At this year’s South by Southwest Interactive, I had a chance to speak with Anya Kamenetz, author of DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education. In her short but insightful book, Kamenetz outlines the forces that are starting to transform higher education in the U.S. and suggests alternative scenarios for what a college education might look like in the future.

One key prediction is that the traditional, four-year college experience will be under increasing pressure, with cost being the largest factor. Kamenetz outlines how we have arrived at today’s situation where four years of college can cost upwards of $200,000 at top universities, and even public institutions are becoming unaffordable. (As with health care, third-party payers – notably government grants and easy loans – are a key factgor in the upward price spiral.) Most would agree that the cost of higher education can’t continue to rise as it has, but few institutions are taking steps to rein it in. Indeed, there’s evidence that colleges that offer lower tuition than their academic peers are somehow suspect, as if they are cutting corners and delivering a less-rich experience.

One of the futures Kamenetz describes is the rise of open source education. For those who find the idea of open source learning far-fetched, one doesn’t have to look far to show the potential of community-driven products. The Neuromarketing website runs on a Linux server, with most of its content managed by WordPress and enhanced by numerous “plugins.” All of those products are free and community-driven. Wikipedia is another example of community building a resource that easily exceeds commercial ventures. (Note that paid/free hybridization is possible – I could download Linux and install it on my own server, but I find it cost-effective to pay a web hosting firm to manage that process. The theme for this blog is also a paid product, even though I could have chosen from thousands of available free themes.)

Getting into the details of how open source education might work is beyond the scope of this post, but efforts are underway to create and distribute all manner of free resources, from video lectures to downloadable textbooks. The need for interaction with fellow students is being addressed in various ways, including resources like the Hewlett Foundation-funded Peer2Peer University. We are a long way off from having open source degree programs that might be recognized by employers and academic institutions, but the building blocks are being put in place. Much as in open source software, hybrid business models will no doubt evolve; free materials might be incorporated in a paid degree program (for-profit or non-profit) that would add structure, accountability, and verification.

But what does this mean for traditional colleges? Nobody expects the Ivy League to go out of business, or even to have a dearth of qualified applicants. Indeed, many top US institutions saw record numbers of applicants this year. But what of the colleges without established brands? What about universities that are neither low-cost providers nor uniquely attractive to students? Much like faded computer operating systems and office productivity suites who couldn’t compete with either Microsoft or “free,” these undifferentiated institutions will find they are caught between their well-branded, well-funded competitors on one side and novel, much less expensive higher ed solutions on the other.

What’s a college to do? Building a brand isn’t the only solution, but it certainly must be a key part of any strategy based on attracting students in an increasingly competitive arena. A school that is known for something, whether that something special is academic, geographic, or even extra-curricular, will fare better than schools who have failed to establish their brand.

Building a college brand could pay dividends as novel methods of course delivery become popular and accepted. A traditional university with a strong brand will be able to extend that brand to, for example, online programs, electronic course materials, certification testing, and so on.

Investing in college branding is a tough prescription in 2010, when most schools are feeling financial pressure from the recession, lower levels of philanthropy, and cuts in government support. The alternative, though, is to imperil the long-term viability of the institution.

And, if you are interested in the future of higher education, check out Kamenetz’s book. You may not agree with everything or find some of the possible futures likely, but you will find plenty of food for thought.

Amazon link: DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education.