Looking Back at the Virtual University

Like in many other states, higher education in Wisconsin is enduring budget cuts in order to address state budget deficits. Campuses throughout the state system are struggling to adapt to a reality that has been slowing evolving over decades, the transition from state supported to state assisted higher education. For example, only 17 percent of my home institution budget is from state support.

I was re-reading about the Virtual University in a report from a joint Educom/IBM roundtable that included the following about the future of higher education in 2007:

Financing in 2007

  • The economics of supply and demand in the new competitive environment keep the costs of basic courses and programs low.
  • Unique offerings garner higher incomes for their providers.
  • In addition to faculty salaries, institutional resources are expended on course materials, instructional technologies, and academic support. Some or all of those may be purchased from other higher education institutions and from private providers. The proportion of the budget allocated to faculty salaries is declining.
  • The move away from contact hours and fixed-term courses requires new approaches to tuition.
  • The move away from site-based educational delivery has required different kinds of capital investments for infrastructure.
  • Educational funding now follows the learner rather than the institution.
  • Because employers have continued to reduce their numbers of core, benefited employees in favor of part-time workers or contracted/outsourced services, most students pay directly for the education they need.
  • Because more students are in the workforce than in the initial college-going population, more students pay directly for the education they need.
  • Public institutions no longer receive a substantial amount of state funding. Revenue sources include tuition, contracts with employers and other agencies of state government for training, sale of courses and courseware to other institutions, and low-interest state loans.

DISCUSSION: Financing Models for a New Higher Education

In the 50 years following World War II, public support for higher education has become inextricably linked with the financing of higher education degrees. If the virtual university realizes its projections, will public support expand to meet it? Some experts argue that because much of the projected demand for modularized work-, home-, or technology-based learning is expected to be greatest among adults, those adults’ education need not be subsidized by public funds. The argument asserts that if the benefit accrues to the individual, then the funding of that person’s education should be the obligation of the person or the employer. Carried to its conclusion, that financial strategy could lead to the privatization of graduate-level programs in fields like engineering, business, health, and, possibly, education.

Current financial investments in education do not view it as a lifelong enterprise encompassing all levels of employment. As Rick Heydinger has noted, today the largest amount of federal money earmarked for education and training is spent on those seeking employment–a small portion of the population. Corporations tend to spend their money on high-level executives, which again represents only a small portion of the working population. The least amount of money is spent on the largest segment of the population: those working in middle management, lower-management, or entry-level positions. These are key target groups to be served by the virtual university.

In considering other financial options that might emerge during the next decade, it is possible that public support will shift from public institutions to private and proprietary institutions. That shift would be stimulated by the current negative impressions of the responsiveness of public education, but also as a consequence of new funding mechanisms. At the state level, student-carried vouchers may substitute for today’s territorial franchises. In the virtual university environment, in which there are no geographic or time boundaries, today’s system of funding the institution rather than the individual will make less and less sense. Proprietary and corporate institutions–with their willingness to rethink the general education component, with their greater employment and pay-scale flexibility, and with their less diffuse governance model–may be more competitive. Even if public institutions respond in kind, simple mathematics suggests that the increasingly constrained state dollars will continue to be divided among more organizations.

Those most interested in serving the learner or consumer advocate abandoning the traditional subsidy of higher education’s institutions in favor of funding students directly through vouchers. Such an approach allows funding to be market driven rather than the result of politics. When the market is unwilling to pay for an activity, it is jettisoned and costs decrease; this is a possible outcome for unsponsored research and general education, which are not always supported by consumers. Overall, the result may be a more streamlined, cost-effective, responsive higher education system delivering just-in-time, outcomes-based education.


When was it written? The Virtual University By Carol A. Twigg and Diana G. Oblinger A Report from a Joint Educom/IBM Roundtable, Washington, D.C. November 5-6, 1996 http://net.educause.edu/ir/library/html/nli0003.html

And where are we in 2011? The course we are on has been set for decades. Higher education in some states has been slow to adapt and is feeling a greater shock than needed to declining state resources. Rethinking the institution that is a university in a physical and intellectual sense is required of us.


About Michael Ritter PhD
Professor of Geography at the University of Wisconsin-Stevens Point, science textbook author, educational technology blogger, podcaster, and freelance media consultant.

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