Or where, when and how they learn. Students today demand ease and convenience. Online education offers a self-determined pace of learning so students can study according to their own individual schedules. “The whole notion of going to a bricks-and-mortar school makes no sense to many people when the confines of space and time have been eliminated,” notes Douglas Shackelford, a professor at the University of North Carolina’s Kenan-Flagler Business School and dean of its new online business degree program, MBA@UNC.
“I have one student who works for a Fortune 100 company. He tells me he has five people on his team on four continents, and he has never met any of them. The idea that he would go back into a classroom to do his MBA seemed like something his granddad would have done. It’s a Facebook world now.”
Erasing the cost issue
A third driving factor is the economy. College is out of reach for many people because of the cost but, for better or for worse, a degree is considered necessary for a successful career. The cost of college has risen by a staggering amount. In the US in 1981, the average annual tuition and fees for a four-year public university were about $2,242 (in constant dollars today). Last year, that number had climbed about 267% to $8,244 a year. The cost of attending a private college has also increased: in 1981, the average yearly tuition and fees for a four-year private university was $10,144; today the cost is $28,500, an increase of 180%. The Federal Reserve Bank of New York says that about 15% of Americans have outstanding student loan debt. The bank estimates the total burden at around $870 billion.
Replicating – and flipping – the classroom
The time may be right for online education platforms, but these enterprises still face a number of challenges. The biggest question, says Jason Wingard, vice dean of executive education at Wharton, is: “What does a sustainable business model look like? Many of these platforms are free. If you’re giving away course content, that might undermine your brand.”
There are also questions about how the platforms will maintain rigorous curriculum standards, and how they will judge performance. “Is the online learning experience equal to, or better than, the bricks-and-mortar experience?” asks Wingard. “Are you testing appropriately to make sure students learn the material?”
The global e-learning market will reach $107 billion by 2015, according to a new report by Global Industry Analysts, a market research firm. And yet, it’s still not entirely clear how this new wave of online education platforms will make money.
In April, Coursera announced it had secured $16 million in funding from two Silicon Valley venture capital firms. Udacity is also venture backed. MIT and Harvard contributed a combined $60 million to launch edX, which is overseen by a nonprofit, but program directors have said they plan to make the initiative self-supporting.
Industry analysts point to several potential ways Coursera and others could generate revenue. Platforms could, for instance, charge students a fee for certificates of completion or even transcripts. They could also make money by providing premium services, such as a recruiting tool that links employers with students who have shown ability in a given area. Another potential income stream: donations from thankful alumni.
Schools involved with these platforms dismiss the notion that free MOOCs could harm their reputation. In fact, universities expect that participating in these platforms will enhance their international standing. The professors involved are motivated by the potential of the platforms to spread knowledge to students around the world.
As Ng, Coursera’s founder who recently taught an online class with an enrolment of more than 100,000 students, told US News and World Report: “I normally teach a 400-student class. To reach a comparable size audience, I’d have to teach my normal class for 250 years…. Today’s top universities offer an amazing education to a minuscule fraction of the population. We would like to see a future where top schools are teaching not just thousands of students, but millions.”
