“Online Education Revolution—Hype and Reality”

Address to the Los Angeles World Affairs Council

October 15, 2013
By C. L. Max Nikias

It’s an honor to be with the World Affairs Council today. I’m grateful for how this organization helps connect our city to the world, especially now, in an era in which this city and region can play an unmatched leadership role globally.

While this was a dusty frontier just a century ago, our location now works to our collective advantage, in this new Age of the Pacific. And if we all work together, in this new era, increasingly all roads can lead to Southern California.

Of course, the technological difference between the Age of the Atlantic and the Age of the Pacific is immense. This means that some aspects of our lives will be lived on a global scale—but still many crucial aspects of our will still be lived at a local, person-to-person level. Success for any enterprise will require finding the right balance between the global and the local.

Today I will discuss this within the context of a revolution happening in my own profession, higher education. My goal will be to offer some perspective on the hype and the reality of this revolution, which involves online learning.

First, let me give you the lay of the land: Universities have been among the most enduring of all social institutions. Businesses may open and close, nations may rise or disappear, and constitutions may be re-written, but universities usually persist, through it all.

America’s colleges and universities are the direct descendants of Europe’s first universities, which sprang into existence about nine centuries ago, and which are still in operation today. Those early European universities themselves evolved from classical Western institutions that go back over 2,300 years, such as Plato’s Academy and the great Library of Alexandria.

Today, there are some 4,000 colleges and universities in America, ranging from small community colleges and liberal arts schools to major comprehensive universities. Of these 4,000, about 50 of them operate as America’s premier research universities. These 50 top research universities remain the envy of the world.

Studying at one of these schools has long been the dream of any family, from Los Angeles to Boston to Bangalore to Beijing. America’s top 50 research universities are still the magnet for the best and the brightest from all over the United States and all over the world.

Most colleges and universities exist mainly for teaching—for transferring existing knowledge from one generation to the next. Today’s great research universities do this too, but they also create new knowledge: they take you to the farthest frontiers of human insight and imagination—and then they blast those frontiers back for pioneers to explore and innovate.

America’s premier research universities produce most of our Ph.D.s., which are the key brainpower that has driven America’s economic success over the past few generations. I’m proud that USC is not only one of these top leading schools, but that USC is growing faster than ever and gaining unprecedented attention.

In recent years, elected officials, from the local city council to the White House, and the media, have placed our top research universities under considerable scrutiny and demanded greater accountability. These are issues that should be and are taken seriously on our campuses.

But I want to place the issue in some new context. About 3 million students graduate each year from America’s high schools. Of these, only about 250,000 have the academic credentials—such as SATs and GPAs and demonstrated leadership skills—to compete for a spot in the top research universities. That is only about 8 percent of the graduating high-school population.

The other 92 percent—in other words, the vast majority of the American workforce!—has to compete for a spot at the other 4,000 schools. These other schools include two-year colleges, 4-year colleges and universities, and an increasing number of for-profit online education schools.

So, let’s aside America’s top 50 research universities for a moment. The other 3,950 colleges are educating the vast majority of the American workforce—but are they doing it well enough? Are these nonprofit and for-profit schools getting the job done?

Politicians from both parties have strong opinions. Former Education Secretary William Bennett conducted a detailed survey of the “return on investment” at America’s colleges, based on cost and future earnings. He argued, after looking at the data, that only 150 of America’s 4,000 colleges are worth the economic investment. Less than 3 percent of our colleges—just America’s Top 50, joined by some top liberal-arts colleges and other institutions—are worth the cost, he argues.

Last August, President Obama offered proposals that would direct federal aid mainly to colleges that meet certain standards of academic and financial accountability. This would involve metrics like tuition and fees, student debt burdens, graduation rates, and access for low-income students.

Indeed, people across the political spectrum argue that the traditional college experience should or must be replaced by something cheaper and more efficient.

The criticism generally flows from some specific concerns:

Critics say faculty should focus more on teaching, and less on research.
Critics say that state-of-the-art laboratories and facilities are too expensive, and that this keeps college out of the reach of lower-income families.
Critics say that faculty don’t need academic tenure or exemption from mandatory retirement.
And critics claim that the Internet is more effective than a campus at giving a first-rate education to a student of any age in any country.
Some things certainly could be done differently, to ensure broad and affordable access to a college education. Does the real solution exist in cyberspace? Let us consider the online education revolution that is getting underway nationally and internationally.

This potential revolution is a result of the digital media revolution and the Internet, which were both nurtured at American research universities. The newest digital media technologies—many of which are being developed by USC faculty—are already revolutionizing communications; design and manufacturing; entertainment; education; news and information; and many other sectors of our home and business environments.

USC faculty have been pioneering new technologies that allow us to reach out to remote students. They can immerse students in a virtual classroom experience, where they can attend and fully participate!

For instance, USC’s Viterbi School of Engineering has created the iPodia platform, which is revolutionizing global learning. Classes are taught in real time at multiple universities around the globe, with students collaborating on team projects with peers on different continents.

USC’s Institute of Creative Technologies is inventing and perfecting “virtual humans” and “virtual environments” for educational and training purposes. These experiences are available even by mobile phones.

Our top-ranked School of Cinematic Arts already has the most impressive lab, which takes state-of-the-art videogame concepts to a new level, making the educational process more engaging and stimulating the curiosity of students in new ways. Video games represent the future of storytelling and the future of teaching and training. The only limit to all these possibilities is our own imagination!

Given the hype about online education, it is no surprise we have seen an explosion of online educational enterprises. Investors and VCs are getting very excited about investing in education-related technology. Total VC investment in education technology was about 450 million dollars in 2011. In 2012, the total rose to about 630 million dollars—an increase of about 40 percent in one year!

Some experts predict that college will become cheaper, because online technology will diminish the need for a physical campus and its costly infrastructure. Some imagine that only a few super-universities will survive. The founder of one online-education company predicted that within 50 years there might be only 10 higher education institutions on the planet.

One recent example of new experimentation is what they call “massively open online courses,” or MOOCs, for short. Companies such as Coursera, Udacity and EdX are at the forefront of this movement. By partnering with various universities, they can allow one professor to lecture hundreds of thousands of people around the world.

Coursera is backed by over 80 universities and by some $65 million in VC funding. Its courses already reach 4 million students.

EdX was launched by Harvard and MIT, who both put a total of $60 million on the table. EdX represents some 30 universities around the world and reaches more than 1.2 million students.

Udacity is another major player. It recently shocked the world with an announcement that it would partner with Georgia Tech to offer an online master’s degree in computer science for $7,000. That is only 20 percent of the cost of Georgia Tech’s on-campus degree.

The initial popularity of these programs—and the media hype—has led to many of the more fantastic predictions about the future of universities. But, seriously, do you remember the Internet’s first wave in the 1990s? It resulted in a dot-com bubble, one that was inflated by a fixation on the total number of users that a company’s website could collect, rather than the true value that was created through a viable business model.

Online education also lends itself to a focus on large numbers—yet there is little evidence that free online classes or viral lectures produce worthy educational or career outcomes. Research shows that on the average, 96 percent of the students who sign up for a MOOC never complete the course. Most never make it past the first few weeks. Some skeptics went as far as to say that the MOOC movement is much like the 4th of July: lots of fireworks, a great spectacle—but on the 5th of July, you have only silence.

We are already seeing a backlash against the MOOC movement. Full-time students on our campuses don’t find them academically rigorous. Professors worry that MOOCs could damage their university’s academic brand.

And, this is crucial: One survey has shown that most employers would prefer a job applicant who has a traditional degree from an average college to one who has an online degree from even a top university!

During this delicate and volatile revolution, I believe we must be careful about preserving the best of what we do have. Universities must be asking:

“What do we want to be as a university?”
“What are our distinct academic values?”
“How much academic rigor should be involved?”
and “What can change … and what can never change?”
The most glaring issue is the manner in which alternative university models could undercut the role of the scholarly faculty. After all, it is the scholarly faculty who make America’s research universities the envy of the world.

It is the scholarly faculty—young and old, regardless of age—who are best able to advise and mentor the next generation of students. It is the faculty who are best able to provide the highest level of patient care. It is the tenured faculty who are best able to design a curriculum, execute it, and continually improve it. And, it is the tenured faculty who are best able to serve as masters of the American research enterprise, embodying an intellectual curiosity and an intellectual independence.

At our core, USC and our peers are research universities. Discovery represents the essence of who we are as a faculty and what we do as a human, academic community. A focus on technological efficiency can have damaging results. The scholarly faculty must be protected, in their research, in their professional obligations and their professional privileges.

It should be our goal as universities to champion a high view of the academy in the face of criticism. We should not be embarrassed to say that something precious is at stake, something that must be protected against dilution. The faculty are, and always will be, the true foundation for a great university: the solid foundation for all scholarly excellence, the strong foundation for our students, who rise up majestically on the faculty’s shoulders as pillars of greatness.

Still, we have been thrown into a new era of change, an era in which those who wish to succeed must be willing to experiment, with bold, new paradigms in learning and teaching. And yet, far from the noisy hype about the MOOCs, Business Week recently reported that USC has been building an online education model that is both academically and financially viable.

Quietly and without fanfare, USC’s faculty have developed an online model that expands educational access to more than 40 nations around the world already— while maintaining the all-important standards of academic rigor, integrity, and quality.

Total annual revenues for online USC master’s degree, executive and continuing education programs reached 108 million dollars this past year—a figure that may be unprecedented for a top American research university. We project 124 million this year. Altogether, our programs reach 7,700 remote students. We project that we’ll double our degree offerings within the next five years, with enrollment reaching 11,000 students around the planet.

USC’s online education model focuses entirely on professional master’s degree programs, along with executive and continuing education. Our goal is to provide an online education that is just as powerful as the classroom one.

The online curriculum is as rigorous as the on-campus curriculum. We use normal admissions standards and charge regular tuition rates. Every student receives close attention from our own faculty. Even though they partner with outside education entities, our faculty and schools still retain sole responsibility for ensuring academic integrity.

And, finally, USC will not offer online degrees at the undergraduate level. We believe that the years between 17 and 22, which coincide with the traditional undergraduate experience, represent a corridor of transformation. Within this corridor, much of a student’s identity and many of her lifelong affiliations are formed.

Face-to-face intellectual and creative encounters, inside and outside the classroom, create the greatest impact. Core academic values and even good old-fashioned school spirit are protected and encouraged. Technology will enhance, but not replace, the traditional USC campus undergraduate experience.

At the undergraduate level, we believe that students deserve an electric environment for learning and growth, 24 hours a day, inside and outside the classroom. At USC, thousands of our undergraduates attend nighttime programs in the arts and humanities. They cheer each other on at athletic events. They reflect and discuss the great issues of life with peers from 115 nations, and from more than 90 different religious worldviews. They serve the children and families of our surrounding neighborhoods. And in this way, they build powerful bonds that last for a lifetime.

But later, when the time comes, online education will be there to help them learn new skills, and to help them retrain for new industries that don’t even exist yet.

So, what can we expect in the future?

We can expect to witness the exciting development of new digital media platforms for online education. We can anticipate old and new paradigms of teaching and learning to evolve together.

We will see many more partnerships between non-profit institutions—as well as between non-profits and for-profit companies. We will probably see the creation of many business startups, all over the world, offering online education and training courses and programs.

There will be more choices, and more competition, at the undergraduate level and the graduate level. This will be healthy!

I believe more universities will experiment with the model of large-scale, low-cost degrees. If even some of these experiments work, the landscape will change.

Some universities and colleges will have to cut back. Community colleges will be under enormous pressure to survive. We should not be surprised, if second- and third-rate colleges go out of business. It may not be so bad to see the closing of schools that are expensive but do not deliver value.

But those schools that remain in business will feel pressure to provide more value in their on-campus programs. They will need to develop more programs and activities outside regular class hours.

Also, we will see many universities begin accepting transfer students on their campuses—students who have taken lower-division online courses for credit. This will open doors for many students to enter elite private universities. It will be a less expensive pathway to earn a quality degree.

By the way, USC is actually one of the only elite privates who have been accepting transfer students for the past 70 years. It is already built in our business model.

These are reasonable predictions, based on today’s developments. But one thing is for sure: No one can predict the future perfectly in this area! It is counterproductive to even try to do so.

We must be ready to be surprised, and to adjust course, and to capitalize on new pathways. We must not be afraid to experiment further, even more boldly, in the years ahead.

Of course, we live in a society that is charmed by many simplistic notions of efficiency and productivity. But this can choke off the academic quality that is the lifeblood of a great university. And it is the role of the university to challenge such popular notions.

I love the character of Antigone in Sophocles’ classic work. Her very name meant “Born to oppose”—and yes, she challenged the authorities of her time in the, just as our universities’ faculty must be ready to vigorously defend meaningful and essential academic traditions that may be falling out of favor.

Yes, we owe it to our constituencies and supporters to seek every sensible way to be more efficient. But never to the point that we dilute the experience for everyone involved, and never to the point that we allow the great intellectual communities that nourish our nation to be scattered to the winds.

Allow me to make one final prediction: America’s top research universities, such as USC, can flourish and continue to make a difference in the future if they are guided, each step of the way, by three fundamental principles.

First, we must show an unwavering commitment to academic rigor, and to student quality and selectivity. This involves a refusal to compromise in any way on academic quality and integrity. We must protect our academic brand and credentials, because that is our essence, without which we are nothing.

Second, we must seek financial viability, in all that we do.

And finally, we must strive continuously to be the pacesetters in online experimentation. We must remain nimble, always ready to change directions quickly. A great academic model, combined with a viable business model and cutting edge technology. That is how we should move forward.

I will conclude with an image from the Greco-Roman classics. Even today they illuminate the complex forces that drive our lives and our shape our cosmos.

In the old Greek legend, Prometheus raided Mt. Olympus. With the blessings and help of Athena, the goddess of wisdom, he stole fire from the gods and gave it to humanity. This made civilization possible, with all its blessings and all its challenges.

In our own confusing times, America’s leading research universities have a Promethean role to play. They supply fire and light and heat through the knowledge and the innovation that they generate.

If they experiment boldly, our universities can be home to the new Prometheans storming Mt. Olympus, in order to encounter Athena and the wisdom she offers, in order to find precious fire, and in order to bring those blessings back to humanity.

Our American research universities indeed have fire to capture, and to carry forward to humanity, to warm it and to enlighten it and to enliven it. We can seize, and share, that life-giving flame, which civilizes a species and allows it to stand majestically at the pinnacle of creation.

Thank you!