Shane BarnhillMonday,25 February 2013

The Snap:

What role do traditional colleges and universities play in world where Massive Open Online Courses (MOOCs) are not only becoming increasingly accessible, but are also bringing Ivy League caliber educational materials online for free? I imagine they’ll adapt to function like Arizona State University’s College of Technology & Innovation (CTI), which according to its website, “is a new kind of college – a different kind of college,” with a focus “on learning through making things and solving real-world challenges through collaboration.”

In other words, CTI’s value proposition involves a type of hands-on learning that isn’t available via an online-only education experience.

The Download:

I was introduced to CTI’s model recently at the 48 West conference, where I attended a session called “Solving Real World Challenges Through Collaboration,” which was led by Chell Roberts, the Executive Dean for CTI. The discussion at Roberts’ session was fascinating, not only because he described surviving TWA flight 841 back in 1979, but also because he was the second speaker of the morning to acknowledge the pressure that MOOCs are putting on universities.

At some point during the discussion, the term “accreditation” (of knowledge) was used to describe the primary service that colleges provide to students (to be fair, I don’t recall specifically whether Roberts was the person who said it, although I think he was). Put simply, schools provide degrees to certify that students have basic levels of proficiency with various subjects.

And so, while student “customers” of university programs undoubtedly benefit from in-person interactions with professors and the relationships they develop with other students, the primary deliverable they get from years of study is a certification of “competency, authority, or credibility” that has been stamped by an educational institution.

Unfortunately, however, the cost of obtaining a traditional university education has risen 4.6% — twice the rate of inflation — in the past year alone, and 1,120% in the past 30 years.

Which brings me back not only to MOOCs, but also to my own undergraduate education.

I majored in Economics (and also Finance, but that was more of an afterthought). Unlike ASU’s CTI program, there was nothing “hands on” about my in-major coursework. I didn’t build product models — I built linear regression models. My Macroeconomics and Microeconomics courses could easily have been delivered via video and augmented by online assignments.

And so you might think that I’d hold up Coursera, MIT, Stanford, or Udacity as the models for the future of open online education.

But you’d be wrong.

Instead, the University of Wisconsin’s new flexible degree program, which “promises to award a bachelor’s degree based on knowledge—not just class time or credits,” is perhaps the best harbinger of the future of university educations. According to UW’s website (the emphases are mine):

“The new UW Flexible Option will allow students to earn college credit by demonstrating knowledge they have acquired through coursework, military training, on-the-job training, and other learning experiences. Students will make progress towards a degree by passing a series of assessments that demonstrate mastery of required knowledge and skills.”

In other words, UW recognizes that knowledge acquired through a variety of sources — not necessarily a structured degree program — merits accreditation. And thus, it’s not hard to imagine a future student who stitches together knowledge into a degree by teaching himself a variety of computer/application programming languages, augmenting this technical foundation with online Information Systems courses directly from The University of Arizona, furthering it with a Human Computer Interaction class from Coursera, and then complementing his technical knowledge with a variety of business and elective courses from edX.

The student in this example could then sit for exams from a “flexible degree” college such Wisconsin or Thomas Edison State College that would grant degrees based on multi-source knowledge. An even more ambitious approach would be a coalition of educational institutions that banded together to offer “coalition degrees” to students who completed the majority of coursework via the coalition’s online offerings.

Right about now, you should be thinking that any la carte model which enables a student to handpick the best offerings from a variety of universities/sources sounds a lot like the dreams of cable TV cord cutters. Opting to take Marketing courses only from the University of Pennsylvania, Economics courses from MIT and Finance courses from Harvard via online systems isn’t a whole lot different than buying only HBO (for Game of Thrones), AMC (to watch Mad Men) and ESPN (for SportsCenter) from a cable TV provider.

And therein lies the problem.

Cable operators won’t sell you an individual show, much less a single channel like HBO. The economics just aren’t there for the content providers, on either side of the equation. Operators like Time Warner haul in millions of subscribers who desire premium channels, and channels like HBO benefit from not only forgoing “the cost of infrastructure needed to support delivery of all those streams,” but also by leveraging the marketing engines of cable and satellite providers.

And so, consumers of television content are often left buying TV shows like Game of Thrones a year or more after they’ve concluded. This provides a nice revenue stream for both operators and channels without threatening their main business and symbiotic relationship.

Extra revenue streams are most likely the underlying reason why universities are investing in digitizing their content and providing it to MOOC systems where students can consume it free of charge. Eventually, colleges will have to monetize these online course offerings to justify the continued investment, either through advertising or direct payments for course content. Such a plan would provide extra revenue while not threatening to decrease the number of students who enroll at the cost of full tuition, especially since online lectures are often from classes taught years ago.

But the willingness of forward-thinking institutions (like Wisconsin) to provide accreditation for a loose collection of coursework changes the game entirely. If students can build patchwork “transcripts” out of lower-cost online offerings — even if the courses are years old and thus not loaded with insights from the latest professor research — and then sit for exams to earn degrees based on this knowledge, then the alternative choice of paying full tuition for 4-5 years becomes a lot less attractive.

This scenario does begin to threaten university revenue models. And the Netflix parallel of low-cost-but-older content sufficing for consumers while disrupting established delivery models should be painfully obvious.

So how do educational institutions adapt?

Well, they could just raise prices for online courses, in order to ensure that it becomes prohibitively expensive for students to seek accreditation from an array of a la carte online offerings. But higher prices would lower demand, of course, and to some extent universities seem intent on distributing knowledge for the greater good of society.

Another option would be head-on competition with accreditation program’s like Wisconsin’s flexible degree program. Granted, this could diminish the value of a university’s degree. However, colleges could opt to follow the model that their athletic programs have with the NCAA. Individual athletic programs earn money from ticket sales, but they share revenue from television contracts, football bowl games, etc. In a similar way, Stanford, UCLA, Arizona and Oregon could partner with other Pac-12 conference schools to offer either online-only degrees or accreditation programs that would only certify coursework from member institutions. This model has potential (assuming revenue-sharing mechanisms can be worked out), but universities would then be forced to restrict access to content, and they couldn’t stop other accreditation programs from providing degrees for students who had taken only a subset of their classes.

A better option, then, is for colleges to take a page from the CTI’s playbook, which differentiates based on its hands-on experiences. In fact, ASU offers two engineering programs — CTI being one — that actually compete with each other. One program takes the traditional approach of teaching theories and subjects, while CTI weaves these theories into hands-on activities. This is a type of “content” that cannot be digitized and commoditized.

And so, universities of the future are likely to rely on MOOCs as distribution channels for commodity content, while differentiating with both hands-on interactions and exclusive in-person content that is priced at a premium. But these offerings will face increased competition from online-only and accreditation programs, and consumers will have the freedom to choose the educational options that best fit their needs and budgets.

While accreditation may increase the ranks of the degreed, it will be interesting to watch the relative value of different degree paths. According to Forbes, “Susan Holmes, a professor of statistics at Stanford, puts it well. ‘I don’t think you can get a Stanford education online,’ she said recently, ‘just as I don’t think that Facebook gives you a social life.'”

In the end, it will be up to “the market” to value these various degree types. I suspect that the institutions which blend both digital and real world content will produce students who can command wage premiums, while accreditation programs will suffice for many entry-level roles.

Hat Tips:

48 West, CTI, Forbes, Huffington Post, The Wall Street Journal, Coursera, edX, Gizmodo, TechCrunch, Vulture, Image Credit: Flickr

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  1. […] How Colleges Will Adapt in a World of Moocs. What role do traditional colleges and universities play in world where Massive Open Online Courses (MOOCs) are not only becoming increasingly accessible, but are also bringing Ivy League caliber educational materials online for free? […]

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