Here are two interesting and seemingly unrelated developments since our last newsletter:

• 1) A front page story in the New York Times on how the rise in technology in education is not having any discernible impact on student learning; and
• 2) As part of his jobs initiative, President Obama has proposed $5 billion in federal spending to renovate community colleges.

Thinking through the implications of both can help us understand what technology can't do in higher education, and what it can.

The Times article recounts the path of technology in K-12 classrooms - from computers in the classroom, to high-speed Internet connections in the classroom, to a laptop for each student, to Smartboards - and bemoans the lack of measurable outcomes to demonstrate any return on the massive investment. The article implies that as IT budgets continue to grow in the face of increasing class sizes, many districts are prioritizing technology over student to teacher ratios.

The experience in K-12 over the past 20 years demonstrates without a doubt the adage that technology is a tool, not a solution. What matters is how it's used. As a study by Mid-Continent Research for Education and Learning (and quoted in the Times article) states: "Good teachers can make good use of computers, while bad teachers won’t, and they and their students could wind up becoming distracted by technology."

The same is true of higher education. There are numerous examples of technologies adopted by colleges and universities that have proven to be a distraction because they are not serving student learning.

A good example of where technology is serving learning can be found at the first new medical school to open in New York City in the past 30 years. The Touro College of Osteopathic Medicine is using technology to rethink how medical education is delivered in its Doctor of Osteopathic Medicine program. Faculty lectures are recorded so students attend online using Touro's iTunes University account before attending class. Classes focus on Q&A and in-class assessments to ensure that core concepts have been retained. Assessments completed online are returned to students showing which lecture and learning object (with the time code reference) covers the topic in question. Finally, with the much more frequent assessments enabled through lecture capture, Touro is able to map student progress assessment by assessment relative to the expected path of former students who have passed the medical boards. Touro now knows at what point divergence from the expected path is predictive of failure to pass the boards and is able to intervene with students at the appropriate point. Not surprisingly, the program is experiencing remarkable success and just graduated its first class of 100, including 35 under-represented minorities (in stark contrast to the medical school average of 5%).

Simply put, Touro has used technology to change its model for delivering higher education. In our view, changing the delivery model is almost always necessary in order to generate a return on an investment in technology. For example, providing Internet access in the classroom has proven to be a distraction to learning (just ask any professor). In this case, the delivery model remains unchanged. On the other hand, the learning management system (LMS) has enabled an entirely new delivery model – online learning – and, as such, is generating strong returns to student learning on a modest investment.

You've probably heard of large state university systems that have adopted a new ERP system – e.g., PeopleSoft – and run into difficulties with cost overruns from thousands of customizations, and resulting service breakdowns. Current conventional wisdom is you're crazy to try to customize an ERP to meet your business processes. The only path is to change your business processes based on what the ERP can do. Otherwise, don’t even try.

It's the same with teaching and learning. If we don't change our business processes to accommodate what technology can achieve, then – from the K-12 example – we're spending money on computers that will sit in the back of the classroom, ancillary and not contributing to student learning.

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This leads us to our second item: the President's suggestion that we spend $5 billion to renovate community colleges.

As is well known, only about 20% of students who start programs at community colleges ever complete a degree or credential. This completion rate is the lowest of any level in the U.S. education system and represents by far the biggest challenge facing the system that enrolls most lower income and minority students engaged in higher education. Given the administration's top higher education priority of regaining our place as the global leader in terms of adults with postsecondary degrees, one would hope that any significant new federal spending would advance this objective.

Unfortunately, poor facilities don't make the top 10 list of reasons students don't complete degree programs at community colleges. Many colleges are saddled with aging facilities. But the reason retention and completion are so poor at community colleges has very little to do with facilities, and much more to do with management, organization, culture, personnel, quality of instruction, and availability of support services.

One company that is rethinking how community college programs should be delivered is Altius Education. Through a partnership with Tiffin University in Ohio, Altius has created Ivy Bridge College – an online community college that, for its initial cohorts, is achieving success rates of almost 60% for a similar demographic that attends community colleges onground. How is Altius generating 2-3x better outcomes?

First, Ivy Bridge is online, which allows students to attend when convenient (rather than an 8 a.m. class – challenging for many 18 year-olds), and allows the institution to focus solely on students interested in ultimately transferring to a four-year institution to complete a bachelor's degree (rather than mixing with vocational and other programs that were the origin of community colleges).

Second, Ivy Bridge provides unparalleled student support. Ivy Bridge's enrollment advisors, financial advisors and academic advisors are organized into pods that sit together to serve defined students. Students know who their advisors are, and the advisors communicate easily with one another about retention issues. The academic advisor is called a "success coach." According to Altius CEO Paul Freedman, a success coach is "an academic advisor, career counselor and career coach all rolled into one – somebody to help with study skills, work-life balance, and to be a friend." Success coaches are in regular phone, text, e-mail, instant message, and Facebook contact to help each student meet defined weekly goals.

For Altius, technology is a tool to adopt a much more effective delivery model. That's the way we need to think about technology in higher education.

The sad thing about the Obama Adminstration's proposal is that it knows better. The last time the Administration proposed billions of dollars in new spending for community colleges it was to develop online courses. (These funds were ultimately removed from the student lending legislation that passed as part of the Health Care Reform bill.)

So instead of spending $5 billion on facilities, how about using that money to shore up Pell Grants, and then make it public policy to encourage public-private partnerships to establish Ivy Bridge Colleges in every state? Let's focus on achieving world-class outcomes at all our institutions, from AA to MD – real jobs for our students, not paint jobs.

University Ventures Fund invests in universities and service companies in areas where rising demand and shrinking supply create rapidly growing market and student service opportunities.

Daniel Pianko, a partner at University Ventures, is a board member of Altius Education.