Education provides the foundation of our prosperity as a society. Our chance to improve our quality of life requires transferring knowledge to the next generation to spur innovation and accelerate technology development.
To compete in the global marketplace, the United States must deliver high-quality education to its citizens. History is littered with failed civilizations. Unless Americans reimagine higher education, our freedom and way of life are at risk.
Gaining specialized knowledge to contribute value to society is also the best way for individuals to gain financial freedom. However, possessing specialized knowledge is not enough; you must know how to apply that knowledge to solve problems and advance innovative ideas. Learning multidisciplinary approaches to apply the big ideas of the major disciplines, including physics, psychology, mathematics, chemistry, and biology, will give you a major competitive advantage.
With the exception of training in the hard sciences, most liberal arts higher education has been designed to allow you to earn a credential and build social connections. College is rarely designed to train you for specific jobs in the workforce. Companies use the credential to filter graduates when hiring. Students and their parents use the degree to signal status.
Although there are always exceptions, U.S. higher education overall is failing to deliver on its promise of multidisciplinary training that provides a foundation for critical thinking, creative problem-solving, and innovative decision-making.
Contributing to this failure are misaligned incentives between schools and students. Schools require payment up front but offer little accountability for the outcome. Students have to pay up front with little certainty that their degree will help them get a job or advance their career or enrich their lives.
I’m not suggesting that no one should go to college. In select professions such as medicine, science, and academia, college is valuable. However, a large percentage of college students and older adults seeking retraining need new models that could provide a better-quality, career-focused education at significantly lower costs.
Four converging trends create a massive market opportunity to develop new models in higher education.
1. Tuition is too expensive.
According to the National Center for Education Statistics, the average cost of a four-year degree is $104,480. Cost of a four-year degree has doubled from 1989 to 2016 after adjusting for inflation. Currently, 44 million borrowers are $1.5 trillion in debt. Unfortunately, most of this money seems to be paying for more administration and not better-quality education.
The high cost of college is also contributing to income inequality and polarization in the United States. Many smart, motived people can’t afford the high cost of tuition but don’t want the burden of student debt. Especially since they get no guarantee that their education will help them get the jobs they need to pay off their loans.
2. Most colleges today don’t prepare graduates with skills necessary for the workforce.
As highlighted in this article in The Atlantic, U.S. companies have been complaining for years about the lack of skilled workers, even while millions of people are unemployed or looking for full-time work. Project-based curriculum designed to meet specific job requirements ensure that students learn skills that will help them get jobs.
3. Acceleration of artificial intelligence (AI) and automation will lead to massive job displacement.
According to a 2017 McKinsey Global Institute report, half of all work activities globally have the technical potential to be automated by adapting to currently demonstrated technologies. Scenarios suggest that by 2030, 75 million to 375 million workers (3% to 14% of the global workforce) will need to switch occupational categories.
If you are not constantly learning, you will be left behind. Therefore, we need education models that provide ongoing, continuous learning and skills development throughout your entire career. Most people will need to learn new skills every five years to ensure that they will not be replaced by a robot or software.
4. Advances in technology enable better online learning opportunities.
Low-cost computing power, high-speed internet access, and high-fidelity video conferencing tools (such as Zoom) make high-quality online education affordable and globally accessible. Online classrooms increase affordability and open up the global talent pool. Of course, project-based curriculum designed to meet specific job requirements ensure that students are learning skills that will help them get a job. Not all training can happen online because some jobs require hands-on training. For example, a nurse will need to practice starting an IV on real patients in order to learn the skill. However, online learning can often replace classroom learning and be augmented by practical hands-on training.
One new model
Lambda School is an example of a new model in education that aligns incentives of the student, school, and employers. The online school offers live instruction, mentoring, and career placement, and its curriculum has been designed to meet specific skills needed by employers. Students sign an income share agreement (ISA) and pay no tuition until they land a job that pays over $50,000 per year; when they reach that point, students pay 17% of their gross income for up to 24 months. Because the ISA is capped, the maximum a student will pay is $30,000.
This model allows the student to avoid going into debt and encourages the school to invest in its students because their ability to pay for their education is based on their career earnings. The nine-month program trains students in computer science or data science. Lambda plans to expand to other job categories, such as nursing and cybersecurity.
New models in higher education are needed to improve our country’s overall quality of life and ensure our citizens can compete in the global market. Students need access to both multidisciplinary education and specialized knowledge in order to contribute value to society and gain their own financial freedom. A massive market opportunity for new models in higher education has been created by the convergence of high tuition costs, changing workforce requirements, the threat of AI and automation, and the advance of online learning. Continue to learn throughout your career to ensure that you cultivate relevant skills and maintain your financial freedom.