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Online course start-ups offer virtually free college

By Jon Marcus,

An emerging group of entrepreneurs with influential backing is seeking to lower the cost of higher education from as much as tens of thousands of dollars a year to nearly nothing.

These new arrivals are harnessing the Internet to offer online courses, which isn’t new. But their classes are free, or almost free. Most traditional universities have refused to award academic credit for such online studies.

Now the start-ups are discovering a way around that monopoly, by inventing credentials that “graduates” can take directly to employers instead of university degrees.

“If I were the universities, I might be a little nervous,” said Alana Harrington, director of Saylor.
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, a nonprofit organization based in the District. Established by entrepreneur Michael Saylor, it offers 200 free online college courses in 12 majors.

Another nonprofit initiative is Peer-to-Peer University, based in California. Known as P2PU, it offers free online courses and is supported by the Hewlett Foundation and Mozilla, the company behind the Firefox Web browser.

A third is University of the People, also based in California, which offers more than 40 online courses. It charges students a one-time $10 to $50 application fee. Among its backers is the Clinton Global Initiative.

The content these providers supply comes from top universities, including the Massachusetts Institute of Technology, the University of California at Berkeley, Tufts University and the University of Michigan. Those are among about 250 institutions worldwide that have put a collective 15,000 courses online in what has become known as the open-courseware movement.

The universities aim to widen access to course content for prospective students and others. At MIT, a pioneer of open courseware, half of incoming freshmen report that they’ve looked at MIT online courses and a third say it influenced their decision to go there.

But the material, which includes videos of lectures, can also be scooped up by others and organized into catalogues of free courses.

Some providers develop their own content. StraighterLine, a Baltimore for-profit company, charges students $99 a month plus a $39 registration fee for each of more than 30 online courses.

These start-ups have a tiny share of a fast-growing online market. An estimated 6.1  million students a year pay for online courses from traditional or for-profit universities.

By contrast, University of the People has registered 1,100 students in two years. StraighterLine says it enrolled 4,000 in the past two years. Saylor.org doesn’t have a count of how many students take its courses; P2PU says that about 25,000 users have opened accounts on its Web site since 2009 but that there is no tally of how many have finished courses.

Still, analysts say the notion of free or very low-cost online college is gaining attention from students who often must borrow heavily to pay spiraling tuition costs at traditional schools.

“Maybe these upstarts don’t have all the bells and whistles of the beautiful campuses. But people are deciding it’s not worth paying for that,” said Michael Horn, director for education at the Innosight Institute, a nonprofit think tank.

To be sure, similar arguments are advanced in favor of community college as a proven, low-cost path toward a degree.

Some students who complete courses through the new online-only providers are able to win credit from conventional colleges. Albany State University in Georgia, for instance, encourages incoming students to take StraighterLine courses to build credits toward a degree.

Still, most conventional colleges and universities refuse to accept transfer credits from these programs. Universities say that they can’t always judge the quality of courses offered by others and that reading online content alone, or even watching lectures, is not the same as attending class in person.

“Libraries are free, too,” says Carol Geary Schneider, president of the Association of American Colleges and Universities. “You can roam around, read books and study. But hardly anyone would say that spending time in the library is a good preparation to work in any economy, much less this one.”

Denial of credits means that students who want a degree from a conventional university often find that they must retake certain courses — and pay for them.

“The last thing universities have to protect themselves is this withholding of academic credit,” said Philipp Schmidt, co-founder and director of P2PU. He contended that conventional schools simply want to prevent competition. “It’s not about a deep concern for the interests of the students. It’s about a deep concern for the interests of the institutions.”

Debbie Arthur of Kingsport, Tenn., who has taken courses from StraighterLine, said many classes at conventional universities are no more personal than the ones online.

“The Pollyanna version of college is that you’re learning and discussing things with your professors,” Arthur said. “The reality is that you have 450 kids in an auditorium listening to a teaching assistant.”

Some free-content providers are devising new credentials in lieu of credits or degrees. Saylor.org, for instance, next month will introduce an “electronic portfolio,” more detailed than a college transcript, that students can show employers.

The John D. and Catherine T. MacArthur Foundation is running a $2 million competition to design digital “badges” that can be used instead of university degrees to prove a job candidate’s experience and knowledge to employers. P2PU and Saylor are experimenting with such badges for students to show they have completed courses.

This spring, MIT will begin offering certificates of completion to anyone who successfully finishes courses the university makes available free online. There will be a small fee for certificates in this project, known as MITx.

Meanwhile, some businesses that offer tuition reimbursement to employees are becoming interested in the free- and low-cost education providers.

CompuCom, a Dallas information technology company with 5,000 employees, has begun to work with StraighterLine. Burck Smith, chief executive of StraighterLine, said such partnerships mean “colleges that want these students later will have to accept StraighterLine credits.”

Ed Rankin, who oversees CompuCom’s tuition reimbursement, said “there’s no question” other companies will follow suit.

“If there is a way to lower the price of higher education, you can’t stand there for long and say, ‘I’ll resist this and prevent it from happening,’ ” said Shai Reshef, founder and president of University of the People. “Maybe it will be a harder road than it needs to be. But it will happen.”

This story was produced by the Hechinger Report, a nonprofit, nonpartisan education news outlet based at Teachers College, Columbia University.

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