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On August 6, 2008, the Washington Post reported that tuition and fees at public colleges in Virginia will increase by an average of 7.3 percent this year. The article was four sentences long and ran in the Metro section, below the fold, in space reserved for unremarkable news. The drumbeat of higher education price increases has become so steady in recent years that it barely merits attention. But the cumulative effect is enormous: the average price of attending a public university more than doubled over the last two decades, even after adjusting for inflation. The steepest increases came in the last five years.

And there’s nothing routine about the way college costs are weighing down lower- and middle-income families. Students are still going to college—in this day and age, what choice do they have? But some are getting priced out of the four-year sector into two-year colleges, while others are trying unsuccessfully to simultaneously hold down a full-time job and earn a degree. More students are going deeply into debt, narrowing their career options and risking catastrophic default. The lightly regulated private student loan market, which barely existed ten years ago, now controls about 20 percent of loan volume, burdening financially vulnerable undergraduates with high interest rates and few legal protections. State and federal governments have poured tens of billions of new taxpayer dollars into student aid programs, only to see them swallowed up by institutions with a seemingly unlimited appetite for funds.

For years colleges have insisted that rapidly rising prices are unavoidable because higher education is a labor-intensive business that cannot become more efficient. A forty-minute lecture takes just as long to deliver today as it did a hundred years ago, they say; a ten-page paper takes just as long to grade. Because efficiencies in other industries are driving up the overall cost of skilled labor, colleges have to offer salaries to match, which pushes productivity down. (Economists call this "Baumol’s cost disease," after the New York University economist who first made the diagnosis.) Regrettable for students, of course, but what can be done?

In fact, this premise is false. Colleges are perfectly capable of becoming more efficient and productive, in the same way that countless other industries have: through technology. And increasingly, they are. One of the untold stories in higher education is that the cost of teaching is starting to decline, but virtually none of those savings are being passed along to students and parents in the form of lower prices. Instead, colleges are pocketing the difference, even as they continue to jack up tuition bills.

This is a classic unsustainable trend. Higher education prices cannot grow faster than inflation and family income forever. If colleges use productivity gains from technology to restrain prices, they’ll continue to thrive in a world that values their product more than ever. If they don’t, they’ll be hammered simultaneously by a frustrated public and new competitors eager to steal their customers. To avoid that fate, colleges will need to do more than just teach better for less. They’ll also need to compete in a whole new way.

To see just how much technology is changing undergraduate education, drive to Virginia Tech University, nestled in the mountains of southwest Virginia about four hours from Washington, D.C.—and then just a little farther, a few blocks from where the campus ends. To the mall.

It’s not much to look at, just another outdated commercial husk that had its heyday back in the 1980s selling cassette tapes and Spencer’s gifts before getting squeezed by Wal-Mart on one end and the newer, bigger, better mall out by the interstate on the other.

Walk down to the poorly lit atrium, take a left, and you’ll find the Virginia Tech Math Emporium in 60,000 square feet of gray, windowless space that used to house a five-and-dime. There are 700 late-model iMac computers arranged in pods of six, row upon row. Arrive at ten p.m. on a weekday and you’ll find hundreds of students, some solving math problems on the computers, others reading textbooks or chatting quietly in study groups while teaching assistants help undergrads with sticky problems in differential calculus and vector geometry. It’s everything you’d expect from a traditional four-year university—except for professors, and classes.

The Math Emporium was born out of a financial problem. Since being founded as a land-grant institution in 1872, Virginia Tech has developed a reputation as a first-rate engineering school and has become an increasingly popular destination for students in Virginia and beyond. By the mid-1990s, the growth was causing strain. Engineers need to learn math: more than a thousand students take linear algebra every semester. But even as the number of students wanting to take such courses was going up, internal budget cuts to the math department were reducing the number of professors available to teach them. This kind of fiscal irrationality is typical in higher education, where departmental budgets often have little relationship with costs, revenues, or demand.

For the math department, all the conventional solutions seemed grim. Adding more course sections wasn’t easy; in addition to the professor shortage, the university was running out of space, and some courses were being taught in a basketball arena and an old movie theater. Capping enrollment in required courses would have forced students to stay in school longer, angering parents and state legislators. Increasing faculty workload would have driven more professors out of a department that was already short-staffed.

Fortunately, someone had a better way. After earning a PhD in applied math from NYU in 1976, Michael Williams moved to Blacksburg to teach. An interest in computers led to a job as the university’s vice president for information systems, and by the 1990s he was busy helping professors integrate computers into their teaching. Williams knew how to teach math, and he knew how to teach with technology. The math department budget crisis gave him an opportunity to put the two together, and bring the effort to scale.

In designing the Math Emporium, Williams started by rethinking the issue of space. Campus space is inevitably a scarce resource, subject to bloody administrative battles between professors and departments. But all Williams needed was someplace cheap that students could get to easily, with enough room for hundreds of computers and little else. He also wanted space that other academic departments wouldn’t want to steal. So he leased the vacant former home of Rose’s Department Store, a now-bankrupt regional discount chain, for the bargain price of three dollars per square foot.

Then Williams rethought the student learning experience from the ground up. Undergraduate education, particularly at big state universities, is often passive and regimented. Students sit and receive information in the form of lectures that occur at a time and place of someone else’s choosing. The Math Emporium courses that Williams designed—there are currently nine—work in a very different way. Each course is broken up into a series of "modules," available on Emporium computers or the Internet, that students are required to complete within a certain amount of time. Each module outlines a specific set of mathematic principles and concepts. These are translated into specific examples to review and problems to solve.

Once the module materials are completed, students can take randomly generated practice tests that draw on a central bank of thousands of potential questions. If they get questions wrong, the computer refers them back to the appropriate materials, and there’s no limit to the number of practice tests they can take. When they decide they’re ready, students come to the Emporium to take an official, proctored test that’s generated in exactly the same way as the practice quizzes. Then they move to the next module. Instead of marking progress by time—the number of hours spent in proximity to a lecturer—Emporium courses measure advancement by evidence of learning.

Ten years ago, places like the Emporium were virtually unheard of. But over the last decade a wide array of colleges and universities have implemented similar reforms, under the auspices of a nonprofit organization called the National Center for Academic Transformation. In March 2008, more than 400 people from 145 colleges and universities gathered at a conference center in Orlando, Florida, for the second annual NCAT convention.

For three days, college representatives mingled in the elevators and hallways with swimsuit-wearing vacationers en route to Disney World and Epcot Center. In rows of windowless conference rooms, professors and administrators gave PowerPoint presentations explaining how technology can lower costs in a wide range of undergraduate courses. Some institutions, like the University of Alabama, have replicated the Virginia Tech Math Emporium model. Others have adopted a hybrid approach, reducing but not eliminating lectures while moving selected course materials, problem sets, and class discussions online. Arizona State, for example, recently used this method to transform an introductory women and gender studies course. Florida Gulf Coast University put its "Understanding the Visual and Performing Arts" course completely online. Portland State University focused on introductory Spanish, freeing up professors to teach more sections by using computers to grade language worksheets. Biology, psychology, chemistry, economics—the whole range of undergraduate courses was on display in Orlando.

Of course, every college has unique courses that can only be delivered by a live person to a small group of students. Liberal arts colleges that specialize in small classes taught by full professors are less likely to benefit from NCAT-style reforms. But the majority of students attend institutions where big lecture courses are the norm. Curricula are fairly standard at most colleges, particularly for lower-division courses—nearly everyone teaches calculus, economics, English comp, and psychology 101. NCAT estimates that just twenty-five such courses make up half of all community college enrollments and one-third of enrollments in four-year institutions. That translates into tens of millions of potentially transformable credit hours nationwide.

It’s tempting to see the automation of college teaching as educational malpractice, a ploy to water down instruction and put professors out of work just to save a few bucks. But there’s persuasive evidence that the opposite is true—properly used, technology can make higher education better, not worse. NCAT has been spreading the gospel of course transformation since the late 1990s, when it secured an $8.8 million grant from the Pew Charitable Trusts to pilot the process with thirty colleges. The results were unequivocal: twenty-five colleges saw learning results improve while the other five saw no change. All thirty reduced costs, some by over 70 percent. As the number of NCAT institutions has expanded, they’ve found similar—or even greater—success.

The results at some institutions have been dramatic. In the late 1990s, students at the University of Alabama were washing out of freshman math courses in large numbers, and the failure rates for minority students were particularly high. After building a smaller version of the Emporium in 2000, Alabama boosted pass rates from 40 percent to nearly 80 percent—and erased the previously large gap between white and black students.

The key is letting computers do what they do best—grading multiple-choice tests, providing 24/7 access to text, audio, and video, connecting people to one another at a distance—while retaining the human element when only real people will suffice. The Virginia Tech Math Emporium is staffed twelve hours a day with a combination of upper-division math majors, graduate students, and faculty, each of whom is prepared to help students with any of the Emporium-based courses.

And even when the notoriously nocturnal undergraduate lifestyle puts teachers of any kind out of reach, the Emporium never closes and the computers never sleep. Virginia Tech students always have access to the mind of Michael Williams, the ghost in the Emporium machines. …

Read the entire article in November/December 2008 issue of The Washington Monthly.