Competing with “Free,” Part One



If credits are available for free, what will colleges sell?

This is becoming a lot less hypothetical than it was even a few months ago. The MIT/Harvard MOOC provider edX has signed an agreement with Pearson to allow students who are taking the free online courses to have exams proctored. The next step, obviously, is credit. Already, the Saylor Foundation is allowing students who take free online courses to take exams for credit at Excelsior College. As the “credit for prior learning” movement gains traction, it will be progressively easier for students not only to learn in nontraditional ways, but to accumulate credits for what they’ve learned.

Right now, the arrangements are still nascent, the MOOCs available relatively few, and the routes to transcripted credit scarce. But they exist, which is more than was true even a few months ago. And the momentum is clear. Coursera and edX — not to mention iTunes — offer prospective students access to well-presented content, and people are starting to develop methods to turn that knowledge into credits. Bundle enough credits in the right combination, and you have a degree.

(I know it isn’t as simple as that, but many of the barriers to it strike me as wobbly.)

The prospect of MOOC-derived credits comes at the same time that states are pushing “stackable” non-credit-to-credit certificates as part of workforce development, and at the same time that CAEL is gaining traction for providing a systematic way to assess the content knowledge of people who’ve picked things up along the way. MOOCs offer a new method to pick things up along the way.

A few months ago, I was much less worried about MOOCs. They just didn’t seem relevant at the community college level. And at this point, most of them still aren’t. But some of the institutional barriers they were up against have already fallen, and in record time. As MOOCs proliferate, and people start to notice them, colleges will face an entirely new form of competitor.

MOOCs get around Baumol’s cost disease, because they aren’t based on seat time. The marginal cost of another student is shockingly close to zero. Yes, colleges now usually have residency requirements — that is, ceilings on the number of transfer credits that can comprise a degree from them before it isn’t from them anymore — but I can see the pressure building. And even with current residency requirements, very few students bump up against the limits. If large numbers of students start doing that, the economic impact on the colleges themselves could be devastating.

The traditional college model was based on scarcity. In the earliest days, books were scarce, so lectures consisted of someone reading from the only book around. (That’s why some places still call lectures “recitations.”) Later, books were common, but colleges provided both help interpreting them and valuable connections. When that was true, the way to provide more access to college was to build more colleges. In the 1960’s alone, the U.S. added almost 500 community colleges — a rate of nearly one per week. It has built less than half that many in the forty-plus years since, which goes a long way towards explaining the academic job market since 1970.

When the public sector stopped growing, the private sector picked up the slack, and for-profit providers become the engines of growth. The last statistic I saw had nearly 1 in 9 undergraduates in America at for-profit colleges or universities. The for-profits tweaked the non-profit model in ways both good and bad, but they, too, were based on a scarcity model.

As academic bloggers well know, the scarcity model has been harder to uphold since the building boom stopped. The trend towards adjunct faculty is only possible because capable people really aren’t all that scarce. Now the internet is making possible a dissemination of information at a level beyond what even the most ambitious entrepreneur could have imagined just a few years ago. When it comes to access, after all, “free” is a magic word.

At this point, if they are to survive, colleges need to figure out how to adapt to a world in which its former stock-in-trade — classes for credit — can be had anywhere, at any time, by anyone, for free. Tomorrow I’ll explore some possible adaptations.