New Arizona State-edX MOOC: Another blow to traditional college

In late April Arizona State University (ASU), in partnership with edX – the Massive Open Online Course (MOOC) provider launched in 2012 by Harvard and MIT – announced it will offer MOOCs for credit this Fall. The cost for each course will be no more than $200 per credit hour or less than half the amount ASU charges for its regular online or in-person courses. If a student is not concerned about getting credit, the courses, like most MOOCs, will be free.

Called the Global Freshman Academy, this is another important step in the revolution that is engulfing higher education. Recently Google and MOOC pioneer Coursera announced “microdegrees”, a set of online courses and a hands-on project that will essentially be the core of a low-cost degree major that will be accepted by top employers. Now ASU and edX is aiming at the package of general course requirements, enabling students to assemble an accredited set of mainly first-year classes to use at ASU or to gain credits that they can transfer to another college or university.

The Global Freshman Academy is a boon to students and an existential threat to traditional state and private universities. Here’s why:

• The credit for these MOOC courses will be indistinguishable from traditional courses – except for the price. ASU not only will accredit the courses but also will not specify in course transcripts which type of course the student enrolled in – in-person or MOOC. By piggybacking on the regular credit hour system in this way, these low-cost transferable courses will add to the “unbundling” of higher education by making it harder for colleges to charge hefty prices for heavily enrolled first year classes to cross-subsidize expensive upper-level courses.

• Students can wait until they complete a course before paying for credit. Students do not have to pay for course credits until they have finished the class and received their final grades. In a sense the student receives a warranty. Just taking the course for fun is free. If the student is interested in taking it for credit, he or she pays $45 to verify their identity during exams and assignments. Only after receiving a grade does the student decide whether or not to pay the fee to ASU for official credit. So if ASU and edX do not deliver courses with the quality of instruction and level of interest needed for students to do well, the student does not have to pay for credit.

• ASU-edX courses and low-cost microdegrees are a pincer movement against the traditional four-year degree. The combination of a for-credit transferable MOOC freshman year and the core classes offered by partnerships like Google and Coursera strike at the heart of the traditional university business model. Increasingly, universities will have to come to terms with these innovations by such strategies as altering their entire course pricing structure, concentrating on their core competencies, and perhaps restructure themselves as two-year institutions that contract out the rest of their degree requirements to other providers. If they don’t, they could soon be out of business.

The ASU-edX partnership is interesting in another way. Unlike the recent small “upstart” innovators that have been shaking up higher education, such as Southern New Hampshire University, this partnership is a strange-bedfellows example of how large universities can respond to the challenge of disruptive innovation. ASU is a major public university that has already smelled the coffee – teaming up with Starbucks to offer degrees for the company’s employees – while edX is a venture developed by two of America’s most prestigious institutions (Harvard and MIT). Expect more unusual partnerships like this in these turbulent times for American higher education.