Much of the talk about online education over the past year has been dominated by Massive Open Online Courses (MOOCs). In just a little more than a year, MOOC providers like Coursera have attracted more than 2 million students to 200 courses from several dozen university partners.
If you take a look at the list of universities that have partnered with Coursera, it reads like a Who’s Who of higher education, with many of the wealthiest and most elite universities offering their courses to the masses for free.
Compare that list to this one of the top 50 online colleges by enrollment just released by Eduventures. Seven of the top 10 are for-profit providers. The rest of the list has lots of other for-profit providers and a bunch of universities without a stake in the current MOOC movement. They, of course, are charging for their online courses, sometimes just as much as comparable courses on campuses.
The brand-name elites are giving away their product for free, while the down-market, generic names are charging premium prices. In any other sector of the economy, this pricing model wouldn’t make sense and probably wouldn’t work. It would be like Toyota charging more for its basic model than for its top Lexus vehicle.
That’s why this current model is unlikely to last. The race toward zero is going to impact the established players in the online market, especially those without a household name. Sure the MOOCs don’t offer credit or degrees right now, but over time they will figure out a business model to do both and that price point is sure to be much lower than the going rates for online degrees today.
Photo Credit: Jeff Chiu/AP