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I kicked off this 3-parter on how to solve the triple scandal of tuition fees by looking at how the current system of fees and loans protects the status quo in higher education.

We now come to the second scandal of this system — that it perpetuates a model of higher education that takes no account of the huge impact digital technologies are having on the world. With fees set at a level designed to sustain their existing modus operandi, there is little incentive for institutions to modernise how they operate, or to explore innovative new ways to deliver degree courses.

Where’s the investment in digital innovation?

It may be that the entire notion of a three-year course at a traditional campus university will become obsolete in a few years’ time. In the US, higher education institutions have been experimenting with Massive Open Online Courses (MOOCs) and the co-founder of leading MOOC provider Coursera believes top universities will soon offer full degree courses entirely online to those who wish to study in that way. The potential exists to create degree courses that combine campus attendance with distance learning and work placements, at a much lower overall cost to students than the current system.

But while the Open University’s own MOOC FutureLearn has begun to work with some UK institutions, take-up here has been glacial. Why invest in digital innovation and new course structures if it might slay the golden goose of £9000-a-year tuition fees?

The entire concept of debt-funded tuition fees treats the current system as immutable. It is rooted in the notion that a degree is a qualification that prepares the individual for a single lifetime career. That’s a rather old-fashioned belief to cling to in a world of rapidly changing employment patterns. It may still hold true for doctors and lawyers, but these days few people expect to be doing the same job for life.

Most young graduates believe that it’s normal to change employers every few years, and many see themselves trying out several different careers during their lifetime. Technology advances and the expected rapid innovation in robotics and artificial intelligence (AI) over the course of this century can only accelerate that trend.

Seizing the AI dividend

Some futurists are even predicting that AI will eliminate jobs entirely for whole sections of the population. Others argue that new jobs will eventually be created in their place, but warn of economic turmoil in the meantime.

These technology trends demand fresh thinking about the structure and delivery of tertiary education. They also present the opportunity of an entirely new source of funding — an ‘AI dividend’ or ‘robot tax’ that redistributes the rising profits of automation back to society. French economist Thomas Piketty has argued that the return on capital in our increasingly automated society is accelerating away from the share paid out to workers. The impact of artificial intelligence can only exacerbate that trend.

To redress the balance, I have argued that the tech industry should lobby for a robot tax , before politicians impose one anyway. The form of the tax would be very simple:

A small, generic levy on company profits that reflects the greater leverage that capital can achieve with the augmentation of modern technology … whose proceeds are invested in society for the greater good.

Others have argued for funding a Universal Basic Income out of such a tax, but the huge costs and likely controversy make UBI a remote possibility in the foreseeable future. In comparison, a modest increase in corporation tax  in order to bring fresh funding into the education sector would introduce the principle on a far smaller scale — and for a much more politically acceptable purpose.

But it would be a sadly missed opportunity if we were to change the source of funding without a radical overhaul of how it is spent. In particular, it is time to expose and eradicate the third scandal of the current system. That, along with a new model to govern how the funding is put to work, will be the subject of my third post today.