Published December 27, 2012
And for people bearing the burden of the debt, the crisis is a deeply personal one.
At the time, few could have predicted that a revolution was already in the works that could someday make student loan debt a thing of the past.
But MOOCs–the nickname for Massive Open Online Courses, which offer elite college-level instruction to anyone with an internet connection–have exploded over the last year, drawing students from locations as far-flung as Sri Lanka and Nepal and even stimulating the minds of retirees in Indiana. The biggest of the companies offering MOOCs, Coursera, had an enrollment of 1.7 million this fall.
And what’s the price tag on these courses offered by professors from such top universities as Stanford, Harvard and Duke?
We explain the growing business behind MOOCs, how they could affect the business of higher education in this country and around the world–and how they could impact the wallets (and debts) of future students.
Companies Offering MOOCs: The Playing Field
Before we dive into how the industry behind MOOCs developed, we’d like to clarify that MOOCs aren’t just regular online courses, which have been around for a while. Traditional online courses are like regular college classes: You have to pay tuition to take them, but you get credit and a small class size in return. MOOCs, on the other hand, are usually free, don’t offer credit and have unlimited class sizes, which means that professors can’t personally respond to students.
So how did this whole revolution get started? In the fall of 2011, then-Stanford computer science professor Sebastian Thrun decided to offer a free course in artificial intelligence. He had no idea how many students his grand experiment would attract, but he ventured that 10,000 would sign up.
The actual enrollment: 160,000 from 190 nations.
he experience prompted him to declare, “I can’t teach at Stanford again,” and then he launched Udacity, one of the key players in the field of MOOCs. The wild success of the course lured others into the burgeoning field, including these major players:
What Does This Mean for Higher Education?
Simply put, MOOCs are set to disrupt the education business. Over the last year, as student loan debt levels reached record highs, polls showed that dissatisfaction with higher education and its costs was also high. (If you have student loans, learn about the top student loan mistakes.) The average total cost of a bachelor’s degree now exceeds $100,000, and a 2011 Pew Research survey showed that nearly 60% of Americans say that the country’s colleges and universities do not offer ”good value for the money [students] and their families spend.”
And this could have a big effect on the economy, given the size of the education market: A quarter of the American population is enrolled in some kind of school, and government expenditures on it alone exceed $800 billion, not including private education costs. Plus, student loan debt has been a drag on the economic recovery as indebted graduates delay major life expenses on homes, cars and even further education.
The fact that MOOCs are free is precisely why they appeal to people like Doug MacKenzie, a 34-year-old Philadelphia firefighter who took an introductory sociology class on Coursera. “I’ve always wanted to go into a degree program, but the problem is that I don’t have the money,” MacKenzie told The New York Times.
But just how MOOCs disrupt the business of higher education is a big question mark. Here are some potential ways, based on a report by Moody’s Investor Service:
Tom Katsouleas, dean of Duke’s engineering school, surmised in a Forbes article that MOOCs pose the greatest threat to master’s programs: “In our visits to corporate partners like Apple and Cisco, it was clear that most top engineers and executives are using MOOCs for their lifelong learning in a way that some used to use corporate sponsored masters programs. Although universities provide individual and team project-based learning that are still difficult to replicate online, a masters education can be taken anywhere.”
MOOCs could also shake up the workplace. At this point, most employers view completion of a MOOC on a job applicant’s résumé as an advantage–as long as the individual also has a college degree. But analysts expect that some education companies may soon begin offering MOOC-like courses to corporations.
The Future of MOOCs
Because MOOCs are rapidly taking off, a number of major players in the education space are trying to figure out what the future looks like–and that involves tackling some of the major unresolved issues of MOOCs:
If these issues get resolved, attending college on a campus could become a thing of the past, and students may instead garner credits from MOOCs offered by different companies. Future employers could also be paying for the costs of an education, if MOOCs remain free to students and companies offering MOOCs instead generate revenue from employers willing to pay for the records of job applicants who have taken MOOCs.
And all these developments could mean that crushing student loan debt might become a thing of the past.