A few years ago I was catching up in Philadelphia with two soon-to-be-married friends over beers. The topic of children eventually came up. They explained they planned to have one child (maybe two—maybe) because, among other reasons, they preferred to be able to shoulder the massive financial burden of college for one child rather than have many who they couldn’t provide for in this way.

Fair enough at a personal level, but as I explained at the time I think their presumption that the extreme cost of higher education is probably not likely to be a reality two decades from now. It’s tough to imagine that within the next generation the residential college system will exist at the scale it does now.

Nathan Harden’s The End of the University as We Know It is stark and probably accurate. It’s difficult to imagine that high level college administrators would disagree with many of his central points, including:

Prestigious private institutions and flagship public universities will thrive in the open-source [online learning delivery model] market, where students will be drawn to the schools with bigger names. This means, paradoxically, that prestigious universities, which will have the easiest time holding on to the old residential model, also have the most to gain under the new model. Elite universities that are among the first to offer robust academic programs online, with real credentials behind them, will be the winners in the coming higher-ed revolution.

In other words, the elites and “public ivies” will largely be insulated from the financial shocks that will hit mid-tier colleges and universities that rely on a volatile combination of maximum enrollment and small endowments. If you could live at home while earning a Harvard, USC, NYU, or Penn State degree, wouldn’t that seriously impact your decision?

“The open-source educational marketplace will give everyone access to the best universities in the world,” writes Harden. “This will inevitably spell disaster for colleges and universities that are perceived as second rate.”

This addresses one component of the high cost of higher education, which is the cost of prestige that’s currently possessed by residential colleges. But Richard Vedder explains at Bloomberg why the proliferation and acceptability of online learning will also cut away much of the artifice that has played a major factor in simultaneously driving and obfuscating the true cost of delivering education:

Put 50 randomly selected U.S. professors in a room. Within 10 minutes they will be complaining about the growing number of administrators in their universities. Professors aren’t right about everything, yet they have a point in this case. … The National Center for Education Statistics reported that in 2010-11, nonprofit colleges and universities spent $449 billion. Less than 29 percent of that — $129 billion — went for instruction … So for every $1 spent on instruction, $1.82 is spent on non-instructional things such as “academic support, student services, institutional support, public service” and a catchall category called “other.”

As the methods of delivery for learning shift, costs are likely to change based on the method of delivery. The colleges that survive will probably be able to continue charging a premium for those interested in the traditional on-campus experience. But students interested in heading right into the job market while also taking classes full-time online (or simply those who can only afford to stay at home with their parents) will save at the very least from a room/board standpoint. (This is true even presuming no structural costs from lack of on-campus administrative support services end up drastically slowing the increase in tuition costs.)

Imagine: The door on the left leads to four years at NYU. Your parents will cover some of the cost but it still means mid-six figure student loan debt and entering the work force at 21 or 22. The door on the right means you’ll attend Penn State, live at home or get an apartment in Philadelphia, and get an entry level job due to proof of active-student status. After some help from parents, earnings while enrolled, and a scholarship or two you graduate with minimal to no debt—and with 3-4 years of experience. Which will be more attractive?

This is the sort of thing I would be focusing on if I were in administration. Fewer new initiatives, buildings, and programs that will require their own revenue streams, and a more vigorous focus on self-sustaining scholarships, endowments, and the sort of strategic investment and debt service that protects my institution regardless of changes to the delivery methods of a degree.

Grander vision combined with more frugal stewardship.