Jun 26, 2017, 4:57 PM ETConference Presentation, Panel

Can the Traditional University Thrive in the Internet Age?

Moderator: Jeff Silber, Senior Research Analyst at BMO Capital Markets.
Panelists:
- Bill Ackmeyer, Founder and Senior Managing Partner of Parthenon EY (Education practice).
- Bill Bennett, Former U.S. Secretary of Education.
- Greg Capelli, CEO of Apollo Education Group and Chairman of Apollo Global.
- Ron Daniels, President of Johns Hopkins University.
- Nikhil Sinha, Chief Business Officer of Coursera.
Topic: The viability of traditional universities in the internet age, driven by recent industry shifts such as the Purdue University and Kaplan University partnership.

Enrollment Growth: Online and hybrid course enrollments have increased by 24% since 2003.
Student Segmentation:
- Traditional Age Group (18–19): Younger students generally prefer the on-campus experience; traditional liberal arts education remains viable for this segment.
- Career-Oriented/Adult Learners: Approximately 50% of higher education enrollment consists of older, career-track students utilizing for-profit universities or community colleges, a segment often associated with higher loan default rates.
Institutional Adoption: Liberty University and other institutions are expanding online offerings, though faculty resistance regarding replacement fears persists.
New Credential Models:
- Udacity Nano Degrees: Offer job guarantees where students receive a full refund if not employed within 12 weeks.
- Micro-credentials: Badges from Coursera (e.g., Microsoft) and Udacity are becoming primary hiring criteria for employers like LinkedIn, potentially displacing traditional degrees for specific technical roles.
Platform Scale: Coursera hosts 25 million registered learners, exceeding the total current enrollment in U.S. traditional higher education (20 million).

Survival of Prestige: Bill Bennett argues that elite institutions (e.g., Stanford, Ivy League) will survive because consumers are purchasing "prestige" rather than just education; these institutions will function like "roaches" surviving environmental shifts.
Role of Research Universities: Ron Daniels asserts that research-intensive universities will survive due to their role in industrial policy, research innovation, and complex student-faculty interactions, though they must adapt delivery methods.
Market Consolidation: Bill Ackmeyer predicts the disappearance of small schools with endowments under $1,000 students, while large institutions will dominate.
Demographic Shifts: Nikhil Sinha notes that online degree students on platforms like Coursera are 5–7 years older on average than traditional on-campus students, representing a new demographic of lifelong learners from lower socioeconomic backgrounds.

Economic Returns: Data indicates college graduates earn approximately $1 million more over a lifetime compared to non-graduates.
Unemployment and Incarceration: Unemployment rates are 2.7% for degree holders versus over 5% for non-graduates; incarceration rates are significantly lower for degree holders.
Completion Rates:
- Community Colleges: Have completion rates of approximately 16–17%.
- For-Profit Institutions: Exhibit completion rates roughly double that of community colleges (approx. 35%).
- Four-Year Institutions: Have a completion rate of roughly 48–52%.
Alternative Pathways:
- Apprenticeships: Acknowledged as a valid alternative, with models in Germany (alternating work/study weeks) showing superior outcomes.
- P-TECH Model: A partnership between schools, community colleges, and corporations (e.g., IBM, Johns Hopkins, BMW) that provides high school students with an associate degree and guaranteed entry-level employment.
- Early College: Models allowing high school students to earn associate or bachelor's degrees concurrently.

Differentiation: Institutions must differentiate based on student goals; "one size fits all" is obsolete.
Pricing Disruption:
- Coursera's Master of Computer Science (same faculty as University of Illinois) is priced at $20,000 compared to the on-campus $80,000, signaling a shift in graduate program pricing.
Accreditation Evolution: Fortune 500 CEOs are increasingly positioned to act as de facto accrediting bodies by defining skills requirements for hiring, potentially bypassing traditional accreditation structures.
Personalization: The future of education involves adaptive learning technologies that personalize content and teaching based on individual student data and career aspirations.
Soft Skills: Employers prioritize soft skills (communication, assimilation) over hard technical skills, a gap traditional online models may fail to address without campus interaction.
Access Initiatives: Johns Hopkins and other elite schools are participating in the "American Talent Initiative" to recruit and financially aid low-income students (Pell-eligible), acknowledging that financial aid alone does not guarantee application from lower-income demographics.

Work-Study Models: A proposal for a radical school/work schedule (3 days work, 3 days study) was raised; Greg Capelli noted existing German models of alternating weekly work/study yield better employment ROI.
Future of Education (10-Year Horizon):
- Nikhil Sinha predicts massive disruption in knowledge delivery and cost structures, with small, low-endowment colleges becoming extinct.
- Greg Capelli anticipates that cost structures will shift entirely to support engagement and employment outcomes.
Degree vs. Major: Bill Ackmeyer noted that career success (e.g., at McKinsey) correlates with degrees in creative arts or biotechnology, suggesting broad, adaptable education is more valuable than specific vocational degrees for top-tier roles.