# If the education bubble collapses, will it be the end of blue skies research ?

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1. Jul 13, 2010

### Simfish

If the education bubble collapses, will it be the end of "blue skies research"?

Okay, I know that this topic can be very sensitive to some people, and I really do not want to offend anyone. But it is something that concerns me, as someone who's interested in astrophysics, and I would like to think about potential changes before they arise.

The main assumption of this concern, however, is based on the assumption that professors earn a considerable portion of their income from undergraduate tuition - or from teaching salaries. While much of the university's income also comes from state funding, support for such state funding primarily comes from the assumption that the university educates the state's citizens. But when the university is no longer deemed necessary for educating the state's citizens, much of this state funding might dry up too.

If this is not the case, then the collapse of the education bubble may not be so much of a concern. There are grants, of course, but grants are mostly supplementary income rather than primary income.

So what I'm thinking is this - there is a distinct possibility that the university (the education bubble so to speak) might collapse in the future, because online learning (and knowledge testing) will become much cheaper and more readily available (U Phoenix is hugely overpriced, and there are already models coming up that are far cheaper than UPhoenix - in fact - many smart people can learn most of the required material for many classes [even if not all] by just reading the textbook and doing the exercises). This may also result in cheaper systems of certification (which are like AP tests, but applied to college subjects). Many people say that online learning/self-studying is "not as good" as regular instruction, but the vast majority of students who go to college won't pursue academic research in their major, in which case employers might not care as much about whether or not they got a "proper education". Grades are a means of signaling a combination of innate ability, knowledge, and conscientiousness - and some economists believe that this signaling is why employers demand college degrees as of now (even though many workers don't end up using the skills they learned in college). But when innate ability, knowledge, and conscientiousness can be signaled through means other than the university, then many people will pursue less costly alternatives and the very model of the university may collapse (the Ivies and top universities may still survive, but a lot of the state universities may collapse). It only takes a critical threshold of competent workers who didn't go to school to make a considerable number of employers stop demanding university degrees. And once this happens, many people will just end up not going to college (and pursue internships, online education, and some self-study instead).

And if this happens, I'm concerned that it may be the end of a lot of "blue skies" research. Or research that comes largely without economic application. This is especially true for astrophysics. Of course, some people in certain subfields of astrophysics can easily find another field that uses their skills. But this is easier for some subfields (astrostatistics, computational astrophysics) than it is for other subfields.

Last edited: Jul 13, 2010
2. Jul 13, 2010

### BenTheMan

Re: If the education bubble collapses, will it be the end of "blue skies research"?

I think this is a long way off. Someone still has to be at the other end of the computer, right? I mean, they don't let just anybody run online classes.

And besides, a lot of speculative research is covered under Dept. of Energy/National Science Foundation grants. At least, that's where my paycheck comes from :)

3. Jul 13, 2010

### atyy

Re: If the education bubble collapses, will it be the end of "blue skies research"?

Right. Jocelyn Bell was a professor at the Open University, which was way ahead of Phoenix.

4. Jul 13, 2010

### Andy Resnick

Re: If the education bubble collapses, will it be the end of "blue skies research"?

This is an incredibly perceptive post.

To your initial assumption: You are basically correct. However, there is a subtle aspect. American universities have evolved over the past centuries toward the following model: undergraduate education follows the OxBridge model, while graduate education follows the German model.

This topic is well explored in "Academic Charisma and the Origins of the Research University"

This has led to two different *financial* models as well. In the main, tenure-track and tenured faculty recieve most or all of their salary from the school (however the school gets their money- that's a *whole* 'nuther issue), while non-tenure track (i.e. 'research' faculty) are generally paid 100% off of grant money- what is known as 'soft money'. Graduate students (ones that receive a stipend and or tuition) are paid off of 'soft money'.

The essence of your thesis (possibility that the university [...] might collapse in the future, because online learning [...is] much cheaper and more readily available) is correct as well- in order for the Business of Universities (and it is very much a *business*) to remain competitive with online content, the business model will have to change.

One strategy is "if you can't beat 'em, join 'em"- the University attempts to cut costs by replacing classes with online versions.

Another is vague arguments about 'quality of educational experience' (for example, on-campus social organizations) as a way to claim a 'value added' component.

The point is, all Universities are trying to figure out ways to compete with organizations like U Phoenix (which is for profit, BTW- Universiities are non-profits), and nobody has a good solution yet. Certainly some Universities and Departments are more 'vulnerable' than others.

That said, 'blue sky' research is 100% (+/- 5%) funded by the US government, and generally forms a small fraction of the total financial picture of any particular University- certainly more is better (and people living off 'soft money' are constantly vulnerable to termination). But as far as the University is concerned, grant dollars are about 'prestige', not a means of income.

So your concern about (say) astrophysics research goes away should be directed the US Congress- the people who write the checks. It sounds silly, but writing your elected representatives and telling them about *your project*- how many jobs are supported off it, how awesome it is, etc... is highly effective. The rep (most likely) will not read your letter- but they have an employee whose job it is to keep them educated about science issues, and that person *will* read the letter- you may even get a response back.

Universities are not going away- although Universities do close- but Universities in the future are going to look different than they do today. As they look different now, compared to 50 years ago.

5. Jul 13, 2010

### twofish-quant

Re: If the education bubble collapses, will it be the end of "blue skies research"?

The big fallacy here is that online education is cheaper. It's not. Online education is different, but to do it right, it's quite a bit more expensive. Universities that have gone into online education with the expectation that it will save money have gotten their heads handed back to them.

And I'm pretty sure that most of those cheaper models won't work.

Yes, you *can* learn a lot of material by reading a textbook, but in order to learn deep knowledge you need a huge amount of social interaction. Also, once you read the textbook, how are you going to get that knowledge into a form that you can put on a resume so that you can make money off of it?

I'm pretty sure that all of the raw material for a physics degree is online, but getting all of that raw material into a finished product is hard and expensive.

Certification is quite expensive. ETS is as big a cash cow as University of Phoenix is. The thing about ETS is that because they use standardized tests, they can spread the costs of certification across huge numbers of people, so the cost per student ends up being low. However, there are limits to how far this will work. There are some things that just can't be certified using standardized tests, and once you have a standardized test, the bureaucracy involved can be quite high.

Personally, I think that a properly done system of online learning/self-studying can be *better* than the traditional educational model, but doing it right is expensive, and part of the difficulty in getting a viable system is to figure out how to get the financing to work.

What employers do care about is branding. They want a word on the resume that they can use to quickly sort potential employees. Also universities do a lot more than teach. Part of the reason that people pay large amounts of money to Harvard for an MBA is that Harvard will market you.

If those less costly alternatives exist. I'm not convinced that they do. Also I'm not worried too much about state universities, because they usually have a huge amount of legislative backing, and in some situations, they have been able to convince people that they are essential drivers of economic growth. UTexas Austin is the core of the research environment of Austin and everyone knows it.

I don't think this is going to happen soon.

There is no such thing as highly paid research without economic or military applications.

People pump huge amounts of money into astrophysics for a reason, and it's not because of pure love of learning. The fact that ability of the US to dominate global politics is dependent crucially on understanding making bombs based on nuclear fusion and prevent other people from making bombs based on nuclear fusion means that you are going to get a lot of funding in astrophysics for a long time.

6. Jul 13, 2010

### twofish-quant

Re: If the education bubble collapses, will it be the end of "blue skies research"?

I think most of it happened post-WWII.

Except that online learning *isn't* cheaper. The main thing about online education is that it allows people to communicate and it makes static information less important. In order to get someone to pay money, you have to provide *dynamic* information and that usually involves hiring a human being.

Now it may be possible to incorporate the internet into different business models, but that's something quite different.

I don't see MIT, Harvard, UT Austin has being any less non-profit than University of Phoenix.

It really depends on the university. Most of MIT's income comes from sponsored research and industrial programs. Undergraduate education is a side-line. Different universities have different priorities.

Personally, I don't think that writing letters is all that effective. Writing ten thousand letters could be, but that involves a large degree of organization, which fortunately exists.

In the case of astrophysics, I wouldn't be too worried. One of the jobs of a senior scientist is to go to Washington D.C. and meet with Congressman to lobby for more funding. One important part of your graduate education is to start to understand the process. One of the functions of a Nobel prize winner is to be a "rainmaker." You hire a Nobel prize winner because if a Nobel prize winner wants to meet with a congressman, the Congressman is probably not going to say no.

Personally, I think it would be more effective if instead of writing letters yourself, you get more actively involved in the professional societies (AAS). AAS and AIP have very well oiled lobbying machines with offices in Washington DC. Something that I think that every graduate student should do is to attend AAS and AIP conferences even if they have to pay their own plane ticket.

7. Jul 14, 2010

### Andy Resnick

Re: If the education bubble collapses, will it be the end of "blue skies research"?

We've been over this: MIT is chartered as a non-profit organization and is owned and governed by a privately appointed board of trustees known as the MIT Corporation. UT Austin is a branch of the State of Texas.

This means those organizations are exempt from paying income tax, and contributions to the organizations are also tax-exempt.

http://vpf.mit.edu/site/tax_services/policies_procedures/tax_overview
http://runningofthehorns.com/old/07-08/docs/501c3_info.pdf [Broken]

http://en.wikipedia.org/wiki/University_of_Phoenix

Last edited by a moderator: May 4, 2017
8. Jul 14, 2010

### twofish-quant

Re: If the education bubble collapses, will it be the end of "blue skies research"?

Which as far as I'm concerned is an organizational detail that tells very little about the internal politics and motives of the organizations. It's quite possible for a non-profit to have a for-profit subsidiary, and it's also quite possible for a for-profit to effectively control a non-profit.

To name examples of for-profit subs of non-profits. Duke Corporate Education. NYUOnline and Fathom. There's also the Chauncey Group which is the for-profit arm of ETS. To make examples of non-profit subs of for-profits. Pretty much every Fortune 500 corporation has some associated non-profit.

Also, there is no rule legal or otherwise, that a university can't be a for-profit corporation, which is an interesting contrast to doctors and lawyers who can't legally form for-profit corporations.

Last edited: Jul 14, 2010
9. Jul 14, 2010

### diggy

Re: If the education bubble collapses, will it be the end of "blue skies research"?

University research won't disappear within the time frame of your working career. So I wouldn't sweat it.

Faculty jobs could be fewer. But, as mentioned above, most research is fully funded by the government. The universities take ~25% of that funding from the researches right off the top. A large part of whats left goes towards graduate students (pays their tuition and stipends and such). So universities typically want as much research money as possible coming through.

But I totally agree with the overall irony of Universities charging more and more for a product (information) that is becoming increasingly free. I think for many people college is more about the credential than the knowledge though.

10. Jul 14, 2010

### Andy Resnick

Re: If the education bubble collapses, will it be the end of "blue skies research"?

It's a *huge* difference- a fundamental difference in the organization and structure of a business. Someone involved in business should understand that.

11. Jul 14, 2010

### Leptos

Re: If the education bubble collapses, will it be the end of "blue skies research"?

College is all about the credentials and networking. If teachers were truly necessary for the learning process, then there would be way more money going into R&D for education and teaching methods, but this isn't the case. Another problem is that in countries like USA is that as the GDP per capita increases, the potential wages for good teachers drops and as a result, talented people end migrating to other fields.

12. Jul 14, 2010

### Andy Resnick

Re: If the education bubble collapses, will it be the end of "blue skies research"?

That's not exactly correct. My proposed budgets have a line "indirect costs". "Direct costs" represent 'my' money- as a point of fact, it's *all* the institution's money, but for practical purposes, direct costs are the monies that I can spend as I wish (salary, graduate tuition and stipend, supplies, travel, etc) in carrying out the covered research.

Indirect costs are also referred to as 'overhead', and is a percentage of the direct costs. Here at Cleveland State, the negotiated indirect cost rate for federal grants is 42% of the modified total direct costs. Other agencies (state, local, foundations, etc) pay a different indirect rate, generally a much lower rate- say 10%. Some federal training grants also have a much lower indirect cost rate.

What the institution does with the indirect is largely up to them. Here, 5% of the indirect is returned back to me, 15% goes to my Department, 10% goes to my College, 20% goes to the Provost's office for research, and 50% goes to the University.

As an example, I'm submitting a proposal that over 5 years asks for $367k in direct costs (personnel (16% of my time, 1 FT grad student, 2 PT undergrad students) is about 1/2, supplies the other 1/2), and thus also bills the government for$135k over 5 years as the indirect cost.

In theory, the indirect covers the cost to the university for my research- utilities, rent, support personnel (janitors, secretaries, administrative staff, etc.), but I've heard that the break-even point requires annual direct costs of around $750k *per lab*. Detail-oriented bean counters typically work with units of "$/sq. ft" in determining the 'efficiency' of a research program. Consequently, university administration typically sees research grants as a money *loser*- hence the need to justify research in terms of 'prestige'.

This can often become a source of friction between administration and faculty- and for those faculty totally dependent on grant support for their salary, a huge source of stress.

13. Jul 14, 2010

### Simfish

Re: If the education bubble collapses, will it be the end of "blue skies research"?

Thanks for all the replies and detailed responses, everyone!

Thanks, I appreciated that comment.

I think one thing is this: can you be sure that someone has gotten deep knowledge by going to a university (especially a state university)? Many people effectively end up studying by themselves, and there usually is not that much communication between student and professor (in fact, it's quite common for professors to say that office hours are frequently underutilized). Ideally, one might get a lot of deep information if one did everything perfectly. But a significant number of students don't really get much more information than they'd get out of simply reading the textbook (and this is often true for the top students, too, many of whom can't choose a lot of students to study with - at least in the state universities). Of course, it might just be that employers expect that a university degree predicts a "higher level of deep knowledge", on average (even if many students don't obtain this higher level of deep knowledge). I'm quite unfamiliar with the working world, though, so I don't have much of an idea about how much employers value "deep knowledge".

Another thing is: what if online communities were set up for people who were taking similar courses? (in which case there may not even be a salary that needs to be paid, as everyone is voluntarily doing the same thing) Obviously, there are currently many barriers that make them unequal to the "real thing" (as a result, the facebook groups for communal studying of MIT OCW and Stanford Engineering Everywhere courses are almost always pretty much empty). I think most of us would agree that even Physics Forums can't really be equal to the "real thing". Of course it's not totally inconceivable that this may change in the future (although different people will probably disagree on the probability of this happening within X years).

14. Jul 14, 2010

### Andy Resnick

Re: If the education bubble collapses, will it be the end of "blue skies research"?

That's a very important question to ask.

First, let's agree on a definition of "Deep knowledge". When I hear or use the term, I think of understanding the underlying conceptual foundations of (say) Physics, which may or may not be correlated with test/homework performance. That is, I assume it is possible that someone may test poorly on exams yet possess adequate comprehension of the material.

Here's the basic problem: If you assume that standard tools of learning assessment (tests, homeworks, etc..) aren't good tools for measuring "deep knowledge", then you have to develop an assessment tool that can measure the quality you seek: comprehension. David Hestenes developed something called the Force Concept Inventory [http://en.wikipedia.org/wiki/Concept_inventory] [Broken] which he claims does in fact measure 'comprehension'.

That's all well and good, but it is an open question whether his claim is true. It's possible to argue that the faculty participants were simply teaching to a different test, rather than a significant change in student comprehension.

So personally, my answer to your question is "I don't know if you can." Again personally, I am working to develop my own teaching method as an attempt to change my answer to 'Yes!", and I'm lucky to be around some Master Teachers who are willing to help me.

Last edited by a moderator: May 4, 2017
15. Jul 14, 2010

### Simfish

Re: If the education bubble collapses, will it be the end of "blue skies research"?

Wow, the Force Concept Inventory looks very interesting. Well, I don't know about other classes, but in physics, at least, there isn't a lot of room for most of the professors to teach in a way that helps maximize "deep knowledge". Instead, most of the professors I know tend to teach things that can easily be substituted by reading the textbook instead, which is why I've often felt that for the majority of my classes, I could do just as well, if not better, simply by self-studying everything and asking questions to professors or Physics Forums. The ideal approach might be to get students to self-study what's in a book, and then come to class for the "deep knowledge" parts of learning (instead of rephrasing the book's material in class to make it easier to understand, which can just as easily be done in a Demystified/Schaum's Outline book). Of course this might take more time for the student (as in the current situation, many students don't even read the textbook, but simply go to lectures to learn what's in the textbook), but each of the individual classes would be more rewarding in return.

There are definitely some universities that are changing their approach to undergrad education though (MIT, in particular)

Last edited: Jul 15, 2010
16. Jul 15, 2010

### twofish-quant

Re: If the education bubble collapses, will it be the end of "blue skies research"?

My personally observation having been in for-profits and non-profits is that it makes much less of an organizational and structural difference than it first seems.

Part of the reason for this is that in large corporations, the shareholders have very little power, and the main power is in the senior management. Similarly in most universities, even though the board of trustees has legal power over the institution, the actual power is in the faculty, which as far as I can tell act pretty much like senior management in large corporations.

Again this is personal observation, and reasonable people can disagree with it.

17. Jul 15, 2010

### twofish-quant

Re: If the education bubble collapses, will it be the end of "blue skies research"?

You can't, but you can me sure that they were able to get up, go to class, figure out the bureaucratic system, take orders, submit papers, and play the game. In short, if you have someone that has gotten a bachelors, you can be reasonably sure that they can "play the game" that is needed to be a good little cog in the corporate machine.

This is not a small thing.

True. However there is a huge amount of communications between students, which is why it's useful to have communities of students in the same location. Also, administering a class is one of those things that requires a *LOT* of work, but a lot of that work happens behind the scenes.

The thing about well run universities and classes, is that you usually don't notice how well run they are, because things just work. However, once you step behind the scenes you find out how difficult it is.

That would be quite good. However it's a lot harder than it sounds. The problem is that within a university, the online community is at best a supplement to courses that are already taught. Once you go between universities, it's very hard to get people studying the same thing to form a critical mass because the curricula are different enough to make that very difficult.

There are ways around this problem.

I don't think that face to face courses are necessarily more "real" than online courses.

The thing is that online education is difficult (just like face-to-face education is difficult).

The other thing is that it's not either/or. It's possible to weave online interaction and face-to-face interaction in new ways. For example, one thing that University of Phoenix has done is to set up massive numbers of satellite campuses.

18. Jul 15, 2010

### diggy

Re: If the education bubble collapses, will it be the end of "blue skies research"?

@Andy. I was just throwing out ball park numbers, of course you're particular ones will vary. Btw, $750k direct funding maths out to ~$500k to be paid to the school. $500k per lab per year, sounds awfully high (ever consider renting :P ). But if that number is right, then research is a financial loser, but it also means the university is incredibly inefficient. If that number includes your salary and benefits it might not be completely crazy though. 19. Jul 15, 2010 ### Andy Resnick Re: If the education bubble collapses, will it be the end of "blue skies research"? It's a tricky topic. But recall that 42% is for some federal grants only- there's lots of different grant dollars coming in, and so the average indirect may be closer to say, 20%. And on top of that, not all direct charges are subject to overhead: The base (the direct dollar amount to which the F&A rate is applied) will now include all costs with the exception of: 1. Any amount over the first$25,000 of each subcontract (subrecipient agreement) issued by Cleveland State University;
2. Nonexpendable equipment with an acquisition cost of $2,500 or greater and a useful Life of more than one year; 3. Capital expenditures (buildings, alterations and renovations); 4. Patient care; 5. Tuition remission; 6. Rental/maintenance of off-site facilities; 7. Scholarships; and 8. Fellowships. Our new federal rates are: • On Campus: 42% MTDC, 7/1/08 - 6/30/12 • Off Campus: 24% MTDC, 7/1/08 - 6/30/12 Following the flow of money in a larger organization is very tough to do, but the system is not that inefficient. What's been happening over the past 20-30 years (the major change occured during the doubling of NIH's budget) is that administrators have pushed more and more costs onto the PI and Departments. I don't mean having lab assistants and whatnot, I mean core functions for the school- faculty salary, tuition for *all* admitted students, Xeroxing, phone bills, recruiting and startup costs... the trend is to make each department 'self sustaining'. While the money was rolling in, that was fine. But now, with success rates hovering around 10% for an NIH R01 and around 15-20% generally, many institutions are finding that they have grown too fast to sustain their own operations. So now there's cases like a successful nontenure-track researcher pulling in$300k-\$400k/year on grant dollars, and not only not getting any reward- nontenure means they stay as long as the money comes in to pay themselves- but their indirect costs are being used to subsidize tenured (and tenure-track junior) faculty who are not pulling in grants (for whatever reason). This is not good for morale.

The bottom line is that many institutions badly miscalculated: education is a money-loser (which justifies the need for institutions to be non-profits), and grant dollars were seen as 'free income' which they could use to grow. Over time, some institutions became dependent on this income to pay for core functions and are now feeling some pain- which trickles down to the faculty, who are pressured to write more and more applications to chase after the finite dollars.

20. Jul 15, 2010

### l'Hôpital

Re: If the education bubble collapses, will it be the end of "blue skies research"?

I suppose slightly off-topic but I can't imagine O-Chem Lab being less real than Online O-Chem Lab.

Though I suppose a more general question, how do online universities prepare people for research or for graduate schools as a whole? How would one obtain research experience if there are no labs or anything of the sort? I suppose there are still REU's, but still.