Shades of the Things to Come?

Southern New England University, a lesser-known player in the crowded Northeastern U.S. university market, is making quite a splash with new online bachelor's degrees in health care management and communication. Targeting older working learners, rather than typical 20-year-old undergraduates, Southern New Hampshire's bet is that a degree costing about US$10,000 in total will be sufficiently disruptive to help finance the bricks-and-mortar side of the school. The Chronicle of Higher Education reported that:

"Their online operation is the institution's economic engine, subsidizing its money-losing undergraduate campus, known as University College, whose 2,350 students enjoy a new dining hall, Olympic-size pool, and small classes taught largely by full-time professors."

The factor that makes such a price point possible is not just avoiding feeding and housing the online students. In addition, the teachers will be lower paid adjuncts handling a higher load of students and courses than traditional professors. To be fair to the university, as reported here, these adjuncts will be paid considerably better than their counterparts in other places, mainly because they will be more economically productive. [Think about this as an experiment in getting beyond Baumol's famous cost disease verdict on the education sector.]While it is way to early to call this anything more than an interesting experiment, I do applaud SNEU President Paul LeBlanc's innovative spirit and can't help but think this move is a step toward what I have been predicting for some time: a striated higher education market, with different price levels corresponding to different service tiers. The more higher ed goes this way, the sooner we will see such moves in the private, independent K-12 space.