Colleges and universities that are marketing their degree programs at high tuition cost are now facing competition from free to low cost massive, open, online courses (MOOCs). Offered by hundreds of Coursera partners from prestigious institutions, a well-financed effort by Harvard and MIT and joint ventures with Udacity and the California state university system and Georgia Tech, this new technology has frightened presidents, deans and provosts of most colleges and universities.
The entry of MOOCs into the higher education marketplace was also trumpeted by language usually associated with revolutions. The "human right" to a college education championed by these new MOOC ventures implied that traditional higher education, as currently organized, is denying individuals a fundamental human right.
"Liberal guilt," the seeming acceptance of MOOCs by prestigious institutions, and the alacrity with which institutional financing has poured into companies entering the MOOC higher education marketplace has caused considerable concern.
Then the MOOC steamroller ran into the same obstacles that have always protected American higher education from competition from new technologies: accreditation "standards" and U.S. Department of Education regulations.
Because enrollment in MOOCs is "open" to the qualified and unqualified alike, completion rates are dismal, less than 5%. Any "accredited" institution participating in the U.S. Department of Education Title IV tuition loan and grant programs will find that its Title IV eligibility is endangered if MOOCs are offered for academic credit.
Open admissions to MOOCs for academic credit, therefore, was quickly rejected. Then, it became clear that the low cost of the first MOOCs was related to the absence of instructor engagement. That, too, ran into regulatory issues since access to Title IV programs requires demonstration of personal engagement of students with instructors.
Suddenly, MOOCs were no longer open nor low cost; they had become HCOCs—Higher Cost Online Courses (pronounced Hickocks).
At my company's MOOC initiative—EDUlearningonline—we calculate that, at minimum, it will cost $90 per student to retain a qualified instructor, another $25 for administrative costs, and a modest cushion of $35 per course to monitor both students and instructors. For those willing to pay $150, students participate in coursework with an instructor and are awarded a richly coded "Badge" for successful completion of coursework. Badges can be posted at a personal Facebook page, a personal Home Page and in other social media contexts.
At $150 per MOOC, this new technology promises to unlock the grip on higher education by the cartel composed of regionally accredited colleges and universities.
At San Jose State, where six Udacity MOOCs morphed into HCOCs, tuition is currently priced at $150 per course, but enrollments are capped at between 35 and 150 students.
Limiting enrollments in HCOCs from what were originally intended to be offered as MOOCs is related to the real costs of administering each HCOC at San Jose State.
Out of state tuition costs are always a good guide to ascertain what it really costs to administer a three-credit course. The cost per unit for non-residents at San Jose State is $372 or $1,116 per three-credit course. Thus the $150 tuition cost of San Jose state's first HCOCs represents about 13% of their actual cost. In other words, San Jose State has decided that it will offer a limited number of HCOCs and subsidize them at a cost of $971 each.
That certainly is not the reason that California Gov. Jerry Brown hoped that low cost MOOCs could solve his problems in financing the California's state college system.
If MOOCs must be converted into HCOCs before they can be offered for academic credit, then they provide little opportunity to lower the cost of a college education.
The American higher education system is a government sanctioned cartel. Membership in this cartel requires regional accreditation and that, in turn, requires that courses and programs be offered at a physical campus.
Since MOOCs, even HCOCs, don't require a campus, acceptance of MOOCs is not going to happen at institutions with physical campuses. Adoption of MOOCs is most likely to occur outside the system of Title IV eligible regionally accredited institutions. Many of these institutions long ago changed into multiversities that offer something for everyone.
Colleges and universities today are no longer exclusively dedicated to education. They have become vocational training institutions. Vocational training for employment doesn't require academic credits and four to six years of expenditures for tuition, room and board, books and fees leading to a diploma.
Here is a list of vocational training programs for which students can earn academic degrees at Old Dominion University in Virginia (other public universities have similar lists):
Athletics & Athletic Training
Drawing & Design
Exercise Science & Wellness
Geographical Information Systems
Information Systems & Technology
Instructional Design & Technology
Lifespan & Digital Communication
Media & Multimedia
Occupational & Technical Studies
Recreation & Tourism Management
Theatre & Dance
It doesn't take much imagination to see that many of these skills can be taught by corporations or vocational schools using MOOC Internet course management systems mixed with apprenticeships.
Except for students seeking employment in public education and government, there is no need to offer vocational training in "degree programs." And many parts of these programs can be taught while students are in high school.
The opportunity that new MOOC technologies offers American education is transformational. Truncate four years of high school into three and offer MOOCs accompanied by apprenticeships in the fourth year.
Transition many degree programs to a combination of MOOC training courses and permit a parallel universe of low cost "accredited" MOOCs in traditional subjects to emerge without the need to seek access to federally subsidized student loans.
At my company, we are preparing 31 online courses in the liberal arts for conversion into MOOCs. At prices of between $19.95 and $29.95 each, it is possible to complete the equivalent of two years of college work for $599. The cost of required texts—all available free online or in Kindle versions—is an additional $400.
A parallel universe of MOOC vendors like us can develop only if MOOCs can establish their own accrediting agency and bypass control by the U.S. Department of Education. Accreditation is now firmly tied to U.S. Department of Education Title IV programs. Accrediting associations do not receive official recognition by the Department for the quality of their academic programs. They are recognized to be Title IV eligible.
In other words, we must return to the pre-1965 world of "accreditation" of associations representing member institutions that define themselves by reference to common education policies—not the ability to offer federal loans to students.
In addition to the education entrepreneurs who will enter the MOOC education marketplace, corporations, private businesses and industry associations may also develop their own MOOC training programs.
Until now, corporations have used the higher education system's academic credits, certificates and diplomas to screen for prospective employees. Yet entry-level positions do not require four to six years of campus-based studies and even post-entry-level employment seldom requires a college diploma.
Once upon a time, when a college education was affordable, we could accept a certain amount of waste of time and treasure spent in obtaining a four-year campus educational experience. Today when it takes six years to earn a four-year degree, the costs that are incurred are astronomical and most individuals require tuition loans.
One solution is for American businesses, corporations and industry associations to bypass the entire college and university system and begin to utilize MOOCs to screen for prospective employees. Once these first MOOCs harvest the identities of exceptionally qualified prospects, most "pre-screening" for employment will occur online, not by examining official transcripts.
This transformative approach to vocational education will affect how corporations make employment decisions, involve corporations in training employees, and increase the quality of those who are hired.
Consider the banking industry, for example, with bank branches in local communities. MOOC training programs in banking offered free to juniors and seniors in high school, which offer employment for those who score in the top percentile, will attract very talented students from local high schools. That in turn builds good will in the communities these banks serve, and yields access to highly qualified recruits.
Much attention has been given to a recent agreement by Starbucks with Arizona State University. Imagine the attention that will be given to a national bank that offers free MOOCs to prospective employees, and the opportunity to earn a degree in banking for those who qualify for entry level employment.
The Artificial Intelligence course that Sebastian Thrun created at Stanford enrolled 150,000 students from around the world, and included many Stanford students as well. As it happened, none of the Stanford students were among the 400 highest scoring students who completed the course. Those 400 computer programming "trainees" are much sought after by Silicon Valley companies.
In banking, advertising, graphic design, marketing and advertising, hospitality management and most other industries that require mastery of repetitive skills for entry level jobs, employees need not qualify for employment by first earning a college diploma. Very low cost vocational training MOOCs, not Hickocks burdened by U.S. Department of Education and Title IV eligible accrediting agency standards, are the answer to the high cost of a college education.
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