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Education, Education Technology & MOOCs OVERVIEW

Education, both at higher and lower levels, is one of the largest activities in the world (in terms of employees, expenditures and consumers—that is, students). However, somewhat similar to the health care sector, education’s expenditures, quality of output and ultimate results vary widely from nation to nation, and from place to place within nations.

In total, global public and private spending on education (K-12 through higher education) is expected to be equal to about 5.8% of GDP, or $4.9 trillion for 2020. These numbers are Plunkett Research estimates. (On a worldwide basis, this makes the education sector somewhat smaller than the health care sector.)

Globally, the UN counted 1.35 billion students in grades K-12 during 2019 (the latest year available). This amounted to about an 89% enrollment rate (of potential students) in primary schools and 66% in secondary schools. The UN also counted 227.6 million students in higher education worldwide.

Meanwhile, the global education market also serves both working adults (corporate training and worker certification) and adults seeking learning for personal, casual or recreational purposes. Many working adults also return to universities in order to continue or expand their educations, often with an interest in changing or enhancing their careers. Corporate training and education was a $82.5 billion market in the U.S. in 2020 according to Training Magazine.

Colleges and Universities: In higher education, the U.S. had 11 million students in degree-granting, 4-year colleges and universities during the fall 2019 semester school year, and 5.4 million students in public 2-year colleges, (the latest year for which comprehensive data is available) according to the National Center for Education Statistics.

Education in Grades K-12: In the United States alone, 57.7 million students (public and private schools combined) attend classes from preschool through 12^th grade, in 98,755 public schools of all types, operated by 13,588 school districts, plus 34,576 private schools. (Roughly 1.8 million additional lower school students are schooled at home.) These schools are run by 3.7 million teachers plus 3.4 million administrators and support staff. These numbers are for 2019 (the latest year for which comprehensive data is available) published by the U.S. Department of Education, National Center for Education Statistics (NCES).

The cost of this schooling is approximately $708 billion yearly for public K-12 schools (not including private schools). Average expenditures were expected by federal government experts to be about $15,946 per student for the 2019-2020 school year, but the cost can vary as much a $15,000 per student per year, depending on what part of the nation you are considering. For example, a study by Education Week of 2019, adjusted for “regional cost differences,” found expenditures ranging from $7,635 per student in Utah to $19,679 in New York, and $17,872 in Alaska.

Roughly $85 billion of the total cost of public K-12 education is provided for by various federal government programs. Most of the balance is split about evenly by state and local taxes.

Long-Term Challenges in Lower and Higher Education: The realm of education can, at its simplest, be divided into two parts: lower education (preschool through high school, often referred to as K-12) and higher education (junior colleges, technical schools and colleges and universities, including their graduate schools). Those two sectors could each be logically divided into two further parts: publicly-funded schools and private schools.

Regardless of which quadrant of this simplified view of schools and colleges is under discussion, the challenges faced by funders, administrators, parents and educators are disturbingly similar in many economically-advanced nations: a) costs that have grown very rapidly over recent years (reflected in high tuition, high operating expenses and growing costs to taxpayers and private tuition payers); b) results that are often disappointing (reflected in a combination of low graduation rates, poor standing in comparative international studies of K-12 student achievement, high levels of college student debt and difficulty among many students in finding good jobs upon graduation—sometimes referred to as underemployment); and c) the need for schools and teachers to attempt to serve large student bodies of widely varying intelligence, cultural or linguistic background, academic interest and individual needs.

There are stellar examples of schools and colleges that rise far above these challenges across the U.S. and the rest of the world. Unfortunately, there are also miserable failures at the bottom of the list, where schools fail to deliver a reasonable return on the time and money invested in them.

The Debate Over the Reform of Public K-12 Schools in the U.S.:

Ever since free public education became the norm in America, the costs and the methodology used to teach in schools have been the subject of intense (and frequently bitter) debate. That debate is now intensifying for three reasons:

1) Costs have risen faster than the general rate of inflation for many years.

2) Many parents, students and observers are disappointed in the results achieved by students. This is fueled by generally disappointing achievement test results in K-12 and a very poor showing for U.S. students when ranked against the students of other nations in comparative studies known as PISA scores. The looming question in many minds is: are students being prepared properly for their future careers, for a world that is rapidly adopting advanced technologies, for a climate of intense competition due to globalization, and for higher education for those students who choose to pursue it?

3) Technology is slowly but surely changing the challenges, opportunities and methods of providing education at all levels, but the implementation of technology leads to further controversies (such as students’ privacy and the so-called “digital divide” that limits the educational opportunities of lower-income students who do not have computers or internet access at home) along with significant school system investments required for equipment, services and training.

Source: Plunkett Research, Ltd.

The proposed (and very controversial) cures to education’s needs are as varied as the challenges faced, ranging from bigger school budgets and higher pay for teachers at the simplest end to more centralized control, government intervention, student testing and accountability for teachers at the most complex end. Some people argue for less federal government involvement and more autonomy at the state and school district level, while many observers state that teachers’ unions have too much power and political influence.

Alternatives to traditional education are gaining traction. Charter schools, home schooling and online classes have been slowly gaining market share, sometimes provided by for-profit companies, sometimes springing from parental efforts, and most often growing through nonprofit groups ranging from public school systems to religious organizations.

The use of online classes was accelerated dramatically by the Coronavirus pandemic of 2020. A desire to make it more difficult for disease to spread on school campuses may make some of this shift permanent. For example, huge freshman courses, that sometimes have a few hundred students enrolled at once at colleges and universities, are now likely to be delivered online, rather than in a giant, crowded lecture hall. Many other courses may be delivered in a hybrid model, with the students rotating the days they spend studying from home with days spent in the classroom.

At the college and university level, concerns about the costs and effectiveness of higher education have been accelerated by the massive debt levels now carried by U.S. college students. U.S. Bureau of Labor statistics indicate that the price index for U.S. college tuition rose by nearly 1,288% from early 1979 through early 2020, four times faster than the overall rise in consumer prices (food, housing, etc.) of about 263%.

However, the increases in tuition stated above do not reflect the fact that financial aid to university students has also increased substantially. The net cost to the typical student has risen at a much slower rate, after factoring in financial aid. Another significant factor that is often overlooked is the fact that state budgets for support to public universities typically have not kept up with inflation, leaving it to universities to look to higher tuition to cover their costs. (State budgets are under extreme pressure due to the rising costs of pensions for former state workers, leaving less money available for education.)

At the same time, many observers point to a long-term trend of rising ratios of administrative, non-academic staff to professors, creating lower operating efficiencies and higher overall costs of education. This would indicate opportunities for the application of better technology to reduce the number of employees required for administrative tasks, such as human resources or accounting.

In fact, total (2020) American student debt, at $1.71 trillion, is of stunning proportions, exceeding even the total credit card debt of all Americans. The average new U.S. graduate with a 4-year degree left school in 2019 with $29,900 in student loans, up from only $18,600 in 2004. The burden of making payments on these loans is limiting the ability of recent graduates to purchase cars, household goods and homes, which in turn is detrimental to the growth potential of the economy overall. There is tremendous pent-up demand among recent grads to form new households of their own, but their finances and job prospects in many cases limit their ability to leave their parents’ homes and strike out independently.

Meanwhile, there is a growing emphasis in America on better supporting and utilizing the community and technical colleges that are already widespread across the nation, in order to reduce overall tuition and fee costs to students and boost career-specific training tailored to suit the needs of local employers. Such schools typically have much lower tuition costs than 4-year colleges and universities.

Technology as a Long-Term Solution: Technology-based education solutions are gathering tremendous momentum, and in many cases they are being carefully tested and applied in real school situations. Online learning is gathering speed at all levels, from home schooling of high school students, to basic courses for university students, to essential skills training for corporate employees.

Software tools enhancing everything from school attendance management, to student engagement, to the availability of learning resources online are growing in availability and popularity. Business and investment opportunities abound due to the immense demand for greater productivity, efficiency and effectiveness in education. “Points of pain” can be found throughout the spectrum of the education sector, while the size of the market is immense, both in developed nations in North America, Europe and Asia, and in less-developed countries starved for good educational resources.

People who are considering the future of education should be prepared for twists, turns and surprises. Massive demand for quality education worldwide, combined with the need to control costs and harness the potential of cloud-based computing, mobile devices, ultrafast internet access and artificial intelligence, will lead to unexpected changes and advancements. For example, Google’s free cloud-based Google Education apps are taking public schools by storm, while traditional publishing firms have invested heavily in state-of-the-art EdTech firms including Udacity, HotChalk and Relias Learning. One of the biggest surprises of all was an announcement by world-class Purdue University, long a leader in fine education with its advanced schools of engineering, science, business and aerospace, that it would acquire the for-profit education business of Kaplan university, picking up 32,000 students in the process. Kaplan owned a very well developed online learning platform, and the acquisition enables Purdue to rapidly expand its offerings to remote students, including working adult learners.