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The Next Economy | Solutions Bank

How Online Education Saves Everyone Money

Online learning isn’t just another path into the middle class. It’s also a way for the government to spend more wisely.

Peter Struck, Associate Professor of Classical Studies at the University of Pennsylvania, records a lecture by Struck on Greek Mythology in Philadelphia, Nov. 15, 2012.(AP Photo/Matt Slocum)

Three times a week, 15 weeks a semester, you can expect to see Sandra DeSousa teaching a room of 150 to 250 students the math they should have learned in high school. The adjunct professor at San Jose State University has another 100 students under her charge this spring, but she rarely sees them face-to-face.

In January, the California university entered into a partnership with Udacity, a Palo Alto-based company that specializes in providing free online courses, to develop entry-level classes in mathematics. Any student, not only those enrolled at San Jose State, can take one of the courses for academic credit. The university has its own separate online offerings, but a three-unit course can cost $1,050. The programs developed with Udacity were priced at $150.

What’s happening at 30,000-student San Jose State, the oldest public university in the West, reflects the pressures facing higher education across the country. Like other state-run schools, it is expected to provide access to as many students as possible. But in the wake of the Great Recession, taxpayers and tuition-payers are struggling to foot the bill. Deficit-ridden California has cut spending per student on higher education almost 30 percent since 2008, according to the Center on Budget and Policy Priorities, and tuition at the state’s public four-year colleges has risen 72 percent. Not surprisingly, students have found it ever-harder to obtain the diploma that’s become almost a requirement for jobs that assure a middle-class life.

 

Education reformers see a remedy in Internet-based tools, which they say can help more students earn college degrees at a lower cost to themselves, their families, and the government. California legislators, hoping to hurry the process, are considering legislation that would require public colleges and universities to give credit for faculty-approved online courses. Those could include some of Uda-city’s free offerings.

Online education isn’t new. But the latest technological wave could shake up traditional modes of instruction—on-screen and off—and change the way brick-and-mortar universities operate. “I really do feel like this is going to erupt in a way that is helpful to students,” said Michelle Rhee-Weise, a senior research fellow in education at the Innosight Institute, a nonpartisan think tank. San Jose State’s partnership with Udacity could be the first tremor.

A SAFETY VALVE

San Jose State has already complemented its standard offerings with Internet-based courses that on-campus students can take for credit and with degrees that can be earned entirely online, ranging from a master’s in public health to a graduate certificate in online business analytics. More than 90 percent of public colleges already offered online courses a decade ago, according to the Babson Survey Research Group. But enrollment has soared. By 2011, 32 percent of students enrolled in a degree-granting institution were taking at least one course online.

Multiple factors are driving this shift. For starters, technology has enabled high-quality video and interactive software. Another major motivator is cost. During the past decade, the price of an undergraduate education (tuition, room, and board) leaped by 31 percent at private schools and by 42 percent at public institutions, according to federal-government figures. Seventy percent more students took out loans, the Federal Reserve Bank of New York found, borrowing an average of 70 percent more money. Even at public institutions, historically able to offer an affordable education, tuition has risen uncomfortably high as state and local funding has shrunk by 21 percent per pupil over the past 10 years.

Infographic

State governments see online programs as something of a safety valve, allowing them to serve more students without raising taxes, said Michael McPherson, president of the Chicago-based Spencer Foundation, which finances education research. The potential for savings prompted a group of governors in the late 1990s to create the Western Governors University, an all-online institution that now serves 38,000 students, mainly working adults looking to advance their careers.

Cash-strapped schools have used online degree programs to subsidize on-campus student services or to expand the capacity of oversubscribed classes. But until recently, online education lacked the academic prestige or a critical mass of innovators to prove that its tools are more than just a safety valve and that they can fundamentally improve the way colleges teach.

“The fact that Stanford and Harvard and MIT and others have gotten into the game has sort of changed the equation,” said Jamie Merisotis, president of the Lumina Foundation, which encourages access to higher education. Big-name schools have spent millions of dollars developing educational software and publishing lectures and course materials—known as Massive Open Online Courses—available to anyone on the Internet. Colleges as varied as Bryn Mawr and the University of California (Berkeley) are blending online materials with classroom instruction. Online learning, Merisotis said, “started off on the margins, and now it’s moving towards the center.”

THE NEW ONLINE

The so-called MOOCs offered by elite colleges have attracted a lot of attention, but they won’t change higher education unless institutions use them in classes or accept them for credit. San Jose State is trying to do both.

Last fall, 83 entry-level students in electrical engineering headed home after class not to read a textbook but to watch “Circuits and Electronics: Introduction to the Lumped Circuit Abstraction,” a lecture course taught by MIT professor Anant Agarwal, who founded edX, MIT’s venture with Harvard to offer online education. Students spent their class time working in small groups, with the instructor and teaching assistant on hand to answer questions. Ninety percent of the students passed the class, compared with as few as 60 percent in past semesters. By emphasizing collaboration and freeing up class time for critical thinking, proponents say, these “flipped classes” prepare students better for 21st-century jobs. EdX and San Jose State recently announced a plan to expand the “flipped” model of Agarwal’s class to as many as 11 other California State University campuses, and the university also expects to offer other blended edX courses.

While the edX collaboration hopes to improve students’ performance, the Udacity partnership focuses on reducing costs while maintaining the quality of education. The courses, which San Jose State professors helped to develop, interweave video, activities, and tests, and use social media to connect students with faculty. “A student told me that it was like sitting and working with a private tutor, ” said Susan McClory, the university’s director of developmental studies. Through the first midterms, Udacity reports, online students taking algebra and statistics performed as well overall as their off-line peers.

Still, there are drawbacks to going entirely online, adjunct professor DeSousa says. Without face-to-face interaction, students can be harder to corral. Some missed the midterm, she said, because they hadn’t read her e-mails. “It’s all really about the student’s attention span.”

At Arizona State University, senior lecturer Irene Bloom has had more success than DeSousa using Web-based technology to help students in remedial math. Her students brush up on their skills with Knewton Math Readiness, an adaptive-learning course that uses complex algorithms to individualize education. As students interact with activities and quizzes, they demonstrate which concepts they’ve mastered and what they need to learn next. They proceed at their own pace, not by following a predetermined syllabus.

When Bloom’s class meets—in a computer lab, twice a week—she roams with an iPad, seeking out students whom her online “dashboard” tells her are struggling. “Rather than lecturing to 60 students about something that five students need, I’m lecturing to the five students who need it,” she says. This year, 2,000 of Arizona State’s 72,000 students worked their way through the Knewton course. Pass rates rose from 64 percent to 75 percent, withdrawal rates dropped in half, and some students moved through the material so fast they completed the course a month early, according to Knewton. The university, impressed with the results, is developing Knewton-powered entry-level courses in psychology, science, and economics.

Arizona State, like San Jose State, offers online courses and degree programs of its own. But ASU is thinking about limiting the number of online classes that on-campus students can take for credit. “One thing we’ve found is that online classes actually require more maturity and discipline than face-to-face classes,” said Philip Regier, Arizona State’s dean of online and extended education. Older students do fine in online courses, but 18-to-23-year-olds often struggle.

Arizona State is betting that hybrid learning will help students pass the general-education classes they need to graduate. One thing these early-adopting universities have learned, however, is that hybrid learning doesn’t necessarily save money—not least because new technologies are expensive to implement.

Entry-level courses are easy to put online because they cover basic material, where the answers tend to be right or wrong. But the equivalent on-campus lecture classes are also the cheapest courses for colleges to produce. At some community colleges, online degree programs aren’t any cheaper than in-person courses, according to Rebecca J. Griffiths, program director of online learning at Ithaka S+R, a consultancy for education technology.

Besides, there are limits to what any computer program, even one as elaborate as Knewton’s, can teach. “The two hardest things for students to do are, one, learn what a good paper topic is or what a good research topic is, and, second, to actually write a coherent paper,” said Ezekiel Emanuel, a professor of health care management at the University of Pennsylvania and a big fan of MOOCs. Online tutors can help students with their writing, but someone still needs to read and grade it. When DeSousa and Bloom teach Web-based classes, they act more as coaches than as lecturers, but their human touch still counts.

CREATIVE DISRUPTION

Until Web-based technologies entered the classroom and online-degree teaching became ubiquitous, traditional institutions didn’t much question why they were teaching the way they did. As the Spencer Foundation’s McPherson puts it, “What are the right indices of quality? And how good is the stuff we’re doing now? These are not questions that have been asked in higher education.”

New technologies become disruptive when they enter the traditional classroom—and they get colleges thinking about whether the existing model will suffice. In many ways, online education isn’t that different from old-fashioned instruction: Algebra is still algebra, no matter how you do your scratch work. But online tools allow educators to personalize learning in ways that weren’t possible before. This is good news for a system of higher education that’s straining to provide opportunity to everyone who wants to learn.

Access to education means being able to pay for it, and it means being able to succeed academically in a college setting. “You can’t look at the cost question, the attainment question, the quality question in isolation,” said Candace Thille, director of the Open Learning Initiative at Carnegie Mellon University. Different technologies will serve different students best, she said, just as no single brick-and-mortar university is right for everyone.

As for students, they’re online already. Head into a lecture hall today, and you’ll see a sea of laptops, with as many students checking Facebook as dutifully taking notes. When students have all the knowledge of the Internet at the touch of their smartphones, the value of an institution lies in how well it helps them learn, not in how many hours they spend in a classroom.

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