Faculty Coalition: It's Time to Examine MOOC and Online Ed Profit Motives

• By Dian Schaffhauser
• 10/09/13

A coalition of faculty groups has declared war against online learning, particularly massive open online courses (MOOCs), because it said it believes that the fast expansion of this form of education is being promulgated by corporations — specifically for-profit colleges and universities and education technology companies — at the expense of student education and public interest.

The question at the heart of the battle is whether higher education is worthy of public investment or better suited to be an offering of big business. A report issued today by advocacy group Campaign for the Future of Higher Education examines the motives behind much of the current push for online education.

The report, "The 'Promises' of Online Higher Education: Profits," examines how the rhetoric used to describe new online offerings — "innovation," "expanded access," and "reduced costs" — should be interpreted "through the lens of corporate interest and influence." Specifically, corporations and investors have a major interest in the adoption of education technology to deliver online classes.

The challenge is communicating the role of online formats and other technological innovations in higher ed in a more nuanced way in order to make more fully informed decisions.

The campaign coalition includes 65 faculty, student, teacher and union associations from across the United States. The stated mission of the campaign is "to guarantee that affordable quality higher education is accessible to all sectors of our society in the coming decades; and to include the voices of the faculty, staff, students, and our communities — not just administrators, politicians, foundations, and think tanks — in the process of making change."

According to the campaign, the report is a "first step in looking at who is making money, how much, in what ways, and with whose assistance in online higher education." Only by understanding those aspects of the evolving formats of education, the report explained, will the public be able to "assess the full 'value' of the seemingly endless stream of technologically related innovations in higher education and make the best policy decisions for the future of higher education in our country."

"The report...shines a light on how leaders in government and in our colleges and universities are being enticed by snappy slogans and slick sales pitches into making decisions that benefit investors and corporations instead of the students we're supposed to serve," said Lillian Taiz, a professor of history at California State University, Los Angeles and a participant in a teleconference about the report. "We're talking here about a critical public need, higher education — one that affects individuals and societies in far reaching ways. The long-term costs and damage can be huge. And that's what we set out to do in this work — look behind this rhetoric."

The report draws a link between the drop in business and value for for-profit schools following a damning 2012 government investigation of the sector and the current surge in partnerships between public institutions and private operators. For example, earlier this year the University of Phoenix said it would enter partnerships with 100 community colleges as well as the Harvard Business School, following on an announcement that the owner of the institution — Apollo Group — would be closing 115 of its own brick-and-mortar locations.

Likewise, multiple public institutions have announced deals recently with private companies, such as 2U, Pearson, Bisk, and others, for "bundled services," to convert traditional degree programs into online versions. In these deals, revenue generation for the for-profit partner is "robust," the report said. Academic Partnerships, which works with schools to develop and market online degree programs, for example, made $4 million from its share of tuition from Arizona State, $10 million from Florida International University (FIU), and $18 million from Ohio U's nursing program. All are public universities.

In early 2013 a faculty senate online review committee at FIU alluded to the contract with Academic Partnerships, suggesting that "political pressure was obviously a factor." Minutes from the meeting noted, "Jeb Bush has great influence with Republicans in the Florida Legislature. If he let it be known that FIU was not cooperative with public-private partnerships, this could hurt FIU's funding." Former governor Jeb Bush is currently a senior advisor to Academic Partnerships.

In all, the report stated, 200 non-profit schools in 2013 partnered with for-profit service providers, and 500 more will consider similar arrangements over the next two years. Those estimates come from Eduventures data.

MOOCs are the latest territory in which for-profit entities are laying the groundwork for injecting their products and services into publicly-funded education. Citing reporting from Inside Higher Education, the report stated that the major MOOC companies — Coursera, Udacity, and EdX — "have 'cash to burn'": $21.5 million of investor money at Udacity, $43 million at Coursera, and $60 million at EdX, "generously bankrolled" by MIT and Harvard.

The public-facing basis for MOOCs "is high-minded," the report explained. "MOOC promoters...promise unimagined-before access to higher education and the dawning of a new age." The reality is turning out to be quite different, stated the report's authors: "Udacity and Coursera are judged not by the quality of the actual educational experiences they provide students, the degree to which they tear down barriers for students and instructors around the globe, or any of the goals so passionately discussed in public. The bottom line here is the business bottom line — which company looks positioned to make the most money."

How will they make money when they're free? Bob Meister, a faculty member at the University of California, Santa Cruz, said the real plan is "to turn my lecture into a technique for collecting a large and permanent database on student performance, a database that can be used to produce many products, only one of which is the certificate of completion that a student would get." What's not brought up much in coverage of MOOCs, he noted, is that "CEOs and investors [are] waking up to the profit-making possibilities of big data in the online education business. The real model is simply to attract the largest numbers of users while it is free so it can create a global database that can be cross-licensed to all of the other big global databases out there. This is all in return for possibly providing the student with a completion certificate for the course. It seems too good to be true because it is."

The report also referenced Moody's take on the MOOC phenomenon: The adoption of MOOCs, according to Moody's, can improve a school's credit rating. Elite public institutions that don't ride the MOOC bandwagon risk "[destabilizing] their residential business models over the long run." In fact, those that do participate in MOOCs gain a "short-term benefit": the "blunting" of criticism that universities don't provide sufficient services to "fulfill their public mission and, therefore, maintain their tax-exempt status."

In 2012 Moody's rated 283 not-for-profit private universities and 228 four-year public universities in the United States. When the company downgrades the debt ratings of schools, such as it recently did with seven Illinois public universities, the impact is reflected in dealings with creditors and the companies those institutions do business with.

The conundrum for public institutions is that the cost for participating in MOOCs is "relatively high," according to Trinity College President Patricia McGuire, "and the net returns unclear at best." Yet, to avoid the wrath of a Moody downgrade, she suggested, universities "will repress more thoughtful consideration of the value of adopting MOOCs for any given institution — and will encourage further avoidance of faculty participation in the decision — in favor of rushing to embrace this unproven method ―because Moody's said so." Her conclusion: "Moody's should stay out of academic decisions."

Gary Rhoades, a faculty member at the University of Arizona, recommended two "pragmatic policy proposals" that stem from the campaign's paper. One, institutions need to put in place "clear business plans for the growing number of online partnership deals between private companies and non-profit colleges." Two, they need to stop "fast-tracking, bypassing, or eliminating quality control decision-making processes in colleges and universities in accreditation or government oversight. These processes are focused on finance, governance, and educational quality and consumer rights. And they are in place to protect students and taxpayers and ensure appropriate use of college and university money."

Over the next two weeks, the Campaign will publish two additional reports, one that examines the accuracy of promises that online courses can reduce costs for students and educational institutions and a second one that looks at the facts behind the assurances that online education will dramatically expand access to higher education.