Summary: College graduation is losing value, according to a decade-old story. The rise of well-funded educational technology companies offering novel solutions like massive open online courses (MOOCs) has made prognosticating the “disruption” of American higher education popular. A regular degree is still valuable in the competitive job market. Traditional universities, frequently in partnership with online startups, lead degree delivery innovation. New online credentialing, such as certificates, MicroMasters, badges, and others, is paving the way for more affordable and accessible alternatives to degrees. The ecosystem is young, but business executives’ openness to new educational credential offerings and distribution techniques will shape the industry.
Higher education enrollment in the United States reached an all-time high in 2010, the first full year after the Great Recession ended. Over the past decade, a narrative has evolved suggesting that college education is losing its usefulness. As a slew of newly funded educational technology businesses, notably those offering massive open online courses (MOOCs), entered the market, predictions of the industry’s disruption of American universities gained traction. Obtaining credentials in the digital realm would pose a threat to and eventually supersede the need for formalized education. Clayton Christensen, a prominent business theorist, predicted that 50% of universities would be insolvent within 15 years. Some have predicted the degree’s eventual demise.
It seemed as though a revolution in credentialing was underway, with digital alternatives and disruptive start-ups poised to displace the traditional degree as institutions’ primary product. In addition, recent news stories have added fuel to this fire by claiming that well-known corporations like IBM, Apple, and others “demand” less formal education for entry-level work.
HR professionals place a high or very high priority on graduation when hiring
Our recent nationwide survey of businesses found that 83% of HR professionals place a high or very high priority on education when hiring, up from 81% in the previous poll. More than half of all job openings nationwide over the past year preferred at least a bachelor’s degree, according to the tens of millions of job postings tracked by labour market data firm Burning Glass Technologies, despite some prominent employers relaxing their baseline educational requirements in a historically tight job market. This percentage has stayed the same for the past five years. Recent studies conducted by the Federal Reserve Bank of New York show that the large wage premium paid to college degree holders by employers is at historically all-time high levels. Businesses still place a premium on education and pay extra to hire employees with advanced degrees.
Increasing skill requirements in today’s information economy are largely to blame. According to our poll, 64 percent of business owners believe that employees will require additional education and certifications to keep up with the growing demand for lifetime learning. This is leading to increased enrollment in graduate and professional programmes. It’s now twice as common for Americans to acquire a graduate degree before the age of 30 as it was in 1995.
Free Massive Open Online Course
Free massive open online course (MOOC) pioneers have discovered a business model, and it centers on online degrees and other fee-based educational credentials, in a market that continues to favor formal educational credentials. Coursera and EdX, two of the most prominent MOOC providers, have pivoted their business models to concentrate on the expanding field of online degrees, a sector that has long been supplied by publicly traded education firms like Pearson, Wiley, and 2U. Competing in the established, two-decade-old market for online degrees, one of the only growing categories in American higher education, are the massive open online course (MOOC) platforms that gave rise to new credential products like the “nanodegree” and the “MicroMasters” (both trademarked terms).
The number of Americans who get their whole education without ever leaving their homes or campus is now over 3 million, with a particularly high proportion of those students (29%) enrolled in graduate programmes taking advantage of the flexibility that online learning offers. Our recent polling at the national level shows that 61% of HR directors and managers consider online credentials to be on par with or even superior to those earned in person. Throughout the years, employers have gained first-hand experience with online delivery through the hiring, participation, and sending of employees to online university programmes.
Market leaders, especially those in the for-profit industry, As far back as 15 years ago, University of Phoenix might have been the undisputed leader in providing degrees entirely through the Internet. Online education used to be seen as suspect, but now major players like Arizona State University, the University of Michigan, Harvard University, and Johns Hopkins University are helping to legitimise it. While the transition to digital delivery in higher education has started more slowly than in other industries, it is already under way and quickly picking up speed.
New forms of online credentials, such as certificates, MicroMasters, badges, and the like, are not replacing degrees; rather, they are acting as the foundation for newer, more reasonably priced degree programmes. Regarding the basic cost inputs (including faculty labour), pricing, and service expectations related to the delivery of degrees, this reflects actual innovation. These programmes are less expensive for institutions to run and sell, and less expensive for the student, thanks to the use of algorithms and really disruptive pricing points.
An example that serves as an illustration is the MBA market. The University of Illinois and Coursera collaborated to establish the “iMBA” program in 2016, adding an online degree programme on top of a foundation of MOOC courses and certificates. This programme costs just $22,000 for the full degree, which is less than one-third of what a standard on-campus M.B.A. programme costs. Three years later, there are now 2,000 students enrolled in the programme, an exponential growth rate that accounts for a significant portion of the national online M.B.A. market’s annual net growth. The university made the decision to stop offering the conventional residential MBA this spring in order to concentrate its efforts on the online option.
The unique master’s degree programme in computer science at Georgia Tech, which is based on massive open online courses (MOOCs) and costs just $7,000. It has grown to enrol more than 6,000 students. The institution has made significant advances in the usage of artificial intelligence-based teaching assistants as part of this programme.
There is a wide variety of new possibilities for talent development and corporate training thanks to the proliferation of live online learning platforms that use cutting-edge technology to give academic credentials to students. The lines between classroom study and on-the-job training are already beginning to blur, and they’re only going to get more blurry as online education becomes an increasingly common method of imparting knowledge in businesses.
The professional education sector is undergoing a period of experimentation and increasing programme options, and business executives should take this into account. Many of the best colleges in the world now offer online courses leading to accredited degrees, but the specifics of each programme vary widely. There will eventually be more consensus and uniformity in the market as a result of analysis and experience. In the end, employers will be among the most important value judges.
Credentials are being stored and shared digitally more and more. This is ushering in a new era of increased openness for educational results and giving hiring managers more and better data on which to base their decisions. Since more and more education is being done online and recorded in digital credentials, businesses should soon be able to better judge the knowledge, skills, and experience of both potential hires and current workers. This can improve the effectiveness of college recruitment initiatives, hiring criteria development, and L&D and executive spending decisions.
And last, the new credentialing landscape is stimulating the creation of novel corporate tools, services, and enterprises because of the possibility of greater integration with talent strategy. Multibillion-dollar sums keep flowing into the educational technology sector, while roughly $3 billion in yearly investment fuels the corporate human resources technology market. It’s still early in the ecosystem’s growth, but the openness of corporate leaders to novel educational credential offerings and distribution methods will be crucial in determining the market’s final form.
