Will online learning destroy America’s colleges?

Some parts of the American university system work well for their students. The rest are ready for disruption.

The American college system is staggeringly large: 2,421 four-year institutions enroll about 18.5 million college students. The proportion of Americans with a bachelor’s degree is at an all-time high — a social victory if they’re able to enjoy a positive return on their degrees, which the Pew Research Center estimates at about $550,000 on average.

And the very existence of that system is threatened, as we are to believe it, by the massive open online course, or MOOC, offered by new ventures from the likes of Stanford, Harvard and MIT. In an essay last week, Clay Shirky compared universities and MOOCs to record companies and Napster: in both cases, the incumbents operated by providing something inconveniently and locally that could be provided conveniently and universally on the web. I don’t agree with the entire essay, but Shirky is absolutely right to point out that the college industry is made up of several markets, and they’ll be disrupted in different ways.

American higher education is deeply divided: it’s outstanding for a relative small handful of students and pretty bad for everyone else. The disruption of MOOCs will likely start at the bottom and move up from there. The question on which we should meditate is: how far up will it move?

Admission rate is a crude way of judging college quality, but it’s available consistently and implies something about the way the market sees a school. There are 2,421 bachelor degree-granting institutions in the U.S. and, according to the College Board (PDF), only 60 of them (2%) accept fewer than a quarter of their applicants (this includes most of the country’s famous schools — Harvard through Notre Dame). But 47% of those 2,421 schools admit more than three quarters of their applicants or have no admission standards at all; 82% of full-time undergraduates attend a school that admits more than half its applicants.

And the educational experience at the least-competitive schools is dismal: 87% of students at the most competitive schools finish their degree in six years or less; 29% of students at open-admission schools finish their degrees in the same period. Even at the 50-75% admission rate schools (a third of all colleges, enrolling 42% of undergrads), 39% of students either drop out or take longer than six years to finish.

That experience at the bottom is ready for destruction. Think of the student deciding between Pace University and a MOOC — maybe a low-cost, non-degree certificate from MIT is worth only 10% of what a degree from MIT is worth in terms of pure return, but maybe a degree from Pace is worth only 20% of what a degree from MIT is worth. Given the difference in cost (tuition, room, board, and fees at Pace amount to $51,364 per year), that certificate from MIT could look compelling, depending on what you’re looking for in the way of a college experience. And if attitudes toward MOOC certificates change, maybe a certificate from MIT starts moving up toward 50% of the value of an MIT degree, and threatens, say, Tulane.

I think Harvard and its peers are safe for the time being, but the vast majority of U.S. colleges aren’t, and even the middle and lower schools in the top tier could be threatened pretty quickly. (That said, there’s a bit of a disconnect at the moment between what Stanford and MIT offer online and what students at expensive, low-tier universities study. Students who enroll in the University of Phoenix’s software engineering program follow a much more applied curriculum than MIT’s computer science students, and even MIT’s high-achieving students find their program challenging.)

Top-tier schools that survive the spread of MOOCs could find themselves subject to new costs and transformations by the creation of a star system for faculty, in which popular teachers will have an international audience. Coursera’s terms of service explicitly prohibit the use of its courses for credit at any university, but it’s easy to imagine that changing at some point — that a University of Florida student could get credit at her school for taking a Stanford computer science class via Coursera. If that happens, Stanford and its vaunted faculty stand to gain; why take a University of Florida CS survey when its famous counterpart at Stanford is available instead? Either way, you’re attending non-interactive lectures (or, increasingly, watching recordings online after sleeping through class) and having your work graded by teaching assistants.

None of this is to suggest that our whole higher-education system will collapse as high school students make careful ROI calculations and elect an online education over four years of seminars in the wood-panelled offices of famous dons. My own liberal-arts education at the University of Chicago was illuminating, and I’d do it over again in a heartbeat — math and economics, with some Greek, history, comparative literature and physics on the side. I’m profoundly fortunate to have had that education available to me.

I think there will be a market for that sort of education for a long time — and, indeed, the giant endowments of the country’s top universities make this kind of education available to an increasingly wide audience. But that’s not really representative of the whole landscape of higher education today; the widest possible grouping of liberal arts majors encompasses only about 40% of college students, and that figure includes tens of thousands of students in majors like biomedical sciences and “science technologies” that are likely applied in their approach.

Students who want a career-focused degree, on the other hand, are already making an ROI calculation of sorts, although it’s not necessarily free of influence from friends and cultural expectations. They make up the vast majority of college students, and they’re ready to be converted.

(Full disclosure: my father is a dean at the University of Virginia, which went through an upset last summer centered in part on the future of the university in the context of online learning. The views in this post are entirely my own.)


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