Bill & Melinda Gates Foundation

Creative Ways To Bend The Higher Education Cost Curve

November 20, 2012

The fiscal reality is clear:  State support for public universities, on a per-student basis, has been declining for more than two decades, was at its lowest level in 25 years even before the Great Recession hit, and cannot be expected to increase any time soon. 

The need for greater levels of educational attainment is equally clear: The U.S. became the world’s dominant super power because it was also the best-educated nation in the world. We now rank 16th in the proportion of our citizens with a college degree, and so are on the verge of losing that critical competitive edge

As a result of these realities, the higher education community must rethink our operating model. We need to reevaluate and reengineer our operations—both administrative and academic—with a much higher priority given to effectiveness, productivity, and accountability, while holding fast to our commitment to the quality of our education programs. 

While there is no one-size-fits-all solution, the University System of Maryland—which launched our Effectiveness and Efficiency initiative seven years ago—does offer some insight as to what steps can be taken and what effect they can have. 

Administratively, we centralized our shared services, such as internal audit, construction management, and real estate development. We’ve also taken advantage of our institution’s large size to negotiate better prices for things like software, computer equipment, and energy. As a result, we have saved taxpayers more than $250 million.

Tuition across the USM has gone up just over 9 percent since 2008, less than 2 percent a year on average. We have achieved this during a period in which single-year, double-digit hikes were common across the country. Academically our “reengineering” efforts have enabled us to reduce the average time it takes to earn a degree to its lowest level ever, while four- and six-year graduation rates are at an all-time high.

Other opportunities to contain costs and improve student success are now before us, if we have the will to seize them. For example, brain scans and imaging allow us to study the ways the brain develops “expert thinking,” are helping us better understand how people learn. This understanding can be combined with intelligent interactive software to create hybrid classrooms, in which personal instruction is augmented with technology-driven interactive learning. These things offer real hope that our nation’s educational goals can be achieved. Successful models of these new teaching and learning strategies exist at universities across the nation, including within the University System of Maryland. However, scaling these models up to the extent needed to “bend the cost curve” will not be easy. It will require leadership at all levels. 

Will higher education leaders step up to the challenge of finding new and affordable ways of delivering students a high quality education? Nothing less than the future well-being of our nation depends on the answer to this question.

 

 
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