Category Archives: Universities

Applying portfolio reforms to postsecondary problems

I just got back from a trip to New Orleans, which continues to be a well of friendship and inspiration.

I. Where should you spend the next philanthropic dollar? 

In a few conversations, the following questions came up:

  1. Are the kids we serve going to succeed in life after high school? What will their lives be like when they are 30? Will they be living meaningful and happy lives?
  2. Is the marginal dollar of philanthropy best spent on making the K-12 system better (after 10 years of improvements) or trying to overhaul the post-secondary landscape?
  3. If you wanted to radically improve post-secondary, what would you do?

II. Post-Secondy portfolio 

The K-12 portfolio mindset entails viewing an educational system in terms of operators (running schools) and seats (how many students are served).

This mindset could also be applied to post-secondary.

By 2020 or so, New Orleans will be graduating around 3,000 students a year.

Let’s say that about 1,500 of them will be prepared to succeed in a four year college; 1,000 of them will be prepared to succeed in a 1 to 2 year credentialing program; and 500 of them will need deep support to enter the workforce and exit crisis situations.

Of the four year college students, you might need 500 to 1,000 “KIPP to College” type supports to ensure students make it through.

For the credentialing programs, you’d need 1,000 seats that can reliably produce students with employable credentials.

For the crisis students, you’d need employment and social service operators that could transition students into jobs.

III. Post-Secondary investment intermediaries 

Instead of assuming this will naturally happen in New Orleans (or any other city), you could capitalize a new or existing non-profit intermediary to launch, recruit, and support post-secondary providers.

At the outset, the intermediary would create a business plan where it laid out how money it would need to get X% coverage on the aforementioned 3,000 seats.

High-Quality existing local providers (like the coding bootcamp Operation Spark) could cover some of the seats, and national providers like Match Beyond could be recruited in.

Overtime, you’d expand what was working, close what wasn’t, and support new entrepreneurs to keep innovation going.

IV. Getting funding streams right

Most states subsidize mediocre public universities; the federal government tops this off with Pell grants.

To make the 3,000 seat post-secondary strategy viable, you’d need to blend a mixture of public support and tuition to make providers sustainable.

Louisiana’s course choice provides a revenue stream for programs that started working with kids while they’re in high school.

Creating a new university that housed many of these programs could allow for the accessing of Pell grants.

Wage contigent loan programs could also be an option for programs that were consistently placing graduates in high-performing jobs.

V. Who are the entrepreneurs that will seek out the 10x play?

The early New Orleans K12 entrepreneurs felt that they could deliver something to students that was significantly better than the existing system.

They were right.

A post-secondary transformation won’t happen on its own.

It will take a set of entrepreneurs to put forth a plan, galvanize funding, and spend a decade building the new system.

Is this the right play? If so, who will step up?

Will Uber-fication of the Job Market Increase or Decrease Human Capital Formation?

uber

Tyler Cowen has an interesting post on the sharing economy and job training:

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This could be true. But I could tell another (somewhat overlapping) story:

1. Currently there is a multi-party relationship between individuals, universities, and employers. Individuals attend universities where they partake in some human capital formation and some filtering and signalling activities. Employers then hire individuals and provide additional training.

2. With on-demand hiring, these relationships will change. As Tyler points out, employers may provide less training to employees.

3. This could lead to less training overall. Or it could shift the onus of training mostly to the individual, as Tyler suggests.

4. However, it could also put pressure on universities to pick up a greater burden of the training load. One could imagine that this leads universities to place greater emphasis on vocational (trade specific) training, as well as more general skill formation (non-trade specific, such as data analysis, project management, people management, etc.). Additional, an individual’s relationship to a university might move from one four year stint to a longer ten to fifteen year on again / off again relationship.

5. Alternatively, if universities don’t adapt (especially mid to lower tier schools), it could create room in the market for new types of training institutions that are more skill based (such as coding academies). These institutions might be tightly aligned with certain on-demand platforms, so that people who want to compete in these on-demand markets can get the necessary skills. Similarly, individuals might form longer term relationships with these institutions.

6. If either universities or new institutions end up picking up more of the burden, there is a world where we move towards more efficient labor relationships, as we will have put real pressure on the weakest part of the training link: universities.

Will the sharing economy decrease human capital formation?

I’m not sure.

I can see a world where it makes our training institutions much better.

But I can also poke holes in my story (employer training is mandatory and thus very different; universities won’t respond; moving from employer to university training is moving from high to low efficiency, etc.), so I’m definitely not arguing that it is right. Just that some version of it might be right.