Unbundling of Higher Education

Before I start, let me make it clear that I am only stating what I am sensing as unbundling of higher education. Any such transformation will have positive and negative impacts, and the impact will depend on the context. As of now, I don't understand in what contexts, what kind of unbundling may be positive or negative. With these, let us begin.

30 years ago, who would have believed that an airline ticket would not include some refreshments, some luggage being checked in, and a few other services. But over a period of time, we have seen the "extras" being stripped off and sold separately. Can the same thing happen to university education. What would it be like to have an unbundled university.

A university is arguably the most complex entity in terms of the range of services it provides. Besides delivering education (which as we will see below is itself a bundled service), doing research, providing consultancy to industry, it provides student residences, food services, additionally runs cafes and restaurants, reading rooms, libraries, entertainment options, a large sports system, transport, medical care, counseling, guest houses/hotels, placement services, and so on. In India, they may even have a full township with residential colonies for faculty and staff, with all municipal functions being carried out by the university.

Why does a university provide so many complex services and not focus on its core strengths. Why should it not ask the students to rent an apartment outside the campus, and live on their own. Why would it not ask the students to depend on medical care available in the city. Every such service can be justified by saying that it helps improve learning. If a lot of students live together and eat together, they will interact with each other and more peer-to-peer learning will take place. If students don't have to go far for medical help, they can spend more time on studies, will have less stress, etc. But surely, some of these services add lesser value at higher cost. Why shouldn't a university look at each service as how much does it cost, and how much it adds to the quality of education. Or at the very least, unbundle the charges, and give flexibility to students to pay for some services and not for the other. Of course, all universities have unbundled residential and food services. But all other services are part of tuition or compulsory fees.

The universities do this bundling for a couple of reasons. One is to ensure that they tightly control the quality of every related service. Further, bundling allows a service provider to increase charges by an amount higher than the cost of that incremental service (but only if the service provider has some market control,which the top ranked universities do). On the other hand, when we look at government supported universities, often the argument is that if the university will not provide all the services in a subsidized bundle, the poor will not be able to afford it.

But things are changing. Even if we look at the most basic function of a university - providing education - that itself is facing unbundling. If you look at online service providers, for example, the basic service of learning a course through online recorded lectures and a bunch of exercises, completely computer based and no human intervention, could come to you for free or at a very low cost. You want a certificate of successful completion. Well, they will throw in some limited form of evaluation, usually computer graded, some limited form of identity check (just taking a picture before the exam and password for logging in), charge you extra for it, and you get the certificate. Even our own Swayam, charges Rs. 1000 for the evaluation, while learning is free. You prefer interaction with other students and teaching assistants, you can pay a bit more for that access. You prefer that the certificate is signed not just by the platform but by a university, you go through some additional exams, this time proctored online through some AI based software, and you pay more. You want access to the faculty for some synchronous sessions, contact him/her during some "office hours",you further pay more. So, even the most basic function of a university is being unbundled with the result that the learning is available to everyone free or at a very low cost.

Unbundling in education is happening in other ways as well. A lot of students in US are doing basic courses at a community college who provide education without any bells and whistles at a very low cost, and then transfer those credits to regular universities, thereby spending less number of semesters at regular universities thereby reducing costs.

Online education is causing unbundling in other interesting ways. Can we unbundle campus services. Can I be a student of a university in US, but use campus services provided by some other entity in India. So I would register for all courses in the US university, obviously all lectures online, submit assignments, and have all academic activities being directly provided by this US university. But I need campus services. I want to interact with other students face to face. I want sports, culture, entertainment. I want the experience of living in a hostel. Can I check into a campus who will provide me all this for a cost. Believe it or not, it is starting to happen. I can then choose which "campus" to stay in which semester. May be some semesters, I will save cost and stay at home itself. Universities can then have some relationships with these providers of "campus" services, and see if they can also provide some academic support like labs, or face to face advising, etc.

Other forms of unbundling are more obvious. Do I need to seek admission for a "degree" program or can I just seek to do an odd course or a few courses. Again, online courses are allowing for such unbundling easily. In an on-campus face to face classes, it was too much of an overhead to have an "admission" process for just one course. If employers have an independent way of judging my skills and knowledge and I don't need a university degree for getting their attention, it will result in more and more people doing a few courses from diverse places and collecting course-wise certificates rather than a degree. Universities must consider this as an opportunity and not a threat, since this also encourages older people coming back to university for courses to upgrade their knowledge and skills.

I foresee that in future, even for a degree program, a university may not have any content of its own, or any other infrastructure. It will pick and choose from vast number of courses available online and ask its students to select from those. It will have agreements with service providers who can provide campus like services in different parts of the country/world. In fact, students can stay in different parts of the world in different semesters and what a great learning experience it will be. (Minerva Institute already does that - let students spend different semesters in different countries.) So without owning any content and without owning any infrastructure, it would be able to provide quality education and degrees to students.

This future is exciting, though there are too many unknowns and hence a bit scary as well.