College Cost and the Value Proposition: What MOOCs Really Teach Us

Massive Open Online Courses (MOOCs) will not replace a residential learning experience for all students, but they are bringing into question college cost and the value proposition for an undergraduate degree.

College Cost and the Value Proposition

George Siemens and Stephen Downes are often credited with teaching the first Massive Open Online Course (MOOC) in 2008, but the fall of 2011 marked the beginning of the challenge to the value proposition of Higher Education with the Stanford MOOC experiment of Sebastien Thrun and Peter Norvig and their “Introduction to Artificial Intelligence class.” I use their class as a marker because it launched the torrent of interest and advances now happening in the alternative space to a traditional Higher Ed experience (i.e., an experience that may be had at a 4 year, residential campus).

To be clear, I use the phrase “value proposition of Higher Education” to mean the perceived value of time, effort and money that goes into achieving a traditional undergraduate degree. Both parties to the proposition (i.e., parents/students and universities/colleges) have a viewpoint, but only the parents/students gets to decide whether the value proposition is worthwhile or not.

With the ever increasing cost of an undergraduate education, the student debt that is taken on to pay for the education and the opportunity cost, both during school and afterwards, the value proposition comes into greater question. Actual dollar cost has an indirect effect on the value proposition as one set of parents/students may think a 4 year, $100,000 education was worthwhile while another set may think a 4 year, $10,000 education was a waste of time and money. The more time, effort and money that goes into an education the greater the evaluation of the value proposition there may be.

What is the expected outcome for the time, effort and money put into achieving an undergraduate degree? This will vary by the parents/students.

All that matters is if they feel it was worth it.

Why Do MOOCs Matter?

In the subtitle of this article, I state that MOOCs will not replace a residential learning experience for all students. Even though I believe this to be true, MOOCs only have to replace a residential learning experience for enough students to have an impact on Higher Education. Another way to think of this was the promise of a paperless office. As far back as 1975, Business Week talked about the paperless office, but over 35 years later the paperless office has not arrived. Even though the paperless office has not been achieved, the changes in electronic exchanges such as receiving and paying bills has impacted the U.S. Postal service negatively as U.S. Postmaster General Patrick Donahoe stated:

Here’s the situation we face. When you look at what’s happened in the world from an electronics standpoint, more and more people every day pay bills, get bills through the Internet. And that’s really taken a toll on our volume.

So MOOCs do not have to replace residential campuses to have an impact. They only have to appeal to enough potential students to have an effect. Who are these potential students? They are the non-traditional students (generally anyone 25 or older) who are not going to alter their lives to live on a residential campus, or alter their schedules to take traditionally scheduled classes. Increasingly, this defines many of our potential students, and they have an increasing amount of alternatives to the conformity of traditional schedules and processes.

Even if a traditional, residential college alters its schedules and processes to better accommodate non-traditional students, the costs of obtaining the education may make less costly alternatives more attractive value propositions. I do not think MOOCs in their current form will be the the more attractive value proposition. What the current MOOCs evolve into will be the disrupter, and they are evolving.

The Lesson of the Apple Newton

When I hear or read some saying that MOOCs will not replace traditional education, or MOOCs are a clumsy attempt at online learning or MOOCs fail at (fill in the blank), I think of the Apple Newton.

I remember thinking when the Apple Newton was released in 1993 how it was big, awkward and not really solving anything. The Newton did not sell very well for Apple with 50,000 units sold in the first 3 months. Certainly, this was proof enough that Personal Digital Assistants (PDAs) would not change anything. The problem was, the PDA concept continued to be refined. Palm Pilots gave up trying to recognize handwriting and introduced Graffiti, and PDAs ruled the marketplace.

Why stop with a PDA? Early smartphones included Research in Motion’s Blackberry and Palm’s Treo. Then came the iPhone and iPod Touch. Android devices followed the iOS devices, and PDA again became “Public Display of Affection” as the Personal Digital Assistants fell into the technology history bin while smartphones took over the scene.

Meanwhile, tablet PCs came on the market, and Netbooks flirted with us for awhile until tablets such as the iPad and Android devices began to dominate.

I am not suggesting that the Newton evolved into these devices. I am suggesting my mistake was thinking the Newton was the beginning and the end of the idea of a smaller, more powerful computing device. I view MOOCs in this light. To think what they lack today will remain lacking tomorrow in the next MOOC or whatever comes after MOOCs is extremely short-sighted thinking.

John Hennessy of Stanford said “there’s a tsunami coming” to Higher Education. MOOCs may not be the tsunami, but they very well may be the rapid retreat of the ocean prior to the tsunami’s landfall. To dismiss this signal is done at our own peril.

This is the lesson of the Apple Newton.

The Statistical Improbability

As I have been reading what others are experiencing and thinking, the viewpoint “Who’s Afraid of the Big Bad Disruption” by Jonathan Marks on Inside Higher Ed is a thoughtful piece that captures some good perspectives in the article, and has some equally illuminating readers’ comments.

A consideration in the value proposition is the experience in the class, and Jonathan makes an excellent comment on what can happen in a face-to-face (f2f) classroom when he states:

An adept teacher can try to read the expressions on the faces of her students, and invite a student to share his thoughts or objections when he seems to have something on his mind. An adept lecturer can allow her students to test her, test them in turn, and convey the sense that they are engaged in a high-stakes enterprise together. In this way, students not only weigh competing ideas but also acquire or further develop a taste for weighing them with the help of others.

I agree with his statement, but notice the use of the word “adept.” Merriam-Webster defines the adjective use of adept as “thoroughly proficient.” What is the statistical probability that an adept teacher will be in every classroom a student takes at a traditional residential campus? What is the statistical probability that an adept teacher will be in the majority of classes a student takes at a traditional residential campus?

The reason I highlight this is the number of opinions and comments on the web that echo his statement, but many forget to leave out adjectives such as “adept.” To me, the sense I get from such opinions and comments is the universal nature of these types of classrooms. Given that the Bureau of Labor Statistics counted approximately 1.75 million teachers at the postsecondary level in 2010, what percentage are likely to be considered “adept” or “thoroughly proficient” as a teacher?

This is one area a MOOC could be better than what many students currently enrolled at all the various postsecondary institutions in the United States experience. What if an adept teacher taught a MOOC utilizing what we know about instructional design? I do want to draw a distinction between a “superprofessor” and an adept teacher. Many Higher Ed institutions run on the model of an expert in a field is a good teacher. I maintain that being an expert in a field does not necessarily make a good teacher, and a good teacher is not necessarily an expert in a field. Educational life is wonderful where these two intersect.

Because a MOOC has the potential to reach more students than any single f2f classroom, the opportunity to get an adept teacher who may be an expert or is backed by experts with superior instructional design is more doable than getting the same for hundreds or thousands of f2f sections spread around the country.

Here is another way to think of this. The Stanford Artificial Intelligence MOOC taught in the fall of 2011 by Sebastien Thrun and Peter Norvig enrolled approximately 160,000 students of which approximately 15% completed. This means 24,000 students completed the course. How many adept teachers in Artificial Intelligence in typically sized f2f sections would this take?

The Degree Granting Business is not the Same as the Learning Business

Credentialing is at the core of a college degree, and an important consideration in the value proposition. When a student has completed a program to the satisfaction of the college or university, a degree is conferred. What does this degree tell us about the graduate? That the graduate was successful in following a program to its end. Beyond this, we cannot tell much else.

Add a transcript to the degree, and we can see what grades the graduate got in specific classes. Do the degree and transcript tell us how well the graduate works with others? Do they tell us how creative the graduate is? What is the work ethic of the graduate? What capacity for empathy does the graduate have? Is the graduate self-directed? Can the graduate express him or herself well? Does he or she need to prepare to speak publicly, or can he or she speak extemporaneously?

True, a good job interview process can address many of these questions, but then what is the degree being used for?

Higher Education has been good about selling the monetary value of a post-secondary degree as evidenced by this quote from the College Board: “The typical bachelor’s degree recipient can expect to earn about 66% more during a 40-year working life than the typical high school graduate earns over the same period.”

Although the College Board outlines all the other benefits of a college degree, the message that often gets through to parents and students is similar to the sentiment the Indigo Girls wrote about when they sang “I spent four years prostrate to the higher mind, got my paper and I was free.” Higher Education is in the paper (degree) granting business. This is a tenuous spot to be in.

Learning has nothing to do with granting degrees. What happens to the value proposition if alternative credentials gain acceptance?

Infrastructure Costs

One of the challenges facing many traditional residential campuses is the cost of legacy infrastructure. The buildings need to be maintained, powered, heated and/or cooled; and they will periodically need to be renovated or repurposed. The grounds need ongoing care, and the fleet of equipment to maintain the grounds needs maintenance and eventual replacement. Classroom and campus technology seems to be ever expanding, and all of these items will need maintenance and eventual replacement.

The University of Minnesota Twin Cities campus spends approximately $50 million dollars per year on energy. Apollo Group, parent corporation of University of Phoenix, is selling off 40% of its physical footprint while only affecting 4% of its students. Certainly, the sell-off by Apollo Group is in response to the financial losses they suffered recently, but I believe this is a strategic response because of at least these two factors:

  1. Reducing the costs associated with 40% of the physical footprint is worth negatively affecting 4% of the students.
  2. Virtual competitors (MOOCs and what comes after MOOCs) are starting with minimal physical footprint which allows costs to be lower.

While the physical footprint of many colleges and universities support great f2f opportunities, the costs associated with building, running and maintaining these structures adds to the cost of the education which makes the value proposition more difficult.

One Information Technology item to look at is access to the Internet whether wired or wireless. Many in Higher Education enjoy good to great access to the Internet. I do not think anyone would want to get rid of the access they now enjoy. On our campus, the demand to increase simultaneous access by all users in a room, including lecture halls, to wireless access points and the services on the other end of the network connection only continues to grow. This is very doable, and our campus has been responding to these requests, but these requests cost money.

MOOCs distribute the network connectivity costs to the end users. Udacity does not need to provide the connection to someone in her or his home, the student does. True, my university does not need to provide the connection for our students while they are at home, but we do have to provide connections for our students, staff and faculty while they are on campus. Our infrastructure costs grow as demand grows. All our wireless access points need to be maintained and replaced as well as the infrastructure they connect to. Labor costs need to be factored in for installing, maintaining and upgrading the wireless and associated equipment. These hardware, software and labor costs are ongoing.

What other costs on a college campus are similar to the one I described above?

What Were These MOOCs?

In the title of this article, I refer to “What MOOCs Really Teach Us.” Here are the MOOCs I have taken and completed successfully:

  • Edfuture (CFHE12)
  • How to Create a Udemy Course at Udemy
  • Introduction to Computer Science: Building a Search Engine at Udacity
  • Introduction to Sociology at Coursera

Here are the MOOCs I have started but not yet finished:

  • How to Build a Startup: The Lean Launchpad at Udacity
  • Introduction to Statistics: Making Decisions Based on Data at Udacity

So What Should Anyone Do?

I suggest starting with the following:

  1. Take and complete a MOOC in a subject different than what your major was.
  2. Take and complete a second MOOC in a subject different than what your major was and different from your first MOOC.
  3. Ask yourself:
    • What is missing from this learning experience?
    • How much time and money is what I am missing worth?
    • What other ways are there to get what I am missing?
  4. Evaluate whether the added value of a traditional, residential college is enough to be worth the time and cost.
  5. Determine if current college costs and their value propositions will hold up in the rapidly changing environment of MOOCs.

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