The Road Ahead: In Search of a Free Ride

In Search of a Free Ride, Central Hall blog 3

NOTE: This is the third installment in a series of essays reflecting on the future of liberal arts colleges. Some speculate all liberal arts institutions are destined for failure. I disagree. We will explore the current dynamics and set the context for the future of Central College.

In 1999, Columbia University and five prestigious partner organizations created a for-profit education company called Fathom. The initial partners included The London School of Economics and Political Science, Cambridge University Press, The British Library, The Smithsonian Institution’s National Museum of Natural History and The New York Public Library. Other equally powerful partners joined the enterprise with the goal of launching a web environment that would be the hub of knowledge and education on the internet.

In a 2001 interview for The Technology Source, James L. Morrison spoke with Ann Kirschner, the CEO of Fathom. During the conversation Kirschner described the goals of the partnership and the vast amount of knowledge that could be made available globally through the company. She noted:

Only at Fathom will you have access to hundreds of free courses and a comprehensive variety of paid e-learning options. Some learners are ready to commit to a semester-length program, but most are looking for shorter options. Fathom delivers the broadest possible range of subjects and pedagogical approaches since we select the best courses from many institutions rather than creating the courses ourselves. Currently, the Fathom course directory offers 600 courses. All have been evaluated according to criteria determined by our Academic Council. We also offer more than 1,000 free seminars and special features from our consortium. We provide a service to a worldwide audience of knowledge consumers looking for professional development and lifelong learning.

By 2003 the venture ended and Fathom was dissolved. To be sure, it was a period of economic recession and some would argue Fathom was simply ahead of its time. Yet in 2001 alone, reports indicate Columbia University invested $14.9 million in the for-profit company, along with $3 million in investments from others. The revenue, however, for that year was a meager $700,000. The total loss was never reported publicly. To its credit, Fathom lasted longer than other for-profit online ventures at that time including those at New York University, Temple University and the University of Maryland.

What do we conclude? To be honest, a lot was learned through those early experiments and it’s helped shape the effective online learning environments we have today. Many would credit these early pioneering efforts as the ashes from which the roses of success have bloomed. For example, we learned effective online courses are not infinitely scalable. Some at that time believed once the course was created, it could be placed on the equivalent of cruise control or auto-pilot as the revenue flowed from eager learners seeking a convenient education. It turns out that the teacher still matters.

Let’s fast-forward to 2012. What’s happening now? Massive Open Online Courses are all the rage. The truth is they are a fascinating form of online learning. MOOCs, as they are called, have grown from vastly improved online learning environments since the days of Fathom. The interest and willingness of star faculty to record lectures and provide course materials is coupled with a student market drawn by one very important word – FREE. While it may feel like MOOCs appeared out of nowhere, it was the Massachusetts Institute of Technology (MIT) that made a rather surprising choice in 2002 and reset the course of online learning. The MIT Open Courseware initiative began making course content available to anyone. With the support of a few foundations and donors, more than 2,000 courses are now available in some form, ranging from basic course outlines and reading lists to video captured in classrooms. Best of all, the Open Courseware content is – FREE. There’s that word again. It’s an enormous public service. Those seeking knowledge around the world can obtain content for learning regardless of their location, socioeconomic status or prior learning opportunities. These efforts often have been referred to as the democratization of global education – something we can all applaud.

The MOOCs, however, are beginning to morph. Venture capitalists have identified the pattern they seek for a new opportunity – high demand, low production costs and infinite scalability. Late this summer, a company formed by two Stanford University professors known as Coursera surpassed the one million student course enrollment mark. Udacity, a rival company moved above the course enrollment level of 700,000. Other companies are entering the competitive space as well. The venture capital is flowing, courses are being developed and star faculty are eager to sign up. These companies have existed for only months, but already are securing prestigious partner universities to make sets of courses available to the demanding public. Predictably, pundits are forecasting the demise of college and university campuses – again.

Even as eager individuals and institutions are energized by the possibilities, there are a few problems.

First, no one has figured out how to make any money from MOOCs. Remember, they are FREE courses offered through for-profit companies. The basic agreements with colleges and universities carry very little risk for institutions beyond time, energy and some production costs. If the MOOCs can be monetized, the universities will make a small percentage on the revenue base. For now these companies are living on millions in venture capital. They have discussed a few ideas for generating revenue such as selling the courses to other educational institutions that could substitute MOOCs for existing course offerings, charging various kinds of fees for students seeking certificates of completion and validated assessments of learning, and identifying talent for employers among those who complete the courses. Eventually, these courses will need to generate profit or Coursera and Udacity will be seated in the depths next to Fathom.

Second, there is no way to validate the quality of learning. Attrition for these courses is incredibly high. The completion rate ranges from about 10 to 20 percent of the enrolled student population. There appears to be a lot of browsing. That’s fine if we are seeking to simply make knowledge available to lots of people. Let them browse. If our goal, however, is to responsibly educate citizens and train professionals, the system is severely deficient. What is more, we have no way to prevent cheating or fraud. At present, there is little interest in cheating since money is not flowing and the courses have not been uniformly accepted by institutions of higher education or industry. Attempts to monetize MOOCs, rest on the ability of these companies to certify course completion, validate learning and provide assurance of any credentials awarded. There is no credible infrastructure available to do this, making the possibility of cheating and fraud more likely. I can already see a cottage industry of learning assessment firms which will be happy to collect fees and pass out credentials.

Third, teaching and learning is a fundamentally human relationship. If we view MOOCs as a vehicle for simply making content for learning broadly available, many of us salute the effort. Those who have worked hard to advance teaching and learning through the effective use of technology, however, are growing increasingly concerned. A MOOC generally offers brief video segments, after which the student completes some online assignments (i.e. quizzes that are automatically graded), and can participate in online communities. For all they offer, they are a passive form of learning. There is no teacher or faculty member present to the student to create active learning scenarios or address the particular needs and interests of a class. In this one-size-fits-all approach, there is no context for understanding student background or capability, thus allowing for adaptation. What some describe as a liberation of the learner is actually the abandonment of teaching.

For decades there has been an obsession with driving the cost out of education through innovations in technology. Usually the claim is the learning will be even more effective and we can save tons of money. Perhaps one day we will understand all forms of education are subsidized by society in some form. Public and private/non-profit institutions both rely on subsidies whether they flow from government appropriations or philanthropic support. What we too often miss is that our for-profit colleagues also rely on subsidies. For Fathom it was dollars derived from non-profit organizations and foundations. Coursera and Udacity are riding on the speculative interest of venture capitalists. The major for-profit educational institutions are funded largely by federal student aid dollars. For many, this is nearly 90 percent of their revenue. When will we learn there is no free ride for education?

Next time: How will the opportunities and threats from for-profit institutions, competency-based education and online learning affect liberal arts colleges?

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8 responses to “The Road Ahead: In Search of a Free Ride”

  1. Don Huffman says:

    Mark,
    As you have observed, there have been a number of published reports of prestigious universities jumping on the bandwagon of offering online course offerings; all of them without records of financial profit or even solvency guaranteed.
    While these may actually succeed -and I wouldn’t want to bet on this- it is entirely appropriate to ask whether online education is, or can ever be “higher education” as understood by most liberal arts colleges and for-profit universities. The learning opportunities inherent with interaction between teachers and students is obviously unlike online courses in many respects, and these interactions are very complex and not fully appreciated/ perhaps even not recognized by those who have not been involved in such a progress. It is even possible that it differs with individual teacher’s personalities, and that some have developed effectove interactive skills that if not unique, are at least extremely complex at a level that online teaching can never experience.
    In times of limited financial resources it is of course a temptation to apply or attempt “new technologies” to gain an advantage in “educating the masses,” but in the meantime, I cannot believe that either gifted educators or their potential students and their families will be willing to risk the loss of what to most of us has become a precious commodity that has been and will continue to be a sound investment in preparing the graduates who will be major contributors to our society and its needs.

  2. Pat Ward says:

    Hello Mr. Putnam.

    Interesting topic. I am especially intrigued by the following statement – “Attempts to monetize MOOCs, rest on the ability of these companies to certify course completion, validate learning and provide assurance of any credentials awarded. There is no credible infrastructure available to do this, making the possibility of cheating and fraud more likely. I can already see a cottage industry of learning assessment firms which will be happy to collect fees and pass out credentials.”

    I would argue that this infrastructure already exists in the private sector in the form of professional certification. I can speak to the data processing industry as I’ve peen a part of it for over 30 years now. There are a myriad of Microsoft certifications one must study for and pass rigorous testing to achieve. In the realm of Project Management (my particular bailiwick), the Project Management Institute (PMI) exists to further their vision of the PM profession by bestowing the Project Management Professional (PMP) certification only after one has demonstrated a significant number of hours in the profession, and a minimum of direct contact hours (35), which one must be able to document before being allowed to even sit for the exam and which are randomly audited. Once authorized to take the exam, one must study for it, and here is where the money part comes in. There are an amazing number of companies that have been in business for several years selling courses and materials designed to prepare one to take the exam.

    Companies offering the courses to prep for the exam must be authorized by PMI to do so and are closely regulated by PMI. Cheating and fraud are not taken lightly by PMI. I know of one case in which a candidate completed their application to sit for the exam early, indicating they had the requisite 35 contact hours – which they did, but the candidate dated the application one day before the date on the certificate from the training company. This candidate was audited and because they claimed the hours before the date on the certificate, was barred from sitting for the exam for 3 years.

    The exam prep courses offered by authorized providers run anywhere from a very intensive week, meeting everyday for 8 or more hours per day, to a “leisurely” 10 weeks or more, meeting 1 or two hours per week. One pays handsomely for the intensive courses – up to $2000 plus travel and lodging, to one course I’m very familiar with that runs $850 over 9 weeks. The course materials are another profit center, and to sit for the exam is somewhere in the neighborhood of $400 ($550 if you are not a member of PMI).

    Note that these courses are not required to sit for the exam, but it is not an easy test. It requires the candidate to apply the information presented in the PMI textbook, not just recite it from memory. There are a significant number of people – very smart people – that fail the test the first time they take it, even after having taken a “teach to the test” course.

    The actual PMP test is administered at a Sylvan Learning Center (online) and is a multiple choice test of 200 questions randomly generated from a pool of thousands of potential test questions with a 4 hour time limit. The course materials test are updated every couple of years to reflect the changing nature of best practices and one is required to obtain PDUs to maintain the certification, which is recognized worldwide as the de-facto standard for PMs.

    There are certifications for many many industries that follow the same model.

    You are correct, there is already “…a cottage industry of learning assessment firms which will be happy to collect fees and pass out credentials.” Although I would classify it as larger than a cottage industry.

    I have a child attending Central and wouldn’t swap out the experiences she has had and is going to have by interacting with Professors and other students, but online education (albeit not a free one) is an option for some and a credible model does exist to monetize it.

    “Free” formal education – online or otherwise – does not now nor has it ever existed – somebody always pays.

    Pat Ward, PMP

  3. Steef Eman says:

    Dear Mark,

    With both earlier responses I can conclude that humans need to interact with humans in order to learn. We should never underestimate the importance of personal interaction in education. How a subtle gesture, glance or body language is part of teaching/learning. But this also includes an aspect that is very difficult to measure. I mean the amount of so-called unintended teaching/learning that takes place between teacher and student outside of the classroom. And I would not want to limit this to the transfer of so-called life skills. Thought provoking, or thinking ‘outside the box’ discussions are in fact academic learning skills that often do not, or cannot take place in the class room. But they are so very important. This ‘unintended’, or ‘down time’ learning/teaching is underexposed in the discussion about the use of technology in teaching. But, it is exactly this hard to replicate human interaction which is probably going to be the saving grace for a traditional, humanities based college education system.

    Steef Eman
    Central College in Leiden

  4. Edward Ver Hoef says:

    There is much to be said in support of “correspondence courses”. While I was in military service, I took advantage of a large number of USAFI (United States Armed Forces Institute) courses. Without meaning to brag, they were very easy – I’d frequently do several chapters, (each with an associated test), in a matter of a day or two. However, I do not think that is indicative of what is really hoped to be achieved by “responsible” on-line learning.

    I think one of the most valuable benefits of classroom education is the possibility of discussion between students and instructor. That is often not simply a two-way conversation between a student and instructor but rather a discussion or lengthy discourse between several students and the instructor. Both the students and the instructor benefit from this intercourse, the students because the get clarification and better understanding, and the instructor in that he sees where he has not been as clear as he intended in his presentation. I don’t see how this could be possible in a correspondence course.

  5. Ross Vermeer '88 says:

    I’d like to quote some figures from what I hope is a trustworthy, reputable source. The article I read traced the rise in the costs of common goods and services over the past 50 years. It used absolute prices, but I thought it would be more useful to calculate and compare how rapidly these prices had actually risen.

    Here are those cost increases over the past 50 years:

    Eggs: 3.7 times, i.e. eggs cost 3.7 times more now than they did 50 years ago

    Food in general: 7.6 times

    Gasoline: 11.3 times

    Housing: 12.6 times

    Health care: 17.5 times

    Liberal arts education: 43.5 times (the actual price of a degree rose from $900 to over $39,000, in case you’re wondering what the actual numbers were – and the liberal arts college in question is Central, since I got all of these numbers from CUI’s latest alumni magazine.)

    An inflation calculator at a US government website tells me that 1 dollar in 1962 is equivalent to about $7.59 today, i.e. just about the same rate of inflation as for the cost of food quoted in the alumni magazine article.

    So why has the cost of attending Central increased at a rate that’s almost six times as fast as the general rate of inflation? Is a Central education really six times better than it was 50 years ago?

    It’s easy to reject the learning students gain from MOOCs and other non-traditional forms of higher ed as ‘passive’ and ‘one size fits all’, and therefore inferior. But learning can happen anywhere and everywhere. I’m an instructional designer who’s worked for the past two decades to build clarity, flexibility and interactivity into all kinds of university courses – traditional face to face, print-based distance education, and online. I have seen many non-traditional courses whose quality far exceeds some of the classroom experiences I have had, including some at Central. The converse is also true in many cases.

    It’s also easy to prove that since producing MOOCs must cost something, therefore they are not ‘free’. Yes, of course. Who really believes that they are? MOOCs are perhaps best characterized as charitable contributions – they are manifestations of noblesse oblige from the richest and most powerful educational institutions in the USA. But there are certainly ways they can already be monetized, as Pat Ward mentioned above, and it’s not hard to see possibilities for others on the horizon.

    Finally, you mention that for-profit institutions are largely funded by government loans. No doubt true. But those very same loans have helped to fuel that six-times-inflation rise in tuition costs for traditional four-year institutions. What proportion of the average Central student’s costs is covered by loans? Has that proportion been rising in recent years? If so, how much does this debt burden hold recent graduates back as they begin their adult lives?

    I apologize if I sound relentlessly negative in my comments on these blog posts. But this article again fails to confront the overwhelming problems facing today’s higher ed sector, and from which it is unlikely Central will be immune.

    The 21st century offers students a growing range of educational options, both pedagogical and economic, from ‘free’ MOOCs to a costly private liberal arts education in the traditional mode. At some points along that continuum there must be possibilities for lowering the crushing costs that so many of today’s students (and parents like me) find daunting.

    No one expects to be able to ‘drive the cost out of education’. But shouldn’t we be looking at ways to bring down that cost, instead of working so hard to dismiss alternatives to the traditional model?

    • Don Huffman says:

      Ross,
      These are interesting observations and comments. I too am concerned about the reasons for the level of tuition costs at Central and at most other comparable colleges/universities.
      I don’t have much hard data at hand, but I can think of some of the things which may be related.
      50 years ago the salary of a beginning faculty member with a PhD at Central -and I think most colleges- was about $3-5,000/year. Support staff for administrative and faculty offices 50 years ago was much lower, probably at least 20X, and there were no parking lots or extensive maintenance staff. Instruments in science courses are at least 50X higher now than then.

      Building an average new 2 bedroom house about 50 years ago in Pella, or buying a new house of modest size cost about $20K, and the cost of these houses are now about $200K to $250K, at least 10X. Price of new car, ie. Ford,Chev etc. 50 years ago was about $3K compared with a current price of about $24K. Gasoline is about 20K higher now than then.

      Is a liberal arts degree now a better product than it was 50 years ago?
      That’s hard to know, but the current faculty are mostly better trained than those of 50 years ago, and they are certainly better qualified to teach the range of courses than they were then. Size of the campus and condition of the buildings and classrooms are certainly superior to those of 50 years ago.

      So, comparable cost and values are difficult to assess, and my guess is that this will continue to be the case. I would not bet that MOOCs will make these costs much different in the forseeable future.

    • Don Huffman says:

      Ross,
      These are interesting observations and comments. I too am concerned about the reasons for the level of tuition costs at Central and at most other comparable colleges/universities.
      I don’t have much hard data at hand, but I can think of some of the things which may be related.
      50 years ago the salary of a beginning faculty member with a PhD at Central -and I think most colleges- was about $3-5,000/year. Support staff for administrative and faculty offices 50 years ago was much lower, probably at least 20X, and there were no parking lots or extensive maintenance staff. Instruments in science courses are at least 50X higher now than then.

      Building an average new 2 bedroom house about 50 years ago in Pella, or buying a new house of modest size cost about $20K, and the cost of these houses are now about $250K, at least 10X greater. Price of new car, ie. Ford,Chev etc. 50 years ago was about $3K compared with a current price of about $24K. Gasoline is about 20K higher now than then.

      Is a liberal arts degree now a better product than it was 50 years ago?
      That’s hard to know, but the current faculty are mostly better trained than those of 50 years ago, and they are certainly better qualified to teach the range of courses than they were then. Size of the campus and condition of the buildings and classrooms are certainly superior to those of 50 years ago.

      So, comparable cost and values are difficult to assess, and my guess is that this will continue to be the case. I would not bet that MOOCs will make these costs much different in the forseeable future.

  6. Brian Peterson says:

    This is a fascinating conversation. I’m going to suggest that the question that seems to have fueled the rise in for-profit education is not the correct question to ask. As Mark has often suggested in the past, we tend to view college as transactional rather than relational. This question/discussion is no different; if our goal is to find the most efficient, cost-effective way to provide an education as we currently understand it, then all of our concern about for-profit institutions is much ado about nothing (short of making sure that accreditation, etc, are all fulfilled). Surely, online education provides more economies of scale and is more efficient than, in-class learning.

    However, in a policy class this is what I refer to as a cost-effective analysis, but is not a cost-benefit analysis. The question about efficient drivers of education is not the question that we should be asking. In my mind, the appropriate question cost-benefit question to be asking is, “what is the best way to education the minds of this – and the upcoming – generation?” This is far more difficult to answer, and forces us into a conversation about pedagogy, learning styles, and the development of adolescents into adults. Based on everything that I’ve read – and continue to read as I think about Central’s sophomores – while technology may be part of the answer, I’m not convinced that moving toward an online education is an appropriate solution to this question.

    This suggests that college is much more about the relational, not the transactional. But don’t we believe that pre-college education is relational? When we think about the best teachers that we had growing up, we think of those who got to know us as people, not just students in his/her classroom that needed to move on at the end of the year. They took time with us, they found out how we learned, and if possible, they changed what they did with us to make sure that we were getting as much out of class as possible.

    Why can’t/shouldn’t that be the case at the post-secondary level? Identifying appropriate learning techniques requires us to get to know who are students are, how they learn, and the pedagogy that will provide the greatest level of benefits. And unfortunately, that can’t be narrowed into a conversation about cost per credit hour, and the number of hours faculty are in the classroom.

    Brian Peterson