It’s been widely noted that, over the past couple of decades, higher education costs have skyrocketed far out of proportion to the economic benefits that degrees provide. Higher education looks like a bubble, not too unlike the dot-com and real estate bubbles that preceded it.

Not everyone is comfortable with such a characterization. Framing a discussion of education strictly in terms of how much it costs versus how much the recipients of it earn seems crass to some. What about the intrinsic value of education? What about the social benefits of having an educated populace? Actually, those might have been better questions to ask back before the price grew so outrageous. For better or for worse, these days colleges and grad schools are largely seen as credential mills. The value of their product is expanded economic opportunity for the consumers of that product.

It’s important to note that the schools themselves have done as much as anyone to foster and promote such a model. This puts them in (to say the least) an awkward position now that the economic reality is such that we’re even beginning to wonder whether a college degree should be a requirement for many jobs.

Moreover, if what we’re really interested in is the intrinsic value of education and the social benefits of having an educated populace, it’s pretty exciting to note that education qua education has never been more widely available than it is today, often at little or no cost. This list of 12 dozen places to educate yourself online for free provides a nice overview. Even if over-priced institutions of higher learning decide they want to reclaim the value proposition of education as intrinsically valuable, they are going to be up against some pretty stiff competition — at a price that’s hard to beat.

So what future is there for institutions of higher learning? What function will they serve post-bubble?

If credentials become less important, and education increasingly becomes a do-it-yourself affair, these schools still have an important role to play. As Brent Iverson explains it, universities need to be in the research business and, maybe even more importantly, the inspiration business:

When a world-class researcher inspires young science students, the practical benefits multiply downstream to drive our economy and at the same time create the next generation of inspirational science and engineering teachers…

When my career is over, I hope that I will have been able to inspire students to find their passions and realize their biggest dreams. As we embrace change and build the future of higher education together, we must never forget that inspiration, a uniquely human interaction that occurs when a college student meets a true scholar, needs to remain an essential and celebrated element of higher education… Information, especially in the technical fields, becomes obsolete, but inspiration lasts a lifetime.

Institutions of higher learning will still have an important role to play after the bubble bursts. The demand for credentials may ease up somewhat, but it’s hardly going to go away. These institutions will continue to drive learning through research, which is not (yet) ready to be outsourced to the cloud. And they will continue to provide the kinds of interactions Iverson is talking about.

Most universities at least pay lip service to the idea that they exist to inspire a new generation of thinkers to move human knowledge along. But if these institutions want to be relevant in the future, they are going to have to go well beyond lip service.

Cross-posted from Transparency Revolution.