Category: Blog

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Free Market Can Deliver Free College

The following article ran in the September 21, 2020 issue of the Wall Street Journal.

By Daniel Pianko
Sept. 21, 2020 7:12 pm ET

Remember paying your broker $200 a trade? Higher education is at that stage today.

The Covid-19 pandemic forced colleges to shift to online learning, often with disastrous results. Students are no fools and many of them are suing for a discount. They have realized what higher education is loath to admit: Instruction is not what they, their parents and the American taxpayer are paying full price for.

The most common discount on offer appears to be a 10% tuition reduction, but some students are pushing for far more. They claim that nonacademic activities, from school plays and concerts to networking and parties, represent a lot more than 10% of the price tag of college. Such discounts imply that students are still getting 90% of the value of higher education (about $45,000 worth, on average) from their Zoom lectures, but much of the educational content has become widely available for free. Students and parents can’t be faulted for suspecting that an online education should cost next to nothing.

At some institutions, it already does. Primarily online Southern New Hampshire University recently announced a free first year for incoming students in light of the pandemic. California-based National University-which offers an array of online classes-cut tuition by up to 25% for full-time students and says that new scholarships will make enrollment nearly free for Pell Grant-eligible students.

Can the pandemic finally bring the traditional college pricing model to its knees?

Or will these examples remain outliers?

Insight into the future of higher education may come from an unlikely source: the brokerage industry. Like higher ed, stock trading is a highly regulated field with massive barriers to change. Recall the stereotypical stockbrokers of the 1980s: Tom Wolfe’s “Masters of the Universe” or Merrill Lynch’s “Thundering Herd.” For years, the traditional brokerage industry was considered too difficult to replicate with technology. How could the internet replace a white-shoe adviser who not only took trade orders but also answered the phone, offered personal advice, and took part in estate planning and other higher-order wealth-management tasks?

The mighty were felled quicker than expected. Over 30 years, technology reduced the cost of trading a stock from hundreds of dollars to virtually zero.

In 1988, a ragtag group working far from Wall Street began disrupting the brokerage business. It was led by Joe Ricketts, the larger-than-life founder of Ameritrade, who was the first to enable stock trading by touch-tone phone.

Ameritrade introduced online stock trading only seven years later.

My first client as a junior investment banker out of college was Ameritrade, and much of my job involved carrying bags for Mr. Ricketts on roadshows. In 1998, when most other firms charged $199 a trade, he revolutionized the brokerage industry by offering to trade unlimited shares for $8 a trade. After days on the road together, I finally worked up the courage to ask him: “How much lower than $8 a trade can stock trading go?”

With a twinkle in his eye, Mr. Ricketts responded, “One day, Ameritrade will pay you to trade.”

I thought he had lost his business sense, if not his mind. Who gives away a product that everyone else is charging $200 for?

Yet Mr. Ricketts saw the future: Today, almost no large brokerage firm is charging for stock trades. Firms make money from new revenue sources, like selling order flow to market makers. It’s not unlike the way Gmail is free for users, whose data then helps Google sell targeted advertising. In the first quarter of 2020, fintech unicorn Robinhood raked in $100 million in order-flow sales alone. Ameritrade’s successor was sold last November for around $26 billion.

Higher ed is where the brokerage business was in the late 1990s: poised for transformation. Even before the pandemic, momentum was building in the education market away from high-cost operators and toward low-cost ones. Southern New Hampshire University and Western Governors University, nonprofits that charge less than $10,000 a year in tuition, have already become some of the largest and fastest-growing institutions in the country. They each serve more than 100,000 students by using online delivery and competency-based instruction to drive down costs dramatically without sacrificing quality.

These mega-universities will leverage technology to drive tuition revenue to zero over time. Some are already on the way, and the pandemic may accelerate the shift for many others. Rather than collecting tens of thousands of dollars from students up front, colleges might make money by forming partnerships with employers, by charging students a percentage of their post-graduation income, or via government-issued social-impact bonds tied to successful outcomes like graduation rates.

Mr. Ricketts’s lesson should be clear to every college president in America: Technological change affects industries in deep, novel ways that established players ignore at their own peril. New education models are already driving tuition down, but there’s still room for massive, structural price-driven disruption in this industry. In the wake of the pandemic, the winner will be the institution that takes the cost of online learning down to free.

Just as no one 30 years ago could have foreseen what would befall brokerage fees, few now can imagine what will befall colleges in a world without tuition revenue. But that world may be coming. If it is, the debate over free college will become an anachronism. Will you greet it with disbelief or a twinkle in your eye?

Daniel Pianka is co-founder and managing director of University Ventures.

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Opportunity Education’s Pathways Program

I think about how actions I take today will impact what happens in the future. It’s not something I try to do; it’s what my mind does naturally.


So even as Opportunity Education’s Quest Forward Learning program continues to help young learners acquire the academic essentials and skills they’ll need to tackle life’s challenges, my mind has been thinking about what happens next for these young people and how I can help them to succeed.


Some of these kids will go to college, or trade school, or the military, or find a job with further training opportunities. But whatever path they choose, I want Opportunity Education to take actions today that will help them succeed in their futures.


It’s from this thinking that Opportunity Education’s Pathways Program emerged. It’s a global program that supports students through high school, post-secondary education, and into their first career. (I say first career because, in the world today, people are likely to have more than one career.)


Finding a good, financially viable path in life is difficult, particularly for low-income students. Opportunity Education’s Pathways Program helps young people understand their options – including the cost-benefit of different choices – and to make a plan for when school is done. Most importantly, we make a commitment to provide support to these young people for 10 years from the beginning of high school.

The Pathways Program is being rolled out at Opportunity Education’s United States and Tanzanian locations.  We recently held our first Career Day in Moshi, Tanzania with 91 high school students from Mtakuja Secondary School.  Presenters included university representatives, government officials from the Tanzania vocational training authority (VETA), the National Council for Technical Education (NACTE), as well as school officials, teachers and Opportunity Education representatives.  It was a full-day event with presentations on a wide range of paths that included things like psychology, veterinarian medicine, nursing, law, and immigration police. 


While it’s early days for the Pathways Program, we already plan to hold two events like this annually in Tanzania. These will be supported by in-school advising through career clubs and individual support.


I want to see young people have every chance for success and for Opportunity Education to help them get started on their paths. It’s my hope that the Pathways Program will help them get started on their way.

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Seamless Learning at Opportunity Education’s Quest Forward Academy

I think a lot of people want to get back to something that feels more like normal, and for families with school age kids, starting classes can be big part of that. But opening a school right now needs to be done in the right way.

At Opportunity Education, the foundation I established to help empower young people, we gave a lot of thought to how reopening should work at our Quest Forward Academies.

We are, of course, following all the guidance from federal and state health officials, including having everyone consistently wear masks, sanitizing hands regularly, and socially distancing.

But just like our Quest Forward Learning program is designed to reimagine education for a modern age, we wanted to approach on campus learning in a way that made sense in today’s world. To do that, we developed Seamless Learning.

At the center of Seamless Learning is our focus on the learning, not the buildings. What does that mean in practice?

• Where allowed by local officials, all our classes are running simultaneously on both Zoom and in physical classrooms.

• Parents and students work with the school to determine if their student should be remote or in person.

• Regardless of where the student is located, he or she can fully participate in each class and review recorded video for any missed class or topic.

Right now, the Quest Forward Academy Omaha is working in the Seamless mode, with approximately 20 students participating remotely over Zoom and everyone else learning on campus. (Santa Rosa is still working fully in distance learning mode as schools are closed for in-person learning in Sonoma County, CA.)

We are living through a period of rapid and disruptive change. It is a difficult time but my experience has been that innovation happens at moments like this. I think Opportunity Education’s Seamless Learning is going to prove to be one of those moments of innovation, and some of what we are learning is going to stick.

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The History of Little Jackson Hole, Wyoming

A few weeks ago, I posted about why I named my ranch Jackson Fork Ranch.  Some folks asked me about this blog post and why I refer to the area where my ranch is as “Little Jackson Hole.”

Since we bought Jackson Fork Ranch a little more than 20 years ago, I’ve tried to learn more about the area – the Upper Hoback Valley.  My early research revealed some interesting things.  First and foremost, I learned that the name “Bondurant” is a relatively recent creation, having been introduced in the early 1900s when Benjamin Franklin Bondurant’s ranch served as the area’s first post office.  For more than 70 years before that, however, the historical records suggested the area had been known as “Little Jackson Hole” or Jackson’s Little Hole.” 

But I’m no expert, so in 2018 I asked historian Elizabeth Watry to conduct comprehensive research into the area’s history.  Ms. Watry had served as Curator for The Museum of the Mountain Man in Pindale, WY and came to the project with a deep knowledge of the area.  (Fun fact:  The Ricketts Art Foundation partnered with The Museum of the Mountain Man and the Buffalo Bill Center of the West to create Fur Traders and Rendezvous, the largest collection of Western art by Alfred Jacob Miller.)

I learned some absolutely fascinating things about the Upper Hoback Valley from Ms. Watry’s 110-page report, including:

  • The nine-mile long and four-mile wide valley in Sublette County, Wyoming recognized today as Bondurant was once known as Jackson’s Little Hole by hundreds of fur trappers and traders, a few missionaries, and assorted other Euro-American travelers and explorers in the area between the early  1830s and 1878. 
  • Warren Ferris may have written the first usage of the place name Jackson’s Little Hole in early August 1832.
  • Almost 70 years later, Benjamin Franklin Bondurant became one of the first settlers in Hoback Basin once known as Jacksons’ Little Hole. His ranch served as the first Post Office, which began operation in 1903. Mrs. Bondurant worked as postmistress until 1926. Bondurant was the Post Office name from 1903 until 1935. From 1935 until 1938, the Post Office was named Triangle F Ranch. In 1938, the name Bondurant was reinstated.

I find the history of this charming place to be quite interesting and thought I would share Ms. Watry’s excellent work with those who might enjoy reading it for themselves.  Ms. Watry’s complete report – along with its copies of the maps and historical artifacts –  is available right here.  I hope you enjoy it!

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An Intolerance of Opposing Views

I tend to have ideas about many different topics.  I like to share those ideas but when I write them out sometimes something gets lost – I don’t always love my own writing. 

On my book, The Harder You Work, The Luckier You Get, I worked with a very talented writer, Greg Lichtenberg.  Greg and I sat together many, many times over the course of a few years and, in the end, I was pleased with the result.  The experience gave me the idea that I could do something similar on this blog.  So sometimes on this blog, when I have an idea or opinion I can’t express in writing as clearly as I want, I’m going to ask for some help from people I think can work with me to get my idea out better than I could manage on my own.  When I do that, I am going to mention having gotten the help.  For the piece I am posting today, I asked Alfred Levitt to work with me on the writing – my ideas and views with help from Alfred on the writing.

* * *

I’ve long believed that a diversity of opinion is essential for our society to prosper.  I oppose shouting down people who express competing views.  It’s in thoughtful disagreement that sustainable progress can happen – silencing those who hold different opinions doesn’t end well.

So the recently published letter, A Letter on Justice and Open Debate, struck a chord with me, despite its overtly anti-Trump frame.  (Yes, I support President Trump.)  The letter, authored by academics, artists, and thought leaders, argues that spreading more widely in our culture is:

an intolerance of opposing views, a vogue for public shaming and ostracism, and the tendency to dissolve complex policy issues in a blinding moral certainty. We uphold the value of robust and even caustic counter-speech from all quarters. But it is now all too common to hear calls for swift and severe retribution in response to perceived transgressions of speech and thought.

I agree. 

Counter-speech is a critical part of a healthy society.  So while I believe socialism, despite its surface appeal, will destroy economic opportunity and leave more people in poverty, I support the right – and indeed the responsibility – of those who believe in socialism to express their views.  I don’t always like what they have to say, but I believe entirely in their right to say it.

Now let me anticipate a criticism those who dislike President Trump might offer: “how can an old, white, rich guy seriously claim to oppose shouting down opposition when Trump is among the offenders?”  All I’ll say about that is I’ve never found a politician with whom I agree fully on everything.

What I do believe is that a big part of the intolerance to counter-speech comes from our University system.  In his book The Breakdown of Higher Education, Professor John Ellis argues that the silencing of competing perspectives at Universities has its roots in a shift among faculty over the past 50 years from mildly left-leaning to something much more radical.  But when competing perspective is silenced and debate eliminated, something essential is lost.  I believe we’re seeing the hangover from this shift rippling through society in a way that’s not good for anyone in the long run.

Adding gasoline on this fire are social and traditional media, which produce echo chambers where personal views are reinforced because people are only exposed to “like-minded” perspectives.  It’s a dynamic that promotes an intolerance for competing ideas.  I think that’s a bad deal – hearing competing ideas, although uncomfortable at times, is critical. 

People should be armed with facts as much as humanly possible so they can make up their own minds about things.  And they should be free to express their own views without being attacked for doing so.