It is rare when I actually take the time to read Baylor’s student newspaper, the Baylor Lariat, and even rarer when I post a critical response to a Lariat article. However, I couldn’t resist commenting on an editorial from earlier this month entitled, “Baylor should implement class to ready students for real world”. In this editorial, the members of the Lariat editorial board opine that Baylor should require a one-hour credit “Life Skills” course in lieu of a basic math course such as “Ideas in Mathematics”. Basically, such a course would be designed to cover very basic personal finance principles, such as budgeting, paying off student loans, buying insurance, saving for retirement, etc. I think this is a manifestly bad idea; let me explain why.
While I am not aware of an empirical literature concerning mandated personal finance courses at colleges and universities, many states have experimented with personal finance and minimum math requirements at the high school level. A recent (2014) Harvard Business School working paper entitled “High School Curriculum and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses” provides a thorough empirical analysis of personal finance and minimum math requirements and finds that mandated personal finance courses at the high school level do little to improve outcomes that are generally associated with financial literacy (e.g., such as building wealth through asset accumulation, prudent credit management, etc.), whereas “… individuals who were exposed to greater math requirements in high school are more likely to accumulate assets, have more real estate equity, are less likely to be delinquent on their loans, and are less likely to undergo foreclosure.”
I just had a nice visit from Cindy Riemenschneider, who is Associate Dean for Research at Baylor University’s Hankamer School of Business. She came by my class for the purpose of presenting (in front of my students) a “Certificate of Exceptional Research” for my paper with Jim Hilliard and Martin Grace entitled “Adverse Selection in Reinsurance Markets” (cf. http://bit.ly/adverseselection). Thanks, Cindy!
What College Graduates Regret
This article from The Atlantic is well worth reading; quoting from this article,
“… when asked what they wish they’d done differently in college, “choosing a different major” wasn’t the top answer. The most popular answer, given by half of all respondents, was “gaining more work experience.” Choosing a different major was the fourth most popular response, after “studying harder” and “looking for work sooner.”
The End of the University as We Know It – Nathan Harden – The American Interest Magazine.
Hat tip to Jonathan Warren for pointing this article out to me. For what it’s worth, here are some thoughts I have concerning this article.
It does seem that the “business models” of many colleges and universities are quite broken. I also agree with the author (one Nathan Harden) that the “massive open online courses” (otherwise known as “MOOCs”) offered by the Coursera, Udacity, and edX represent a highly disruptive innovation and that they will help contribute to the demise of many institutions (particularly academically marginal ones). However, Mr. Harden’s article reminds me of the kinds of articles which regularly appeared in the media at the dawning of the commercial Internet way back in the mid-to-late 90’s; the conventional wisdom back then was that the Internet would bring about the demise of intermediaries (so-called “middlemen”) in any number of businesses through a process commonly referred to as “disintermediation”.
While it is true that some types of intermediaries have vanished or are in the process of vanishing (large scale brick-and-mortar record and video stores like Tower Records and Blockbuster readily come to mind), it’s not like the music and movie industries are going away. What’s changed is how the supply chains for these industries are organized; particularly the methods of distribution. I think we can expect similar competitive pressures on higher education; although it remains to be seen what the overall effect of MOOCs will be, perhaps MOOCs are part of a larger (self-correcting) market reaction against the unsustainable financial trajectory that the system has been on for the past quarter century.
So where does this leave colleges and universities like my school (Baylor University in Waco, TX) that are academically competent but clearly not in the same league as academic elites like Harvard, Stanford, Princeton, etc.? My Baylor colleague John Martin is fond of pointing out that the saving grace for brick-and-mortar colleges and universities like Baylor is that these institutions provide a particularly important service to parents of college-aged students which goes well beyond the task of providing education. Specifically, the Baylors of the world also provide parents with relatively safe environments where said students can be warehoused away from home and have a few years to grow up. I don’t think that aspect of the college experience scales particularly well to the online environment.
Thus, I see online education as more of a complement rather than a substitute for (good quality) brick-and-mortar colleges and universities primarily serving the 18-25 year old age cohort. For adult/continuing education, online education represents a viable alternative to many (particularly lower quality, endowment-poor) brick-and-mortar colleges and universities.