Online Classes Cut Costs, But Do They Dilute Brands?

Universities are delving into online education as a way to cut costs and take in more students. But questions remain as to whether online teaching will bring the same kind of education to students. i i

hide captionUniversities are delving into online education as a way to cut costs and take in more students. But questions remain as to whether online teaching will bring the same kind of education to students.

Sean Gallup/Getty Images
Universities are delving into online education as a way to cut costs and take in more students. But questions remain as to whether online teaching will bring the same kind of education to students.

Universities are delving into online education as a way to cut costs and take in more students. But questions remain as to whether online teaching will bring the same kind of education to students.

Sean Gallup/Getty Images

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.

Recently reinstated University of Virginia President Teresa Sullivan came under fire for failing to move fast enough into online education. i i

hide captionRecently reinstated University of Virginia President Teresa Sullivan came under fire for failing to move fast enough into online education.

Steve Helber/AP
Recently reinstated University of Virginia President Teresa Sullivan came under fire for failing to move fast enough into online education.

Recently reinstated University of Virginia President Teresa Sullivan came under fire for failing to move fast enough into online education.

Steve Helber/AP

"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.

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