Friday, December 27, 2013

How to Obliterate the Cost of College

A competent financial advisor may be able to save their clients tens of thousands of dollars in college expenses through a fairly straightforward understanding of merit-based scholarships, which we recently wrote about.

But it bears mentioning that an emerging trend would allow consumers of higher education to save hundreds of thousands of dollars, and advisors would be remiss if they were not fully briefed on the rapid changes taking place in online education.

Want a Stanford education without the $59,000 a year price tag? The growth in massive open online courses (MOOCs) now makes that possible.

Of course, you don’t get the on-campus experience with all that that entails—close interaction with teachers and fellow students for some, parties and football games for others—but the ability to learn from world-class experts is now widely available.

More available perhaps than many would think. While many have heard of MOOCs, few probably appreciate how explosive their growth has been.

Dhawal Shah, who while taking one of the first MOOCs from Stanford in 2011, founded Class Central as means of keeping track of the continually expanding menu of online courses, has recently tabulated where we stand two years into the MOOC experience. (Although a Stanford MOOC attracting 160,000 registrants galvanized public attention in 2011, some say the first MOOC, or a precursor MOOC, launched as early as 2006-07).

In an article written for education technology publication EdSurge, Shah summarizes MOOCs’ rapid progress: “200+ universities. 1200+ courses. 1300+ instructors. 10 million students.”

With 10 million students, why are Americans seemingly less cognizant of the MOOC phenomenon? Consistent data on MOOC demographics is hard to come by, but the single example of the University of Wisconsin—Madison is instructive. Only 23% of participants in its four MOOCs are from the U.S. The rest come from 19 other countries, including Brazil and India.

There are critics of MOOCs, with some preliminary studies suggesting that there are higher dropout rates among MOOC students, who also get lower grades than students in conventional brick-and-mortar colleges and universities.

As for online courses, aptly named start-up Coursera, founded by two Stanford professors, dominates the market, with nearly half of all MOOCs (47%). edX, which MIT and Harvard launched before U.C. Berkeley and 26 other institutions joined, has 8.3% of the market, followed by third-place udacity (with 2.8% of the market), whose founders taught the wildly popular Stanford class on artificial intelligence in 2011.

In terms of content, while MOOCs have been largely identified with computer science and engineering, Shah reports that swelling enrollment in humanities MOOCs has made that the largest segment, accounting for 20% of MOOCs, followed by computer science and programming (16%) and business and management (15%).

With all the potential advantages MOOCs offer—predominantly free online college-level courses in a wide and growing range of subjects often taught by renowned experts (the “Ivy League for the masses,” as Time put it)—one  key drawback has been that they do not, as a group, meet the demand for college degrees.

That shortcoming may become of less and less consequence as the high cost of college together with growing awareness of its educational inadequacy inspire a greater openness to MOOCs. In an op-ed in Friday’s Wall Street Journal called “We Pretend to Teach, They Pretend to Learn,” one professor laments the credentialist motives of the mass of students whose lack of preparedness he says is being noticed by employers.

Nevertheless, Shah, in his article, says that credentialing may be the big MOOC development of 2014. Many MOOCs are already offering certificates of course completion, but Georgia Tech and Udacity’s online master’s degree in computer science doubtless suggests that more economical degrees will be part of the near future. And at just $7,000 for a master’s degree, financial advisors can now suggest ways to obliterate most of the current cost of college.

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