Getting to the Bottom of the $10,000 Bachelor’s Degree

It’s one of those YouTube clips that probably would have evaporated if it had featured anyone other than Bill Gates.

In August 2010, Mr. Gates, founder of Microsoft, speaking informally at a technology conference, said technological innovations should be able to lower the cost of college to $2,000 a year.

Mr. Gates’s comments reportedly caught the attention of Gov. Rick Perry, a Republican of Texas, who came up with his own back-of-the-envelope estimate of how much college should cost: Multiplying $2,000 times four and adding $2,000 for the cost of books or other learning materials, the governor decided that a bachelor’s degree should cost $10,000.

Looked at another way, that much money in Austin, Tex., will get you a 2005 Ford F150 pickup with more than 125,000 miles, according to the Kelly Blue Book.

In February 2011, Mr. Perry challenged public colleges in his state to create a $10,000 degree. Several of them have answered the call.

From Texas, the idea of a $10,000 bachelor’s degree has spread like an Internet meme to governors in Florida and Wisconsin, a state legislator in California, and some national online colleges.

But the growing attention to the bargain-basement bachelor’s degree isn’t just an indication of how an idea can quickly take hold with the public and lawmakers. The idea itself has become a kind of Rorschach test for how people view American higher education, what they think its role should be, and whom or what they blame for its shortfalls.

How Much Will This Cost?

Like a lot of things that get passed around on the Internet, Mr. Gates’s comments became obscured by the interpretation. What he went on to say was that college costs would diminish because place-based higher education would become “five times less important” in five years.

But in the rush to answer the subsequent gubernatorial challenges, the proposals that have emerged in Florida and Texas, in particular, have relied largely on shifting some costs of the traditional college model from the state to some other entity, such as businesses, community colleges, secondary schools, and even the student.

In other words, the $10,000 degree will still cost more than $10,000.

The cost to the student may only be 10 grand, says Dennis P. Jones, president of the National Center for Higher Education Management Systems, but those degree programs often rely on extra credits from Advanced Placement courses that are taught in high school, or from courses that students pay for at a community college.

“They’re using some smoke and mirrors to get to that number,” Mr. Jones says.

St. Petersburg College is one of Florida’s 23 state colleges, which offer both two-year and four-year degrees, that are seeking to offer $10,000 baccalaureate degrees beginning in the fall. Its program will be a pilot program for about 100 students, says William D. Law, the college president.

With the current cost of a credit hour at $102, a bachelor’s degree at St. Petersburg would cost about $12,240 without any room and board. To shave off the $2,240, students will have to transfer in about 15 credits through prior learning, Mr. Law says. He acknowledges that his $10,000 degree can be offered to only a small number of students for the foreseeable future.

Doing Without

To get the costs down, as Mr. Gates suggested, at least one model calls for getting rid of the campus, the traditional courses, and the faculty members.

Western Governors University, for one, relies on competency-based education and students’ interactions with academic advisers, who track their progress. Western Governors charges full-time students about $6,000 a year for all the courses they can finish.

What saves students money is that they take less time to complete their degrees: 35 months, on average, says Robert W. Mendenhall, president of the nonprofit institution.

But that still adds up to $18,000.

What if you get rid of the individual academic mentoring? That’s essentially what Excelsior College, a private, nonprofit institution in New York, does. Instead of signing up for more structured, online courses, which cost $370 each, you can study free, online courses, for any of 36 examinations, to earn a bachelor’s degree for 10 G’s.

But that cost doesn’t include the cost of books, which adds as much as $4,860 for the full program, according to Excelsior.

At least two institutions offer a bachelor’s degree for less than $10,000, without any extra expenses or shifting the cost.

New Charter University and Patten University, owned by the for-profit company UniversityNow, use a competency-based approach similar to Western Governors’, but the interaction between academic mentor and student is handled mostly online, says Gene Wade, a co-founder and CEO.

The other reason for the lower cost is that New Charter and Patten don’t accept federal financial aid. That cuts down on the cost of complying with federal regulations, Mr. Wade says. But it also eliminates low-income students using Pell Grants—arguably the group that would most benefit from having a low-cost credential.

The Value of a Degree

Travis Reindl, program director of the education division at the National Governors Association, says the important question to ask is not how many governors will try to create a $10,000 degree, but how many are trying to meet the educational needs of working adults. “The pressures that brought us to the $10,000 degree ... are about squaring our needs with our resources, he says. “Expectations are high, and resources are modest.”

What seems most relevant right now is that the value of four-year degree is seen by many as equivalent to the price of an eight-year-old pickup with a lot of miles.

To those who see it as a good idea, the $10,000 degree amounts to an indictment of higher education: Traditional colleges are elitist institutions that cater to the affluent and produce graduates with little practical work-force knowledge.

Governors including Tom Corbett, of Pennsylvania; Rick Scott, of Florida; and Scott Walker, of Wisconsin, have endorsed policies to encourage more job-training skills while questioning the value of the humanities and social sciences in academe.

The public’s views about the value and direction of higher education are more ambivalent. Nearly 70 percent of those who responded to the annual Gallup/Lumina Foundation poll released in February think a college degree is essential for getting a good job, but nearly three-quarters said higher education was not affordable to “everyone who needs it.”

Thomas Lindsay, director of the Center for Higher Education Policy at the Texas Public Policy Foundation, a conservative-leaning group, says the $10,000 degree is in part a response to “the growing contempt that students and parents have for higher education.”

The college degree is now seen by many solely as a way to earn the commonly cited million-dollar salary differential between college graduates and those without a degree. Those extra earnings have been touted by higher education for at least a decade as colleges tried to preserve state appropriations.

But in doing so, higher education has been promoting its economic value at the expense of the liberal arts and humanities, says Mr. Lindsay, a former political-science instructor. If colleges made clearer the value of education itself, “the dignity of that pursuit would have impressed itself on lawmakers and the public,” he says. “For me, the tragedy of higher education is not that it was forced out of this role, but that it walked away.”

Correction (3/6/2013, 12:18 p.m.): This article originally gave an incorrect name for a higher-education institution in New York. It is Excelsior College, not Excelsior University. The article has been updated to reflect this correction.

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