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How online credits could change higher ed's business model

Legislation introduced in the California Senate today could require the state’s public colleges and universities to award credit for faculty-approved online courses taken by students unable to register for oversubscribed classes on campus.

A bill proposed in California today could open the door a bit wider to massive open online courses, or MOOCs. (By the way, if anyone’s got a better name for these things, send it our way). The bill would require public colleges and universities in the state to grant credit for MOOCs and other online courses when students can’t get into those classes on campus

Budget cuts have taken such a big bite out of California’s community colleges and universities that thousands of students are turned away from required classes.

“No college student should be denied the right to complete their education because they could not get a seat [in] the course that they needed in order to graduate,” said Darrell Steinberg, president pro tem of the California senate, in a press conference announcing the bill today.

If it passes, the bill could be good news for companies like StraighterLine, based in Baltimore, Md. The company sells low-cost intro courses like the ones students are having trouble getting into.

“What it also does is open a much larger marketplace,” says Burck Smith, StraighterLine’s CEO.“A larger marketplace will ultimately drive prices down, will raise quality up, and that’s a good thing.”

Others looking for a bigger slice of that market are providers of those massive open courses -- companies like Udacity and Coursera. Classes on artificial intelligence and gamification have been wildly popular, but few colleges accept them for actual credit.

F. King Alexander, president of California State University, Long Beach, is concerned that too few students who sign up for MOOCs actually finish them. Of course, that might change when the stakes are higher.

“At the moment, we’re very neutral but very optimistic about taking advantage of these technologies,” says Alexander.

Faculty also have good reason to be nervous about online alternatives, says Kevin Carey, director of education policy at the New America Foundation.

“It may mean that people who right now are employed as adjunct professors teaching these basic classes will not have those jobs in the future,” Carey says.

The bill has to pass first. With Democrats controlling the legislature, it’s got a good shot. Sen. Steinberg said today, “if it wasn’t at least a little bit controversial, it wouldn’t be worth doing.”

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.
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