Clicking your way to a top-notch education

Marketplace Contributor Oct 22, 2012

Clicking your way to a top-notch education

Marketplace Contributor Oct 22, 2012

A number of America’s most prestigious universities –- including Harvard, Stanford and MIT — are putting many of their courses online for free. Anyone in the world can attend. Millions of students have already signed up. This experiment in worldwide teaching is backed by a group of professors who want to revolutionize higher education. But there’s also money to be made.

Udacity is a free, online university headquartered in California’s silicon valley. At the Palo Alto command center, whiteboards are covered with inscrutable equations and color-coded action plans. There are rows of computers staffed by young people sipping energy drinks.

“Udacity is trying to make great education available to entire world,” says Udacity president David Stavens. “Right now, a great education is available to a few tens of thousands of people in great institutions in the U.S., Europe, Asia and South America. But there are still millions — if not hundreds of millions — of people around the world who cannot get access to education.”

The course catalog at Udacity focuses on science and technology. The curriculum is designed to help students get new jobs or move up to better positions. Udacity Co-founder Sebastian Thrun -– a highly respected Stanford computer scientist and a research fellow at Google — says college is just too expensive for the millions of people who need higher education to find 21st century jobs. In the modern economy, Thrun adds, workers need to constantly update their knowledge and skills while staying on the job.

“What I hope to achieve is that we change the whole education model,” Thrun says, “to make it more flexible, so people can keep learning — for free — as they go through life.”

Just down the road from Udacity is its main competitor, Coursera. It has signed up more than two dozen colleges and universities to offer many of their classes free on Coursera’s web site. The schools include prestigious names like Stanford, Princeton and the University of Pennsylvania. Coursera offers a range of academic subjects, from business and finance, to arts and the humanities, to science and medicine.

With a few exceptions, you don’t get actual course credits from Udacity or Coursera classes. But Coursera cofounder Andrew Ng says you do get a certificate of completion.

“The world is moving towards less formal forms of accreditation,” Ng says. “We will increasingly see students use these certificates on their resumes to get better jobs.”

In Trondheim, Norway, 24-year-old Ivar Urdalen studies engineering at a local university. He recently took a Stanford Coursera computer science class.

“I really wanted to go to a prestigious American university after high school, but the tuition costs didn’t give me the opportunity to go,” Urdalen says. “This Coursera model provides me this unique opportunity to get some of that world-class education, but for free.”

If Udacity and Coursera are giving their classes away free to millions of students, how can they stay in business? There are at least two ways to make money, says Coursera’s Daphne Koller. Classes should always be free, she says, but maybe not the proof that you successfully completed the course.

“The certification may be something people pay a modest amount for,” Koller says. “When you multiply it by the number of people we’re talking about can bring in a nice revenue stream.”

Coursera and Udacity will also make money with a kind of job-referral service. Each will charge a fee to connect successful students with companies that are hiring.

Both Coursera and Udacity are for-profit business. Both have won the backing of Silicon Valley venture capitalists, including New Enterprise Associates. NEA has invested $8 million in Coursera.

“We look for things that change the world,” says NEA General Partner Scott Sandell. “Things that change the way people work, they way they play. We like to say we invest in really large markets that don’t exist yet.”

Together, Udacity and Coursera have already signed up more than a million students. Not bad for a market that didn’t exist just two years ago.

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