There's a massive problem in higher education. The number of people qualified to attend the world's best universities who don't get the chance to do so is growing. At the same time, the cost of attending college has risen to the point where people question its value, and student debt is skyrocketing.
The Minerva Project and its founder Ben Nelson, the former CEO of Snapfish, are making an ambitious effort to fight both problems.
Their goal is to attract the best and brightest young students in the world without a traditional campus, while charging tuition "substantially less than half" of what they do in the Ivy League.
Former Harvard President and Treasury Secretary Larry Summers chairs the advisory board; and, former Nebraska governor, U.S. senator, and the New School president emeritus, Bob Kerrey, will be executive chairman of the Minerva institute. Benchmark Capital, one of the world's most prestigious venture capital funds, put $25 million into it during its very first round of fundraising. The Economist says it's "one of the biggest seed investments of a leading Silicon Valley venture firm ever."
The first class is expected in 2015. All courses will be taught in seminar form, via live streaming from around the world, giving the organizers an incredible amount of flexibility, which is at the core of what's an intriguing idea.
Today Minerva announced the creation of the Minerva Institute for Research and Scholarship, which aims to solve two of the problems the project hadn't thoroughly addressed yet: research, and creating opportunities for every student. "That's effectively what this most recent announcement is about—the foundation of the Minerva Institute—which will have a role of both promoting scholarship for our students and getting them up the curve and learning how to be the world's most impactful creators, as well as supporting our faculty in their pursuit of generating meaningful knowledge, CEO Ben Nelson said."
In an interview with Business Insider, Nelson outlined the overall idea behind the school, how it plans to get both the world's best professors and highest-performing students on board, and how it's solving that thorny research problem.
The bottom line?
According to Nelson, Minerva's a response to an enormous demand gap, and to the fact that we need an elite university built for this century, not another built "in a 19th century context."
"That's effectively what Minerva is, so we really are taking every aspect of the university and rethinking it from scratch, and imagining, if we wanted to create the world's greatest university today, what would it look like?"
That includes rethinking everything from how the faculty's assembled, to admissions policies, to tuition, to how students will live.
The pitch that got Larry Summers, Bob Kerrey, and Benchmark on board.
"The pitch for Minerva is actually very straightforward," says Nelson argues. It all comes down to supply and demand. There aren't nearly enough spots at elite schools for the students brilliant enough to attend them.
There hasn't been a new, elite research university created since the late 19th century. Since then, there's been a massive increase in demand as women and ethnic and religious minorities joined the pool. In response, elite universities increased their class size.
Then came the 1980s, which saw demand explode even more. The need for blind admissions policies, according to Nelson, "effectively quintupled" the market for elite universities. Then came the end of the Cold War. "When that happened the international demand jumped by a couple of orders of magnitude," Nelson said. And that's not just people who want to go, that's people who are absolutely qualified to.
The response of elite universities? They froze the size of their incoming classes. "Effectively, the Ivy League's incoming class today hasn't even tracked population growth over the last 25 years," Nelson said.
How big is the potential pool for Minerva? In Nelson's words, "very, very, very large."
"If you look at a traditional university, we characterize their admissions philosophy as having a high floor and a low ceiling. It means that it's obviously very difficult to get into any Ivy League university," Nelson said, "but, because of their capacity constraints, depending on factors that are completely nonacademic, your likelihood of getting in is dramatically different."
Think of Stanford, which just won the Rose Bowl. They only admit 1,700 hundred students, but have too many elite sports teams. Then you add the issue of diversity. Universities concentrate on that, and there's nothing wrong with that, but it does create a problem. "Because the highly qualified kid from New York doesn't have the 'right parents' or doesn't have the right throwing arm, he's kind of screwed," Nelson pointed out.
The problem's even worse for international students. Seven percent of Stanford's class is non-American. Harvard accepts around eight students from China each year.
That leaves thousands, if not more, domestic Ivy League-caliber students who don't get into the Ivies or their peer institutions, and by Nelson's calculations, "orders of magnitude" more international students, because the U.S. is only five percent of the world's population.
The pool gets even bigger when you look at the options available in students' home countries. Many countries may have top tier institutions in a few fields, but are completely lacking in others.
"Let's say I'm a brilliant kid growing up in India. But I don't want to be a doctor and I don't want to be an engineer. Therefore, I don't want to go to IIT or IIS," Nelson said. "I want to be an economist, I want to study political science, I want to study philosophy. Right? Where do I go? There actually is not a single institution of the caliber of any top tier university in the world that teaches those subjects at an undergraduate level. So we provide that opportunity."
Assembling a world-class faculty without shelling out millions to poach them
Maybe the most important part of creating a new university to challenge the Ivies is getting world class faculty. Minerva doesn't want to go out and say, "We'll pay you 20 percent more if you come and leave Harvard and Yale and come to us." Nelson said, That's both very expensive, and worse, it's actually very bad for the industry.
What they do want to do is pick up the top talent that gets stuck in what Nelson calls "transition points"—the areas where bright people stall because there's simply no room.
Nelson gave the example of a friend of his who teaches philosophy at Berkeley who described a grim job market for graduates. "There were two, and I kid you not, two postings for professors of logic open in the country," Nelson said. "I will tell you that there are more than two PhD graduates from excellent institutions who have concentrated in logic."
That's one of the four major transition points Minerva has identified—the transition from PhD to associate professor, where there simply aren't enough jobs. This is an opportunity to get formal training and experience in teaching, do research, and publish, which puts those graduates in a better position to move to a top tier institution.
The second transition is from assistant to associate professor, where great professors don't quite get tenure. Nelson had an experience many people can relate to, where a beloved professor didn't get tenure because they hadn't published quite enough. "When you don't get tenure at Penn you don't wind up going to Princeton. Right? You wind up dropping a couple of 'tiers.'"
Minerva hopes to provide an opportunity for these sorts of people to take a couple of years to publish and burnish their credentials so they don't necessarily have to drop down to a lower-tier institution just because their seven years ended at the wrong time for their department.
The third point is dual academic households. Think of a doctor who wants to go work at UCSF, but is married to an economist. UCSF is only a medical school, so what's his spouse going to do? Because Minerva faculty can teach from anywhere, it can help resolve what's become a significant problem.
The final option is emeritus professors who still want to work, but want to live somewhere other than the last place they happened to have taught.
It's a faculty model that works with, rather than against, existing institutions, without having to pay massive salaries to poach people, and without sacrificing quality.
Providing an opportunity to professors left behind by the current system is one part of building a great faculty. The other is the opportunity to do great research. Minerva doesn't want to build massive labs, but professors sometimes need them. They will provide all of the support needed to write grants, but the experience will be very unique.
"Whenever there's overhead that's necessary for a research project, it is built just in time, not necessarily built but actually charged for, outsourced," Nelson said. "So as an example, there are entire biotech companies now that don't own a single lab, what they do is outsource their experiments to labs in India and they get the results back and continue to iterate on them in that fashion, and those labs in India are open 24 hours a day, so there's absolutely no lag."
That doesn't mean researchers who want to work in a lab won't be able to find one, because they can live anywhere in the world. "For example, if they want to sit in a lab they can go and [collaborate] with a scientist in Germany, they can go to the Max Planck institute," Nelson explained, "and even though we pay their salary, they can be working alongside their colleague and sitting on their bench for free."
The same goes for professors who work extensively in the field.
The final point, which Nelson hopes will be particularly appealing, is that Minerva won't claim any part of the intellectual property researchers create because they won't be paying infrastructure costs, unlike Universities, which get a chunk and manage commercialization.
Getting students to take a chance
Beyond the fact that there's a massive population of brilliant students who are effectively locked out of an Ivy caliber education, Nelson argues that Minerva has something to offer students, to convince them to take a chance on a new model.
"I think the preponderance of our students will come simply because they believe in what we want to do and are excited by our educational system," Nelson said.
Additionally, the experience is going to be dramatically different from anything else available. "At Minerva we will facilitate and expect our students to live in 7 different countries by the time they graduate. So they live in the U.S. or their home country for their first year, going through our core curriculum, and then every semester thereafter they move from city to city, to the city of their choice," Nelson told us, "so they can go to Moscow and London, another student can go to Beijing and Mumbai, another student will go to Rio and Sydney, and another student will go to Johannesburg and Jerusalem."
They'll have residence halls in a range of cities, where students will live together, but no central campus.
Additionally, everything will be in a seminar format. "There are no lectures at Minerva. Every single one of our courses is meant to provoke and actually change your perspective of the world."
Completely changing the admissions process
When it comes to aptitude, Nelson expects Minerva will be harder to get into than Harvard.
Applicants will have to demonstrate the ability to handle an intellectually rigorous curriculum, with good grades and good test scores. But they won't have to write an essay. According to Nelson, people often just pay someone else to write their essays. "The more you pay someone the better your essay will be, and that's generally what happens," Nelson said. "We don't think that that's necessarily a fair thing to do."
What differentiates their admissions process is the interview. "We interview the students. And in the interview we'll actually do a battery of tests that will look at their potential as far as leadership, grit, creativity, analytics, etc."
So once you demonstrate that you're "Ivy caliber as far as smart," you have to show that you have these additional abilities to get in.
However, the big difference is that "if you pass those tests, you're in. There are no waiting lists, there's no well, we will get back to you later. If you pass our bar, you will have an opportunity to get into Minerva," Nelson said.
"What will never happen at Minerva is a student who is qualified who meets our bar but we say, 'we already have too many of you, so you're rejected,'" Nelson said.
The business side of the equation
The first thing to realize is that Universities are an incredibly good business. "The fact that Harvard has a $37 billion endowment is not because it's a non-profit organization, it's because it's a for-profit organization, and rather than paying out taxes on its profits, it puts it on its endowment."
Minerva hopes, by being narrowly focused, appealing to a huge pool of untapped demand, and dramatically reducing costs, they can be a big player in that business.
They won't have an ever-increasing infrastructure, they won't have a University-sponsored athletic system, they won't have major labs, they won't offer courses and majors that require intensive lab resources, like mechanical engineering, and they'll have a vastly smaller administration.
All of that means that they will take out an "enormous percentage" of the costs of running a University. They won't spend it on advertising like some lower end universities.
Those savings are going to go into creating a good experience, and into lowering tuition dramatically. "We really are going to spread our message by going and identifying the best students and talking to them, which is far more capital efficient."
"Obviously room and board is room and board, we have to eat and we have to live, and we don't know how to make that much cheaper," Nelson said, "but we certainly know how to bring tuition dramatically down and we think that's going to be very important."
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