You Ask, I Answer: AI’s Impact on Higher Education?

In today's episode, Marcus asks, is AI the final nail in the coffin for the outdated, overpriced higher education monopoly? Not uh not pulling any punches there. It depends. So first of all, I should probably preface this by saying that a lot of my comments are going to be from the perspective of an American. The USA has a very particular uh higher education system, which despite many of the names, is a for-profit corporate education system, in the sense that you are pay a you are a paying customer to uh universities for education.

It is not subsidized by the government in any meaningful way, unlike other uh more developed nations. And uh those costs tend to be very high, and there's also the complication of a third-party payer network. Uh, what that means is that very few uh US college students pay uh pay for their education in cash. Uh many take out loans to do so. So there is a lending network, uh, partially run by the government, partially run by private banks, that uh students borrow from and then repay over you know decades, uh, if ever, to to pay back the cost of their education.

That model is already uh already highly problematic because anytime you have a third-party payer system, there is there's not an incentive to control prices. So if you are if you are selling education, your customer isn't necessarily the student. Your customer is actually the bank, right? Because you are you're getting the money from the bank, and then the customer of the bank is the student. So already you've you've got some issues with inflation there that if customers had to pay cash uh for the education, very few people would enroll in higher education because they just couldn't afford it.

American colleges, state schools, namely schools that are partially subsidized by the state, typically run around $15,000 to $25,000 per year, all inclusive, you include tuition room and board. Private schools like Harvard, for example, run $70,000 or more per year. So a four-year undergraduate degree can cost you a quarter million dollars. If people had to pay essentially rack rate for education, they would not be able to afford it, right? That is the price of a house.

And very few people, again, borrow the quarter million dollars. Maybe people have a quarter million dollars laying around just to buy a house. Everyone takes loans for that sort of thing. You can't take someone's degree and hold it and resell it in the way you can repossess a house if someone doesn't pay back their loan. So part of the part of what makes the US system already outdated and overpriced is that third-party payer system and the fact that very few education options open to American citizens are cost effective in the same way that uh, say a student in Denmark or France can avail themselves of higher education and pay substantially less.

Um that part's already got to change. And it is. There are you are you're seeing uh enrollments, uh, particularly full fare enrollments declining. Uh, you're seeing the financial aid system itself being very overburdened in the USA. Where AI is going to play a role is in pricing pressure on the outcome.

Many of the jobs that people do, their first job out of a college, the entry-level job, much of that job can be done by machines. So, for example, I worked at an old PR at a PR agency, and um one of the first jobs is the account coordinator. So one step above intern. The account coordinator really does a handful of tasks. Like on our team, the account coordinator was taking notes during client calls, was uh searching databases for mentions of clients to assemble into into a report, was drafting meeting agendas, was uh writing up client reports that had to be reviewed by an account executive or a senior account executive.

Everything I've just named is work that can be done by AI. Better, faster, much faster, cheaper. And so where this puts pressure on higher education institutions is to differentiate. What is it that a human seeking an entry-level job can do better than a machine? And the answer today is not much.

This is why AI presents kind of an existential problem for higher education's value, because if a machine, if a company has a choice between a machine and a human, and the machine is orders of magnitude cheaper, most rational companies in a capitalist economy are going to choose the machine. It is cost effective, and you can have one person running all the machinery. You could have one account executive who is skilled at AI doing the work of 10 account coordinators. Because we have transcript automatic transcription of meetings now. We have summarization, we have writing of basic meeting agendas and things.

There's none of that requires a higher education degree. None of that requires a human. That is table minimum tasks. So the question of is AI the final nail in the coffin? I don't know that it's final.

It is it presents an existential threat to the value of a higher education. What is the value of a higher education for those students being groomed to be workers in a in a knowledge economy? Machines do it better and way cheaper and a lot faster with fewer mistakes. So what does higher education have to do? They've got to figure out what their value is.

They got to figure out what what a human's value is in the future of work. What can people uniquely do that machines can't? And can a college graduate who's in the USA is average age 20, 21, can that person learn that? Maybe, maybe not. It's difficult to say, but it definitely AI will present greater pressures on universities, and it will present greater pressures on the entry level workforce.

So if you are a person or you have you know a person or have a person who is in that situation where yeah, AI is endangering their economic viability. Now is the time to get really good at it. Because one of the things I've been saying for a decade now is you're no longer the first violin in the orchestra. You are the conductor of the orchestra, right? The orchestra is now machines.

You are you are managing the machines as you're as essentially part of part or significant part, or maybe all of your job. The challenge is there's what 50 seats in an orchestra and one conductor. So you want to be that one conductor and not the 49 other people who aren't needed anymore because of many of those tasks can be done by machine. That's the short-term answer for someone who is a college graduate now. The longer term answer, I don't know that I have an answer to right now about the future of higher education and what value it creates that's unique and distinct from what machines are capable of.

So if you have one student who doesn't know how to use AI and another who does, when they graduate, who's the workforce going to hire? We want one conductor of the orchestra. We don't need people sitting in the orchestra anymore. Who are we going to hire? The person who knows how to conduct, the person who doesn't know how to conduct.

That's a no-brainer. And so it is incumbent upon education to figure out how to integrate these tools and teach their skillful use so that students have economic viability. It's a really good question. We could spend a lot, a lot of time on this topic. But the short version is that education is facing an existential crisis from AI in the teaching, in how students learn, how students how students interact with the world, but especially in the economic viability of their immediate graduates.

That's gonna do it for this episode. Thanks for tuning in. Talk to you next time. If you enjoyed this video, please hit the like button. Subscribe to my channel if you haven't already.

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