Home > Educational Leadership, Educational Reform, Higher Education > Rethinking Higher Education Business Models

Rethinking Higher Education Business Models

By Robert Sheets, Stephen Crawford, & Louis Soares

The cost of college has skyrocketed during the last two decades, rising by 429 percent, a rate that’s even higher than the rate for health care. To cover these costs students have borrowed ever-larger amounts resulting in an average debt at graduation now exceeding $27,000. Yet only 50 percent of students pursuing a bachelor’s degree—and 21 percent of those pursuing an associate’s degree—complete their college programs.

Clearly, the great challenge facing higher education today is to contain costs while at the same time improving outcomes—in short, to increase productivity.

Information technology has long been seen as a major key to meeting this challenge, but the results thus far have been disappointing. In this brief we argue that the fault is not with the technology but rather in the ways it has been deployed. Drawing on the work of eminent Harvard Business School professor Clayton Christensen and others, we explain the need for parallel innovations in higher education’s business models and “value networks.” We also urge policymakers to facilitate such innovations by funding more applied research in these and related areas, including higher education’s regulatory and standards environments.

Continued at: http://www.americanprogress.org/issues/2012/03/higher_ed_business_models.html

Read the brief: http://www.americanprogress.org/issues/2012/03/pdf/higher_ed_business_models.pdf

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