I have spent the last 18 months or so trying to answer two questions about higher education:

  1. Why it’s offering to undergrads (mostly) sucks, yet, still manages to maintain its foothold in society as the post-secondary default?
  2. How can we fix it and what are the alternatives?

Whilst my analysis is focused on my experiences in the UK, I suggest the logic still applies to the rest of the world - even if the services are free at the point of consumption - opportunity costs to the individual and costs to society are costs nevertheless. I also do not overlook the benefits I and others receive from an undergraduate higher eduction, from the freedom to leave home, doors it opens and the connections you make. I would, however, like to shift higher education from an industry stuck in time (having not changed in about a century) to one that can transform and improve.

We’ll answer the first question by unbundling the undergraduate experience into four features-sets and diving further into each:

  1. Learning, specific knowledge & skills
  2. Exploring, new hobbies & careers
  3. Networking, meeting a wide range of people and building deep relationships
  4. Signalling, loosely defined as “building up your CV”

Poor quality learning

  1. The web provides all of the core resources (lectures, problem sheets, exams, etc.) that uni offers but better, faster & cheaper. In some cases, these resources are offered by other top universities around the world, be it CS lectures from Stanford, Engineering tutorial sheets from Imperial or Philosophy seminars from Oxford. In other cases, it’s provided by a YouTuber uploading their content for free from a remote part of India.
  2. The learning experience is nearly entirely one-size-fits-all. This phenomenon seems to originate from the formal lecture system - it would have been terribly inefficient to listen to a scholar speak 1-on-1. However, even with the internet and video playback, universities still commit significant resources to offer bespoke, real-time lectures, leading to learning at the pace of the average, even though the 2-sigma effect has shown its significant drawbacks.
  3. Systemic lack of incentive to improve. Universities and faculty do not get paid by the rate of student learning or getting them into their desired careers. Again, this stems from a historical quirk that research universities care about publishing research and not ‘babysitting undergrads’. This has resulted in boated faculties and the resulting increase in tuition rates with little improvement to the offering.
  4. Lack of applied learning. Outside of working in academia, getting applied learning (skills to be used in the ‘real world’) has gotten so separated from the university offering that it is now expected (necessary even) to get internships to supplement your learning.

Lack of exploration

The structure of the undergraduate degree restricts your ability to explore careers. Few know from the age of 18 what they want to do with their lives. Those that do will more than likely change their mind. This is another thing that has gotten outsourced away from universities and onto internships. To make matters worse, university courses offer a narrow and lagging representation of the types of fields you can learn about - courses about the creator economy/social media are yet to show up - though I am sure it’s only a matter of time before they become mainstream.

Poor signalling

Your qualification level has become a less and less reliable marker of your competency. The more common check has become the name brand of the university you managed to get into - lower acceptance rates = stronger signalling. This has resulted in the majority of the signalling coming from getting accepted in the first place, going so far as to divide the annual cohort of university goers into those that got accepted into prestigious universities (top 20% within a geography); and those that did not. On top of this, we still outsource plenty of signalling onto internships, meaning most spend large chunks of their time at university applying to companies to have a chance of standing out.

How can we fix it and what are the alternatives?

Like before, we’ll start from the feature-sets and rebundle them back to see what a better system can look like at the end.

  1. Spending time early as an undergrad exploring different fields and career options. Ideally, spending time actively participating in the career path or, at the very least, having a high-level simulation of what a career is like.
  2. Spending more time and resources on projects, real-life experience and building things.
  3. Aligning monetary incentives with the institution and staff directly. This can be done in a few ways, a recent method being the Income Share Agreement.
  4. Spending more time and resources making the learning hyper-personalised through mentorship, a self-paced curriculum and flexible learning structure.
  5. Open sourcing signalling to the ‘market’ through internships.

Now, what might this new improved system look like:

  1. Startup accelerators like YCombinator and EntrepreneurFirst. This solves just about all of the problems outlined above, and, whilst a seemingly niche sector of the economy, they have more going for them than most realise. I suspect this model will take the higher education sector by surprise - going from a small number of ‘students’ into a large minority of the world’s most ambitious. The same business model (or some derivation of it) can also be applied to different industries and even new ones that don’t currently exist at scale - a great example of this being the creator economy.
  2. Bootcamps and online communities like OnDeck and Interact, Bloomtech and the Thiel fellowship. The pandemic seems to have levelled the playing field for online communities and bootcamps with the ability to closely emulate the university offering, whilst being significantly cheaper. It’s only a matter of time before the important physical aspects get emulated and for the cultural network effects to set in.
  3. Apprenticeships and internships. Multiverse is a great example of taking real-life experience and bundling it with certification, community and exploration. I am already seeing top students reconsider even the top universities for getting hands-on experience at Google, Monzo and others.
  4. New universities. Minerva is leading the way for how you can take similar regulatory and cultural values and do them better, faster and cheaper than the incumbents - a great example of innovation from within.

The undergraduate degree has embedded itself within our cultural fabric and continues to have strong network effects today. The democratisation of higher education - that is, allowing anyone to have a world-class education - will happen sooner than most people think. The incumbents will begin loosing the strong network effects that have led to their complacency just as the disrupters begin getting theirs.