March Madness, Your Tax Dollars and the Future of Higher Education

Hoops fans will be glued to the TV this weekend and early next week to watch the Final Four, college basketball’s annual culmination of March Madness.

 A new Bloomberg Government Insight by senior analyst Patrick Driessen shows how the federal government, through the tax code, supports the games. Many of the main players in both the men’s and women’s tournaments – except the athletes themselves – benefit from various breaks in the federal tax code: universities, their major donors (including those targeting their funds just on athletic programs), advertisers and the NCAA.

 And then there are bettors all across the country – yes, all of you who participate in some form of bracketology. Although winners are supposed to declare their winnings as income, the IRS takes a lax attitude toward enforcing this aspect of the tax law.

 Meanwhile, college presidents and perhaps many of their faculty probably, and justifiably, are worried about more than who wins, and instead about the future of their institutions in the face of the online education revolution– the subject of another higher education study published by Bloomberg Government.

 In it, I argue that it’s a mistake to conflate online instruction with for-profit schools, some of which have attracted some well-deserved bad publicity in recent years. The online movement is a separate phenomenon, and it would be a mistake to dismiss it.

For one thing, some high-quality online education providers are non-profit, like Udacity, co-founded by Stanford computer scientist Sebastian Thrun, or the Khan Academy, which has thousands of short instructional videos for K-12, college and even some professional courses. Other providers, such as Straighter Line, offer courses for roughly $100, far below what students would pay at any state university or even community college. These sites are growing in popularity by leaps and bounds.

 Potentially even more important, many established universities and community colleges are taking the online revolution seriously. They are incorporating online features in their introductory or even intermediate level courses. Some of the more prestigious institutions have formed consortia to offer “massive online open courses” (MOOCs) that anyone can take for free. At least one MOOC course (introductory calculus) offered by Coursera, a consortium of 62 universities and growing, is now accepted for credit at more than 2,000 schools.

 Almost 7 million students, adult and college age, or about one-third of all college students nationwide, have taken at least one online course. These numbers are likely to go up as online courses improve in quality, and as accrediting bodies begin giving credit to more online courses, either on their initiative or spurred on by the Obama administration, which wants changes in the accrediting system.

 Even without those changes, the online revolution will continue changing the way bricks-and-mortar colleges deliver instruction, most likely toward a blended model that uses the best teaching available through online sources coupled with mentor-teachers who help students needing one-on-one attention.

 In the process, look for some major changes in higher education down the road: in who teaches and how it’s done, how long many college-age students actually live on campus, and what many schools may be compelled to do with otherwise empty dorms and classrooms if more students spend more time learning at home. Oh, and one more thing: expect more athletes to take online courses, as Heisman Football winner Johnny (Football) Manziel is doing this fall semester at Texas A&M.

 As for the March Madness tournaments, which have become businesses as well as national entertainment, they are almost surely here to stay. So are elite educational institutions, private and state.

 Some of those mid-majors and Cinderella schools in the basketball tournament, however, may not be around several decades hence unless they incorporate online features into their programs and harness, rather than resist, the most disruptive force in higher education in the post-War era.

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