Education Innovation Can Drive Down Costs

Online Education Drives Costs Down

Education costs are poised to fall because as new technologies like virtual classrooms become more prevalent, according to a piece published in the Atlantic this week.

The article raises points out that many modern higher education classes today are taught very similar to those of two millennia ago, but that is going to change as teachers embrace new technologies.

“The present resistance to innovation [in education] is breathtaking,” Joel Klein writes in The Atlantic this month. The former chancellor of the New York City Department of Education was writing about public high schools, but he might as well have been talking about universities. Despite college costs rising faster in college than any institution in the country including health care, we have the technology to disrupt education, turn brick and mortar lecture halls into global classrooms, and dramatically bring down the cost of a high quality education.

One example of this is the emergence over the last decade of freely available online courses from Ivy League schools like MIT, Yale and Stanford. Yale alone has had more than three million visitors to its Yale Open Courses website and the article mentions that millions more users are watching the content through other technology mediums like YouTube and iTunes U.

Interestingly, the author also calls to task many traditional educational institutions, which are encouraged to act inefficiently and limit access to education.

Colleges rarely think about efficiency, because all the signals tell them to spend more money on fewer students. Theoretically, the most efficient school would give the highest quality education to the most people for the lowest price. In reality, national rankings reward universities for rejecting the highest number of applicants, teaching the fewest number of students per class, and spending the most per capita on resources. That doesn’t mean colleges are failing. It means the system suffers from an incentive to be inefficient.