Unbundling — the future for higher education?

Conclusion: The hollow middle

What will an unbundled education system look like? As we saw in part one and part two of this article, an unbundled uni would be a deconstruction of the traditional (some might say elitist) model. It means significant increases in online learning, and it means students can, to an extent, ‘pick and choose’ the elements they want, and disregard what they don’t want. So far, so good — in theory.

A key point here is that those universities that thrive will be either high-end, prestige institutions, or start-up, disruptive, innovative models that can be agile and trim costs. The middle tier is eroding. Ryan Craig and Alison Williams in Educause Review outline this trend: ‘In a survey of 368 small private colleges and midsize state universities, 38 percent failed to meet their 2014–15 budget for both freshman enrollment and net tuition revenue. Even more shocking, approximately half of institutions that claimed to hit budget were reporting against downward-revised budget numbers.’ For Williams and Craig, ‘like the retailer and restaurant markets, the middle of the higher education market is being hollowed out from both the top and the bottom. Currently, the vast majority of institutions are somewhere in the middle, providing mediocre returns for $10,000–$20,000 per year.’

What will this hollowing-out look like in practice? Students will find that ‘institutions will provide a higher return on investment. Whereas discounters are likely to deliver their programs primarily online, premium providers will utilize technology for some delivery but will focus on immersive, intensive, employer-focused and -facing experiences for students.’

If we accept the ‘hollowing out’ theory of unbundling, next we have to ask what the landscape looks like over the next five to ten years. Ryan Craig: ‘Forced to demonstrate definitive value, midtier institutions will have to decide what they want to be when they grow up. If they’re in the business of providing basic degree programs — where value to the student accrues primarily as a result of the credential itself — they will become a discount provider: delivering the program as inexpensively as possible. If they can truly provide premium programs with a high return on investment, they will be able to continue to charge high tuition. What they must not do — if they want to survive — is stand still.’

In other words, the two-tier university system mentioned above becomes a reality. From the student’s point of view, there is increased access (for those who can’t afford conventional university programmes, or are unable to study for geographical or other reasons). But there also comes responsibility and a need to make challenging decisions — not something every eighteen-year-old is equipped to make, and which the bundled system organises for you. Craig argues that the unbundled system needs to address this. ‘Too few are thinking about how to help students make sense of and navigate this emerging, unbundled world and integrate the modular pieces together in ways that help them carve out a coherent and sensible life path,’ he says, arguing it’s an essential point to make because ‘in a personalized learning future, every single learner will have a custom fit educational pathway.’

Future pointers

On the other hand, unbundling might make the educational journey easier. ‘Focus groups conducted at Macomb Community College in Michigan, offering 200 degree and certificate programs to 48,000 students, revealed that very few students were able to navigate the complexities of enrollment, financial aid, transcript requests, prior credit recognition, program selection, and course selection/scheduling,’ reveals Craig. ‘Because of the flawed transfer-credit system, students have difficulty identifying pathways toward a degree if they’re changing institutions — something that a large percentage of them will do over the course of their studies.’

Finally, a quick word about MOOCs (Massive Open Online Courses). For Jose Ferreira, CEO of Knewton, MOOCs are not unbundled forms of university. Using the theoretical example of an unbundled company we saw in part one of this article, Ferreira argues that ‘these courses wouldn’t be MOOCs. MOOCs represent the unbundling of the course itself; they strip away the credits, and most of the high-quality materials and support services, to offer just lectures.’

Whether you see unbundled education as utopia or ‘appalling’ rather depends on which end of the telescope you are looking down. Either way — it’s important to identify that this seismic shift is underway. Students need to learn how to navigate their way round it — and providers need to address how they’re going to adjust to it. How things shape up over the next decade will prove to be fascinating.