Policy Initiative Spotlight: Can Elite Education Be Free?

Congress this week has been debating the growing debt burden faced by American college students. Today’s “Policy Initiative Spotlight” examines the recent expansion of free, online university education led by several elite institutions. Renewing America contributor Steven J. Markovich examines some of the newest endeavors, which could multiply the impact of America’s universities and help to control costs for students.

Despite an underperforming K-12 education system—the subject of the CFR Independent Task Force on U.S. Education Reform and National Security—U.S. universities continue to lead world rankings; in 2011, fifteen American universities placed in the top twenty-five according to U.S. News and World Report. High performing universities improve U.S. competitiveness by strengthening the workforce and anchoring innovation clusters.

Several premier institutions have launched initiatives to use online education to spread their lessons far beyond campus. In May 2012, Harvard and MIT debuted edX, an open source non-profit joint venture. EdX will offer free online classes and advance research on how technology can help on-campus and online students learn. Each university will contribute $30 million and course materials. While the coursework is free, the universities are contemplating charging for certificates of course completion.

EdX is based on the technology of MITx, MIT’s online education platform launched in December 2011.  MITx was designed to enrich the education of full-time students, and allow millions more to learn online. EdX built upon this approach to create student-paced learning through video lectures, collaborative online labs, and online testing with real-time feedback and student ranked Q&A’s.  The edX platform is open-source and other institutions are invited to join.

The universities say they believe that online education will “never replace the traditional residential model of undergraduate education.” They don’t perceive a significant brand and market cannibalization risk, which is understandable given their single digit acceptance rates.

But EdX already faces competition from for-profit startups backed by Silicon Valley venture capitalists. Udacity has its roots in Stanford’s 2011 experiment to put its introductory computer science course online; 160,000 students signed up and 23,000 students passed. In-class attendance dwindled from 200 to around 30 students as on-campus students opted to learn online. Sebastian Thurn, who co-taught this course, left Stanford to co-found Udacity.

Thurn’s intent is for Udacity to become a free premier online university: “The biggest problem [in higher education] is cost.  Student loans are going up 6 percent a year whereas the return on that education is going down. We’re clearly in a bubble.” Regarding Udacity’s potential impact, he said: “You could get an entire computer science education for free right now,” he said. “You could take your tablet with you, you learn on the bus, and take these minutes and learn how to learn for a lifetime.”

Another for-profit startup is Coursera, which offers free access to course content from affiliated universities: Stanford, Princeton, University of Pennsylvania, and University of Michigan.  Coursera raised $16 million in venture capital investment in April 2012. Co-Founder Andrew Ng explained that “[Raising capital] “allows us to focus for a while on building an exceptional platform without having to worry about revenue.”

While both Coursera and Udacity offer free course materials, neither has explained their ultimate revenue model. Observers have speculated that they could charge for access to supplemental learning materials or to provide certification of achievement.

While these efforts will improve access to college and graduate level learning, there are also similar efforts to improve K-12 education. Since 2006, the non-profit Khan Academy has provided free online videos covering a wide range of topics, from algebra to the French Revolution.

In March 2012, TED launched its educational initiative, TED-Ed, with original educational videos designed to spark curiosity. The initiative entered its second phase with a website that allows teachers to create customized online lessons. Using the free “Flip this Lesson” service, teachers create can custom lessons for any video on TED or YouTube. Teachers can track the performance of individual students through multiple choice quizzes and free response questions, and target classroom instruction to reinforce difficult concepts.