students with an education that is relevant to today's workplace, they have no choice but to spend on technology. And computers are more expensive than chalk.

"Part of any reasonable explanation of what's happened to the cost of providing higher education has to include the fact that a lot of these technologies we are introducing our students to and allowing our students to utilize add to the expense," explains Archibald, who is chancellor professor of economics at The College of William and Mary (VA). "But the fact is, if we didn't provide those technologies, we'd be providing a very low-quality education. The technology is expensive, but it's a matter of keeping up with what's going on with the rest of the world."

When Archibald talks about keeping up with the rest of the world, however, he means from an educational standpoint, rather than vying for the affections of tech-hungry students with knee-jerk tech spending.

"It was a big story a few years ago that schools were supposedly competing to become PC Magazine's most wired campus, but I honestly don't see this as some sort of arms race among institutions," he notes. " If there were only one college in the world, that college would still have to invest in technology to serve its students. It's about doing a first-rate job of preparing your students to go into that world."

What Is Necessary?
But the delineation between tech spending that is necessary as opposed to elective is not always clear-cut. Take, for example, the explosion of iPads on campuses. The excitement about the device shows no signs of abating, and students are obviously enthralled by it. Yet it could be argued that the iPad represents the bleeding edge of educational technology, with the buzz based more on its potential than on its ability to address specific educational issues. Indeed, the profusion of sessions at ed tech conferences on how to use iPads in teaching is, in many ways, a testament to the fact that iPads are not filling an obvious role in the current educational setup.

Whether the iPad proves to be transformational or not is moot, however. The point is that many schools are investing heavily in a technology whose identified use is still in its embryonic stages--and at a time, moreover, when many faculty aren't even engaged with their schools' LMS. The question is why?

While Archibald is dismissive of the idea of technology spending being part of an expensive arms race among colleges, other educators are equally adamant that this is exactly what is happening. In fact, they assert that a school's tech cred--whether it's a robust wireless network or a shiny new iPad--is a key factor in attracting prospective students.

"Ten years ago, the top three questions the students visiting a campus asked were: 'Where's the fun stuff (sports and drinking)? How's the food in the residence hall? And what's the computer connection in the residence hall?'" notes Ron Bonig, a research director in Gartner's higher education group. "Now it's: 'Can I bring my mobile device? Can I sign it onto your network? And how ubiquitous is your wireless? And, by the way, are you sure you have a 100 MB connection in the dorms?' The truth is, if you don't offer a reasonable tech package, the best students go elsewhere."

And seen through traditionalist eyes, much of what constitutes a "reasonable tech package" has little--if anything--to do with improving the quality of teaching and learning on campuses today. From a purely educational standpoint, for example, ubiquitous wireless service is convenient, but certainly not essential. And what of the enormous bandwidth devoted to satisfying student passions for streaming video and gaming--as much as half of the entire bandwidth available at private colleges, according to a survey by Campus Televideo, a satellite provider of telecommunications?

But the idea of colleges competing with one another as part of an institutional arms race in technology may be missing the real story. What if schools aren't trying to outdo the Joneses? What if they are simply trying to keep up with student expectations? Are students themselves driving up the tech-related cost of college?

In short, yes. The demand by students for top-flight services and facilities may have something to do with the student-as-customer model of business that now permeates much of higher education. This model has flipped the traditional educational paradigm on its head: Instead of feeling privileged to have the opportunity to learn from distinguished academics, many students now view their higher education experience in much the same way they do a weekend at the Hyatt. A 2008 study of 1,025 students at the University of South Alabama, conducted by assistant professors Zachary Finney and Treena Gillespie, discovered that 52 percent of respondents considered themselves customers of the university.

This attitude has only been exacerbated by the consumerization of IT and the stunning speed with which technology has infiltrated every facet of life. For a college to lag behind the local Starbucks in wireless connectivity, or to provide less bandwidth than a residential cable provider, may well have long-term implications for its competitiveness and its brand.

The effects of both these trends are being felt in academic and non-academic areas of campus. In college residences, for example, students expect a level of services unheard of two decades ago. "We need to offer an equivalent experience to what you would get living at home," says Ben Price, director of residential information systems and technology at the University of California, Santa Barbara.

But the classroom is not exempt either. Increasingly, students expect to see the tech systems they take for granted in their daily lives incorporated into the fabric of their learning, too. "Students are becoming more and more reliant on technology, and we can't continue to have them 'power down' when they walk into a classroom," says Don Chaney, assistant dean for distance education and outreach in the College of Health and Human Performance at the University of Florida. "Our educational system must evolve into more online and mobile environments."

And what of the cost? Surprisingly, as an overall percentage of their budgets, schools spend relatively little on IT. Gartner estimates that colleges and universities run their IT departments on 3.5 to 5.4 percent of their yearly budgets on average. Larger universities spend less as a percentage than smaller colleges, because of economies of scale.

Even then, these numbers are not reflective of what schools actually spend on student-facing technology. According to Bonig, much of a school's IT budget is directed strategically toward improved administrative and management capabilities--enrollment systems, CRM software, and content-management solutions--all of which he believes ultimately cut costs.

Where IT Saves Money

As college CIOs are painfully aware, their organizations are seen as cost centers. And with concern growing about the high cost of college, plus lingering budget woes stemming from the Great Recession, the pressure to cut falls disproportionately on areas that are considered money drains. In a recent Gartner survey of approximately 200 CIOs of US colleges and universities, about 60 percent of respondents reported that their IT budgets were flat over the previous year or slightly down. The budgets of the other 40 percent were up only slightly.

These anemic numbers are simply a continuation of a period of flatlining budgets that date back several years, even as enrollment continues to rise and IT faces enormous technical challenges in an era of BYOD. To cope, CIOs are using every weapon at their disposal--virtualization, outsourcing, contract renegotiations, layoffs, and resource reallocation. But is it fair for IT to be branded as an out-and-out cost center? As a service organization, IT also plays a significant role in helping other university departments save large sums of money--savings that help keep the cost of college down. Shouldn't IT get some credit for this?

Bill Carter, vice chancellor of IT at Houston Community College (TX), thinks so. He is on a mission to turn IT from a cost center into a cost-neutral operation. To achieve that, he goes to great lengths to quantify the savings stemming from every project IT undertakes. Savings totaled $9 million last year, $8 million in 2009-2010, $4 million the year before that, and $2.9 million in 2007-2008. Those savings have come primarily in the area of administrative systems:

  • Automation of the time-sheet system: $2.3 million over two years
  • Outsourcing of student payments: $500,000 per year
  • Outsourcing of student refunds and financial aid disbursement: $1.3 million in year one, $1.4 million in year two
  • Automation of enrollment systems: $500,000 per year

In 2012, the IT department at HCC expects to cover 77 percent of its total budget in efficiencies of investment. Although Carter hopes his group will be cost-neutral in two years, Robert Archibald, chancellor professor of economics at The College of William and Mary (VA), is skeptical that college IT departments will ever be anything other than a cost center--or that IT can accurately quantify the savings that it does create.

"I'm inclined to think that the cost savings are overwhelmed by the cost increases," he says. "We have efficiencies in administration, getting out assignments, communicating with students, et cetera. But that's very difficult to quantify. That's actually a quality enhancement. You can't easily measure quality-corrected costs. If you're just looking at the books of an institution, the amount of money spent on information technology has gone up. I don't think there's any question about that."

Even if tech spending isn't a primary driver of costs on campus, it would still be presumptuous to assume that IT is off the hook when it comes to the affordability crisis. For students coughing up $40,000-$50,000 per year, even a couple of percentage points is serious money--money that has to be borrowed in many cases.

But would students give up their "reasonable tech package" in exchange for lower fees? It's doubtful. A survey a few years ago at Washington State University revealed that students valued good network service above operational bathrooms. One possible solution is to let students choose--and pay for--a tech package that suits their specific needs. As it is, many schools already levy technology fees that give students the option to purchase additional bandwidth. Such an approach would not work in the classroom, however, where all students need equal access.

But it is in the classroom that non-administrative tech spending can probably be best justified. Educators across the country have seen the potential of technology to transform higher education as we know it--to be able to provide students with personalized, engaging instruction on their terms.

To achieve that goal is not the work of a moment. Colleges and universities have a long way to go--missteps will occur and money will be wasted--but a better educational experience is a laudable end point. It is not an argument that can be made about expensive new stadiums, sports complexes, or fancy dining halls. As higher education responds to mounting pressure to reduce fees, the challenge facing CIOs is to prove that IT's tech spending provides a bigger bang for the buck in the one area that really counts--student learning.

Is Online Learning the Antidote to High Costs?

While tech spending may contribute to the high cost of college today, does it also hold the secret for reducing these same costs tomorrow? For Sebastian Thrun, the answer is probably yes. A former professor at Stanford University (CA), Thrun quit his position to launch Udacity, a company geared to teaching online computer science courses for free. More than 160,000 students from 190 countries enrolled in its first class, "Introduction to Artificial Intelligence," and it has offered an additional six courses so far.

Udacity is just one of several major initiatives in the online space in recent months. In May, for instance, Harvard University (MA) and the Massachusetts Institute of Technology announced edX, a joint venture that will offer free online courses from both universities. While some educators blanch at the thought of technology being used to deliver education on a massive scale, it's also clear that the precipitous increase in the cost of a traditional education is not sustainable.

While free instruction has obvious appeal--especially when the professors come from the top of their fields--it's unclear whether employers will embrace students whose higher education consists solely of participation in these pioneering endeavors. Udacity hopes to make its profits by referring qualified students to potential employers. For their part, Harvard and MIT do not intend to put their names on any certification given to students who complete an edX course of instruction.

At the other end of the spectrum, consider established institutions such as the University of Southern California and Purdue University (IN), which do put their names on degrees earned by online students. Tuition fees for online learners at these schools are essentially the same as for those students who attend in person, even though online students never avail themselves of the physical facilities on campus. In effect, students are paying for the brand--the stamp attesting to the value of the education received. And as long as brick-and-mortar institutions remain the primary generators of revenue, their online degrees are unlikely to be priced much lower. Indeed, it's quite possible that the cost of a quality college education will only decline when online-only initiatives achieve their own brand recognition.

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