TeslaI read recently an article in USA Today describing how the Iowa Department of Transportation shut down a weekend of Tesla test-drives in Des Moines. For those of you that are not familiar with Tesla, the company is revolutionizing the auto industry through the development of an electric car that is capable of going over 300 miles on a single charge and performs like a high-end sports car. Another key difference in how Tesla is revolutionizing the auto industry is how their customers buy their cars. Instead of using costly dealerships, Tesla sells directly to customers online or at one of their store locations in upscale malls across America.

So why did the Iowa Department of Transportation stop Tesla’s test-drives in Des Moines?

Two reasons: 1) Iowa does not allow automakers to sell directly to the public and 2) Tesla is not a licensed dealer in Iowa. The state of Iowa considers test-drives as a “dealer activity.”

And who ratted Tesla out? The Iowa Automobile Dealers Association.

This reminds me of higher education. Instead of the dealers adapting to the changing marketplace and working with the automakers to build similar cars to compete with Tesla, they are simply using arcane and outdated laws to limit an innovative alternative to traditional car options.

Higher education has relied on the Department of Education and regional accreditors to limit competition under the auspices of ensuring quality education. However, they truly cannot measure quality and are simply relying on the old system to protect the status quo. Like the Iowa Department of Transportation, the entities that oversee higher education believe they are protecting the consumer (student), however their over-protection is forcing innovators to find a “work-around.”

In a previous post, I discussed how Uber, the online rideshare company, is disrupting the traditional taxi industry. As promised, here is my plan for how to truly disrupt the traditional higher education industry in the United States.

First, the entities that control the institutions must be neutralized. In the taxi industry, it was the local and state governance of the taxi drivers and companies. For education, that is the Department of Education and Accreditors. Sure, you might say, that is no easy task to make the DOE and Accreditors no longer relevant. I tell you, it is quite simple; and here is how.

The DOE controls the money through Title IV funding and the accreditors are a gateway to the money. Furthermore, accreditors provide some artificial seal of approval as to the quality of a program, thus allowing transferability among institutions and access to advanced degrees. So, take away the money and much of the power disappears.

Those of us in higher education know the reliance on Title IV funding is unhealthy and has caused the price of education to outpace most other industries several fold. But how do institutions drop their dependence on the new social welfare of Title IV funding? I don’t think most can. That is why we need new institutions. And those new institutions must initially come from corporate training programs.

Diploma from Hamburger University

Diploma from Hamburger University

Hold on! Here is where the conversation gets wild. Take Hamburger University, the McDonalds training program based outside of Chicago. Each year over 7,500 students attend Hamburger University and receive training that is ACE evaluated for transfer into traditional academic programs. It would not take much for McDonalds to offer enough general education requirements allowing students to earn a degree. But would the Higher Learning Commission allow McDonalds to become “an accredited institution” without jumping through years of costly self-study and bureaucratic BS?

Nope. But in my model, they would not need to.

Why? They are self-sustaining through funds from the corporation. They don’t need access to Title IV funds.

The last hurdle of non-regionally accredited universities is for their graduates to continue their education. Right now, several regionally accredited institutions will allow non-accredited and nationally accredited Bachelor degree graduates to enroll and pursue a Master’s degree. Pressure to compete will bring hundreds more willing to accept our graduates from this alternative model. While some might laugh and discredit the McDegree, I bet you a big Mac you won’t be laughing in the future.