Free your mind – The push for cheaper textbooks

As anyone who reads this blog knows, the cost of education is an important topic for us. One of our goals is to expand the number of education options for everyone in the entire world. Lots of people are trying to do similar things, especially those in the movement to have more open source educational material.

Textbooks, Senate, Cost of Education

Senators propose public funding for free textbook creation.

Those folks are getting some support from two US senators. Senator Dick Durbin of Illinois and Senator Al Franken of Minnesota have proposed a bill to offer public funding for the creation of education textbooks on the condition that the material then be offered free of charge.

Here’s what Senator Franken said about the bill.  “I’m proud to introduce this bill because it will help provide cheaper alternatives to traditional textbooks and keep more money in students’ pockets, where it belongs.” Here is what Al Franken said when he used to be an actor on Saturday Night Live. I bet he’s proud of that, too.

Textbook costs are more significant than one might think. The average student at a four year public university spends about $1200 per year on textbooks, according to the College Board. Since 1978, the cost of textbooks has risen 812%, according to this analysis from Mark Perry of the American Enterprise Institute. That is higher than the growth rate for healthcare, real estate, and general consumer prices.

The high costs translate into big business for education publishers as well as textbook renters and re-sellers. They are reluctant to cede that market to the open source movement. That does not mean they are not preparing. The three largest publishers, London-based Pearson, New York-based McGraw-Hill, and Boston-based HoughtonMifflin Harcourt, are all working on digital content strategies. Check out more about that in this great article by Michelle Davis at Education Week.

In terms of the Senate bill to fund textbook creation, I can see a potential problem. I am no hardcore capitalist or anything, but if the funding comes without regard to how often the textbooks are used, then the authors lose some incentive for making engaging, high quality content. They don’t need to be as competitive. That may or may not be a problem. Time will tell.

On the positive side, the increasing use of electronic formats for e-readers and laptops could reduce textbook costs further and expand the reach of free educational content. The benefits could easily overflow the borders of the US, helping students around the world.

At Rukuku, we’ve done our best to make content creation as painless as possible. Our Composer feature allows teachers to simply cut and paste text, graphics, and video into class worksheets.

The trend, regardless of whether this bill passes or not, is toward open resources. Composer can help teachers organize those free resources into class materials. Those materials can then be shared, or possibly even sold, on Rukuku’s Marketplace.

Rock Enroll: Fewer people enroll in post-secondary education

College costs are going up. Everybody’s talking about it, including us. The tricky thing is, if prices are going up, and enrollments are going up, then shouldn’t that be a sign that college is not overpriced. I mean, people are still willing to pay for it. Just simple economics, right?

College, University Enrollment, Students

Enrollment in Post-Secondary Education Falls

It is actually not simple economics, as there are all sorts of arguments on the societal benefits of having a well-educated population as well as arguments that education is not your typical consumer good. I’m not going to get into those in this particular post.

Instead, I am going to highlight an interesting stat released by the US Census Bureau a few weeks back. After more than a decade of rapid growth, college enrollments are going down. In 2012, the total number of students enrolled in college fell by half a million from the year before, according to their figures.

Why did that happen? I don’t know but that’s not going to stop me from pointing out some possibilities.  The most obvious of those is price. As we’ve pointed out before, educational costs grew by 165% from 1993 to 2011, faster than general inflation and medical costs. The pace of increase is slowing, luckily, with prices at public four year universities up only 2.9% in 2012, according to the College Boards.

On the other side of that same coin is the job market. Job prospects are dim and have been for many years. A college degree will make that job search easier, but high school kids are likely shaken by the uncertainty, especially when looking at college price tags and average debt loads.

The prospect of being young and jobless is scary. The prospect of being young and jobless and tens of thousands of dollars in debt is terrifying. The average graduating senior this year was in seventh grade when the economy tanked. That’s a lot of years to let the idea of a crappy job market sink in.

Students over 25 are even more sensitive. In that that group of older students, 419,000 fewer people enrolled in post-secondary education in 2012 than in the year before, accounting for almost 90% of the total decrease in enrollment.

Luckily the continuing conversation over college costs has brought more awareness to the issue. Already, rankings on affordability are becoming more prominent, and colleges are marketing their financial value to prospective students as well as their academic rigor.

Meanwhile, companies like Rukuku are utilizing technology to bring more affordable options to students. This will put even more pressure on the colleges to justify their prices tags.

Financial Aid and the Plight of the Financially-Challenged

I am a huge fan of need-based aid, as I described in this post last week. That doesn’t mean there aren’t some problems with the system. At the end of the day, most universities still prefer students that can pay their part. To do this, while maintaining the need-blind admission label, universities have employed a few techniques.

cost of college, need-based financial aid

Colleges adjust policies to attract high income students

One of these ways is early admission. Early admission policies allow students to apply in the fall to their favorite schools, and in return, those students must commit earlier to attend these schools. That seems harmless enough on the surface. In fact, a senior year of high school where one already has college plans sorted sounds like a lot of fun.

The problem is, information on financial aid packages is still not available until the spring. If the amount of financial aid offered could influence your decision (aka, paying full price is not an option for you), then you may not be able to commit early. This is one way that colleges can ensure they are getting students that can contribute more in tuition.

A second way is by offering merit-based scholarships rather than need-based scholarships. How could offering more scholarships be bad for poorer students? Seems crazy, right? This is how it could work. A $5000 merit-based scholarship for a student that can pay the remaining $20000 is far better for the school than offering a $20,000 need-based scholarship for a student that can only pay $5000.  With that $20,000 need-based scholarship, the school can offer four $5000 merit scholarships, bringing in $80,000 in tuition.

This is especially helpful for state-owned schools, where out-of-state students pay a much higher price. Giving them a merit-based scholarship may convince them to attend, when they will actually still pay much more than the average student. According to a May study by the New America Foundation, the percentage of students at private universities that received merit-based aid increased from 24% to 44% from 1995-97 to 2006-07, while the percentage receiving need-based scholarships decreased from 43% to 42%.

Along similar lines, the increase in student loan limits seems at first like a measure that should help low-income students. In reality, however, the increase in student loan limits has come with rising tuitions. There are many reasons for those rising costs, as we’ve discussed in past posts, but the net result is that low-income students graduate with much more debt than in the past. Students graduated with an average annual debt load of $35,200 this year, according to research from Fidelity Investments.

So what’s happened as a result of all this? Unsurprisingly, high-performing students from lower income backgrounds are less likely to attend prestigious schools. This has some serious consequences for those students. Similarly performing students that attend more selective universities have better chances of graduating and higher lifelong earnings.

According to research from the Georgetown Public Policy Institute, students with SAT scores of 1100-1199 that attended one of the 468 most selective schools had an 81% graduation rate, while those that attended open access two and four year schools had graduation rates of only 53%. Ten years after finishing schools, the graduates from the selective programs made $67,000 a year, on average, compared to $49,000 for those attending less selective schools.

The new ranking system that the Education Department is working on may address some of these issues. It will be tough to reach the proper balance in that ranking, as we’ve highlighted before, but it is a project worth pursuing.

For the record, the New America Report highlighted the fifteen schools below for being particularly generous in offering need-based aid, so for any of you out there looking at colleges, keep these guys in mind: Amherst College, Vassar College, Grinnell College, Williams College, MIT, Wellesley College, Cooper Union, Stanford University, University of Richmond, Pomona College, Rice University, Cornell University, Bowdoin College, Wesleyan University, and Dartmouth College.

A Scholarship in Need is a Scholarship Indeed!

We’ve talked a lot in our blog about the rising costs of college and deepening student debt. But we have not discussed ways in which students might avoid those debts through scholarships. I realized this as I read through this article earlier this week about a girl that applied for over 100 scholarships. Her lessons from the process – stay organized, apply early, and recycle essays and recommendation letters, among other tips.

scholarships, video games

Many unusual scholarship opportunities exist for those willing to put in the time to find them

After reading about this, I thought I’d look up a few scholarships, just to see what I might recommend to someone getting ready to attend college.  I found some cool stuff. For example, did you know that you can win scholarships for devising a zombie apocalypse plan, wearing Duck Tape to prom, or coming up with a new peanut butter sandwich recipe? Sound like fun scholarship applications. Maybe I should go back to school. And to prom.

Beyond these sorts of deals, though, I wanted to offer some serious advice. I found tips plastered all over the internet. The reoccurring themes were apply early, apply often, and apply for everything, whatever the award amounts. That all seems reasonable to me, but it also seems exhausting. I still recommend that you do it, of course.

But I want to recommend one big step first. Many students with good guidance counselors and involved parents will already know this step, but I am amazed by how often people misunderstand the types of scholarships that are available to attend more selective, high-priced schools. I am not talking about scholarships for the best essay, the best test scores, or the best apocalypse plan. I am talking about need-based scholarships.

I think many people don’t realize that once they get into a university, that university will very often offer free money for them to attend. Will they still have loans? Probably. Will they have to work while studying? Again, probably. Will they have to pay something? Yea, of course. Will it be much less than that $100,000+ price tag? Very often the answer is yes.

To qualify for this sort of aid, you need to fill out and submit your Free Application for Federal Student Aid (FAFSA) AND you may need to fill out a College Scholarship Service’s PROFILE form. I put that AND in capital letters because my high school guidance counselor did not even realize that a second form existed. Filling out these forms will require some effort from you and your parents. If you are financially independent, which will be very tough to prove, you can qualify for even more aid.

Is it worth doing all that, just to go to a better school? Absolutely. It will of course look better on your life-long resume, and you will likely have better teachers and smaller class sizes, though no guarantees. Equally important, though, a point often overlooked when choosing colleges, graduation rates are higher at more selective schools. Yea, those schools admit more serious students, but they also tend to offer more support for students in trouble and sometimes a little grade inflation to boot.

One more big point here. You do not have to be below the poverty line or even close to qualify for aid. Schools look at all sorts of factors and then make a determination on the abilities of you and your parents to pay tuition. They generally don’t expect your parents to be broke before OR after paying tuition. Different schools offer different amounts, so explore the options.

Definitely apply for all those crazy scholarships. Apply early, apply often, all that stuff. But first, sit down with your guidance counselor and figure out what forms you need (and double check online, because trust me, they don’t always know.) Then sit down with your parents and get them to fill them out. Those few hours could be the most economically well spent of your life.

As for universities, 61 in the US claim to meet 100% of student financial needs, according to US News. Theoretically, that means they do everything possible to make it financially viable for a student to attend once he or she is accepted. Beyond these, many other schools offer need-based scholarships, often very generous ones.

By giving need-based aid, the schools get some advantages, in terms of tax policies and media rankings, and they may get more advantages once the Obama administration’s new ranking system comes out. This doesn’t mean that universities don’t want or often prefer students that can pay full price. We’ll discuss a few of the strategies they employ on that front next week when we discuss the challenges facing need-based aid.

Class Dismissed

Is it time to question the traditional, expensive education models? Does education need to equate to decades of debt? Could education be acquired outside universities?

Is it time to question the traditional, expensive education models? Does education need to equate to decades of debt? Could education be acquired outside universities?

Throughout history, or at least the part I know about, students have sat through class, impatiently waiting for a bell to ring, a clock to tick enough ticks, enough sand to run through the hourglass, a teacher to utter the words, class dismissed. Well, that waiting may be over for good, at least for some university students.

On Monday, the US Department of Education approved Capella University’s FlexPath programs for bachelors and masters degrees. FlexPath allows students to get credit for classes by performing well on competency examinations, with no requirements on class attendance. In other words, as long as students can prove they have the knowledge, they can get credit for the class.

This is the first accredited program in the country to make such an offer. The implications are profound and affect several types of students. First, older students, who may have more experience in their particular field, can avoid spending time in classes on topics about which they are already familiar.

Second, bright, motivated students will also benefit. The Doogie Howsers of the world no longer need to sit through classes covering material that they already understand or could understand very easily by studying on their own. In such a competency-based program, these students could easily pass through lower level classes at a much more rapid pace than your average student.

Finally, and most importantly, this program will drive down prices. Universities can hardly justify their astronomically high fees when students work through material at their own pace, at home, with professors offering support but not serving as the centerpiece of the course. The university’s responsibility is as much evaluation as direct teaching.

We talk a lot in this blog about disruptive technologies, and thus far, computers and the internet have only had minimal effects on education, at least when compared to industries such as travel, music, and consumer retail. To see an example, just pass by your local bookstore, or at least the spot where it used to be.

The awarding of credits has complicated the transformation of education through technology. Students need personalized evaluations from their professors, gauging their participation in class and performance on homework as well as exams. Professors can only work with so many students, and their time is not cheap.

Shifting to a competency-based system of evaluation for credit opens many opportunities for students that have learned their skills through less traditional means, including non-credit online courses. For the universities, it offers opportunities to reduce costs. It also puts pressure on them to improve the value of their students’ experiences, in and out of the classroom.

I went to a four-year college and had an excellent time. I made many friends and gained much, not only from my time inside class but my time outside of class as well. With tuition prices soaring, however, today’s students are questioning whether those experiences are worth decades of student debt payments.  It is an important question, and universities will increasingly have to provide a satisfactory response.

 

Breaking Barriers

As we outlined last Wednesday, there are several significant barriers preventing low-income people and other disadvantaged groups from accessing quality education. How can new technology address these deficiencies?

1.      Technological advancement will lower the input costs of education. The traditional teacher-classroom education model is no longer the only game in town. With intuitive and flexible online platforms, teachers and learners will be able to meet in a virtual environment, drastically cutting costs. Before, this transaction would have had to incorporate the cost of transportation, a brick-and-mortar location, and materials, but now it only has to address the cost of hiring a great educator. Both the student and the teacher benefit.

2.      Online platforms will allow a teacher to interact effectively with a greater number of students. Currently, a major limiting factor in the efficiency of education is class size. Thoughtfully designed online learning platforms can eliminate the constraints of the physical classroom while preserving (and even enhancing) the teacher-student relationship. This will further hack away at the major barrier to entry for many people – cost – while improving quality.

3.      Online education technology will also bridge the quality gap by increasing accessibility. The beauty of learning online is that teacher and student can interact from anywhere in the world at any time. People in areas that are remote or lacking in quality teachers will be able to connect with great educators around the world – educational demand and supply will be connected in a dramatically new and more efficient way.

The possibilities are truly exciting.

Please check back with us all next week for more about educational problems and solutions!