Published on 2013/06/12

Online Learning Captures Transactional Value of Higher Education

AUDIO | Online Learning Captures Transactional Value of Higher Education
Higher education can have two distinct value propositions; transformational and transactional. At the moment, online learning captures the transactional element with ease, but the next big innovation is going to be when online learning can dominate the transformational marketplace as well.

The following interview is with David Staley, director of the Harvey Goldberg Center at Ohio State University. Staley has discussed at length how emerging online learning resources such as Massive Open Online Courses (MOOCs) are helping autonomous learners fit into the higher education space in his previous articles published on The EvoLLLution. In this interview, Staley shares his thoughts on how MOOCs and other alternative online higher education providers are changing the value proposition of higher education.

1. Historically — looking back 15 to 20 years — what would you say has been higher education’s most significant value proposition?

The way I look at this is to think about the value proposition of higher education in sort of one of two categories: higher education as transformative and higher education as transactional. And, over the last 15 to 20 years, I think we’ve seen a shift in … consumer behavior, the way that students are coming to higher education. What is it that they are interested in achieving? What is the experience that they’re looking for? A transformative one or a transactional one?

Let me define those.

A transformational experience means that people come to college, people come to university, assuming that they are going to be different people at the end of the experience. They go in with the assumption that, “I’m one type of person today. After four years … I will be a different person. Either I’ve matured in some way, or I’ve experienced the world, I’ve travelled, I’ve gained new insights, new perspectives.” Whatever else one majors in, the idea is that a university experience is a transformational, personally transformational experience.

I contrast that with transactional experience so that higher education is a transaction between the university and the student. … In a transactional experience the idea is that, “I’m going to be the same person or nearly the same person when I leave. It’s just that I’ll have more skills,” let’s say, or “I’ll have a credential or I’ll have been connected in a network somehow or I’ve received some sort of informator from a university. But I’m fundamentally going to be the same person when I leave that.”

I think that over the last 20 years or so, I think that … we have transitioned largely from a view of university as a transformational experience to one that is a transactional experience. So, if we’re going to define the value proposition of higher education, I think we have to understand those categories.

If you value higher education as a transactional sort of experience, then this has been, I think, a most significant value proposition. And I think it’s in this context you have to understand what online education means, what MOOCs mean in these sorts of things.

2. If you look at what the ideal of higher education is versus what we’re seeing higher education become, that dichotomy of transactional versus transitional experience definitely seems to be one that is popping up, and when we look at elite liberal arts, there’s a real push to maintain that transitional approach to higher education.

I’ve seen a lot of this when I work with adult students, for instance. And I’ve seen this over many years of working with adult students.

You know, 75 percent of the students in the class — their experience of higher education is transactional. “I’m here to get skills, I’m here to brush up on skills, I’m here to get some sort of credential that will give me a promotion in my job, I’m looking to change careers, I was laid off and so I need to have a new skill set.”

You also have adult learners who saw university, who saw college, as transformational. “I’m doing this for myself. I want to set a good example for my kids. I never thought that I could go to college but this is a statement about who I am as a person.”

And when I make these distinctions, I don’t think it’s so dichotomous that someone isn’t going to university hoping to achieve both, let’s say, but I really do think that we’ve seen, broadly speaking across all kinds of higher education institutions, I think we’ve seen a general shift towards higher education as more transactional than transformational.

3. Higher education has changed immensely over the past few decades; especially as online learning has become more prominent, being offered both by institutions and private providers creating postsecondary-style learning opportunities. How has this innovation changed the marketplace?

So, I think that online learning, and all of the examples that you list there, are emerging at the same time that this transactional notion of higher education is gaining prominence. I think that the … online learning experience taps into, and services very well, the transactional notion. If you think the college experience really is a contract or transaction between an institution and a student, well, online alternatives serve that purpose just fine. … Although there are certainly emerging examples of this, we’re not quite there yet with online learning as a transformational experience.

4. Would you say that higher education’s value proposition has been changed by these online learning providers, or have these online learning providers capitalized on a change in the value proposition of higher education?

I like the latter, although as your question implies, it’s probably much more complex than that. But my sense is the latter: I think online providers are capitalizing on this shift. And that shift to a transactional notion of higher education, of course, is caused by all kinds of factors. I think most online providers are capitalizing or meeting a market demand represented by this shift in perception about the value or the importance or the meaning of a college experience. …

So, I think [of the reasons this shift is happening], number one among them is the notion that individuals are becoming more and more responsible for directly paying for their college experience. We know, at least in this country, the level of support — state support, for instance, for higher education — has been dwindling and not just simply as a result of the Great Recession. We can track this back to at least the early part of the 1980s, where we watched an erosion in state support for higher education. In many ways, the cost to educate a student has not been rising that significantly. What has been rising is the tuition costs. There is a difference between the cost to educate a student and the cost that’s borne by an individual student. And … more and more individuals are directly responsible for paying for their own higher education. There is a growing sense that this has to be like an economic investment. I think, before the 1980s even, many would have thought of higher education as an investment in one’s self. I think more and more consumers of higher education today really do see it as an investment in an economic sense more than an interpersonal sense. I think the nature of the economy is such that the kinds of skills — the kinds of complex skills — that one learns in higher education are so much in demand.

Again, I point to an example of working with adult learners and this is one anecdote that I think gives a sense of the larger picture. I was doing some consulting with a career college and met a woman probably in her late 30s, early 40s, I would guess, who was absolutely terrified around a computer. … When I met this woman again about six weeks later because of some interventions that the school had done, she had a facility with computers that earlier on in her life she never would have assumed. Never would have believed. For her, I think it was a very transformational experience. But, I think it also indicates the kinds of skills that people need to have just to be able to function in the society, in the economy, we have here today.

We simply can’t rely on skills that might have been achieved in a high school education decades earlier. The nature of the economy is such that everyone needs the kinds of complex skills that one can learn in higher education. I think that’s another thing that’s driving the value proposition of higher education.

5. Is there anything you’d like to add about how online learning has impacted the value proposition or, conversely, how the change in the value proposition of higher education has impacted the growth of online learning?

There are obviously lots of providers that are moving into online, and we’ve talked about this before. Online education is hardly a new thing. I think that the rise of the MOOCs just two years ago has drawn attention to online learning because now some of the big elite schools are becoming involved; MIT and Stanford [University] and Harvard [University] and the like. But we’ve been obviously delivering online education for … almost two decades now and if you want to talk about the Open University model, you can go back even further.

So, as I said earlier, online learning does a terrific job, I think, in meeting the expectation of higher education as a transactional experience. I think that the next wave is going to come from those providers that will be able to deliver on the transformational experience of higher education through online platforms. I don’t think that we’re there yet today. But that’s, I think, going to be the next great innovation.

I can’t wait to see which educational entrepreneurs, which entrepreneurial universities and colleges, are going to move into this space.

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Readers Comments

Chelsea Bellows 2013/06/12 at 10:00 am

Contrary to Staley’s opinion, I believe online education providers have changed the value proposition of higher education. This is because online education has allowed individuals to see higher education disaggregated for the first time, where instruction has been isolated and offered as separate from other components of the ‘university experience.’ This has impacted the value people attach to higher education.

Greg Allen 2013/06/12 at 2:18 pm

I’m not convinced online education can ever truly move beyond transactional, as it lacks elements of faculty-student and student-student interaction necessary to making higher education transformational. However, like Staley, I’m excited to see the direction online education goes in the coming years. A very interesting interview.

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