UV Letters

Frack U.

Volume V, #21

I attended law school when cable television exploded from 50 channels to 500. As law school was pass/fail, we had a lot of time to keep an eye on the new niche channels appearing seemingly weekly. My roommate Dave and I began keeping a list of new channels we half expected to see. The top 10 were:

  1. Food Court TV (a spinoff of then popular Court TV)
  2. The Conspiracy Channel
  3. The Post Office Channel
  4. Yarn Channel
  5. The Autopsy Channel
  6. The Highway Building Channel
  7. The Shower Channel
  8. Life After Death Channel
  9. The Cotton Candy Channel
  10. The Channel Surfing Channel, so you don’t have to take the trouble to surf yourself.

While none of these came into being (to my knowledge), audiences were fracturing then and continue to fracture today. Aside from our collective love of the NFL, some in the TV business wonder whether “mainstream” programming still exists.

Perhaps higher education should be concerned with the same phenomenon. While we’ve always had trade or specialty schools, the attention being paid to coding boot camps by the media and government makes me wonder whether we’ll begin to see public- and Department of Education-sanctioned purpose-built institutions for every industry e.g., watchmaking.

If so, perhaps some higher education wildcatter will name his or her new Texas- or North Dakota-based school “Frack U.” This would be appropriate, because the fracturing (or fracking) of higher ed. is being driven by two distinct groups saying “Frack U” to mainstream colleges and universities.

The first group is students, who are increasingly unhappy with the status quo. In a Gallup-Purdue survey released last week, only half of 30k college alumni strongly agreed that their higher education investment was a good one. Not surprisingly, the number was significantly lower (38%) amongst alumni who’ve graduated in the past decade. One interesting footnote in the survey: participation in an internship as part of a degree program materially increased satisfaction while conducting a research project with a professor did not. The Gallup executive responsible for the poll sounded the alarm: “If we don’t figure out how to improve [the] value proposition, the great tidal wave of demand for higher education in the U.S. could easily come crashing down on us.” Certainly, the federal government is listening. This week Secretary of Labor Tom Perez told CNN: “Apprenticeship is the other college, except without the debt.”

Second, employers are also saying “Frack U” to mainstream colleges and universities. While employers expressing dissatisfaction with employment preparedness of college graduates isn’t news, some leading employers are starting to do something about it. Following an internal Ernst & Young UK study demonstrating that degrees had no correlation to job performance, college degrees will henceforth be disregarded in that firm’s hiring process. Google, America’s second-most admired company according to most surveys, is America’s most outspoken company on this issue. Its Senior VP of People Operations has said that grades in degree programs are “worthless as a criteria for hiring.” Google has partnered with both Udacity and Coursera in an attempt to develop and deliver shorter, less expensive credentials and now bases its own candidate evaluations on highly predictive custom-developed assessments.


Is all this fracking an existential threat? Are we likely to see the unbundling of the university not only in terms of product (i.e., degrees), but also in terms of specializations? Are multidisciplinary universities sitting on shaky shale?

To answer this question, let’s go back to TV for a moment. The 500 channel universe always seemed unnavigable and unknowable to me until my wife subscribed to Netflix. Netflix disintermediates channels and provides a simple elegant interface to establish a direct relationship with content, and then to find similar content. Suddenly, I’m no longer frustrated by TV (a good thing, since my wife is a TV writer/producer). However, I am frustrated that there isn’t a Netflix interface in other areas of life (like for being a parent).

Another area in desperate need of an updated interface is higher education. I think a lot of the fracking from students and employers comes from a newly developed (and correct) sense that it should be easy to navigate data-rich environments. Higher education is exceedingly data rich, but students and employers are accessing it through the same interfaces as prior generations. Our frustration with higher education is high because our frustration tolerance has declined.

So when General Assembly or Galvanize opens a sleek and modern campus in town with a discrete set of short, accessible programs leading to well-paid jobs (and with no Title IV financial aid), it’s a simple interface that allows students and employers to establish a direct relationship with education. Therefore it’s attractive – and it’s attractive to believe that specialized schools (not multidisciplinary universities) represent the future of all of higher education.

But that would be mistaking the symptom for the disease. My diagnosis is that while the huge advantages to students and employers of combining disciplines are likely to increase over time, higher education remains the most complex product purportedly designed for mass consumption. Not that it shouldn’t be hard to complete a higher education program; that should require creativity and rigor. But it shouldn’t be hard to figure out what to learn and how that learning is or isn’t connected to adjacent topics and disciplines, or to future education or employment opportunities. And the transaction costs involved in starting to learn should be more like walking into the café at the front of a Galvanize campus, and less like doing your taxes.

Some of these interfaces will sit atop what universities are already doing e.g., competency marketplaces and ePortfolios where algorithms parse, extract and match competencies from student work and employer job descriptions. But probably most important to the higher education enterprise is allowing students and employers to interact intelligently with curricular metadata. As this ostensibly requires institutions to organize curriculum in a uniform, coherent and intelligible way, I see three potential outcomes: (1) Colleges and universities upend curriculum development and management practices and force faculty to recreate courses using a standard set of tools, which export searchable, manipulable metadata; (2) Some genius develops a product that utilizes big data technology to sift through disorganized, incoherent curricular materials and provides a simple interface for students and employers to engage directly and meaningfully with curriculum for planning; (3) Neither of the above.

Knowing what I know about higher education and inertia (old friends, these two), I don’t think it’s likely to be #1. So I’m hoping it’s #2 (and that it’s one of our portfolio companies). If not, option #3 could mean colleges and universities are fracked.

While specialty “just-in-time” institutions work extremely well in IT and probably make sense in select other sectors as well, the demise of the multidisciplinary university and the rise of the college equivalent of the Cotton Candy Channel won’t do much to advance knowledge or citizenship. So let’s hope we get this right. Or we could all be fracked.

University Ventures (UV) is the premier investment firm focused exclusively on the global higher education sector. UV pursues a differentiated strategy of 'innovation from within'. By partnering with top-tier universities and colleges, and then strategically directing private capital to develop programs of exceptional quality that address major economic and social needs, UV is setting new standards for student outcomes and advancing the development of the next generation of colleges and universities on a global scale.


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Three articles that tell us where the puck is going in higher education

1. Is a Bachelor’s Degree Still the Ticket to the Middle Class? Video interview with Mark Schneider, VP at American Institutes for Research, on whether graduates of associate’s or certificate programs are out-earning bachelor’s degree holders. The most important finding has to do with the high wages that students with sub-baccalaureate credentials can earn if they know how to fix things or they know how to fix people. These degrees put people squarely in the middle of the income distribution of their states. When I started this a few years ago I was just reporting first-year earnings and people would say these data are terrible because students with a degree will take a much longer time to catch on, but ultimately… in 10 years, the person working in Starbucks today will be a CEO and the guy who got a technical degree and is working in the oil patch in Texas will be replaced by a robot. Well, it turns out, 10 years out, the pattern is pretty much the same. Read more 2. University of Phoenix Enrollment: Upside-down U Arizona Republic article on the changed fortunes of America’s largest for-profit university, and the impact of the decline on local employment, by Ronald J. Hansen. The company expects its student numbers next year to be down 70 percent from its 2010 peak of nearly 477,000 students… [This would] stabilize enrollment at 2002 levels, when it had thousands fewer employees and faculty… The ratio to students to employees at University of Phoenix has largely held over 20 years, suggesting a steep reduction in jobs if enrollment comes down to 150,000. Read more 3. Competency Marketplaces: The Rich Get Richer? Inside Higher Education article on critique of Coalition for Access, Affordability and Success plan to power and evaluate high school students’ ePortfolios in order to better evaluate applicants, by Scott Jaschik. Critics said the system was excessively complicated and would end up favoring both wealthy applicants and wealthy colleges. Many said the new system was tailor-made for those who hire private counselors or attend private high schools with low student-counselor ratios… Amy Goldin, a private counselor, made a post to Facebook that was being forwarded by coalition critics, in which she imagined what the future might look like under the coalition's plan: "I can help you package your coalition application! Call Coalitions R Us, for the best in portfolio building, creative writing (101 and 102, for you Ivy hopefuls), and special rates on directing and producing your annual videos! Only $10,000 for the full four-year package! Call now! Limited spaces available!" Read more

California Higher Education Innovation Council Forum

Academic Infrastructure and Financial Health in Higher Education: Managing the Tension

October 22, 2015 | 3:00 p.m. – 7:00 p.m. | Emerson College, Los Angeles.
Free, reservations required to attend.
To receive a formal invitation and register contact: CHEIC@parthenon.ey.com

Panel one: Interdependent challenges for leaders of higher education institutions: physical infrastructure and financial health
Robert Lytle, Managing Director, Co-head of Education, Parthenon-EY
Tom Rousakis, Senior Managing Director, Infrastructure Advisory, EY and
Jessica Matsumori, Senior Director and Analytical Manager, S&P

Panel two: Context-sensitive higher education strategies where senior management has reconciled the demands of physical infrastructure and financial health
Dave Hoverman, Managing Director, Parthenon-EY
Daniele Struppa, Chancellor, Chapman University
Sabrina Kay, President, Fremont College
Patrick Smith, Director of Development and Alumni Relations, Emerson College
Seamus Harreys, VP, Business Affairs/Graduate Campuses, Northeastern University