Over the last few years, the education technology sector has enjoyed unprecedented levels of growth. According to a report by PwC, the global EdTech sector is currently worth $250 billion. A projection by HolonIQ indicates that by 2025, the sector will have doubled in market value. Although this is only a small part of the current global education industry, the population expansion in the coming decades coupled with greater access to technological tools will likely be a huge boost for the sector.
While EdTech companies are experiencing a positive momentum, the traditional higher education industry is choking from the twin crises of excessive student debt and poorly compensated contingent academic staff. Americans owe north of $1.5 trillion in student loans, which is 50% more than the amount they owe in credit cards. In the United Kingdom, the picture is not any rosier. According to a report by the UK government, the class of 2018 graduated with an average debt of around $47,114.
As students saddle themselves with more debt to obtain higher education, one would imagine that instructors are having a field day. Most instructors in higher education institutions, however, endure harsh working conditions and are paid unlivable wages. According to a report by the American Association of University Professors, in 2016, 73% of all instructors in American institutions of higher education were working in non-tenure track positions, meaning they had no job security, received few benefits, and earned low per-course pay. Similar to the United States, a 2016 report indicated that in the United Kingdom, 49% of academic instructors were on short contracts.
If students are taking hefty loans and teachers are still underpaid, where is all the money going? According to one study, for every dollar spent on instruction in the United States, 64 cents are spent on administrative matters. Furthermore, the number of administrative positions has substantially increased over the past three decades. In 1990 there was only one administrative position for every 3.5 instructors positions, but in 2012, that ratio had shifted to 2.2 administrative positions for every 3.5 faculty positions. In the United Kingdom, it is estimated that two thirds of all universities have more administrators than instructors.
This “administrative bloat” has not gone unnoticed. Some commentators have entirely attributed the alarming rise in college tuition costs to this phenomenon. However, others argue that the matter is not so simple. In the recent decades, they point out, the higher education landscape has changed dramatically, necessitating the introduction of new policies and compliance procedures. Issues such as diversity and protection from sexual assault have become increasingly critical, and higher education instituations have had to hire experts in those fields to keep pace with the shifting landscape, all while also retaining their accreditation status.
Critics of the “administrative bloat” argue that more administrators have not made much difference in student outcomes. Students still graduate in about the same amount of time they did two decades ago, and despite the heavy financial burden they take on to access higher education, they are not well equipped for the job market. Others point out that companies like IBM, Dell, and Bank of America have dropped the degree requirement for employment, which means that students no longer have to spend tens of thousands of dollars seeking a traditional college degree.
The traditional higher education system is in dire need of reform. Students have a right to affordable and quality education that will prepare them for the modern job market. University instructors have a right to stable employment and proper support to practice their discipline.
Given their increasing prominence in the education space, what role do EdTech companies have in contributing to the achievement of these goals?
A 2012 brief by Bain & Company highlighted key ways in which forward-thinking education leaders were trying to address the problems of excessive student debt and poorly compensated contingent faculty. These approaches entailed scaling down the administrative costs, investing in innovative learning models, and freeing up any capital tied up in non-core assets.
Working at the intersection of education and technology, EdTech companies have a unique chance to be the vanguard of innovation in higher education. According to data from HolonIQ, the global expenditure on the digital side of education is only 4% of the total education expenditure. Most of the budget goes to expenses like labor, utilities, and analogue content.
Through their innovations, EdTech companies can help both traditional and emerging institutions of higher education to make a digital shift and subsequently reduce their administrative costs.
As the first global collegiate university, Woolf has developed proprietary software that helps qualified organizations to attain accreditation and meet regulatory requirements at a fraction of the traditional cost in weeks, not years. Woolf takes care of all key items, ranging from the creation of courses to the issuance of diplomas. By embracing this kind of technology, member colleges are spared from the high cost associated with getting and maintaining accreditation. Reducing administrative costs in this manner can consequently lead to lower tuition fees and reduced financial burden on students.
On the faculty side, EdTech companies can help provide numerous work opportunities. While some traditional institutions of higher education may see EdTech companies as rivals, the fact is they are not. Woolf, for example, can help reduce compliance costs for traditional institutions, create new accredited universities, and subsequently increase job opportunities for highly qualified but under-employed instructors.
Scaler is an India-based EdTech company that recently launched Scaler Neovarsity, which offers upskilling programs to qualified machine-learning engineers. As a member college of Woolf, Scaler was able to launch an 18-month program that ultimately grants graduating students 90 ECTS credits and an accredited master’s degree in computer science. Those ECTS credits are transferable to universities in over 60 countries globally and are widely recognized by employers, leading to better employment outcomes.
EdTech companies can empower higher education institutions by reducing administrative costs, improving job opportunities for qualified educators, and leading to better student outcomes. Woolf can help with all of the above.
