In recent years, there has been a growing trend to view educational institutions as businesses, assessing them in terms of business models and measures. Consistent with such models, institutions are required to justify their existence based not on criteria such as quality of faculty or resources, but on whether they:
- satisfy a current demand,
- anticipate a future one,
- keep their clients happy,
- continuously increase product offerings (courses/programs) and sales (enrollment), and
- positively balance their books.
This trend arose partially from the need to move away from the subjective and over-emotional manner in which education has been traditionally approached (vague references to intellectual maturity and greater good) and was encouraged by the increasing reliance of educational institutions on state or private “investors,” who demand increasingly measurable, objective, short-term “return on investment.”
Conceptual and Practical Problems with the Business Model in Education
In the business model of education, the institution is viewed as the “service provider” and the students are viewed as the “clients.” The only tangible and measurable components of the transactions between the two in the current version of the model are the fees the students pay to attend an institution and the degree (“product”) students receive at the end of their residency at the institution.
However, unlike any other business transaction in the US, payment of the fees does not guarantee that the “clients” will:
- always be right (by definition, the opposite is most often the case),
- receive the end product (the “provider” actually delivers the “product” based on criteria other than fee payment),
- be able to return the end product for a refund, exchange, or credit if it does not fulfill the expectations raised by the institution (there is no system in place to hold providers accountable for their products), or
- get a refund if they eventually change their minds and decide not to attend the institution.
To stay consistent with their current business model version, institutions would have to either:
- provide degrees upon payment (I do get several emails per day advertising just that), eliminating in the process the degrees’ value and therefore the institutions’ reason for existence or
- issue refunds to students that do not earn the degrees, permitting noncommittal students to take up resources and bankrupt their business.
One could envision a two-stage model in which the provider-client roles switch half way through the paying-fees-receiving-degree process.
Stage 1: Institutions as Service Providers, Students as Clients
In this stage, students pay a fee. In return they get access to resources that facilitate and structure learning, such as:
- qualified, accomplished, passionate instructors,
- comprehensive, manageable, and timely curricula, and
- physical and virtual facilities that promote retrieval and dissemination of high quality information related to the educational area they paid for.
These resources are clearly spelled out in the institution’s mission/advertising/contract with their “clients” (through admissions policies, for example). After the service has been provided (e.g. at the end of each quarter), clients have the right to evaluate the service they received and examine whether it fulfilled the admissions contract. If it has not, they should be able to request remedies such as:
- improvement in instruction/curricular resources and
- re-offering of a course for a reduced or waved fee.
If these requests are not satisfied, students should be entitled to a refund. This is where the first stage of the transaction ends.
Stage 2: Students as Service Providers, Institutions as Clients
In this stage, institutions “pay” students with a grade and/or degree. Degrees are the currencies of educational institutions. Their value has been earned through the universities’ work and, like all currencies, degrees carry a proof/promise of value and can be “handed over” in return for employment (among other things).
Once students have completed stage one and have accepted the educational service they received as fulfilling the admissions contract, the institution demands that students demonstrate that they deserve the grade/degree. Students do this in the form of:
- submitted projects, etc.
In stage one, it was up to the students to assess whether the institution provided them with what was promised in the admissions contract. In stage two, it is up to the institution to determine whether or not the students can provide the “service” necessary to earn the degree, which constitutes a certification that the recipient has demonstrated thorough knowledge of the topic the degree is for.
Staying within the business context, the reasons institutions would enter stage two and require proof that the students deserve the “payment” (degree) cannot be of the vague, education-for-the-greater-good kind. In other words, it cannot be about ensuring that the students have grown intellectually, are better and more knowledgeable and experienced individuals, and can better serve society. Rather, the reasons for requiring proof before handing out degrees will be about ensuring that the promise this degree makes to the world is true (the promise that the recipient has demonstrated thorough knowledge of a topic and has acquired certain certified skills). The motivation is that ‘true’ degrees result in:
- happy employers of the degree recipients,
- trust in the institution,
- demand for recipients of the institution’s degrees, and, consequently
- increase in the institution’s business, the ultimate measure of any business’s success.
Such an approach to education-as-business and to the meaning of a degree would be more consistent with the scope of a true business model. The question that remains is, “Is this what we want education to be?”