The $10K Degree – How High is This Hurdle?

This is the fifth post in a series of undetermined length. All posts are categorized as $10K Degree.

Trying to run the high hurdles is a challenge. It becomes more of a challenge as they continue to raise the hurdles to new heights. College prices also continue to explode to new heights. I’m going to share two little tidbits of data that help illustrate how high the hurdle is for the mythical $10,000 baccalaureate degree.

Textbooks and Other Class Materials

The data used in the SREB meetings indicate that the average spent on textbooks and similar course materials are a whopping $4,540.  Keep in mind that this figure assumes that the student completed the degree in four years and with no wasted credits. Therefore, figure in another 20-30% in cost for the true “average student.” Let’s just round off and say five grand.  (CC photo by fófs)

That’s half of the desired price tag. Ouch.

Yesterday I made a webinar presentation about Open Educational Resources and Creative Commons licensing and the advancement of these alternatives to the traditional textbook publishing model. I don’t see any other way of getting to the $10K degree without utilizing OER in a major way. As in 100% of the course materials would need to be OER or similar. The cost to the student needs to be reduced to zero, or very near that.

This is not the most outlandish idea ever, except maybe to bookstore managers and CFO’s who have come to rely on bookstore profits. Does the K-12 system charge each student for textbooks? Not that I’m aware of. It’s a cost of doing business that they absorb. Do they want to pay higher and higher prices for textbooks? Pretty sure they don’t, which is why OER are getting more and more attention in the secondary schools and below.

Public University Sticker Shock vs. For-Profit Sticker Shock

Lots of people have been beating up on the for-profits lately. Sometimes with good reason, but just as often without any apparent evidence or support. Let’s take a look at some recent data. The National Center for Education Statistics recently published a report titled “Postsecondary Institutions and Price of Attendance in the United States, 2010-11, …” (report PDF) which contains data that is useful to this analysis.

Ask this question of the next 10 people that you see. “Which do you think costs more, an out-of-state student attending the local public university, or that same student attending a private, for-profit university?”

On page 9 of the report you’ll find your answer. On average, being an out-of-state student at the public U costs more than going to a for-profit U.

Public 4-yr U, out-of-state = $15,742 average tuition/fees

Private 4-yr. U , for-profit = $15,700 average tuition/fees

This reminds me of something that a friend of mine from Davenport University said during a conference presentation: “I don’t think there’s that much difference between the for-profits and the ‘for-surplus’ schools.”  I thought that was a brilliant way of changing the conversation about the “not-for-profit” schools.

Not-for-profit schools are really “For-Surplus Schools.”

Similar goals, just different terminology.

To close this post, let’s take a look at the current average tuition/fees for a student, assuming 2 years at the “in-district” community college and two years as an in-state student at the public university. Since this scenario would take four years to play out, I’ll assume a 5% tuition increase each year from the 2010-11 rates.

Yr. 1 @ 2-yr school = $2,716
Yr. 2 @ 2-yr school = $2,852  (assume 5% increase)
Yr. 3 @ 4-yr school = $7,424  (assume 10% increase over current $6,749)
Yr. 4 @ 4-yr school = $7,795  (assume 5% increase over year 3)

Total tuition/fees  =  20,787

So, if books and materials cost the student zero, we “only” need to cut the tuition and fees by about 52% to get them down to $10,000. You might notice that if we could get 4 years of credits at the 2-year school rates – we’re almost there with an average of $10,864 ($2,716 X 4) if we hold tuition constant over four years. But who would want a 4-yr degree from a 2-yr school? Oh, that’s right, it’s already happening. We’ll look at that in an upcoming post.

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2 Responses

  1. “For-Surplus schools,” – that is a very creative concept, Barry.

    It tickles my brain.
    I am liking it.

    BTW — The $10,000 bachelor’s degree is not such a pipe dream.

    Get Educated does national cost surveys of online degrees and lo and behold the University of Wyoming offers a bachelors business online for about $16,000 — whether the student is in-state or not.

    By comparison this same degree is available from Phoenix Online at $66,000. (A tad bit more than the cost a a new Lexus)

    Average cost is about $43,944 with the most expensive at well over $100,000. What a range.

    Data Source: http://www.geteducated.com/online-college-ratings-and-rankings/best-buy-lists/best-buy-online-bachelor-business-management

    Love your work untangling the cost issue.
    Cost is not related to quality in higher education.
    Let’s find out what it is related to and keep that — shell the remainder.

    Keep writing and I will keep reading.

    Vicky Philips, Founder
    GetEducated.com

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