Online education options are becoming more available every day. There are now thousands of online degree programs available in bachelor’s master’s and PhD programs in every field that you can think of. You might be led to believing that online education has completely evolved.
Oh, you would be deeply mistaken. Radical changes in online education are afoot. Low cost, educational startups are popping up everywhere online, and millions of dollars are being poured into them by major corporate players. Consider: If a $100 billion company – Facebook – can use the Internet to replace the college year book, what might happen if companies and educational organizations use the Internet to replace the entire college experience – at a much lower price point?
That is what is starting to happen right now. The eventual result could be nothing less than the replacement of the traditional on campus degree model that still dominates the educational landscape.
For example, at the Massachusetts Institute of Technology (MIT), the college recently named its new president – L. Rafael Reif. Reif is the developer of MIT’s new Web presence MITx. This is MIT’s new free online education initiative.
MITx might appear at first glance to be a bunch of regular class lectures just posted online. No, it is a great deal more than that. The initiative also includes discussion groups, coursework, and a program of certification for completing the work. MITx’s idea of issuing a certificate of completion for successfully completing the online coursework could well be the idea of the future…one that could possibly bring regular 4-year college degree programs to their knees.
Think about it: How are traditional universities going to be able to continue to hike tuitions by 7% per year, putting their students $75,000 in debt, when you can go online and receive vital, skill-focused education that will land you a good job – for free?
MITx is hardly alone. Another new entry into the low-cost online education space is Coursera, an inexpensive, online, quasi-Ivy League college. The developers of the website believe that the power of the Internet should be harnessed to let millions of people get a high-quality education at a very low price. They have already signed up volunteer professors from major universities, including Stanford, Princeton, University of Michigan and the University of Pennsylvania. Coursera promises to offer 35 courses in math, computer science, history, poetry and a lot more. These are full courses – not just videotaped lectures – and include homework, grades and exams.
Of course, Coursera is just in its infancy, and how to generate revenue is an open question at this time. One possible business model would be to charge potential employers for helping them find highly qualified employees. This type of model would be a true game changer in education. Imagine if you could go to college online for almost free, get a certificate in, say, computer science in a year, and then that same site helps to find you employment? This would severely threaten the current on campus college model.
Another new online education startup that is making waves is Udacity, which bills itself as ‘The 21st Century University.’ The goal of the founder, Sebastian Thrun, is to use the best instructors in the world to conduct highly interactive online classes and allow them to reach more than 100,000 students around the world. As of June 2012, Udacity offers 11 classes for free, and there is a community of over 100,000 students and professors with whom you can interact online. For a fee, you can have your skills certified at testing centers around the globe. And, for free, Udacity will provide your resume to dozens of potential employers. Yes, its current offerings are small, but the potential for an educational revolution in that young Website is clear.
Thrun anticipates charging for classes eventually, but get this: He thinks a fair price for a master’s degree could be about $100. Do you see why provosts and presidents at regular colleges might be getting nervous? Another reason for them to sweat – financiers at Charles River Ventures dumped $5 million into Thrun’s product. The big money people see the potential.
It remains to be seen if Coursera, Udacity, or MITx will become a new model for online education. However, we do know that there are a great many smart people working on this issue. There is a good chance, given the burgeoning problems with student loan debt, that these new online models may be able to burst the bubble of traditional higher education.
That is exactly what Mark Cuban – billionaire owner of the Dallas Mavericks – thinks is going to happen. In a recent blog post, Cuban likened the coming meltdown in higher education to what happened to the newspaper publishing industry as it was supplanted by online Internet content. He sees a collapse coming in higher education because 37 million students currently are holding more college loan debt than 175 million people hold in credit card debt. As long as the economy was strong and jobs were plentiful, perhaps this situation could continue. But the economy is not strong, and jobs are scarce in many fields.
Cuban believes that students are going to start to grasp that they can’t get a good job to pay their $50,000 debt and still live a decent middle class life. They will stop wanting to go off to college for four years if it just ends up saddling them with a huge debt (that usually cannot be discharged in a US bankruptcy case). He also thinks that once these realizations take hold, many students will begin to flock to new types of online education, such as the ones we mentioned above. Cuban thinks those new educational institutions respond much faster to needs in the market, and will provide low-cost certification programs that will arm students with vital job skills. And they’ll do it much faster than a regular college program.
Another report notes that as students go more into debt and cannot find jobs. they will start to wake up and will look for lower cost educational alternatives. Right now, large state universities charge high tuitions so that they have the money to pay for libraries, stadiums, fancy dormitories and nice faculty office space. This will not continue forever. Low cost, online certification is going to put pressure on traditional colleges in a big way and soon.
Perhaps traditional colleges are starting to get the gist of what’s going on. Many start ups in online education are occurring with the support of major universities. EdX is a joint venture backed by Harvard and MIT. 2Tor has raised $90 million in start up cash, and is running graduate programs in business and nursing, for University of North Carolina and Georgetown. As more of these new online programs appear and provide very low cost certifications and job skills in a short time, regular college degrees could start to disappear.
While the new online education movement is in its youth, and business models are still developing, the higher educational ground is fertile for revolutionary growth. College debt is swelling. The job market is down. Online technology is growing and dropping in price every day. And financiers are pouring money into these new online ventures. Yes, big changes are coming to online education, and it cannot be too soon.