The Online Course Tsunami (2)

In my first post on this topic, I raised the question of how we might assess student learning in the online environment — at least in history education. Today I want to raise the question of the possible economic impact of the online course tsunami on the traditional institutions of higher education.

This topic is not a new one for me. Way back in 2008 I raised the issue of what technological disintermediation might do to our universities and reprised it earlier this year. In that reprise, I wondered if we might be heading toward a university business model that Milo Minderbinder would find quite congenial? That is, a model where we lose money on every transaction, but it doesn’t matter, because everyone owns a share.

In that reprise post, I staked out my admittedly naive position on the issue of economic models. Today I want to let real experts, such as my colleague here at George Mason, Tyler Cowen, explain the economics of the possible online/hybrid/analog future facing higher education. What the economists understand much better than I is how to propose analytical models that might explain how the future will unfold as the online tsunami gathers strength.

I particularly appreciated a blog post by Bryan Caplan who lays out three possible models for predicting the impact of online education on bricks and mortar institutions and an addendum by Tyler Cowen offering a fourth model. Also worth reading is a post by Arnold Kling who offers some useful perspective on the comparative advantages of hybrid models over standard face-to-face or online only models of course delivery. I think every university president should read these three posts carefully, because, to my mind anyway, they not only lay out the parameters of the real (as opposed to hyped) landscape of the future of online education and how the traditional institutions may or may not thrive in that environment.

To say that the future is unclear is to significantly understate the matter.

And then there is my alma mater, the University of Virginia. Anyone paying any attention to higher education over the past few months knows that one of the key issues in the dispute between the Rector and the president of the university was the speed with which UVa was (or wasn’t) establishing itself as a player in online education. The university announced today that it had signed on with Coursera, one of the several big players in the online education space.

Which of Caplan’s models, I wonder, do the leaders at UVa (and elsewhere) think will prevail? Is it the Human Capital model? If so, they are signing their own death warrants. Is it the Status Good model? If so, they are admitting that the reason they exist is to teach marketable skills, something universities like UVa have resisted for decades. Is it the Signaling model? If so, they are throwing good money after bad. Or, is it, as I suspect, Cowen’s Hybrid model that they are betting on?

If that is the case, and the online course tsunami leaves in its wake a lot of institutions using some sort of online/hybrid delivery to teach the first years of the college curriculum, then get ready for a radical restructuring of the academic labor force and the landscape of graduate education at second and third tier colleges and universities.

If general education is to be delivered through whatever means (online only/hybrid) seems most cost effective and/or universities opt for a competency model such as I proposed in those long ago posts on the free economy and higher education, then we will eliminate the need for large numbers of junior and/or contingent faculty, because our students will be able to present credentials that demonstrate their mastery of what is currently called general education. Someone, somewhere, will be making money on these courses or course-like options.

Who won’t be making much money on such courses are institutions like George Mason. Why not? Because if a prospective student opts to pursue her general education through a company such as Coursera, what are the odds she’ll select an introductory mathematics or history course from Mason over one from Stanford, Harvard, MIT, or UVa? Close to zero is what I suspect. Brands will out in this space, and institutions such as Mason can’t possibly compete on that playing field.

So, at a place like ours, if the cross-subsidy model proposed by Chris Anderson in Free back in 2008 is the one that prevails, institutions like mine should prepare for a radical downsizing of our faculty ranks over the next two decades.

And, at tuition-driven places like Mason where those big intro courses provide the revenue that supports those tiny courses for doctoral students, we should also prepare for a radical downsizing of our graduate programs.

Will that be a bad thing?

Just ask a travel agent…if you can find one.

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7 Responses to The Online Course Tsunami (2)

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  3. Jay says:

    I didn’t get a PhD in history last year so that I could teach online or work as an impoverished adjunct while administrators multiply in numbers and their salaries balloon. I see the writing on the wall, and I’m leaving academia. Someone with fewer scruples than I have can help the customers get their job tickets.

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