Should lifelong learning be state subsidized?

I have argued frequently that universities had yet to grasp how online lifelong learning could be a new line in business and potentially an unfettered source of new revenue – where learners (and their employers) would be prepared to pay the full cost of tuition.

In fact, public two year colleges in North America have realised this – there has been a 10-15% per annum increase in online enrolments compared with 2% for the whole system fairly consistently over the last seven years (without in most cases increasing fees, because they are reaping economies of scale). For-profit online universities in the USA have been expanding by 30-40% per annum. (However, quality of online courses  in the public two year colleges has been problematic, due to poor course design and faculty training). The main research universities though have been much slower in moving into this market, around 5% increase per annum, and growth has been particularly slow at the professional masters level, mainly because they do not have an appropriate business model for this market or because they are not really interested in expanding into this area.

In Canada, different provinces have different policies towards tuition fees paid by students. Most provincial governments though strictly control undergraduate tuition fees by setting a limit that universities can charge. In British Columbia, though, universities can charge full cost tuition fees for NEW post-graduate programs but increases to existing programs are limited to the rate of inflation (2%). Thus it is easier to set up a completely new program that did not exist before (subject to approval by the Ministry’s Degree Quality Assurance Board) than to take an existing on-campus M.Sc for example then offer it as an online program at a higher tuition fee.

However, in reality, since the online courses would need to be re-designed and probably even the content changed to meet market requirements, it would not be difficult to give such a program a slightly different name for it to be considered a ‘new’ program. For instance UBC was able to charge full tuition fees for its Masters in Educational Technology (a new program) while its longstanding M.Ed on-campus program has much lower fees. (This can cause some internal problems when students want to include online courses within their campus degrees because there may be differences in tuition fees). One major innovation with the MET was a tuition fee per course rather than per annum, which gave working students much more flexibility (they could take five years to graduate)

So it all hinges on whether a redesigned online program is considered ‘new’, even if it covers the same ground as a campus-based institution.

In a sense there are two issues here. Should new courses aimed at a professional rather than an academic market have a higher level of tuition fee, irrespective of their means of delivery? Or should online or ‘hybrid’ courses be charged differently from on-campus courses? My view is that the former makes more sense than the latter, since tuition fee policy is more clearly ‘market’ focused in the former case. With the growth of hybrid programs, it will in any case be more difficult to differentiate on the basis of the delivery mode.

So what we have at least in BC is an extension of existing policies to ‘new’ courses aimed at a professional market with a good degree of freedom for universities to charge market rate for professional programs (so long as they are ‘new’).

There is however another way of looking at the issue, which is more controversial. Instead of determining fees by the program, you could determine fees by the history of the student. For instance, all students may be ‘subsidized’ for a maximum of seven or eight years of post-secondary education. After that, they pay full fee (irrespective of the program). This would have the advantage of getting students to complete more quickly (a growing problem in North America, where the average time to degree completion for a four year undergraduate program is between six and seven years), and it would be more equitable. It then allows for unlimited expansion of cost-recovery lifelong learning programs, provided the mature students or employers can afford the cost. With quicker completion, it may even bring down the cost of tuition fees for undergraduate students, resulting in students working less to pay their way through university. However, I don’t know of any jurisdiction that has tried this.

Underlying all this is public policy about who should get subsidies for higher education. I can see the equity argument for everyone having the opportunity of some form of higher education, but once they have been subsidized for a first degree (and possibly even for one year post-graduate study) and as a result have a more opportunity for a well paying job, should they continue to be subsidized for ever? Or is lifelong learning now such a great public good in terms of economic return that it should continue to be subsidized – and can the state afford this? A good question for economists!

In the meantime, the only barrier I can see to universities rapidly expanding into the professional masters market for lifelong learners is the lack of an appropriate business model and imagination. However, UBC’s Masters in Educational Technology shows that costs, including recruiting new tenured research faculty to teach the program, can be fully recovered through tuition fees. So if the opportunity is there why are so few institutions or departments seizing it?

What’s your view on this?