How to make expensive University education affordable – #FeesMustFall

If we start with the premise that Universities should be affordable and accessible, as success in life should not (simply) be determined by the “Ovarian” lottery. Yet when we look at it, the pain of increasing University fees is being felt in recent years protests happening across the UK, Germany and most recently South Africa.

So if it is taken as a given that fees should fall to affordable levels in order to progress this argument, we are left with the face that Universities are expensive to run, this allows us to start venturing towards better questions. As Universities are expensive to run…

…who should pay?

After visiting a love refugee friend in Aalborg (Denmark), I was introduced to a different economic and welfare system, far more collective than the sometimes very individualistic forms of Capitalism I had been “programmed” to think were the only feasible alternatives to Fascist Communism. I knew conceptually there were obvious shades in between, but this was an example of one that worked. In Denmark students are paid to go to University, with this being balanced by a large portion of the population paying 50%+ in taxes.

With Denmark sitting 3rd on the Social Progress Index (RSA 59; UK  9).

From this it seems the easy answer is that the government should pay, they have access to cheaper loans and will make the money back in the form of more tax from higher earners. A degree though doesn’t guarantee higher earners and neither should it. A music graduate can contribute as much to a society (if not an economy) as an accountant. Most Governments are straining under the current debt burden perhaps more so than some individuals. As Universities are Social Enterprises (Not for profit) focusing on the pain point (price -> fees) is the wrong place to be looking, we should be looking at the costs of running a quality university, a subtle difference for many, but fundamental to the business owner or accountant, so an even better question….

….why are Universities so expensive to run?

There are many, but a few include:

  • Facilities – A “good” university will have lecture halls, sports facilities, residences, social areas…the list goes on. These all are expensive to maintain to a respectable level.
  • Limited scalability – You simply cannot fit 10,000 people into a lecture hall big enough for 1,000 people. Additionally individual assessments required mean that 10x people requires 10x time in assessing.
  • Competitive – This is between universities, but also the alternatives. Lecturers could leave for other Universities offering better prospects in terms of salary, research funding and prestige. They could also leave for the corporate world.
  • Value Perception – What are the best Universities and Schools in the world? Which are the most expensive? – The reality is perceived value is strongly correlated to price. The more you pay, the more it’s worth to you. The more it’s worth to others?
  • Not producing anything – Not exactly true, they are producing graduates, so perhaps a clearer statement is they are not directly producing anything while the individuals are at University, students are consumers, not producers. The majority of university students entering their “prime” are not producing anything valued until at least their post graduate days. That is 3 years+ or almost 10% of their anticipated working life not producing anything. (Side note – There is also no direct Return on Investment, if a University produces a “better” graduate, who earns more,  then the Government gets more taxes. Perhaps the incentives could be aligned better?)

So Universities are expensive to run. So fees must be high (regardless of who pays), either the individual or the Government and the individual pays later in taxes. The next question then….

…what is the point of a University? Or from first principles why does a university exist?

The first is partly from convention, the dogma is that it is that it is necessary for success. While we can all be inspired by the billionaire college drop outs, they are the exception to the norm and there is a massive survivor-ship bias.

So looking at some broad generalisations of why Universities exist:-

  • Educate – The primary purpose should be to Educate through:
    • Knowledge – Historically Universities (and schools) have been key to knowledge transfer and preservation, to a lesser extent discovery and enhancement. This is perhaps no longer relevant. With the internet, a lot of knowledge is readily available to anyone who can afford a mobile phone and data plan. They do still play a role in ensuring the quality of information is distilled.
    • Skills – Few University degrees transfer the skills needed in the market place. Many individuals learn more relevant skills in a few weeks of work, than 3 years of University.   In the the future the demand for knowledge and IQ is likely to be surpassed by Focus, Creativity and adaptability. In fact Cal Newport reckons “Focus is the new IQ”.
    • Research, Development & Innovation – By concentrating the brightest minds with similar interests, individuals feed off each other and incremental gains are made rapidly, if not exponentially. This hive of activity is where a University should really thrive.
    • Increase capacity – Through deadlines, assignments and lecture pressure, the graduate has been challenged and stressed to step changes in mental capacity. Perhaps a way to prove this would be to see how quickly the University graduate could absorb the knowledge of a high school graduate requirement.
  • Filter – This has unfortunately become one of the key functions of tertiary education in general. It works as a filter for Corporates and other institutions, where the cream of the crop is more clearly distinguished. This unfortunately means that the rudimentary  and at times even archaic entrance requirements filter out a lot of value, specifically in terms of diversity.

So if the current purpose of a University is to Educate and Filter, surely there are more efficient and effective options out there, it does not seem like Universities are a good return on investment or put another, they are not good value for money for either the individual or the government…

…so what are some of the alternative options?

This should be given a lot more thought by smarter and more informed people than me and I am definitely not envisaging that Universities should no longer exist, but I think they should potentially re-purpose to focus more. Perhaps they should no longer be the default path for those that can afford (and cannot), but rather left for those who are destined for a life of study to the benefit of all. Those going to the workforce can and should utilise alternative options.

So simplistically the model could be changed by focusing on the outcome envisaged. In the future a movement towards ongoing specific targeted intensive learning, rather than a broad based learning foundation. Individuals can focus on their current needs, for example starting this blog I am doing a lot of Digital Marketing Training. I don’t need, want or have the time for a 3 year degree, where much of what I learnt in the first couple of years is forgotten or become redundant by the time I am ready to use it. When I need a step change, I will find another focused course to give me the relevant skills I need.

To Educate – Start your own “Private University”

Srikumar Rao has an excellent course. I believe everyone should take it. The problem is, it’s about £6,000. His book costs £6. Would the course have 1,000 times more impact, probably, but perhaps an easier way is to start your Private University. Think about that £10,000 spent on a year at university compared to a 6 month retreat in Thailand or India. Where you read 100 books on different disciplines, listen to 100s of hours of podcasts and spent time getting fit mentally and physically. This while being exposed to different cultures, opinoins and experiences. This would currently cost at the top end £5,000, probably a lot less. (Perhaps you should be able to get a student loan for that?)

If you can’t justify or are unable to take 6 months out, there are slower, but as effective ways to develop. Look at things like utilising your commute, in London this is a great option. If you are morning person, consider waking up earlier, alternatively make it learning part of your bed time routine. Find a time that you can consistently work on your personal development, consider setting yourself goals. In terms of methods, with technology these days it is easier than ever. Podcasts, Kindles, Audible, Amazon delivery all makes it easier than ever.

Your Private University can be very tailored and specific to your development needs and you can develop rare skills the market needs. With the demand for knowledge and IQ likely to be surpassed by Focus, Creativity and adaptability. In fact Cal Newport reckons “Focus is the new IQ”.

The biggest difficulty with this is that it requires personal determination and is not as tangible. However it does not generally take long in a conversation to work out if an individual is well read (educated).

 

To Educate – Online Free or at Cost Efficient

The obvious place is to start with places like the Khan Academy – Tag line – “You only have to know one thing: You can learn anything. – For free. For everyone. Forever.” #youcanlearnanything.

There are also numerous other resources, including our own Academy, offering short, focused and relevant training. A multi-disciplinary education has been championed by the likes of Charlie Munger for years. While we may need to become specialists, we also should not be completely ignorant of key skills for everyone such as Sales, Negotiation, Career Planning and Financial Literacy – Which simply should not be ignored to the extent that they are.

Start your own Private University, for ideas see our Recommended page.

Filter – Corporate and Institutional

This is far trickier, the rigid structure and framework of getting into a University and then getting a degree increases the value perception (and price paid, so natural commitment). Is this the chance for Corporates or the Government? Perhaps finding a better filter is an opportunity for a startup disruptor in the recruitment field? Something like @youfeed? Or you as a reader? 

FOR THOSE THAT HAVE SKIM READ THIS BLOG POST, THE KEY POINT IS WE SHOULD BE UTILISING CHEAPER ALTERNATIVES TO EDUCATE. RATHER THAN DEFAULTING TO AN INHERENTLY EXPENSIVE MECHANISM AND EXPECTING IT TO BE FREE OR AFFORDABLE.

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4 thoughts on “How to make expensive University education affordable – #FeesMustFall

  1. Hi Dave – I thoroughly enjoyed this fresh perspective on the University system. As I read this, I immediately agreed with your points on starting you own private university – I think most of what we learn (especially at university) comes down to self education – lectures are merely a guideline (if even worth attending). To truly master a concept – one must learn with understanding and this is only acquired by tackling the problem yourself. So there it is – you can learn anything as long as you have the will to actually learn it. Perhaps this is one of the downfalls of the university system -I think many of us merely pick our courses with the reasoning of “this will lead to a solid career”, cram as much context into our minds to achieve a result that looks good one paper – without much analytical thinking of the skills/knowledge we are shoving into our minds – leaving university with the perfect skill set to work for someone else. But lets say we exclude the piece of paper we receive at the end of our degree, and decide to teach our selves a set of skills, so our incentive is no longer to merely obtain a qualification but rather to better ourselves for our own personal growth/gain- I think then, even from the start we are begin to analyze why we are learning these skills – and how we might apply these skills in business/career situations. This is far more valuable I think.

  2. Hi Dave,

    Thanks for a very interesting article. Also agreed on the position that learning is largely determined by the individual. To the university learning it might be added that there are additional benefits to collective learning, particularly through exposure to alternative interpretations of information or content. This is of course not something that is limited to tertiary institutions, and if you can find a way to get exposure to perspectives that challenge your world view or your perspectives on a subject, outside of an institution – perhaps through online collectives, or specialised groups (possibly physically, or created though social media platforms)- much of this could also be substituted.

    There is also a range of educational models that exist in different institutions, the one that I am working at currently (Aalborg University) has a very strong practical aspect to the learning program, which appears to be well appreciated by the commercial world. Academia, however, as you mention, is as much a profession as it is a means for education – ironically, tertiary education (at least in the South African / British models) probably prepares students more for a career in academia than it does for a career in the professional environment for which a study program is created.

    The reality in Denmark is not so much that everyone has access to a university education, but rather that there are systems established that support the development of almost all individuals – university education is typically only pursued by those that desire a role in society as a specialised professional, or an academic. A major contributor to the success of the system here is a massively reduced power and income difference between university educated professionals and technically educated functional roles. Where those with no tertiary education will typically earn around 30% – 60% of what the highly educated will, and where all roles are socially respected.

    Side-tracking somewhat, perhaps the question should be, Where are the technical education institutions? or Should those with tertiary educations really acquire the degree of social status and opulence commonly afforded to them? The discourse of social value in terms of the ability to generate financial gains, and the lack of appreciation for the environmental benefits created by a well functioning society appear to have contributed to serious self-attribution bias when it comes to success. Some social collectivism and responsibility would be welcome.

    Perhaps that way the ovarian lottery would be less important, fees could fall, institutions could take advantage of the cheaper learning opportunities, and everyone could get the education that is best suited their skills and abilities in order to provide as much value to society as possible.

    1. Thanks Rob. Some great insights. I think it’s even more the case in the UK than SA, where the University system was set up for people to thrive in a life of Academia. Business acumen was driven by starting at a firm and working your way up.

      I agree. Technical and vocationally driven education should be the go to, the number 1 option.

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