AI in Higher Education, Reimagined: Inside SFBU’s $10,000 Degree and AI-Avatar Model

“You describe San Francisco Bay University as a startup, a challenger brand. How do you define that, and what made you say it?”

“We are in a unique position at San Francisco Bay University to really up-end higher education. When we talk about a challenger brand, we think about Airbnb. I like to say we’re going from the Yugo version of higher ed to the Waymo version. We are purposefully changing how higher ed is delivered, and doing it in a way that’s both affordable and accessible.”

“Up to this point, higher ed has largely failed a lot of students, particularly students who have not had easy access or resources. We think of ourselves as a 40-year-old startup. We’ve been around 40 years, but it was only a couple of years ago, when I arrived, that we built a new leadership team. I like to say we got a bunch of folks who have a healthy disgruntlement with higher education, but who are firmly committed to what it can do, which is be life-changing.”

Reimagining higher education with AI starts with an admission most institutions avoid: the current model failed the students who needed it most. It means rebuilding cost, teaching, and the student experience at the same time, not just rebranding.

“How do you make it that affordable, and do it for everyone?”

“Let’s start by capping our classes at 20. Relationships are the key feature to any meaningful success for students. We decided to train faculty how to teach. The dirty little secret in higher education is faculty have never been trained in how to teach. There’s no other labor force in the world where you would hire people who don’t have the skill for the job you want them to do.”

“We offer wraparound services for all our students, including academic support and unlimited mental health, because the foundation of educational success is interpersonal and social success. And we are affordable. Tuition is about $10,000 a year, and our new MBA will cost $10,000 for the entire degree.”

“Wow. How do you make it that affordable?”

“Back in the early eighties, tuition was around $536 a semester at the University of Maryland. Over 40 years, tuition has outpaced inflation and even healthcare. It’s become a race to the superficial: rock climbing walls, a lazy river, athletics that look professional. There are only a dozen schools nationally that make money on athletics. You can’t tell me you can have a billion-dollar endowment and can’t offer mostly free tuition. You’re doing something else. What else are you doing?”

An affordable college degree, in this model, is an engineering problem, not a miracle. The $10,000 degree comes from deliberate choices: small classes, faculty trained and paid to teach year-round, wraparound services that protect retention, and no spending on amenities that do not move learning.

“How has higher education changed from when you started to now?”

“Costs have increased. State and federal subsidies have disappeared, which has made publics look more like privates. We’ve grabbed onto the 90-credit undergraduate degree as the new standard. A hundred years ago we built 120-credit degrees largely to give faculty something to teach. Oxford, Cambridge, and others have a 90-credit degree. If they can do it, we can.”

“Faculty have gained more control over the curriculum, and it used to be in service of students. Now it’s more in service of faculty. Our view is faculty have no business designing curriculum, because they’re not curriculum designers. They’re great content experts, but we need to help them teach and design the curriculum.”

“We keep upping tuition because we could, not because we should. We give families high hopes, then when they arrive we expect them to have low expectations. That mixture never works.”

The future of higher education is blocked by three legacy habits: cost inflation untethered from value, a curriculum captured by faculty preference rather than student outcomes, and a 120-credit degree that survives on tradition.

“What excites you most about the innovations happening now?”

“AI is coming at an important time and lets us lower costs and be more effective. We’ve developed MBA Pro Plus, largely online, with a human component where faculty are best and an AI component where students learn with AI avatars from faculty.”

“Anyone can teach Harvard’s negotiation skills. We can have an avatar professor interact with students in a way that’s personalized and neurodivergently compliant. Students learn the content, then have an experience with an avatar boss where they negotiate a salary increase. They demonstrate the skills for 20 or 30 minutes and immediately get feedback. No one’s perfect right away, so they go back, try again, and learn the way all of us learn.”

“That’s not just ChatGPT giving them praise for doing everything right. Our AI tutors actually frustrate students a little. We want them to engage in intelligent failure, to try, make a mistake, and learn from it. Then they meet a human professor who does what professors do best: build community, mentor, develop relationships, and offer career guidance.”

AI avatars in education, the way SFBU uses them, are practice environments, not answer machines. The distinctive idea is intelligent failure: tutors designed to let students struggle and retry rather than dispense praise, the opposite of most consumer chatbots. Pairing that with a human professor splits the work cleanly. AI handles repetition, feedback, and 24-7 availability; humans handle relationships and judgment. For institutions exploring AI in higher education, that division of labor is the template.

“You’ve launched initiatives that aren’t typical university programs. Can you talk about Innovate Bay?”

“Innovate Bay is our incubator. It provides opportunities for folks who traditionally have not had access to incubators. Rohan Brown, our managing director, has done an amazing job connecting us with the community and bringing on small companies, and we provide seed funding. As a university, our students have access to it.”

“We also have our signature Startup Scholars Program for undergraduates. It gives free tuition, free room and board, a monthly stipend, and a $10,000 stipend toward a passion project or startup they create with our guidance. These are not Shark Tank rejects. They’re people very early in their thinking who have outstanding ideas.”

“We also have our signature Startup Scholars Program for undergraduates. It gives free tuition, free room and board, a monthly stipend, and a $10,000 stipend toward a passion project or startup they create with our guidance. These are not Shark Tank rejects. They’re people very early in their thinking who have outstanding ideas.”

“AI is reshaping teaching, learning, and engagement. Will it significantly improve student retention and enrollment?”

“Our graduation rates hover around 80 to 85%. The national four-year average is 50%. Most universities use six-year graduation rates, around 60%, which is unacceptable. Then call yourself a six-year college. With the 90-credit degree, we want a three-year graduation rate of 80% or more.”

“AI can be a huge help. You can offer faculty avatars available 24-7, the best version of the best faculty you’ve had. If a student is up late and stuck, they don’t have to wait a week for an appointment. But you don’t want AI just to give answers, because that’s just a fancy Google search. We want students to learn concepts and apply them.”

“Universities aren’t embracing it. They’re trying to avoid it: how do we stop students from using AI, it’s cheating. It reminds me of the calculator, the computer. Every new technology. It’s important to use it effectively so our students can have jobs later.”

AI improves student retention only when the tool is built for learning rather than answers. AI tutoring is a 24-7 supplement that closes the gap between a stuck student and timely help, which is where retention is won or lost. The sharper point is cultural: many institutions treat AI as a cheating problem to suppress, while SFBU treats AI fluency as a graduation and employability strategy.

“What about the traditional degree in the next 10 years? Will it still be effective, or will it have to change?”

“Degrees are going to have to change. I don’t know that we need the 60-major university anymore. We’ll have about half a dozen majors, maybe a dozen at most, that are purposefully interdisciplinary. Anytime you’re answering an important question, you have to be interdisciplinary. If you only look at one field, you’re missing a big chunk.”

“An emerging discipline is cyber psychology, which integrates psychology, communications, computer science, and marketing. It’s how people interact with social media. That’s a multifactorial problem that can’t be addressed in one field alone. Everyone is going to need more skills that are process-based, not just content-based.”

The future of the college degree is fewer majors, broader majors, and more transferable skills. Cyber psychology is a clean illustration: one real-world problem, the effect of social media on people, that no single discipline can answer. The shift from content-based to process-based skills matters most in an AI era.

“Workforce needs are changing. How are students getting ready, and do they need AI fluency?”

“Right now, the way universities are structured, they’re woefully under preparing students. There are so many factions in a university that prevent innovation. Universities better change. About one is closing every week, and it’s not surprising. They should have seen it coming, and they didn’t. Shame on them for not understanding how things work.”

Preparing students for an AI-driven workforce is not happening at scale because most universities, full of competing factions and isolated innovation pockets, resist change. One closure a week reframes AI fluency and higher education innovation as a survival issue, not an enhancement.

“Universities are closing and struggling with enrollment. What should they do to bridge the gap?”

“Our new general education curriculum, which is purposefully interdisciplinary, was validated with industry folks who could tell us, yes, this is what we need, or no, it isn’t. A lot of it is critical and durable skills, the liberal arts skills as we’ve defined them. Industry partnerships are critical for students to see how work works and how to behave at work.”

“Most universities are still targeting the 17 and 18-year-old. There are 40 to 50 million people nationwide who have some college but no degree. Why not focus on them? If we’re all trying to fish in the same pond, that’s the problem. There’s not really a shortage of students. There’s a demographic cliff, but there are many students nationally and worldwide who need an education. Why do we keep focusing on the one thing that was effective 20, 30, 40 years ago? That’s a Blockbuster video model of product development, and we need other examples.”

The enrollment crisis, reframed, is a market problem, not a population problem. The 40 to 50 million Americans with some college and no degree are a massive, underserved audience, and chasing only traditional-age freshmen manufactures the scarcity. The Blockbuster comparison is the hook: clinging to a decades-old model means fighting for a shrinking pool while ignoring the larger one.

“What kind of partnership should industries and universities have to build a future-ready workforce?”

“Our new general education curriculum, which is purposefully interdisciplinary, was validated with industry folks who could tell us, yes, this is what we need, or no, it isn’t. A lot of it is critical and durable skills, the liberal arts skills as we’ve defined them. Industry partnerships are critical for students to see how work works and how to behave at work.”

“The pandemic has a long tail of trauma, big T and little T. We’ve seen delayed emotional development, and social media adds to that delay. Everyone says the new generation doesn’t work as hard. I don’t think that’s true. But they’re not skilled in ways that are important, so they have to be taught the mature skills students typically had 20 or 30 years ago.”

Industry partnerships do two jobs at once: they validate the curriculum against real hiring needs, so durable and process-based skills match what employers want, and they show students how work actually works. The candid point about delayed development, accelerated by the pandemic and social media, names something many employers feel but rarely say out loud.

“More students want online over physically attending. Will the future be more online, or still traditional?”

“Online will have its place. We’re developing neighborhood campuses, small-footprint spaces, maybe 4,000 square feet, with a seminar room for about 20 plus WeWork-type lounges for online learning. But that alone won’t work. Look at the four-year graduation rate, not six-year, not eight-year. If it’s less than 70 percent, something’s wrong.”

“There’s something important about human interaction with professors and family, and that can happen in a much smaller space. But it may only be a year or two. By the third year, most students say, just give me the degree. Our goal is to get them a degree and into grad school or a job. Our neighborhood campuses might be in a public library or community partnership. We’re building one in San Jose, then Oakland, then the Bay Area, then south to LA and San Diego, then eastward. We don’t need a 50 or 100-acre campus to be effective. That’s the problem with a lot of universities: they don’t understand how to scale. And just throwing what you do online isn’t effective. You have to redesign both the online space and the campus space.”

“I see this like retail. Even though online is in every store, people still prefer to go to the store. I hope the physical experience stays.”

“Some version should be there. I agree there’s value to it, just not at $30,000, $40,000, or $100,000 a year.”

The future of the college campus is small, distributed, and cheap to operate. Neighborhood campuses swap the debt-financed campus for leased space in libraries and community hubs, keeping the human connection that drives early-year retention while online handles scale. The four-year graduation rate as the honest metric is a filter any family can apply today.

“What would the campus of the future look like? Will there be more robots?”

“I think it’ll look like us. Neighborhood campuses, online aspects, meeting the needs of different student groups at the same time. The best universities aren’t going to just focus on the 17-year-old undergraduate. Students learn differently and need personalized education at every developmental level. Some 17-year-olds come in looking like a mature 30-year-old. Others, after family trauma, may look more like a 14-year-old developmentally. You have to meet all those needs.”

“The future university will also offer lifelong learning to older students who come back. What are they going to do if AI supplants a lot of entry-level jobs? Older folks were often told to retire and sit on a beach. That sounds great for a few weeks, but at some point you need to find meaning. Maybe you were an accountant your whole life and now you want to be a teacher, or study plants, or study peace. There’s a lot of work to be done.”

The campus of the future is less about robots and more about personalization at scale. Designing for development, not age, is the core idea: two 17-year-olds can arrive at very different stages, and one-size programming underserves both. Lifelong learning extends the same logic across a career.

“What leadership lesson would you give to others at a similar university?”

“Be bold. Don’t be influenced by fear of change. In higher ed there are all kinds of pressures not to do things, versus just going and doing them. Don’t let people dissuade you. Be consistent with your true mission. We want to reach populations that have traditionally been left out, and students who have had access. We’re hitting both. But that means thinking of higher ed differently.”

The leadership lesson is short: boldness anchored to mission. Boldness without mission is recklessness; mission without boldness is the slow decline the rest of the conversation warns about.

“With AI, the workforce is often reluctant because of job loss. What’s your take?”

There will be job loss. The research right now points to losses at entry-level positions, but there will be increases in areas that need AI plus human expertise. A significant loss may push us toward something like universal basic income, which wouldn’t necessarily be bad, and it could help us develop fields we’ve neglected, like peace studies or reducing violence, both physical and verbal. AI is not going to replace therapists anytime soon. If we do this well, we’ll come together as a community, and neighborhoods will become the center of social life again, like the local pharmacist who knows the people in the community. That’s what’s missing in our culture.

“Look at San Francisco Bay University as a model, and then get better than us. We challenge other universities: if you think you can do it better, do it better, because there’s a lot of need out there. Let’s not focus only on select students and exclude others. Let’s focus on all students.”

The honest read on AI and job loss is neither denial nor doom. Entry-level disruption is likely, but so is growth in roles that combine AI with human expertise, and the upside may be a chance to invest in neglected, deeply human fields like mental health, peace, and community. Reimagining higher education with AI is less about technology than about widening access, restoring human connection, and building institutions willing to be measured against a better standard, then beaten.