Phillip W. Magness

U.S. Economic & Political History

Some thoughts on the MOOC fad

Massive Open Online Courses, or MOOCs for shorthand, are all the rage these days in U.S. higher education. These technologically trendy, web-based providers of academic content have been touted as a fundamentally disruptive force in the higher ed marketplace and, in the most fanciful portrayals, perhaps even the beginning of the end for the traditional university wherein low cost internet-enabled mass dissemination of knowledge effectively sidesteps the institutional rigidities of classroom credits and degree requirements. MOOCs are not without skeptics though, with the main criticisms ranging from a purported loss in quality provided by an in-person classroom experience to more tangible metrics such as decidedly underwhelming completion rates, albeit of their own contested significance.

Let me suggest though that these touted benefits and criticisms alike are actually ancillary to a larger problem at play with MOOCs and other similar “disruptive” products: They do indeed offer something of value as a mechanism for disseminating knowledge, but predictions of an internet-based alternative that will disrupt the traditional university are largely a conflation of a (trendy, low cost, and therefore highly appealing) technology with its supposed competitor product.

Why? Because for all the lofty claims and pretensions otherwise, universities are not actually in the business of knowledge dissemination. Or at least not in the sense that it’s their primary function. Note that this does not mean that universities fail to disseminate knowledge – they do just that, and sometimes quite effectively. It’s just not their primary product.

Higher Education as a Signaling Model

What then, if not knowledge, is the product of the university system? I’ll suggest that it’s something not far removed from what Bryan Caplan calls the signaling model of education. In this model, formal “education” – usually expressed in attaining a diploma, degree, or some other form of earned credential – functions as a signal of aptitude or “qualification” in a relatively uniform and easily recognized format for prospective employers or even other similarly credentialed “experts” to evaluate. In doing so, it partially solves an information problem about the quality or intellectual ability of an applicant, namely that “education” as a concept is exceedingly difficult to measure. The benefit is a substantial reduction in the amount of time and energy an employer must invest in determining whether applicants who are otherwise unknown to him/her are suitable for a position. Thus a college degree in Field X is supposed to convey aptitude in X, and specific attributes about that degree (i.e. is it from an Ivy League school or backwater state university?) signal certain quality variations therein. But since education signaling is also an imperfect substitute for knowledge, a more cynical take on higher education (and indeed Caplan’s own description) describes it as a metric of one’s ability to “jump through hoops” to demonstrate his/her own intellectual ability, rather than the “knowledge” provided by formal training in a field or subject.

And remember, that even the most cynical take on education signaling does not preclude a university from also disseminating knowledge to the recipient of a degree – that is only a corollary benefit of the degree-seeking process.

Licensing and Entry Barriers

So what does this mean for traditional university degrees and the supposedly disruptive trend of MOOC alternatives? Simply put, a university degree is a form of entry barrier to certain aspects of the employment market. It’s a license to work in a profession, or a membership card to the club of other credentialed persons in that profession, and meeting it allows the degree recipient to seek entry into that field. The evidence of this is visible in any job posting, ranging from minimal and entry level stipulations (a high school diploma, GED) to basic college degrees (a BA, field open) to professional degrees (a JD or MBA) to advanced expert credentialing (a PhD in a narrow and highly intensive specialty field). In each case, the degree functions not only as an easily understood if imperfect signal of aptitude to the employer but also as an entry barrier to employment upon those who do not possess said degree or credential.

The primary function of universities, then, is to provide this credentialing service. Expectedly, they charge money for the credential. But they also require you to do certain things to obtain it, which in turn increases the reputation and signaled value of the credential offered. Since reputation is itself a part of this product, an impetus for some degree of quality control also exists – both to distinguish a school’s product from the extremes of the field (e.g. a pay-for-play degree mill) and to establish niche variations in product between a given university and its close substitutes from other universities. While the data isn’t always particularly clear on how a specific college’s product stacks up vis-à-vis its cost, there are partial indicators to go by and they do indicate that some semblance of a pricing mechanism is at play to attain the proper credential certificate for entry into a field.

This is where the relationship between MOOCs and traditional education becomes interesting as MOOCs are – by design – “freely” offered, or perhaps made available at very low cost. After all, their strongest commendation is in the mass conveyance of knowledge built upon the economies of scale permitted by the internet and similar technologies. So shouldn’t this threaten or disrupt at least some aspect of higher ed by undercutting the “price” of a university that provides more or less the same “knowledge” content for $20,000-60,000 in tuition a year?

It’d be a bit more conceivable if universities were primarily dealing in the dissemination of knowledge and therefore competing on the “price” of that knowledge. But we’ve already established that they are not – they are dealing in credentials to signal aptitude, even as the dissemination of knowledge may accompany that credential in some sense.

The Accreditation Game

Degrees issued aren’t the only “credentialing” good at play though, and this is where the MOOC concept runs headfirst into a brick wall – even when the MOOC is offered under the auspices of a university program. Universities also operate under an additional instrument of institutional credentialing for the aforementioned purposes of signaling the claimed quality of their own products, and these too function as entry barriers against uncredentialed purveyors of similar or substitute products. At the university level this is called accreditation, and it functions to distinguish student credentialing by a member university from a random pay-for-play degree mill run out of a former motel in Montana.

The interesting thing about university accreditation is that it emerged as something of a private purveyor of a form of regulatory governance, and in fact there is no single uniform accreditation body in the United States. Instead universities maintain accreditation through membership in one of a variety of accrediting entities of various stripes and attributes and even professed “quality” (e.g. geographic region, religious affiliation, or professional specialization to name a few). Maintenance of membership in an accreditation body usually entails submitting various aspects of a university’s degree program, course offerings, or institutional performance to review by the accreditor, which in turn draws upon its membership institutions to set various standards that reflect, albeit imperfectly, the academic rigor and baseline expectations for degrees offered by a member institution. The idea behind this university credentialing mechanism is that it can quasi-cartelize the process of degree issuance and thereby maintain certain ostensible standards of quality in that product (which in turn signals aptitude to prospective employers for the aforementioned reasons). If a new university wishes to enter the degree-issuing market, it must obtain accreditation in order for those degrees to mean much of anything to employers. And if an existing university fails to sustain the minimal standards of its accrediting body it may go under probation or lose its accreditation entirely, thereby impeding its ability to attract a premium for a now-worthless un-credentialed degree.

This is the point where politics start to heavily intrude upon the operations of higher education, because university accreditation is a valuable commodity to have for one very specific reason beyond the cartelization effect: college education is heavily subsidized by the government in the United States, owing to the political popularity of what is essentially a payout to segments of the electorate (parents of prospective college students) mixed in with a large financial industry that derives its livelihood from the navigation of these college education subsidies and preferential student loan arrangements. Eligibility for most college subsidy instruments, both state and federal, is in turn determined by a system of laws and regulations that almost uniformly stipulate that it must be applied to a college or university that possesses accreditation by a recognized accrediting body, as determined by the U.S. Department of Education.

So now we start to see why membership in an accrediting body pays: it’s a direct ticket to federal student loans, to state and federal tuition support, and to almost all other state and federal expenditures and grants for higher education.

(For an interesting and related aside, have a look at the political economy of accreditation in the for-profit higher ed world. Institutions of this type are widely known for comparatively lax academic rigor and the value of their signaled degree credential is typically less than most traditional universities, but their business model depends heavily upon using internal economies of scale to assist prospective students in navigating the federal student loan paperwork bureaucracy and thus make them paying customers. In the University of Phoenix’s case, 84% of their revenue is from students receiving federal financial aid. They therefore invest heavily in political efforts to sustain and expand their access to accreditation)

With all the issues at stake in university accreditation, it begins to become clear why MOOCs will forever be an imperfect and ancillary substitute to accredited degree-issuing universities, at least insofar as it concerns the primary product being offered – the signaled aptitude credential of the degree, not some lofty-sounding mass “dissemination of knowledge.” The stakes of the accreditation game are exceedingly high and they are wrapped up in the political economy of the federal higher ed funding behemoth. Universities have access to that behemoth and MOOCs, in addition to lacking the mechanism of providing the signal mechanism of a degree, generally do not.

Wither the MOOC?

It might be duly noted at this point that some MOOCs and MOOC-like entities are being offered under the auspices of accredited universities and by credentialed professors at those universities. This is perhaps the most interesting trend of the MOOC world to the extent that it brings about some element of interaction-by-substitute with the traditional classroom. Yet even here with the accreditation barrier partially crossed, we start to see limitations kick in.

Since accreditation derives almost entirely from (admittedly imperfect) evaluation metrics built around traditional in-person degree programs, a MOOC offered under the accredited auspices of an existing university is at best enjoying the positive spillovers of its associated in-person degree programs and the faculty who teach them. We might therefore see a future in which individual MOOC-style course credits toward a traditional degree become more widely available at Yale, Duke, Cornell, and Berkeley – not because they are a replacement for the classroom but precisely because they are attached to classroom reputations at Yale, Duke, Cornell, and Berkeley. Or even a lower tier public state university for that matter.

We will also likely see a variety of light credentialing programs in the form of non-degree certificates attached to MOOC offerings, both inside and outside of the traditional university. But for better or worse, this will remain a very peripheral form of credentialing when evaluated along side a traditional degree – at most a slight uptick at the margins of employment for a degree-holding applicant, but more likely manifested in little more than a small additional claim to a skill or narrow piece of knowledge.

The MOOC, in this sense, is actually more likely to become an ancillary service product offered outside of a traditional college degree or in augmentation of its effect (though not primary purpose) of disseminating knowledge. It may take many forms in providing this ancillary product:

  • A cheaper or more efficient means of providing an intro survey class, functioning along side the Advanced Placement testing program for high school students
  • A technologically expansive means of providing non-degree credits, similar to the service provided by auditing courses, “continuing education” programs, and other non-credit mechanisms of access to higher education
  • A single-course specialization service, similar to correspondence courses that some universities offer for persons wanting a highly specialized skill set in a single subject as opposed to completing a four-year degree program
  • A “community service” device to convey mass-education to the public, not unlike a public museum display that certainly contributes knowledge to a small percentage of the population that happen upon it even as it carries just as much credentialing value as reading a plaque next to a historical marker on the side of the highway.

In case each of these functions sounds like something that many universities (and non-university educational institutions and companies) are already doing through other means, that should come as little surprise. The service being offered by the MOOC is almost identical to such familiar entities as the public lecture, the museum display, the correspondence course, the subscription book club, and the class-on-cassette-tape or CD-ROM or CD or DVD – all devices dating from a couple years back to as much as a century ago.

crimecourse

There are still many reasons why a university, or even non-university entities, might pursue each of these activities through MOOCs and MOOC-like devices. Foremost among these is that MOOCs allow some amount of ancillary price discrimination around the university’s educational product.  They are essentially a low-cost way of attracting an additional customer base beyond the traditional credential-seeking student. This could entail value received in a nominal registration fee for the MOOC or something as abstract as the “good will” associated with charitable public education. MOOCs might even serve a purpose of converting non-customers with an interest in expanding their “knowledge” into customers of a more intensive traditional degree program. For a select few, a MOOC may even be a route to an intellectual life or a font of entrepreneurial inspiration.

There is nothing intrinsic to MOOCs that makes this so, whereas more traditional sources of higher education (as well as some perfectly viable and entrepreneurial career paths that eschew formal higher ed) at least tend to draw in consumers who self-select their products based on the expectations and social cues of the associated signaling mechanism, or a conscious desire to work around the very same. Just don’t expect that MOOCs will become the magic bullet of mass education, or even much more than a technological accoutrement to traditional higher ed that somewhat expands its dissemination by allowing greater price and product discrimination. With that in mind, also expect that the typical consumer of such products will probably have much more in common with Pierce Hawthorne from Community than an undiscovered genius ala Good Will Hunting.

PierceHawthorne

But barring drastic disruptions to the signaling functions of the traditional university degree and the institutional devices that sustain these functions through entry barriers and credentialing (changes, I might add, that are almost wholly external to the various knowledge-disseminating services provided by MOOCs) they will not become a competitor to or substitute for the traditional college degree at any point in the near future.


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