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Copyright 2016 NPR. To see more, visit http://www.npr.org/.

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Online Classes Cut Costs, But Do They Dilute Brands?

Jul 2, 2012
Originally published on July 3, 2012 8:15 am

The University of Virginia may have settled its most urgent controversy by reinstating President Teresa Sullivan after initially forcing her out. But still unresolved is one issue underlying her ouster: whether the university was too slow to join the stampede of schools into the world of online education.

Many other schools share the concern and wonder if the technology will live up to its hype.

Rollins College in Florida was one of the early pioneers of online learning. It's one of 16 Southern schools using technology to share courses and professors. Rollins President Lewis Duncan says it's easy to understand how neighbors may be fretting about "not keeping up with the whizzes."

"There's the old saying that for any organization when the outside world is changing faster than the inside world, you're moving backwards," Duncan says.

Add in the financial pressure on universities and their need to find new ways of doing business, and it's not hard to see how anxiousness could turn into panic. Especially with each new venture launched, such as Coursera — with Stanford, Princeton and others — and edX, a partnership between the Massachusetts Institute of Technology and Harvard.

"Certainly it got everyone's attention, and I think schools that don't try and find their place in that will be left behind," Duncan says.

While it used to be just a relative few who paid MIT tens of thousands in tuition to take Electronics 6002, today anyone in the world can take Electronics 6002X online — free.

Last semester, about 160,000 people took the course and about 7,000 of them passed.

"I like to call it flipping the funnel," says edX President Anant Agarwal.

"You know what we're doing now is expanding mission, so now, everybody has a equal opportunity to come in on the big end of the funnel," Agarwal says. "And if they can cut it, they can get a certificate at the end of it and, you know, pass the course."

New Ways For An Education

Agarwal is the first to concede that giving education away free is not a sustainable business model.

But this is just beta testing, he says. Eventually, there are lots of ways to generate revenue. For example, edX could charge for certificates, or schools could venture into career placement services and make money the way headhunters do.

"You know this is the Wild West. There's a lot of things we have to figure out," Agarwal says. "And you know if anybody says they know exactly what they're doing, I think that would be a far cry from reality."

But the frontier of digital education is also a risky place to be. Schools that go online also put their names on the line.

"You run the risk of potentially diluting your brand," says Jason Wingard, vice dean at The Wharton School of the University of Pennsylvania.

Wingard says online learning does have great potential, but it's hard for schools to offer a free, or cheaper, version of their product without undermining their customer base.

"There becomes a disconnect where the customer doesn't understand the difference. All they understand is that they're giving it away for free over here and they're charging money for it over there," Wingard says.

Many also doubt that employers will ever be as impressed by an online certificate as by a traditional college diploma.

But acceptance is growing, especially for jobs that require specific skills like computer programming. There's even a secondary market cropping up around quality control.

Jenifer Freemont Smith founded Smarterer, a company that tests and grades what a job applicant actually knows.

"There needs to be a viable third-party credentialing system that employers can trust. And once employers accept that kind of a system then people can go out and gain their skills in all of those places," Smith says.

A College Experience

Another knock against online learning is that while it may be good for students who can't afford college, it'll never compare to the on-campus experience.

But that may also change as new blended formulas develop, says Stanford professor Terry Moe.

"What you have is a mad scramble; it's a certain kind of chaos but this is a revolution," Moe says. "There's no way this isn't going to transform the way schools are organized."

Many innovations will turn out to be spectacular successes and spectacular stumbles. But edX's Agarwal says that shouldn't deter anyone.

"You know, stumbling and groping in the dark here and trying to figure things out is a good thing. And if you're not stumbling, you should be," Agarwal says.

He says the worst mistake a school could make is sitting still.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

ROBERT SIEGEL, HOST:

The University of Virginia may have settled its most urgent controversy by reinstating President Teresa Sullivan, after initially forcing her out. But one of the issues behind her ouster is still unresolved, namely whether the university was too slow to join the movement into online education.

As NPR's Tovia Smith reports, many other schools are still assessing the value of Web-based courses.

TOVIA SMITH, BYLINE: Rollins College in Florida was one of the early pioneers in online learning, as one of 16 Southern schools using technology to share courses and professors. Rollins president Lewis Duncan says it's easy to understand how neighbors may be fretting about not keeping up with the whizzes.

LEWIS DUNCAN: There is the old saying that for any organization, when outside world is changing faster than the inside world you're moving backwards.

SMITH: Add in the financial pressure on universities and their need to find new ways of doing business, and it's not hard to see how anxiousness could turn to panic, especially with each new venture launched from Coursera, with Stanford, Princeton and others, to Harvard and MIT's online giant called edX.

DUNCAN: Certainly it got everyone's attention. And I think schools that don't try and find their place in that will be left behind.

(SOUNDBITE OF A LECTURE)

UNIDENTIFIED MAN: In this sequence, we are going to look at a whole bunch of techniques for analyzing circuits...

SMITH: While it used to be just a relative few who paid MIT tens of thousands in tuition could take Electronics 6002, today anyone in the world can take Electronics 6002x online, for free.

Last semester about 160,000 did and about 7,000 passed.

DR. ANANT AGRAWAL: You know, I like to call it the flipping the funnel.

SMITH: That's edX president Anant Agrawal.

AGRAWAL: That, you know, what were doing now is expanding mission. So now, everybody has an equal opportunity to come in, in the big end of the funnel. And if they can cut it, they can get a certificate at the end of it and, you know, pass the course.

SMITH: Agarwal is the first to concede that giving education away for free is not a sustainable business model. But this is just beta testing, he says. Eventually, there are lots of ways to generate revenue. For example, edX could charge for certificates or schools could venture into career placement services, and make money the way headhunters do.

AGRAWAL: You know, this is the Wild West. There's a lot of things we have to figure out. And, you know, if anyone says they know exactly what they're doing, I think that would be a far cry from reality.

SMITH: But the frontier of digital education is also risky place to be: schools who go online also put their names on the line.

DR. JASONG WINGARD: You run risk of potentially diluting your brand.

SMITH: Jason Wingard, vice dean at the Wharton School, says online learning does have great potential. But he says it's hard for schools to offer a free or cheaper version of their product without undermining their customer base.

WINGARD: There becomes a disconnect where the customer doesn't understand the difference. All they understand is that they're giving it away for free over here and they're charging money for it over there.

SMITH: Many also doubt that employers will ever be as impressed by an online certificate as a traditional college diploma. But acceptance is growing, especially for jobs that require specific skills like computer programming. And there's even a secondary market cropping up around quality control.

Jennifer Freemont Smith founded Smarterer, a company that tests and grades what a job applicant actually knows.

JENNIFER FREEMONT SMITH: There needs to be viable third-party credentialing system that employers can trust. And once employers accept that kind of a system, then people can go out and gain their skills in all of those places.

SMITH: Another knock against online learning is that while it may be good for students who can't afford college, it'll never compare to the on-campus experience. But that may also change, as new blended formulas develop, says Stanford professor Terry Moe.

TERRY MOE: What you have is mad scramble, it's a certain kind of chaos but this is a revolution. There's no way this isn't going to transform the way schools are organized.

SMITH: Many innovations will turn out to be spectacular successes and others spectacular stumbles. But Agarwal, from edX, says that shouldn't deter anyone.

AGRAWAL: You know, fumbling and groping in the dark here, and trying to figure out is a good thing. And if you're not stumbling, you should be.

SMITH: Agarwal says, the worst mistake a school could make is sitting still.

Tovia Smith, NPR News. Transcript provided by NPR, Copyright NPR.