MOOC Money

Caroline M. Hoxby recently published a NBER working paper on the role of MOOCs in the future business models of both “selective” and “non-selective” postsecondary institutions. The bulk of the paper would be interesting only to an economist, but the end is where things get interesting.

Hoxby argues that the current way that MOOCs are run (make your courses available publicly) could align with the business of non-selective institutions, in that students would pay to enroll in a course just like they would at a brick and mortar school. For “Highly Selective Postsecondary Education” (HSPE) Institutions (schools that rely heavily on alumni donations), though, Hoxby presents an alterative:

Viable online education for HSPE must deal with two problems: (i) the selectivity necessary for offering advanced education and (ii) the experiences that build the beliefs and adherence that sustain the venture capital-like financial model.

Consider a system in which HSPE institutions created online versions of their courses that could be traded with other institutions whose students had similarly high aptitude and preparation. The exporting institution could maintain the advanced nature of the course by limiting enrollment to those outside students who were best prepared, by disallowing outside students whose home institutions had previously sent students who underperformed, or by insisting that the outside students receive support (interactions and assessment) from an instructor at their home institution who is trusted by the exporting faculty member. Exporting institutions might offer such courses at a sustainable cost.18 A student’s home HSPE institution would continue to set his degree requirements, grant his degree, and be responsible for all other aspects of his PE experience.

I haven’t thought enough about this model to consider its implications, but this is one of the more novel pieces I’ve come across that speaks directly to how higher education business models can incorporate these new modes of teaching. If you’re aware of others, please do let me know!

Link: The Economics of Online Postsecondary Education: MOOCs, Nonselective Education, and Highly Selective Education