Public Choice Academics

By John Glaser

Marc Parry's piece in the Chronicle about universities outsourcing online education to private companies is interesting throughout. The article raises the question of whether allowing corporations to provide online education might bring perverse incentives to the practice of educating students.

But the new breed of online collaboration can tread into delicate academic territory, blurring the lines between college and corporation. Derek C. Bok, a former president of Harvard University and author of a book on the commercialization of academe, questions companies' encroachment into teaching. He worries that bottom-line thinking will drive decisions about how colleges deliver courses. They might choose exam formats that are easier to grade, for example, to keep costs down.

[...]Embanet says its college partners retain academic control. And despite Mr. Bok's worries, the practice of contracting out parts of online education seems likely to expand.

[...]Where some colleges see opportunity, Mr. Bok sees a "dangerous trend." Even though campus officials insist that they control hiring decisions, he doubts that a college would veto a company's recommendation in a situation in which students were waiting for a class, and time to find a teaching assistant was limited.

Parry explains how these kind of worries are largely speculative and hypothetical, since, at least currently, Embanet abstains from any academic control over the courses.

In fact, instructors mostly do come from "the Northeastern family," Mr. Moore says, meaning people familiar to the university because they are alumni or have taught the course before as lecturers. But on "one or two occasions," he says, the university has needed someone, "and Embanet has provided an instructor for us." In such a case, if Embanet recommends someone, Northeastern interviews that person and decides whether to make the hire, the dean says.

Embanet's financial reach extends beyond teaching assistants. The company even pays Northeastern for the salaries of tenured professors who teach online courses. "Embanet reimburses us for both the cost of course design and faculty teaching," Mr. Moore says.

Harlan D. Platt, a finance professor who has been at Northeastern for 30 years, compares Embanet's role to the DVD service Netflix. "Embanet has nothing to do with the education I deliver—nothing to do with the education my facilitators deliver," he says. "It's me. I'm the studio. I'm the actor. I'm the director."

I'm puzzled by these worries (like Mr. Bok's) of money-hungry corporate educators defiling the whole academic process because of the "bottom-line thinking" inherent in business. Why is there a presumption that the institutional structure of universities as they are now don't harbor similar perverse incentives or other unique problems? Even if the worries of further corporate, as opposed to professor control over curriculum are a legitimate concern (which, so far, they appear not to be), is it really true that the tenured professoriate care more for the education of students than the higher ups in a business model academic structure? Aren't there problems with the administrator-student relationship as it is now, too?

The truth is, the humans that make up the faculty at universities - profit and non-profit - operate under the same human conditions and motives as the humans at a company like Embanet. Sure, making money is one thing. But so is reputation. As soon as a company like Embanet garners a reputation for hiring corporate lap dogs who pass students easily in order to have happy customers, their business suffers. These are some more of the shockingly identical incentives that influence faculty and university administrators.

To be clear, initiatives like Embanet are new and there could turn out to be serious drawbacks with them. But the relevant (and obvious) question is whether the benefits outweigh the costs (I think so). Well, Parry had some info on that as well:

In a short period, Embanet is helping to transform Northeastern's business college. The online programs have grown to 1,000 students and could reach 1,700 next year, meaning more graduate enrollment online than all the college's traditional graduate courses combined. Despite Embanet's cut of the tuition, the programs returned more than $2-million to the university in the past year, Mr. Moore says. In other words, that's how much Northeastern took in after expenses were covered, cash the college is using to reinvest in faculty.

Cost is perhaps the biggest problem with higher education today. And these types of innovations and business initiatives are helping. Why attempt to shut them out?