The Challenges Faced by MOOCs

In the immortal words of one of America’s greatest living philosophers, Yogi Berra, it is “deja vu all over again.” I am referring to the announcement that Richard Levin, long-time president of Yale University, who recently retired, is going to be CEO of Coursera, the for-profit provider of free on-line courses. I vividly remember his predecessor, Benno Schmidt, went from Yale to Edison Schools, a for-profit provider of K-12 schools that was going to revolutionize education. While still in existence, Edison Schools did not turn out to be the game changer for K-12 that many hoped. Will a Rick Levin-led Coursera be it in higher ed?

                The parallels here go further. Edison was supposedly going to succeed because it did not face many of the huge liabilities of public K-12 education: intransigent teacher unions, irrational pay schedules, resistance to modern technology. Similarly, Coursera and other MOOCs like edX and Udacity were going to overcome such huge liabilities of higher education as extraordinarily high costs, indifference to quality undergraduate instruction, and a failure to utilize modern technology. While Edison still exists, it failed to have a transformative role, suffering severe financial difficulties along the way. The big problem: public K-12 education, while terribly inefficient, was free to users, something Edison was not.

                Will history repeat itself? In Coursera’s case, there are other challenges. While the price of Coursera courses to students is very low (usually zero) relative to the competition, how can Coursera make any money? How can you give something away free and still make a profit? Right now, the company gets a little money handing out certificates of course completion to students, but to be truly profitable, Coursera must increase its revenue stream –and that probably means charging for courses (selling ads included within course materials might be a second potential revenue source). For example, suppose Coursera courses cost $200 each; the 45 courses or so constituting the academic content of a bachelor’s degree would cost $9,000 –dramatically cheaper than existing universities, and a low enough cost that the need for financial aid would largely if not completely disappear. With adequate volume, I could see how that could be profitable. StraighterLine, a pioneering for-profit provider, apparently uses successfully a similar model (although charging somewhat more).

                There are three problems, however, with MOOCS that have prevented them from having the breakthrough that shakes up higher education as the “disruptive innovation” some predict. First, a large proportion of college students attend college for multiple reasons, not just to learn or become credentialed for the work force. They want to party, make friends, find a spouse, and, more hedonistically, have sex, drink, smoke pot, and cheer on college athletic teams. There is a consumption dimension to higher education that MOOCs simply cannot provide but that many are willing to pay for (often with borrowed federal dollars).

                Second, there is one nagging problem that technology maybe can solve –how do you assure that those students claiming to take the online course are actually doing the work? Solutions include the low-tech method of having students take examinations in person at testing centers, or perhaps using sophisticated technology like retina scans, that are relatively foolproof.

                But the big problem is accreditation. Employers now want to hire graduates of accredited universities. As a rule, accreditation organizations approve colleges, not courses. Colleges are in the aggregation business: they package together 45 or so courses and call that a degree. Why can’t students take 10 courses at University X, 10 at University Y, 10 at College Z, and 15 courses on-line through Coursera and receive a bachelor’s degree? Since MOOC providers are competitors with traditional universities, and since accreditation organizations are controlled by boards made up of university personnel, there is an inherent conflict of interest that has thus far prevented MOOCs from taking off.

                Make no mistake: students are far less interested in the romanticized view of many professors of “learning for learning’s sake,” and far more interested in hopefully getting a piece of paper that is a ticket to a job leading to a prosperous life. But the federal government will not provide student financial aid to those attending non-accredited schools.

                To deal with this, Coursera’s Levin would be well advised to work to change the accrediting system. Talk to Judith Eaton at the Council for Higher Education Accreditation and explore the possibility of working with the Accreditation Establishment, but, additionally, talk to business groups like the U.S. Chamber of Commerce about offering alternative accreditation approaches. Why can’t the Chamber and other business groups themselves set up an accrediting organization that accepts aggregations of courses from traditionally accredited universities as well as MOOCs like Coursera? Why can’t they introduce the National College Equivalence Test (NCET), a combination of the Critical Learning Assessment and a knowledge-based general education examination, as an additional measure of student learning? A person loaded with Coursera and edX courses who scores well on the NCET might be viewed by employers as having the equivalent of a degree from a mid-quality state university if not better.

                MOOCs have enormous potential. Having top-flight instructors instruct students by the thousands in a rigorous matter is doable and even happening. But turning that reality into something that will be used importantly as a way of providing postsecondary education does require dealing with the credentialing dimension that many surveys show is of paramount importance to college students.

Richard Vedder directs the Center for College Affordability and Productivity, teaches at Ohio University, and is an Adjunct Scholar at the American Enterprise Institute.


Posted by: Richard Vedder

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