COLLEGES FACE HIGH-TECH THREAT
By David Crane
Reprinted Courtesy The Toronto Star Syndicate
How about getting your university degree or college diploma from Disney Corp.? Or getting your software diploma from ITT Education Services, part of the Sheraton Hotels organization?
Or for that matter, signing up with Liberty University, the university of the right-wing Christian Coalition in the United States?
Like it or not, Canadian higher education is going to be turned upside down over the next few years as the Internet and cable-TV networks enable all kinds of corporations, such as Time-Warner, Viacom, Jones Cable and many others, to invade the world of education.
Indeed as U.S. expert John Roueche of the University of Texas told the leaders of Ontario's 25 community colleges here yesterday, this decade may be remembered as the decade of "the privatization of education worldwide."
As it is, in the United States, the for-profit providers are the fastest growing segment of the higher education industry, if that's the right word, and could be racking up $2 billion (U.S.) a year in revenues by the year 2000.
One of the most aggressive of these corporations is something called the University of Phoenix, which generated $283 million (U.S.) in revenues last year. It offers a wide range of courses either on its physical campuses or "virtual" or on-line university.
While the quality of "education" offered by the University of Phoenix has been strongly criticized, it is now accredited to offer programs in Alberta and Saskatchewan and is trying to find an entry point here through one of Ontario's colleges.
The appeal of entities such as Phoenix U, says Roueche, is that they offer students convenience - students can start a course whenever they want, rather than waiting for the start of an academic term, and can get fast, just-in-time training, 24 hours a day, 7 days a week. So even though Phoenix charges much higher fees, it is attracting students away from public institutions.
At the same time that for-profit institutions are expanding their reach, governments are demanding publicly-funded colleges and universities become more accountable. In Ontario, the Harris government has announced the provinces and colleges will be required to provide students with information about graduation rates, employment rates and student loan default rates for their programs.
At the same time, educational institutions will be responsible for paying back student loans outstanding above a default rate of 38.5 per cent. However, this is targeted more at for-profit institutions that encourage students to take out big loans to pay the much higher fees that they charge. Students in these schools have a much higher default rate on repayment.
DeVry Institute, a U.S. - owned company, had a student default rate in Ontario of just over 50 per cent last year, for example. It is also facing a class-action suit from disgruntled former students who claim the company did not deliver on promised jobs. Shaw Business College had a default rate of almost 72 per cent.
Despite all these changes, from private-sector competitors and growing demands for accountability from governments, colleges still have significant opportunities. In effect, Roueche's message to the Ontario colleges was a wake-up call - a warning that without major changes in the way they operate, colleges could face a bleak and diminished future.
In fact, a healthy dose of competition will be good for our colleges and universities and even more importantly, for students.
Colleges that are flexible in scheduling and courses, where faculties enjoy working with students, where mentoring and counselling are of high quality, which are interconnected with high schools and universities, which develop distance learning and on-line courses and work closely with business in meeting future workforce need will have a big role to play.
Many of our colleges are trying to do this. But one of their biggest problems is the rigid control the Ontario bureaucracy exercises over their actions.
So, while colleges face great challenges in meeting radical new forms of competition, the Harris government should be giving them more room to change.
Ontario's future requires a highly skilled workforce, and we are not going to get that from the DeVry Institute or the Christian Coalition.
We need our colleges but they have to become 21st century colleges for the knowledge economy.
David Crane is The Star's economics editor. His column appears in Your Business Tuesday to Thursday, Saturday and Sunday.