MOOCs: Corporate welfare for credit

We know Big Pharma, Big Oil and Big Food. Get ready for Big Ed

Published October 28, 2013 11:43AM (EDT)

The New York Times declared 2012 to be the Year of the MOOC, enthusiastically adopting venture capitalist argot advocating “disruption” and “starting the revolution that has higher education gasping.” Thomas Friedman referred to Massive Open Online Courses (MOOCs) as a “revolution” nine times in three separate columns.

The Chronicle of Higher Education, less pithily, has issued the "Infinite Jest"-like imperative “Call it the year of the mega-class.” A Chronicle survey of professors who had taught MOOCs (which admitted that its sample was “stacked with true believers” in digital learning) found that 79 percent of instructors “believe MOOCs are worth the hype.”

This euphoria feels familiar, and for good reason. For all the hype about innovation and disruption, the MOOC providers -- for-profit companies such as Coursera and Udacity -- are following a previously beaten path, one laid out by earlier proponents of for-profit education in the charter school reform movement.

The plan is simple. First, declare a crisis in education that doesn’t actually exist. Second, declare that a for-profit model can fix the crisis. (This is easy when you get to invent the particular calamity.) Third, rather than starting small and building empirical support from experts in the field, seek sweeping legislative changes that lock your position into the system.

The “crisis” in higher education

In December of 2011, the New York Times gave Op-Ed space to Stanford professor Daphne Koller, complete with a fawning four-color Shepard Fairey-style portrait of the author, who declared that “[o]ur education system is in a state of crisis ... The high costs of high-quality education put it off limits to large parts of the population, both in the United States and abroad, and threaten the school’s place in society as a whole. We need to significantly reduce those costs while at the same time improving quality.” Introducing Koller only as “a professor in the Stanford Artificial Intelligence Laboratory,” the article gave us no hint that she might have a personal stake in the issue. Five months later, with co-founder Andrew Ng, she would launch Coursera, a MOOC provider much loved by venture capitalists, presumably for its profit potential.

“Education is really in a crisis,” Udacity founder Sebastian Thrun told Smithsonian magazine in December 2012. “With Udacity, he says, he also wants to make education accessible to people with jobs, kids, mortgages,” the article noted.

Thrun and Koller are right about one thing -- there is a crisis. Just not the one suggested by MOOC advocates. Their crucial contention is that access to higher education in this country is critically insufficient. But college enrollment in the U.S. hit an all-time high in 2009, when 70.1 percent of those who finished high school were enrolled in college by the fall of that year. The U.S.’ Gross Enrollment Ratio (the number of students enrolled in tertiary education divided by the number of 18-23-year-olds) was 95 percent in 2010 (the last year figures were available), tied with Cuba and second only to Korea among world nations.

The crisis in U.S. higher education is not a crisis of access -- it’s one of retention. More U.S. students than ever before are starting college. The problem is that our students aren’t finishing college. Six-year graduation rates vary from 51 percent at private institutions, all the way down to 21 percent at state schools. This is the real crisis, and it is one that MOOCs are singularly ill-equipped to address. Coursera MOOCs offered without academic credit face a 90 percent attrition rate (with more than half the students dropping out before the first assignment). Those offered for credit in San Jose State University's partnership with Udacity saw a much better completion rate of 83 percent. Unfortunately, 56-76 percent of students failed the classes. As a result, San Jose State's contract with Udacity was abruptly canceled. Overall, the average MOOC completion rate is under 7 percent.

What MOOCs learned from charters

The MOOC makers seem blithely indifferent to these kinds of criticisms, because their charter school-inspired strategy does not attempt to build a base of empirically backed support among experts in the field. Instead, the plan says: After you've created a crisis, lobby federal and state policymakers to legally install you as the solution.

The charter school movement’s Magna Carta was the No Child Left Behind Act of 2001, a bipartisan bill authored by Democrats George Miller and Ted Kennedy and Republicans Judd Gregg and John Boehner, that forced schools to administer yearly competency exams as a condition of continued funding. Progressives were attracted to the promise of efficacy and egalitarianism. Conservatives were attracted to the idea of smashing teachers’ unions, long a bastion of Democratic power, and funneling money into the for-profit sector.

Years before Koller and Thrun won favorable press from the Times and the Chronicle, promising to “significantly reduce those costs while at the same time improving quality,” the charter reformers had laid out the template, promising better test scores for less money by destroying unions, the new villainous face of educational mediocrity. The grass-roots lobbying phase of this movement would reach its apotheosis in the documentary "Waiting for Superman" and the Hollywood pablum "Won’t Back Down," both funded by evangelical billionaire Philip Anschutz, Fortune magazine’s 2002 “Greediest Executive,” who previously backed campaigns to overturn anti-discrimination laws in Colorado and promote intelligent design in schools.

Having laid a foundation of publicity, the charter movement again succeeded in politically locking in profits. The Obama administration’s 2009 Race to the Top proposals, as noted by education historian Diane Ravitch in "Reign of Error: The Hoax of the Privatization Movement and the Danger to America’s Public Schools," accepted the same premise as No Child Left Behind. “[T]hat charter schools and school choice were necessary reforms; that standardized testing was the best way to measure the progress of students and the quality of their teachers, principals, and schools; and that competition among schools would improve them ... By picking a few winners, the Race to the Top competition abandoned the traditional idea of equality of educational opportunity, where federal aid favored districts and schools that enrolled students with the highest needs.”

And how are charter schools performing?  Seventeen percent performed better than public schools, 37 percent did worse, and 46 percent did no better than a similar public school. In public schools nationwide, there were massive cheating scandals (brought on by testing-based funding) in Atlanta and Washington, D.C. An investigation by the Atlanta Journal-Constitution found “suspect scores” in 196 school districts across the country.

As Ravitch notes, Race to the Top “was the first time in history that the US Department of Education designed programs with the intent of stimulating private sector investors to create for-profit ventures in American education.”

But the MOOC makers hope there will be a second time, and, following the charter movement's playbook, have been busy lobbying for that outcome. Although a California bill that would force state colleges to grant academic credit for MOOCs has been shelved, the Obama administration has announced a similar plan for higher education. Titled “A Better Bargain for the Middle Class,” the White House plan is to “[t]ie financial aid to college performance” and “[c]hallenge states to fund public colleges based on public performance.” MOOCs are specifically mentioned three times and Coursera is singled out for its “median response times for questions posed by students.” (Which is 22 minutes, as opposed to an actual classroom, where questions tend to be answered immediately.) “Entrepreneurs” are mentioned twice. (The phrase “datapolooza” is, mercifully, used only once.) Despite having no empirical evidence that this sort of competition-based funding benefits anyone other than for-profit education companies, this notion has become gospel, no doubt in part due to the White House’s willingness to hold meetings with Koller, Thrun, and Anant Agarwal, president of EdX, the nonprofit joint MOOC venture from Harvard and MIT.

The brass ring for these start-ups is public policy conferring college credit on MOOCs. When that happens, their services will have a government-mandated price point and the profit potential for MOOCs -- with their low costs, near infinite scalability and tens of thousands of tuition-paying students per course -- is staggering. The concern is that underfunded colleges, in this age of austerity, will be especially tempted by the revenue-generating power of MOOCs. The result could be a redoubling of the inequalities already so acute in higher education, with affluent and talented students in flagship state schools or prestigious private schools, receiving a classroom education, with its proven track record. Meanwhile, low-income students in community or second-tier state or private colleges get MOOCs, with their also-proven track record, which is not so good.

In sum, MOOCs are aping the way of the charter movement -- use the media access of major investors to create a crisis that your product is designed to solve, then use their political leverage to secure a legally privileged place in the system.

How to address the real crisis

So the bad news is that higher education does have a crisis -- not one of initial access, but of retention -- and it is not a crisis that will be solved by MOOCs.

The good news is that we know a great deal about retention, including how to achieve it. What's lacking is not the way so much as the will to solve this problem. Here's what we know: Given the rapidly escalating cost of higher education, it's not surprising that staying in school is primarily a problem for low-income students. Tuition costs have ballooned by a gob-smacking 1,200 percent since 1978 -- five times faster than the Consumer Price Index and dwarfing even the increases in the cost of healthcare, gasoline and housing.

Of course, there is financial aid to help meet these costs. But here, too, higher education has shortchanged the neediest the most. The dirty little secret of college financial aid is that too much of it goes to students who don't need it, leaving too little for those who do. Admissions offices have an Orwellian name for the cruel trick played on many low-income students. It's called "admit/deny": The applicant is admitted to the college, but denied the financial aid needed to make a go of it.

This practice is also called "gapping," and the biggest gaps between need and aid fall on the poorest families -- those least able to bridge those gaps. After the financial aid office has presented her with a package of grants, work study and loans, the average low-income, first-generation college student is left with over $3,500 in "unmet need"-- need that, the FAFSA form shows, her family cannot pay. Some students manage to squeeze the necessary blood from a stone -- from an aunt or a grandparent or a bank -- for the first semester or year, but can't replicate the feat after that.

Meanwhile, those students who are neither low-income nor first-generation are also being aided -- to the extent that their "gap" is a negative number. Once their financial aid package is added to the family's contribution, they have an average $7,300 surplus -- $7,300 more than they need to attend college.

Facing these financial hurdles, higher than those of more affluent students, it's no surprise that low-income students don't usually make it to the finish line. For low-income, first-generation students enrolled in four-year colleges, the completion rate within six years is 31.6 percent. The comparable figure for non-low-income, non-first-generation students is 71.2 percent.

Again, this retention gap is the bad news. The good news is that, as repeated studies and best practices have shown, increased aid -- sometimes even in small increments -- increases graduation rates. By the 1990s, a large federal study found that providing an additional $1,000 per semester lowered dropout rates by 7 percent-- with even stronger results for African-American and Hispanic students. Another study, by the National Bureau of Economic Research, found that increased financial aid directly and by itself improved retention among Canadian students.

Florida State University and the University of Alabama have focused their retention efforts on African-American and Hispanic students, whose graduation rate nationally is 20 points lower than that of white students. The result has been astonishing: graduation rates of black students at the University of Alabama are now higher than those of white students.

What's more, providing additional aid to needy students does not have to exhaust colleges’ financial resources. Georgia State University found, in fact, that it was a revenue enhancer for them. Provost Timothy M. Renick mined some data to discover that providing mini-grants of less than $1,000 to students who would otherwise be dropped for non-payment of fees was often enough to sustain them -- and the fees they were able to pay. Even as a pilot program, the grants generated $660,000 in what would otherwise have been lost revenue.

The other half of retention and the paradox of MOOCs

Of course, there's more to retention than just financial aid. Low-income students are likely to arrive at college with less cultural capital than their peers. For that reason, the sources we've reviewed suggest that a combination of targeted financial aid, together with remedial and tutoring programs, is the optimal stay-in-school program. But of course, these remedial and tutoring programs are the very things MOOCs are ill-equipped to provide. In fact, one study that asked what works in preventing online dropouts came to the rueful conclusion that the answer is, "Nothing."

The first paradox of MOOCs we encountered was that they are designed to meet a crisis that doesn't exist. And now we've met MOOCs' second paradox: that the at-risk students they propose to serve are the ones most unprepared to benefit from online education. A recent Inside Higher Ed report confirms that at-risk students in particular do worse in online classes, quoting educational consultant Michael Feldstein: "If we know that at-risk students don’t tend to do well in online courses, you can’t just wish away that problem."

The Silicon Valley gospel of “innovation” and “disruption” may work very well for driving stock prices and attracting investors, but is it not a panacea for our nation’s most vulnerable students. Americans are familiar with increasingly concentrated capital, wielding disproportionate power in our political economy. We’ve met Big Oil, Big Pharma and Big Banks. With the arrival of charter schools and now MOOCs, we are about to meet Big Ed.

By Christian Exoo

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College Diane Ravitch Education Internet Internet Culture Mooc Online Courses Philip Anschutz University