>> Harold Javid: Welcome everyone. There are sometimes when your job is a pleasure, and
there are sometimes when you're job is a great pleasure, and today it is my great pleasure to
introduce Richard A. DeMillo, who is going to speak you on a topic which I think we'll all find
very interesting. He has a very illustrious background; you can find that background in the
description of this meeting invitation which includes everything from being directors of
computer centers to the Dean of Georgia Tech to serving as the first chief technology officer at
Hewlett-Packard and with all those credentials, though, I think we're going to be stimulated
most about what he's learned through a lifetime of service in our industry and our academia,
and so please Rich, please join us.
>> Richard A. DeMillo: Thanks Harold. Thank you. It's good to be here today. So where to
start? This is a group that's been around universities a lot. Let me just start by saying this is a
really interesting time to be talking about this subject. It seems like every time you read a
newspaper, flip on a cable news channel there is some kind of information or misinformation
floating around about higher education. We just passed $1 trillion in student debt, if you can
believe that. If you take out home mortgages, it's the largest source of personal indebtedness
in the United States. Penn State has let the lure of $70 million in cash flow a year get in the way
of their mission. I just saw a YouTube video called the great college conspiracy that has at last
count 3 million views and it's a one-hour rant that charges higher education as an institution
with all sorts of deeds. Some of the charges are true; some of them are not. Three million
views on YouTube is by any measure a lot of people looking at higher education. And of course
we have presidential candidates that are making all kinds of statements about the state of
colleges. It's all happening in a backdrop of what I think of as kind of swirling invention and
what bothers me the most about it is that a lot of innovation in education in general, higher
education in particular, my profession in particular is taking place outside universities, things
like The Khan Academy. Who would've thought that some guy with a lot of cousins could set up
a video camera in a broom closet literally and produce a couple of thousand knowledge verse
that are viewed by millions of people and have come to reshape how people think about what
goes on in the classroom. A billion new students are being added to the worldwide population.
There were 300 million alone in India. Declining public support for universities, I'm going to
come back to all of these. As a backdrop it's hard to find a better time, maybe they worse time
to be talking about where institutions are going. My comments are focused to a large extent on
American universities but as we were just discussing a few minutes ago, American universities
are a bellwether for higher education around the world, so whatever we are seeing here for
good or ill is going to affect the way the world thinks about its colleges and universities. And I
guess if I had to characterize all of the things that I've mentioned up till now, there's a lot of
opinion out there; most of it is unformed and a lot of it is uninformed opinion. But most of the
opinion is unformed. It's easy to find people that can write opinion pieces, make cable news
commentary by cherry picking facts about higher education. It's really hard to find someone
who has looked at what is going on in the nation's colleges and universities and draw some
conclusions about it. And that's the book that I wrote. It wasn't the book that I started to write
when I stepped down as dean at Georgia Tech in 2008, I did what Dean's are supposed to do.
You're so close to write a valedictory so I wrote a five-page memo to my president and, you
know, being a careful guy, I said well, before I send this to the university I think I'll send it to
some colleagues and see what they think about it, and I started getting notes back from people
saying well, I don't believe this, or can you explain this? So my five-page memo turned into a 10
page memo which turned into a 50 page, I don't know what it was, 100 page white paper is
what it turned out to be, and I set it aside at that point not thinking very much about it. I was in
the process of selling a manuscript for a completely different book to my publisher, MIT Press,
and my editor just happened to ask one afternoon, so what else are you working on? And I
said, well, not much, I just have this hundred page thing about universities, and that discussion
turned into this book. But even, even at the point at which I decided to write a book that
partially summarized my experiences as a dean partially looked ahead to higher education as an
institution, I really thought I was writing as a professor for the professors. It wasn't until I went
to literally a neighborhood cocktail party, and I live in a neighborhood where everyone is
college-educated. Some people have advanced degrees. Some of them have been on my
advisory board, I am embarrassed to say, and I would've thought would've had a lot of insight
into what makes universities work, why they work they way they do, and they would say what
are you working on? And I would say this book that I'm working on and 30 seconds into the
conversation eyes would glaze over. I could tell that they had no idea what I was talking about.
They didn't understand why it cost so much. They didn't understand why no one that goes to a
public institution can complete four years. They didn't understand any of the things that drive
us crazy when we look at universities. There wasn't very much that was coming out of
universities to explain that. After all, if universities had been spectacularly successful at
explaining what their value is and why they’re in the shape that they’re in, we probably would
have better public support for our institutions, but we're not very good at doing that. So at that
point my project took a right turn and I decided to write a book not for academics, but a book
for general audiences about universities. Why are they the way they are, where they going and
what can be done about it? So what were people asking? It was cocktail conversation, so what
were people asking me? I think the number one question is why does it cost so much? If you
just look at the cost of higher education, I'm sorry the price of higher education, compared to
consumer price index, it's growing at an annual rate that's about four times consumer price
index, twice, this is over a long period of time now, twice the healthcare cost. Why are the
outcomes so bad? Everyone hears stories about Cornell, any Cornell graduates in the room?
Anyone hear stories about Cornell graduates flipping burgers and those are the stories that get
propagated through, and also Georgia Tech graduates. Those are the stories that get
propagated through these conversations. Why can't I understand what's going on? Is it worth
it? I don't mind paying money for my kids tuition if I know that there is some sense in which
that tuition is going to be paid back either in economic terms or in some other terms. And
those discussions are extraordinarily difficult to handle. Why can't higher ed change? Why
can't universities change? We've seen every other industry in the world change, or be changed.
Why can't higher education be changed? And there's a lot out there that I would call easy fixes
with easy answers to what's going on. For example, there is a common conversation, a
common mean that flows through cable news programs that says that the easy availability of
federal loans is driving up the cost of college. That's basically an assertion without any data
behind it. In fact, there's an easy argument that shows you why that can't possibly be true.
Most Pell grants go to profit-making institutions; profit-making institutions live and die on their
ability to extract profits from student tuitions. Their costs aren't going up dramatically, and yet
you find in public institutions on an annual basis 9% annual tuition increases over the last eight
or nine years, where private institutions have basically held their costs in check. So you have
for profits that are holding their costs at a constant amount, and you have publics that are
growing at basically 10% a year, and you have private universities whose costs are constant.
And for none of these institutions has spending increased. So you have all possible outcomes of
this experiment. Which one of them is consistent with the idea that the ready availability of
Pell grants is driving up costs? None of them. Now it doesn't matter which side of the
argument you take; none of those is consistent with the idea that Pell grants is driving up the
cost of college. Yes?
>>: Is that on a per student basis, that [inaudible]?
>> Richard A. DeMillo: This is all macro read every number I'm giving you a sort of a macro, a
macro economic number.
>>: So could it be that [inaudible] student [inaudible]?
>> Richard A. DeMillo: No. And in fact, we'll come back to this in a few minutes, but just to
kind of look ahead to what the real driver is, the real driver is loss of income. Over the last two
generations public institutions have undergone massive mission creep. They've undertaken
more and more things that are outside the core mission of a university, everything from
technology licensing offices to running hotels, and hiring seven million-dollar basketball
coaches in my institution’s instance. When support is going up, you can hide a lot in the annual
increase in revenue. When local legislators start to cut the amount of support and you decide
not to cut any of those ancillary things, you have to go someplace to recover those funds. And
the only place that's available, the only fungible source of free cash in the system is in the
tuition that is paid from a relatively small number of zip codes. And if you wanted a single
answer what's driving up the cost of tuition, mission creep would be the number one. There is
almost no, if you take a look at the top 15 drivers of increased cost, increased tuition, there is
almost no new spending category in that first 15. People say well it's faculty salaries. Faculty
salaries don't even make the top 15, and they certainly haven't increased. So lots of easy
answers, the question is lots of easy fixes. Most of which are uninformed by data. And most of
which, by the way, represent deeply held beliefs on the part of university administrators and
boards of trustees, who are probably the least well-informed as to what the actual data looks
like. So what's with the title of this book? Let me first of all talk about that. Abelard to Apple,
so Peter Abelard was an 11th century French monk, arguably the first true university professor,
although he never worked at a university. He was charismatic, figure, scholar, kind of an
iconoclast, I guess. Not kind of an iconoclast; I mean his masterwork is a treatise called Yes and
No and what he did is he quoted ecclesiastical authorities who had taken both sides of
propositions to point out inconsistencies, but, you know, at some level he was teaching the art
of argumentation and rhetoric to his students. Well, as you might imagine, this was not
something that the church elders took kindly to and ultimately it was his undoing. Peter
Abelard is mainly known because he was half of the famous love affair of Abelard and Heloise,
and it didn't end well for either one of them. It ended less well for Peter Abelard, I would say
than for Heloise. She wound up in a convent and he wound up being castrated, so it wasn't a
great outcome, but it was, it was a style of interaction with students that really molded the first
universities. He drew thousands of students to his lectures. And Apple refers to Apple
Computer, and I have to say that know exactly where I'm talking today and the only reason that
Microsoft isn't in the title of the book is that all of the people that were in the equivalence class
of Peter Abelard had names that begin with A. Aquinas, Ancel, Abelard, so if there had been a
St. Mickey, maybe the title of the book would've been different. The Apple in the title refers of
course to iTunes U which is a style of interaction between master teachers and students that
we still are not sure how is going to play out, but it does represent a new way of connecting
between charismatic, sometimes iconoclastic teachers and masses of students who feel that
they can connect with their professors, independent of the value that the institution provides
and that's a key point. So the book is to a large extent an essay about the value of higher
education that follows this historical arc from Peter Abelard 11th-century to iTunes U in the
21st century. The subtitle is the Fate of American Colleges and universities. What is the fate of
American colleges and universities? It's embarrassing to say, embarrassing to have to make the
argument, but the fate of American colleges and universities is to be subject to the same
political and economic geographic forces as every other human institution. And that is the
simple fact that colors this entire discussion, because there are forces in higher education that
absolutely don't believe that that's true. In the face of all the data and all the rational
argument, they think that they are an entity unto themselves. And the book talks a lot not
about what's going to destroy higher education, how bleak things look, but talks about this fact
of being subject to forces that are inescapable to any human endeavor. So I wanted to get
people talking and this is the framework for getting people talking about higher education. It's
been a really, it's been a gratifying experience for me because I had expected, for example, that
my colleagues would just hate the idea of this book. This isn't a tell-all book. I mean there are
some parting of curtains that takes place, but I'm not really writing a book of secrets here and I
would've thought that my colleagues would've taken some of the more controversial aspects of
the book and run with them, but they haven't. And I would've thought that people from
various political stripes, economic stripes would've had very different takes on what I have to
say about higher education and that really hasn't been the case. Conservatives and liberals
react approximately the same way to the things that we’re going to talk about. If there is any
pushback at all to the subject matter, I think it comes from, it's kind of an unexpected source; it
comes from my colleagues in humanities and liberal arts. And if you haven't seen Stanley Fish’s
Chautauqua lecture, sermon this summer where he argues, without me in the room I might
point out, against the premise of my book, the premise is how dare you try to assign an
economic value to something that has an obviously inherent value of its own. And it's a fair
point, but it's in some sense a silly point. You know, people who have thought about
universities and their role in society for the last thousand years or so have had this recurring
discussion about what is the value of the university, and in fact, the last really important person
to talk about it was not Stanley Fish, but John Henry Cardinal Newman, the founder of
University College Dublin, maybe the most important influencer of higher education in Europe
in the last 200 years. And when he stepped down from his presidency in Dublin, he wrote a
treatise called the value of university. And he kept writing the same book over and over again
for the next 30 years. And the thing he kept coming back to was this idea of what is the value
of education? What is the value of a university? What is the value of a university curriculum?
And the compelling argument that Newman made which seems to be to sort of settle the issue,
is that you can agree that education, you can agree that a liberal arts education has a value that
is in some sense self-evident. It doesn't need to justify itself, but there are many, many things
that are worth doing in their own right. This is an argument that Locke made. Many things that
are worth doing in their own right, and in fact, there are so many things that are worth doing
that you can't possibly do them all. So we can accept that all of the things that go on in a
generally liberal education are worth doing, but it doesn't help you at all, because you have to
make choices. Some things go in and some things come out. And as soon as you start making
choices you have to assign value, assuming that you don't make choices at random. And once
you start assigning a value, you are into economics and you've assigned an economic value to
education, so this idea that somehow universities can escape the conundrum of having to
justify themselves on the basis of some value, I'm not talking necessarily about dollar and cents
value, some value proposition, just seems to me to be a way of avoiding an important
discussion. So I mentioned a few minutes ago about the kinds of misinformation that I see
floating around. What is it that we want to talk about and how do you cut through what people
think is going on in our institutions and get to the heart of the matter? So there is a discussion
that's taking place in a lot of media right now about the number of people that are going to
college. Are too many people going to college? It's a fair question. And you can argue on the
basis of all kinds of political beliefs about whether or not they are, and maybe we're sending
too many college graduates to low-paying jobs or it really never comes back to them in terms of
salary earned, for example, when compared to the amount of tuition that they've paid.
Remarkably no one until this year has done the obvious economic study. How many people
should we be sending to college? So a guy named Anthony Carnevale at Georgetown University
just did what, since I'm not an economist, what I would do and anyone who first thought about
the problem he'd look at the supply and demand for college graduates based on publicly
available data. So he just looked at consumption of people with degrees versus production of
people with degrees without making a lot of distinctions about where the people were from,
what they were studying or where the jobs were. And it turns out using robust statistics that
the U.S. has been under producing college graduates to the tune of about a half a percent a
year for a long time, 40 years. So if you just did the strict arithmetic, we're probably short 20
million college graduates today in terms of what the economy can consume. So it's a simple
argument. It's the kind of thing that you could look at the data that's available and say well, the
argument that says we're overproducing college graduates can't be true because we have been
underproducing for the last 40 years. And then the overlay to that is the argument that says
well, college graduates are ending up in jobs that don't require college training. Inconveniently
for that argument there is a classification of skill levels that the Department of Labor does that
keeps track of what kinds of people fill those jobs. So low skilled jobs, retail sales, flipping
burgers, jobs that could either require a high school education or not, depending on the job,
jobs that have higher skill levels, and then the most skilled positions. So at the bottom of that
hierarchy the unskilled jobs, yeah, there are in fact positions that are being filled by people with
Bachelor's degrees, Masters degrees from reputable institutions, but not many, 1.7%. And it
turns out that even those people are better off than people without a college education. The
moral of the story is that if you're going to be a retail sales clerk at Old Navy, you're better off
being a retail sales clerk with a Bachelor's degree from NYU than not, because you're going to
earn more over your lifetime, your possibilities for advancement in lifetime earnings are
enhanced. Most people with college degrees end up in the top two levels, the highly skilled,
the skilled levels. Now, it matters a lot what you study, of course. Not surprisingly, it matters a
lot what you study. If you are a petroleum engineer, you are relatively in more demand than
someone who majors in pre-Hellenic cultures. It's just a fact of life, but even when you look
across all possible majors, the rates of employment or unemployment between people with
college degrees and those who don't have college degrees is striking. There's also a divergence
in terms of economic rewards, economic inequities, depending on how you look at things, so by
and large, the United States is diverging into two distinct populations based on what you've
studied, where you studied it, what zip code you grew up in, and it's an economic inequity that
just continues up for the foreseeable future. There is also a lot of discussion about some of the
things that I call mission creep, that people think are really an essential part of the university.
Research, for example, so we're in one of the cathedrals of research here. It's not always the
case that the university needs to conduct a program of sponsored research to be the University.
Scholarship and sponsored research are not the same thing. And in fact, there is an assumption
floating around most administrations that says that I can increase my bottom line as a
university if I go after federal research contracts, if I go after industrial research contracts. With
a handful of exceptions, it is simply not true. With a handful of exceptions, it costs a university
two and a half dollars to bring in every dollar of sponsored research. And it's not rocket science
to get to that number. Just look at a cost of sales for a university research grant, two and a half
for every dollar. I'm not talking about overhead. I'm not talking about the cost of
administration. I'm simply talking about the direct cost to the institution for going after those
federal funds. Which means what? Which means that if you don't have research as part of
your mission, and there are very few institutions in this country that have research built into
their mission statement, if you don't have research as part of your mission, you have to come
up with those funds from someplace else. The only place to come up with those funds is
instruction, the only fungible part of the budget, since you're not going to give up football and
hotels, and since you don't have subsidies for those instructional funds, you have to go back to
students and raise tuitions in order to cover that, so this vicious cycle of an entitled set of
activities that have nothing to do with the core activities of the institution being funded on the
backs of students just continues on and on. Let me kind of jump to one of the central ideas in
the book. It's the idea that the higher education system in this country increasingly around the
world is a class system, kind of an intellectually jarring notion. We think of universities as being
a meritocracies, utilitarian, all of the Democratic, all of the things that we like to think of our
institutions. It turns out, of course, that it's simply not true, that higher education is a class
system. At the top, the ruling classes are the 60 or so elite institutions that kind of guide
everyone's thought about higher education. These are, a good share of them are members of
the American Association of Universities, top research institutions or the elite undergraduate
liberal arts colleges like Williams College. At the other end of the spectrum is sort of a
hodgepodge of stuff; for-profit universities is kind of a good example of what that hodgepodge
looks like. University of Phoenix, Savannah College of Art and Design, all of these places that
are kind of outside anyone's pale of what it means to be a quality institution. The interesting
thing is that both of those extremes are doing pretty well. The elite institutions are doing just
fine. You know, Harvard's endowment goes down a few billions of dollars as the market
fluctuates, and university of Phoenix has to contract its growth rate from 15% to 12% annually
computed, but they sort of know what they're doing and they're charging down their own path.
In the middle, and in fact, in the book it's what I call the middle, are somewhere between two
and 3000, and the fact that we can only narrow it to within 1000 institutions tells you a lot
about higher education. Somewhere between two and 3000 institutions that are neither elite
nor doing just fine, thank you. They are living hand to mouth. They live on tuition to the tune
of about 90% a year, sometimes 95% a year. They don't have large endowments to rely on and
their only hope to move to a more stable economic situation is to move up in the class system,
either to become a research institution or to become more selective or to raise tuitions. That's
the group that I'm talking about. It's the bulk of higher education in this country, and it's the
part of higher education that I talk about when I talk about the fate of American Colleges and
Universities, it educates 80% of our students. So 80% of our students are locked into this thing
that I call the middle. And I want to read just an excerpt from the book that talks about the
middle because this is to a large extent what's going on in the middle and why we're having this
discussion today. So the chapter is called Beware the Well Oiled Machine. So Linda's first
challenge when she was named department head was to reform the curriculum. Students were
required to take the introductory courses in her department that were appropriate for their
majors. This requirement meant that the instructional workload for the introductory teachers
amounted to thousands of credit hours per year. Many more contact hours than would be
consistent with effective mentoring. Over time the department had figured out how to cope
with such a high workload. They decided to become a sort of factory. Part-time instructors,
usually retired professionals were handed an hour by hour lesson plan and a large sack of
overhead transparencies for recitation to 100 freshmen. Projects were carried out in smaller
groups under the supervision of teaching assistants, many of them undergraduates themselves.
Tenure-track faculty members had virtually no contact with freshmen, and there was no faculty
supervision of the introductory course sequence. A student services organization staffed by
non-faculty academic professionals and advisors oversaw the entire operation which consumed
a sizable fraction of the department’s operating budget. By 2002 the results were indisputable.
A cheating scandal was exposed to the glare of national media. Lab assignments and projects
designed as a rite of passage by upperclassman and graduate students required an
unreasonable amount of time to complete and were wildly out of sync with the academic goals
of most students. Student complaints far exceeded any other unit on campus and the attrition
rate for students in Linda's department was well above 50%. Even worse, the introductory
courses alienated female students. Male teaching assistants assigned projects by gender.
Women were assigned writing a documentation test and men were assigned leadership roles.
Female enrollment was a full 10 points lower than the national average and 20 points below
the levels of other departments in the university. Open-ended comments from students
confirmed that there were few mature guiding hands in the introductory courses. Linda's first
step was to hire Mark, respected senior professor who had a reputation as a sort of turnaround
expert to guide the reorganization of student services. Mark began to review operations of the
student services organization but longtime staffers immediately warned him that he should not
mess around with how things were currently being done because it's a well oiled machine. It
was a revelation. Even the support staff thought of themselves as workers on the factory floor
and the learning spaces reflected it. Students hung out on long wooden benches in a large
lobby area with shabby green carpet. To get to instructors’ offices, students had to pass under
a hand lettered sign that said swamp. This was remarkably effective set up for the students
who chose to remain, but students on campus and off were choosing other paths in
increasingly large numbers. Student service staff members received consistently higher marks
from their supervisors during annual performance reviews. It did not take Mark long to figure
out why the supervisors loved the well oiled machine. The cost of instruction for the
introductory courses was low and advisors effectively moved the few students who chose to
remain through the program without a lot of hassle. Accreditation teams routinely approved
the curriculum without requiring much from the department, and best of all, the tenured
faculty members were rarely bothered with undergraduates. While students, alumni and an
alarmed public were letting Mark know that the well oiled machine was not doing its job, the
department's research reputation continue to rise in the national rankings. In the strange
accounting of the middle, things were going well. So if there was ever a metaphor for what's
going on in those 2000 institutions, that is it. So what is going on? Higher education is a
multisided market. There is no single determining factor. Is it an economic bubble? Yes, it has
many of the same characteristics as an economic bubble. It's a rapidly growing marketplace,
highly fragmented and it is in the hands of incumbents. At a time when economics, technology
is driving the pace of change, being an incumbent is an exceedingly bad thing to be in a growing
marketplace, and that's what higher education is today. So what can you say about all of this?
There are a few things that I want to leave you with. One is, and I spend a fair amount of time
towards the end of the book talking about this, the university system in the United States
became great because of experimentation. In fact if you trace the history from Abelard to
Apple, there is a series of points of punctuated equilibrium where experimentation just seems
to flourish from nowhere. So at the end of the Renaissance, for example, European universities
were Mormon. Universities at the, medieval universities at the end of the Renaissance had
long since run their course. They weren't attractive to business people. They were called in the
openly, in the press outmoded homes of, obsolete homes of outmoded knowledge I think was
the term that they used until the Jesuits quite by accident decided well, why don't we run an
experiment? Why don't we run an institution that uses their textbooks but actually teaches
people what they want to know. And the academies in northern Europe did the same thing, so
there was a burst of invention that took place in Europe that fundamentally changed higher
education. So in the U.S. this occurred after World War II. You can just kind of track the
number of universities. In medieval times there were dozens of universities. By the end of the
Renaissance there were hundreds of universities. By the time the Civil War ended, there was a
burst of thousands of universities. Most of them were frankly unsustainable experiments.
Sectarian schools that were held hostage to various churches kind of narrowly defined
institutions, but in the same period of time you had the Morrill Act so you had the appearance
of land-grant colleges, which for the first time tied the idea of a university degree to a job. Why
do we have the Morrill Act? Because there are things that a growing country needs to do that
can only be done by a university education. So it was a generally new concept and it resulted in
a spurt of universities. You had during that same period of time, Johns Hopkins, so the
invention of the modern research university. You had tufts. You had Williams College. You had
Amherst. You had Mills College. You had all the institutions that we think of as being the great
institutions, but of course there were thousands of others that were experiments that failed,
but that's how we got to where we are right now. Experimentation in this country basically
stopped in 1960. I don't care what measure you choose there has been no increase in capacity
in the American higher education system since 1960. A small institution here and there, but
that's about it. There's been precisely one new research university since turn-of-the-century.
Anybody know what it is? UC Merced. And UC Merced is on life support at the moment
because its bigger cousins are sort of sucking all the oxygen in the wake of the California
economic crisis.
>>: When did Santa Cruz come?
>> Richard A. DeMillo: Probably about that time. Santa Cruz was…
>>: ‘60.
>> Richard A. DeMillo: ‘60, yeah. Who is experimenting? Well, Indians are experimenting for
one thing. Kapil Sibal, for good or ill has promised the Indian people 27,000 new universities
over the next 10 years, 27,000. It's an easy number to get to. India currently sends somewhere
between 11 and 12% of its high school graduates to university. To be internationally
competitive that number has to be closer to 50%. That over the next 10 years is about 300
million students. So if you take medium-size universities, 10,000 student universities, that gets
you to about 30,000 universities. Now how do you do that? How do you open dozens of new
institutions a week over the next 10 years? You can't. You can't. So they have to have a
different notion of what it means to be a university. And China is in exactly the same boat.
There was just an article in the Chronicle of Higher Education this morning about the rapid rise
in the quality of Asian universities, so using Western measures of quality you see a dramatic
move of Asian universities into the upper quality clusters. It's all a result of experimentation.
And in the U.S. as I said we stopped experimentation. What is the path forward? A lot of things
can go into where we should be heading as a country, where as institutions we should be
hitting a lot of the things you know about, things like open learning are going to play a key role.
Why? Because open learning is an unquestionably a good idea? No, because open learning is
an experiment. Open learning will enable dozens maybe hundreds of experiments of the kind I
couldn't take place if you had to rely on bricks and mortar institutions. Open certification, I
take accreditation agencies to task in my book. I think I'm being pretty harsh. I've had
colleagues that accuse me of pulling my punches. Do we really need to spend eight cents of
every Stanford tuition dollar on accreditation? Does that end up in any sense translate into
value in a Stanford degree? It's a system that is built on a parasitic industry that at its basis has
good roots. Rockefeller and Carnegie needed to know that their foundation money was being
well spent 100 years ago, and that's where the accreditation agencies came from today, but in
institution like Georgia Tech is beholding to 40 different accreditation agencies, none of which
add value to a Georgia Tech degree. So we know what it takes. I mentioned the growing
marketplace. We know what it takes in a growing marketplace to be successful. You have to
have, and this is the lesson of dozens and dozens of technology revolutions, business
revolutions. You have to have a compelling value proposition, a compelling brand, a compelling
price. It helps if you have all three, but if you don't have at least one of those, you're in trouble.
In higher education today those two or 3000 institutions in the middle don't have any of those.
I end up giving a version of this talk for leadership groups for a lot of university presidents and
one of the games that we play is to haul out strategic plans, and I'll just kind of X out the names
of the institutions of the strategic plans and mix them up and ask provosts and presidents can
you pick your own strategic plan out? And by and large you can't, because the strategic plans
of universities are interchangeable. They promise to be empowering. They promise to provide
values. They promise things that are generic across any institution, but not specific any
particular part of their mission. There are exceptions, of course, for every institution like that
you have a Harvey Mudd, that says we are going to take engineering students, science students,
make them skilled policy makers. We're going to make them skilled in the liberal arts. We're
going to make them skilled in the humanities. We are going to teach them how to
communicate about what they know about science and technology. Or Georgia Tech, Georgia
Tech has the highest in the country in terms of percent of return on investment, annual return
on investment over 30 years, the highest of any institution in the country, 14%. If you wanted a
good investment, it's hard to find over 30 years something that returns 14%. A Georgia Tech
tuition returns 14%. After all we say about Georgia Tech's growth as a research institution, the
reason students come to Georgia Tech is that the great bulk of the students who have no desire
to be PhD level scientists, know that they're going to leave being smart, competitive tested
engineers who can walk into any engineering organization in the world and succeed. That's a
value proposition. And we make a big deal about it. I don't end the book with a lot of
discussion about here's what you should do and here's what you shouldn't do. I did, when the
book was done I did feel that I had to leave readers with some sense of what the framework
was, and so there is in chapter 20 of the book a set of rules of the road. And there are 10 of
them and I'm not going to talk about them in detail here, other than to say that they really
divide the strategic choices that a university president has or legislature has into two pieces.
One is to know your value. One is to define your value proposition as an institution. If you
can't do that in this growing marketplace of the billion new students, then you probably won't
survive intact. And once you've done that, you have to think about architecting an institution
that delivers that value and that's the hard part, because that requires presidents to carry out
unnatural acts. They have to violate, Clay Christiansen has this nice analogy in The Innovator's
Dilemma of the irrational act that an innovator has to go through. You have to abandon
something that's been successful for you in the past and jump to a technology, a business a
market that has many, many risks associated with it and may fail, what president gets rewarded
for doing that? Not many. But there are a few. There are a few I talk about some of them in
the book. So let me finish. I didn't talk anything about technology. An the book doesn't spend
a lot of time talking about technology, which is good because most discussion of technology in
higher education is misguided or it assumes, it assumes that none of us have read Nicholas
Carr, so it assumes that none of us have read the idea that IT doesn't really matter if you don't
know what you're doing to begin with. So automating a 16th century curriculum still gives you
a 16th century curriculum. But, there are some directions that technology can take you. There
are some things that we know are probably going to be required that technology enables The
Abelard to Apple story is to a large extent the journey from a monolithic one-size-fits-all
curriculum to a specialized curriculum. But we stopped that with the appearance of majors,
because we didn't have platforms that would allow universities to operate with the kind of
curriculum that was more finely subdivided then with majors. But today we do. Today
technology enables the kind of personalized delivery of education that we see being discussed
in medicine, for example. So a personalized delivery of a university degree now becomes
possible. We're not quite sure how to do it, but it becomes possible. And to some extent it's
the only thing that we should be thinking about in terms of technology. There is a much
ignored paper by Benjamin Bloom. Anyone know who Benjamin Bloom is? The Bloom
Taxonomy? Well, it turns out that Bloom and his colleagues did a meta-study in 1984 about the
effects of different styles of classroom instruction. So he looked back at the last 50 years of
data and said well, let's clump styles of classroom instruction into three categories. There's
traditional classroom instruction, so someone like me gets up in front of the room goes like this.
You give a test. Students either pass or fail. We’ll call it the normal classroom. Then there is
something called the master classroom. Someone like me gets up in front of the room goes like
this. You give a test. You retest and retest and retest until students learn the material or at
least pass the test. That's called a mastery form of classroom instruction. And then there is a
one-on-one tutoring, which is what it sounds like. You have a single Peter Abelard with a small
number of students, maybe not one student but a small number of students to mentor them.
So Bloom looked at the data across 50 years. As much data as he could gather. And if you look
at normal classroom instruction the outcomes are a bell shaped curve. You have lots people in
the middle, the tails are relatively light. When you move to a master classroom that bell
shaped curve shifts a little bit to the right, so people perform better if they're made to do the
assessment until they actually learn the material. The shocking thing for Bloom was that the, if
this had been a clinical trial, they would've had to stop the trial. The shocking thing for Bloom
was that tutor-based instruction moved everyone to the 98th percentile. It's a two sigma
difference. In fact is called the two sigma [inaudible]. The only thing that we know that is
quantifiably the best thing to do in the classroom is to get rid of the God damn classroom and
replace it with Peter Abelard, replace it with a tutor. Now that was considered to be a
completely unrealistic goal, because how do you have, you know, Peter Abelard for 30,000
students in a large public university? But now we have technology that mediates that. I've got
this great video from, and it happens very quickly, this great video from HP about 1998, 1999;
Amazon had just been distributing widely for couple of years at that point. And HP was
supplying the servers for Amazon. There is this great commercial where a car pulls up in front
of an obviously closed mall and a guy gets out and he kind of peers in the door kind of confused
because the mall was closed. Another car pulls up and says what are you doing? And he says
it's closed. A policeman pulls up and says what you guys doing here? And he says I don't know;
this mall is closed. And of course the message is that Amazon is a mall that never closes. That
was two years into the e-commerce revolution and already it had been an infectious idea in the
marketplace that you could have a different kind of customer experience, mediated by
technology. And the idea that we can have a different kind of student experience mediated by
technology that essentially solves Bloom’s two sigma problem I think is not beyond reach, and
you can see it in the Silicon Valley startups, Udacity Coursera, the venture backed companies
that are using a heavy combination of machine learning and AI to deliver a personal, a more
personalized experience and we are less than the first generation into that. So if I had to put all
of my eggs into any one technology basket, that would be the basket that they would be in.
Once we start gathering analytics on millions upon millions of student hours of classroom
experience and we know what it means for a mouse to hover over a review question for 10
seconds longer than the average, then you start getting real-time feedback that it takes to
make decisions that affect large numbers of students. So I think I'll stop there. There is just a
return to the dark aspect of the book. There is a discussion at the end of the book of what
happens if you decide that you as an institution want to kind of go on your current course and
speed and the outlook is not great. The outlook is not great. There is a discussion at the end of
the book as to what happened when Antioch College closed. Antioch College, founded by
Horace Mann, in many respects the beacon of progressive educational thought in the U.S. for
100 years, closed. By the time it closed its endowment had shrunk to $5 million, its freshman
class was 20 students, its entire enrollment was 500 students. What happened? Antioch
College had implemented a strategic plan five years before that that essentially created a
funnel for anyone that wanted to enter Antioch College, a kind of orthodoxy shoot that she had
to go through and unless you went through that shoot you were not going to be admitted as an
Antioch student. When they announced they were going to close, the AAUP was called in.
They did an audit. They found great fault with the university governance. Never once in the
AAUP report was there a mention of the role of the strategic plan played in closing Antioch
College, and again that's a metaphor for why institutions don't change. So Harold, thank you.
[applause].
>> Harold Javid: We have time for questions, so please.
>> Richard A. DeMillo: I'm here for two days. [laughter].
>>: I think you made a lot of really interesting points and when you referred also to Clayton
Christiansen's Center for American progress report which I thought was very interesting on its
face as well. One thing I was wondering about that he talked about a lot was, is that I
absolutely agree with the numbers. The middles are losing out on the great proposition there
and they don't have great outcomes. What's interesting is that some of the Phoenix University
like places and community colleges that are offering online kinds of things are just starting to
eat their lunch because they actually have better outcomes per dollar than some of these
middles do. And what's interesting to me is that some of the most innovative things are not
coming from the Stanford and MIT things; they are coming from these community colleges, you
know, they are doing different forms of discussion and I wonder what you think about the
potential for real innovation coming from them?
>> Richard A. DeMillo: Well, you would hope that it would be a source of innovation. I think
my big fear for community colleges is that they’re stuck in the same envy model that everyone
else has. The NSF budget for community colleges has gone from essentially zero when I was at
NSF, exactly 0 when I was at NSF to 200 million today. So there is 200 million research dollars
flowing to community colleges. Now some of this is for educational reform. It's hard to argue
with that, but a lot of it isn't. A lot of it is straight heads-up competition with research
institutions for peer-reviewed research. So you can tell what's happening. Clark Kerr, the great
University of California president who coined the term multiversity talked about this idea of the
mission creep, how it's always in the interest of trustees, of presidents to move up into the
Carnegie classification and that's what's happening in community colleges. The state of Georgia
has no more community colleges. It used to have a great community college system in Georgia;
now we have four year colleges and technical colleges and every one of those four-year
colleges is trying to move up, is trying to move up the food chain. So you would like to look at
what is happening in community colleges and take lessons away from that and you kind of keep
your fingers crossed that they're going to be there as a source of examples. On the other side,
the for-profits are still looked on with great disdain by traditional universities, sometimes for
unrealistic reasons, because they're for-profit as if those of us with endowments don't earn
profits. Sometimes because they accept from zip codes that most of us wouldn't touch. They
accept the kind of student that we wouldn't accept. But demographics is working in their favor.
By 2020, doing straight line extrapolation of current trends, a majority of college students will
be outside the 18 to 24-year-old demographic. That is 25 years old or above. What does that
say? It says that if you built your reputation, if you built your value proposition on dormitories
and fraternity houses and football and climbing walls, you're probably not going to hit where
the market is, because most students will be what we would normally think of as nontraditional
students. Recent immigrants, Gulf War returning veterans, single parents returning back to
school, people my age going back for sometimes a second or third degree, that's the great
trend. That all favors the for-profit universities.
>>: And I think that speaks exactly [inaudible] arguments that you have about the preferred
customer pool which is like the high-end customers that are going into the top-end universities
and a lot of the middles are clamoring for also but then you have that kind of the unwanted
customers which the for-profits are happy to…
>> Richard A. DeMillo: That's a remarkable point. It's a remarkable point and the interesting
thing is that almost no one who's doing planning in higher education is aware of The Innovators
Dilemma.
>>: Typically in history when a brand becomes that important you get franchising, so if you take
a look at what's happening in healthcare you start to see, you know, lots of major hospitals
have remote centers, that they bought up smaller hospitals, do you see that happening with
universities?
>> Richard A. DeMillo: It's happening already with the for-profits, so the for-profits, and its
reverse branding. So what they're doing is they're going out and buying a small religious
college in the Midwest that already has a brand and they're moving in and running it as a forprofit. Antioch is a perfect case in point. Antioch College that graduated Coretta Scott King
disappeared, but the online Antioch University is still growing its enrollment. So it's like reverse
takeover almost. The other thing that's happening, I think and I mentioned Coursera and
Udacity with some malice of forethought, you find institutions like Stanford who are taking this
great brand and the great reach that they have with a worldwide stead of stakeholders and
saying well we can reach Abelard style, we can reach that group of stakeholders with
technology in ways that we couldn't 50 years ago. Why don't we figure out how to do that?
>>: They also are doing, perhaps not Stanford but places like Cornell doing campuses offshore
in Singapore, Malaysia and places.
>> Richard A. DeMillo: Yeah, it turns out to be a really bad business choice for most of them.
>>: Seems to be. I was never convinced of that. You say that there's some, I'd like to read the
report about the end of production of graduates. I mean there are also reports that they are
going to be very short of IT related fields.
>> Richard A. DeMillo: Software engineering. Software engineers are being under produced at
the undergraduate level at an astounding rate.
>>: What they want to do is encourage more historians, artistry people and things like that
necessarily.
>> Richard A. DeMillo: So this gets back to my Stanley Fish problem, right? How do you deal
with, how do you deal with humanity--it's not as if, it's not as if the liberal arts are doing a
terrific job. I have to say it at the offset. There is a great study by a guy named Richard Ahrams
who tracked 2300 students across 1000 institutions to figure out if there was any measurable
difference in having taken the general ed requirements at a university versus not, and general
ed requirements are by and large humanities and liberal arts. Almost half of the time you can't
tell whether or not someone has been the first two years of college. So what does this say
about how we're teaching critical reading skills, writing skills, quantitative reasoning? We're
doing a horrible job of it so maybe the solution to the problem is to find an integrated way of
teaching the humanities within Harvey Mudd style, within a technical curriculum. Now no one
knows quite how to do that at scale, but it's certainly an approach to the same mission. Yes?
>>: You spoke of the unwanted students. What exactly did you mean by that? Did you mean
academically underprepared?
>>: It's more like when you look at the, you know, the MITs and the Cornells and places like
that, they are going after the very top tier students, and more and more of these middles also
want to compete for that. That's what increases their numbers and make them seem better.
And the people who are the worst off, economically disadvantaged or, you know, we said
they’re single parents going back to school where they're trying to retool for new job, they are
kind of like lower performers. They’re from the wrong zip codes. They don't have the
education background and the grades and the top universities don't want to look at them and
so they are going to these places and saying okay, I can pay a certain amount of money and I
can get the training and certification or the degree and I can get the job that I want to get and
that's what is providing me the value that I need, and so that's where these for-profits are
cleaning up.
>>: Is that training rather than quote, education?
>>: Well, you know, I mean it's hard to [inaudible]. So one of the things that Christiansen, I'm
sure when you talk about some of his number is two, if you look at the outcomes, the dollars
that they get that compared to the dollars that they put into education, it's often much better
for the high-end of these for-profit places than it is for the low-end like in the middles. So for
the people who are paying for this education, it matters to them.
>> Richard A. DeMillo: Right. And again, come back to the Richard Ahrams’ study. It's not as if
the things we are passing off as education were all that effective. We inflate grades. We have
horrible outcomes.
>>: I attended a great talk by [inaudible] and he had a quote here from the Dean of [inaudible]
students and it says as an academic institution USC's purpose is to promote and foster the
creation of intellectual property, and I thought that was a really bad mission statement.
>> Richard A. DeMillo: Oh man. [laughter]. We could go another two hours on that.
[laughter].
>>: But how, also you see Stanford and MIT now doing, MIT's open courseware and now
they're doing these courses that people can sign up for. Isn't that going to leech away from the
middle ground schools?
>> Richard A. DeMillo: Oh, absolutely. So what is, if I can learn quantum entanglement from
Leonard Susskind at Stanford, what will I need to have a course at my local teachers college in
physics for? Why wouldn't you just do that? And the argument has to be, I mean, there is an
argument to be said that we probably have too many people teaching those kinds of courses. If
you just do a strict money ball, I did a money ball analysis of the amount of money spent on
introduction to computer science courses, and I haven't published it so I'm not going to give
you the exact numbers. Let's just say there's a gazillion dollars spent across this country on
teaching introductory computer science and there is no corresponding value associated with
that. Do students end up performing well compared to international competition? No. Do
they do well on standardized tests? No. Does a place like Microsoft believe the grades that
they get? No. That's why you bring people in and subject them to a day’s worth of on-campus
interviews. So those universities have to figure out what their value is and it can't be, you
know, a world weary professor standing up in front of the class and giving exactly the same
lecture that's been given for the last 25 years. There has to be some aspect of mentoring that
goes with it.
>>: So nowadays books are kind of a different kind of animal because you can have a
[inaudible] accountant on the web. As you go through the nation and you talk to different
people and you come to more conclusions are you planning to kind of keep a blog so we can
follow the insides of what you're [inaudible] for?
>> Richard A. DeMillo: Yeah. Things are moving too fast.
>>: Yes, exactly, that's why it's so beautiful to have [inaudible] and actually as you move
around we can see that you have continued pursuing the ideas and maybe, you know, create a
Facebook page or something like that.
>> Richard A. DeMillo: Yeah, that's a good idea.
>>: I tried to download your book [laughter] and it was technologically unsuccessful [laughter].
Is it just, is there a secret?
>> Richard A. DeMillo: You have to go to Amazon.
>>: Got it.
>>: I want to come back to this issue that you mentioned right to beginning, which is what I
consider to be unsustainable growth in the cost of education.
>> Richard A. DeMillo: Price.
>>: Price of education in the public universities and do you see, so something is going to fall off
a cliff here at some point for a lot of [inaudible]. Are any of them starting to wake up now,
starting to understand what they have to do in order to make the price correspond a little
closer to the cost so that the crash…
>> Richard A. DeMillo: You know the problem is that all of the pressure is on the wrong
pressure points in the system. You have the administration threatening to penalize universities
that have price increases above a certain percent. Much better to look at institutions that cut
back on what they do. So the University of Chicago made it perfectly clear that you can be a
really good university and not field a division one or two football team. Well…
>>: [inaudible].
>> Richard A. DeMillo: You know, it's true for 119 BCS schools. It's true for the 119 schools that
send the field football teams that are eligible for bowl games lose money hand over fist. The
median loss is $10 million.
>>: For having a football team?
>> Richard A. DeMillo: The median loss is $10 million. Rutgers last year plus $38 million which
was almost precisely the amount of money it lost from the state in terms of appropriations. So
what would happen as I suggested if there were a new Glass-Steagall act for intercollegiate
athletics that put an institutional wall between intercollegiate athletics and higher learning,
make it impossible for a university to give athletic scholarships. Make it impossible for athletic
teams to recruit on behalf of the university. Universities can license their names and their logo
to a privately owned company but that company has to live or die on its own balance sheet. It
can't affect the university. You mention intellectual property. How many intellectual property
licensing offices lose money hand over fist? They exist only to employ the lawyers that
negotiate the agreements. Six institutions make money on technology licensing. This week the
Association of University Technology Licensing managers is being held. There are 2300 offices
represented. Not people, offices, 2300 universities. Six only make money.
>>: Another [inaudible] I noticed a brick universities accepting [inaudible] from out of state so
they get more tuition money from those students.
>> Richard A. DeMillo: It's bowing to the pressures, yes.
>>: They still want the cream.
>> Richard A. DeMillo: They still want the cream, yeah.
>>: But still, that is one way you can increase tuition.
>> Richard A. DeMillo: There are exceptions. Michael Kroger Arizona State looked at Arizona
State’s mission and said Arizona State is not going to be, is not going to grow into a great
university by being more and more selective. We're going to grow by setting a threshold above
which any citizen in Arizona can attend Arizona State. And the threshold that he set just strikes
me as a common sense bar. So the admission requirements at Arizona State are basically what
they were at Berkeley in 1960. B average in high school, good test scores, recommendations
from teachers and an appropriately challenging high school curriculum will get you into Arizona
State. It's a different, there's an example of a president who has not shied away from taking
risks. Yes?
>>: I want to ask you a [inaudible] situation so they close at home example. We have
University of Washington right across the lake. State of Washington has a great deal of talent
to offer in software development. They have a very fine computer science department, but
unfortunately at this point 4 to 5 kids from within University of Washington that are trying to
get into that program are turned away, and they are then forced into other majors that they
really didn't want to go into and so what went wrong? Is that a problem with the tenure
system, is it just, what's happened?
>> Richard A. DeMillo: It's hard to fault tenure there. At some level it's a fault of institutional
leadership for just year after year accepting the status quo until it becomes no longer
successful, acceptable for the people paying the bills. I mean that's the way it is in Georgia.
That's the way it is in most…
>>: [inaudible] distribution of places.
>> Richard A. DeMillo: And the way that we do business. And the way that we do business.
>>: I formerly worked at University of Washington and I know many students who for instance
weren't accepted into the business school because it was full, so they majored in economics
and liberal arts. That was kind of the backup.
>> Richard A. DeMillo: Business schools are ranked on the basis of their selectivity, so the
reason the business school was filled was…
>>: I'm assuming that's the same reason that the computer science problems are limited in
role.
>> Richard A. DeMillo: There has never been as far as I know a pact between a public
university, and I am speaking of all only publics now, a pact between a public university and a
state legislature to cut the cost of general ed requirements by a fixed percentage. If at
University of Washington, if at any large state institution there was a program put into place to
make it half as expensive five years from now to go through the first two years of a college
curriculum with better outcomes, I think the conversation would be different. I don't know if it
would be better, but it would be different.
>> Harold Javid: Well, thank you very much.
>> Richard A. DeMillo: Thank you.