What Do MOOCs Cost?

Rachelle Peterson

The “Massive” in MOOC refers to class size, but you might think it stands for cost savings as well. MOOCs are free to students who register and cheap for those who seek credit. Not too many colleges and universities plan to grant credit for MOOCs, but of those who do, the cost to the student is typically a few hundred dollars per course. Sometimes, it’s only the price of paying for a proctored exam.

But MOOCs are not all that cheap to the colleges and partner platforms producing them. Building a MOOC is tricky work. It involves writing lecture scripts, rethinking course structure, creating a slew of multiple choice quizzes, adapting grading software, filming lectures and (sometimes) discussion groups, editing footage, and building a course page. Once the course goes live online, someone has to pay for monitoring chat feeds, responding to student questions, fixing those ineluctable technical glitches, and in some cases even hiring a squad of tutors and administrators to help out.

In a survey of professors teaching MOOCs, the Chronicle of Higher Ed found that on average, each spent about 100 hours preparing a MOOC, plus another 8-10 hours per week for the duration of the course.  All this, for a class that is supposed to be a lot like a frozen dinner: pre-packaged, simple to prepare, and meant to be consumed in front of a screen.

Adding it Up

So what do MOOCs actually cost the producers? Some are cheap, like self-produced off-the-cuff lectures delivered in front of a webcam and uploaded via an open source platform like Google’s Course Builder. But scripted remarks professionally shot and edited, spliced with interactive features, can cost on the order of a quarter-million dollars. 

For most MOOCs, three different parties help pay for production: the school volunteering the content, the platform that hosts it, and often third parties who contribute to the cause.

Udacity budgets $200,000 for each course it makes. For many technologies, production costs decrease after their initial development, but Udacity’s costs are likely to keep rising as it launches MOOC 2.0, a modified version that includes more personal interaction with professors, tutors, and mentors. In its partnership with Georgia Institute of Technology’s new MOOC-ified master’s degree in computer science, Udacity expects to double its costs to $400,000 per course. (More on that later.)

EdX gives its partners the option of either producing a MOOC on their own and then submitting the finished product to EdX, or else paying for EdX’s design and consulting services at a rate of $250,000 per course plus another $50,000 each time the course is re-run. EdX is run jointly by MIT and Harvard, who have each fronted $30 million to create the program, though EdX president Anant Agarwal emphasizes the need for EdX to generate sustainable sources of money to avoid becoming a drain on its university parents. Georgetown, when it announced a partnership with EdX, planned to invest $2 million in the Harvard-MIT brainchild, while Amherst College expected to spend a total of $2.2 million, though the faculty voted down the proposal. Meanwhile the University of Texas shelled out $5 million to join EdX.

Coursera’s costs are less public, though its partner schools have spent tens of thousands of dollars on their own course development. The University of Pennsylvania spent about $50,000 per course, while the University of Edinburgh dropped approximately $45,000 on each of its six courses. U Penn and the California Institute of Technology, when they joined Coursera, invested $3.7 million, justifying the expenditure as an investment in branding and a jumpstart for future online possibilities. 

In addition to schools and platforms, a hodgepodge of third parties help to pick up the tab, sometimes obscuring the true cost of MOOCs. Private donors, including alumni eager to see their alma maters splashing the covers of technology journals, fork over substantial donations. The Bill & Melinda Gates Foundation has spent millions of dollars promoting MOOC use, especially advocating for MOOCs in remedial education. (Udacity founder Sebastian Thrun credits Gates with making remedial ed MOOCs a reality.) Gates has also provided EdX a grant of $1 million. Then there are the venture capitalists, who have backed Udacity with $22 million and Coursera with $65 million. Sometimes governments help to foot the bill, too: the state of California awarded $16.9 million to California community colleges, asking them to further develop online initiatives, including MOOCs.

Many of these investors, of course, hope to make money on MOOCs, most likely not by selling the courses directly to students, but by renting them to small schools who then pair the outsourced lectures with proctored tests and, in some cases, group discussions and extra assignments. Udacity and Coursera have also experimented with doubling as paid headhunters; they sift course participation and assignment grades to identify promising students, offering to match them with a potential employer who pays a fee for each introduction. They’ve also experimented with selling their own certificates of completion. But most college presidents don’t actually expect MOOCs to reduce student costs. And even if courses do generate revenue, large portions of that revenue will return to the platform, not to the school that supplied the MOOC.

Georgia Tech, in its much discussed plan to create with Udacity a MOOC version of its prestigious master’s degree in computer science, hopes to turn a profit of $4.7 million by its third year of operation, but it’s banking on a $2.1 million start-up grant from AT&T to do it. It’s also raised as many doubts as it has hopes about financial viability, including critics who note that the first year’s course development will cost over $15,000 per student, and that in order for Georgia Tech and Udacity to recoup costs and make money, they will cater to the business interests of AT&T, which will suggest lecturers, train its employees, and offer AT&T work projects as course assignments. Georgia Tech also counts on quickly attracting 8,700 full-time students—more than the total number of computer science master’s degrees awarded in 2009-2010. 

Heeding Caution

Spending money on experiments isn’t categorically bad. If not for fearless financial backers, we wouldn’t have the personal computer, or the printing press—both of which have been great boons to the academic world. MOOCs are still developmental: we don’t know yet whether they’ll succeed in facilitating learning, and careful investment is healthy. Innovation is important, so long as we don’t innovate our way out of features that tradition has taught us to value, like the need for discussion, debate, interaction, and mentorship.

What is worrisome, though, is the reckless abandon with which schools, companies, donors, and philanthropies are dropping money bombs on a high-profile experiment that for the most part doesn’t benefit their own students. That experiment is subsidized by their enrolled students who pay “real” tuition. And so far, the experiment has performed poorly. MOOCs gather lots of wannabe course registrants, but with attrition rates of about 90% in most MOOCs, and high failure rates and student disappointment with credit-bearing MOOCs, these ed-tech giants fail to deliver on their promises. That’s a price that ought to give schools pause.

This article originally appeared on Minding the Campus on September 17, 2013. 

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