Monday, August 19, 2013

The Weekend Interview in the Wall Street Journal Actually Has an Interesting and Newsworthy Content

An Attack on Higher Education That is On Target – A Solution That is Not

The weekend interview in the Wall Street Journal is usually a puff piece.  The Journal finds some conservative blowhard and asks them a bunch of powder puff questions and publishes the edited results, with the usual excessive prejudicial commentary as though it were news.  But lo and behold the WSJ has an actual piece of news.

This news is about a wealthy investor who plans to start a university from scratch, and challenge schools like Harvard for the top of the academic ladder.  Oh yes, and it will also be a for profit school.

Mr. Nelson founded and runs the Minerva Project. The school touts itself as the first elite—make that "e-lite"—American university to open in 100 years. Or it will be when the first class enters in 2015. Mr. Nelson, who previously led the online photo-sharing company Snapfish, wants to topple and transcend the American academy's economic and educational model.

Here’s how it might work if it gets underway (always a question in these projects).

Mr. Nelson calls Minerva a "reimagined university." Sure, there will be majors and semesters. Admission requirements will be "extraordinarily high," he says, as at the Ivies. Students will live together and attend classes. And one day, an alumni network will grease job and social opportunities.

But Minerva will have no hallowed halls, manicured lawns or campus. No fraternities or sports teams. Students will spend their first year in San Francisco, living together in a residence hall. If they need to borrow books, says Mr. Nelson, the city has a great public library. Who needs a student center with all of the coffee shops around?

Each of the next six semesters students will move, in cohorts of about 150, from one city to another. Residences and high-tech classrooms will be set up in the likes of São Paulo, London or Singapore—details to come. Professors get flexible, short-term contracts, but no tenure. Minerva is for-profit.

All of which sounds good, after all the modern university in America is in decline and likely to stay in decline for reasons expounded elsewhere on this Forum and other places. 

But a radical for profit university, that doesn’t plan on making a profit or even consider that important,

Effusive on every other topic, Mr. Nelson turns vague when I bring up Minerva's finances. Skeptical investors have seen this movie before. Mr. Nelson doesn't even hint at projected profit or a growth timetable. He says the school has to become roughly the size of an Ivy League university, enrolling around 10,000 students, to break even. "Making your profit, your substantial revenue, based on 18-year-olds is not the mover," he says. "It's what you do with them. It's how you build the brand."

is going to have problems.  And as for where the students will come from there is this.

Any education startup must also brave a regulatory swamp. By opting out of government-backed student-loan programs, Minerva won't have to abide by many of the federal rules for so-called Title IV (of the relevant 1965 law) schools. Americans won't have an edge in admissions and Minerva expects most students will come from abroad.

That’s right, the new school will be largely a group of young men and women from the emerging upper middle class in South America and Asia. And far from being an elite group, it is most likely the major qualification for the students will be the ability of their parents to write the tuition check.  

So no, Harvard is not worried, not yet.  And we suspect despite his right on criticism of American higher education, Mr. Nelson really has his eye on Harvard’s $30 billion endowment.  That is likely his real dream to get that type of financial resource for his college, which will of course be used to reward investors as opposed to Harvard's endowment which is used to build a better college build prestige.

But if Mr. Nelson were really serious, and we wish he were, everyone would be much better served if he would just go out and buy a nice public university, sort of the way T. Boone Pickens has done wit Oklahoma State.  It would be a lot less expensive, and even more importantly, some of his proposed reforms might actually work.

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