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The $10,000 Degree: Fundamentally Changing the Way Universities Do Business
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The $10,000 Degree: Fundamentally Changing the Way Universities Do Business

New public attention on access and completion goals are pushing universities to either evolve or fade away.


A college degree can result in higher lifetime earnings and an improved quality of life. Increasingly, employers want employees who have obtained degrees. Compelling reasons for a college education, right?

At the same time, skyrocketing tuition and massive student debt burdens are crushing the higher education hopes of many.

Several state legislatures are frustrated by higher education costs outpacing the consumer price index. Realizing higher education costs are killing opportunities for many would-be students and threatening the quality of life for everyone, they have challenged college leaders to cut costs and improve student outcomes.

With too few exceptions, colleges and universities have yet to heed the call. Many in the higher education community stand by, waiting for the financial crisis to pass, so they can “get back to normal.”

Some states have enacted tuition moratoriums and other limiting policies to prod the serious attention the issue deserves. In 2012, Texas Governor Rick Perry challenged colleges and universities in his state to create a $10,000 degree, a greatly reduced and quantifiable goal to which the academy could strive. The concept struck a chord with a number of other state leaders also looking for dramatic change; the $10,000 degree was picked up by Florida with similar calls for belt-tightening following in other states.

While many remain in denial, elite colleges and universities nationwide have embraced the challenge. By rethinking the status quo and enacting positive changes in educational delivery and measurement, they are bringing innovations to scale to reduce the cost of a degree.

The National Center for Academic Transformation incorporated technology to improve student learning outcomes while taking a chunk out of university costs. They’ve redesigned 156 learning environments at universities coast-to-coast, showing a 72 percent improvement in student learning outcomes while reducing instructional costs by a third.

My institution, Western Governors University, uses an online, faculty-guided, competency-based education model that is especially effective for working adults. The university sustains itself on tuition of about $6,000 annually per student; that rate has remained unchanged for the last six years. The average time to degree is 30 to 36 months. Student and employer satisfaction rates are very high.

Redesign leading to cost reduction was demonstrated by the Georgia Institute of Technology this year with a massive online master’s of science degree in computer science, for about $7,000.

And in Texas, the cradle of the $10,000 degree concept, at least 18 institutions responded to the call for a more affordable bachelor’s degree, using a variety of mechanisms in business and STEM fields, among others.

Despite the need for fundamental change, “chatting critics” equate the focus on cost-cutting costs and increased student attainment levels as a detriment to the academy.

To these colleagues I say:

The reset button has been pushed in this country. We have the choice to either participate in the reshaping of higher education to help more prospective students reach for their aspirations or live in denial.

Most Americans have changed how they do business and manage their personal finances. We must, too. The recession of the last decade spawned more leery consumers and led far too many to question the value of an investment in education.

That’s the importance of the $10,000-degree challenge. It recognizes the need for fundamental change in higher education. Furthermore, it provides a tangible finish line to which the academy may strive.

It’s time we, the leaders of colleges and universities, raise educational attainment levels — not costs.

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3 Responses to The $10,000 Degree: Fundamentally Changing the Way Universities Do Business

  1. Mike H Reply

    2014/05/08 at 10:30 am

    What Floten fails to mention is what the original investment to create the under-$10,000 degree was. My guess is that, for WGU to be able to maintain tuition at the $6,000 level now, there was a significant upfront cost of moving to a competency model. This isn’t to say the cost of implementing this new system should be a deterrent.

  2. Ran Howard Reply

    2014/05/09 at 3:30 pm

    Agreed.

    I would be interested to know more about the process of moving to a competency-based model and what the financial and human resource implications are, in order to compare it to the current model at most institutions. It would help to determine whether the $10K degree is a feasible goal for all institutions, or if some are better suited to developing this option than others.

  3. ww Reply

    2014/05/12 at 4:34 pm

    The idea to offer a relatively low-cost degree is a good one. However, I think it’s too early to tell if, in practice, this will make higher ed more accessible and produce real results for adult students. From what I’ve read, the efforts by Georgia Tech have yet to produce significant outcomes. I haven’t read much about Western Governors so can’t comment on that. But one issue I foresee arising is a ‘two-tier’ system where one type of degree is more valued than another. If that were the case and the $10K degree was seen more as a fringe option than a serious academic endeavor, similar to some online degrees by private institutions, it might not result in better outcomes for adults.

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