Riding the MOOC Wave

As mayor of Rancho Mirage, Calif., Scott Hines is in charge of a town of about 17,000 people in the Coachella Valley. As the chief operating officer of World Education University, a new company that says it “will forever alter the landscape of post-secondary education” by offering free courses online, Hines is now in charge of the personal information of about 50,000 prospective students and more than $1 million in seed funding.

But as World Education University continues to raise money and populate its database with the personal information of curious students, some observers in the higher education community wonder whether the company, which is not authorized to award degrees and has no formalized academic program, may be a mirage -- an idyllic fantasy that is more likely to dissolve into the landscape than alter it.   

The company’s official unveiling earlier this month was timely. Massive open online courses, or MOOCs, have created huge buzz in higher education and beyond by offering anyone the ability to take online courses from professors at top universities -- including Stanford, Princeton and the Massachusetts Institute of Technology -- at no charge. Coursera, which has signed deals to host MOOCs from professors at more than a dozen institutions, last week announced that it had exceeded 1 million registrations. Udacity, a competing MOOC provider, has also attracted hundreds of thousands of curious learners.

Although its ambitions are sprawling and largely abstract, World Education University, which goes by WEU (and encourages you to pronounce it “We-You”), makes a similar proposition. “What if you could get a course from the top educator in the whole world -- from Harvard, or Cambridge, or Stanford, or USC, or the University of Colorado, or wherever you want -- for free?” says Steve Vicory, a marketing and advertising consultant and an “advisory board member” at WEU, in a YouTube testimonial.

Although Hines says he and his business partner, Curtis E. Pickering, have been laying the groundwork for WEU since well before the MOOC wave began to crest, the company seems to be riding that wave now. As of last week, more than 50,000 prospective students had submitted forms with their names, contact information and academic interests to WEU, even though the company says it has not done any marketing beyond issuing a news release and selecting a shrewdly search-engine-optimized name. Hines says the company has raised over $1 million from angel investors -- including “hundreds of thousands” from himself and Pickering -- and has plans to seek out venture funding as well.

The company says it plans to open between 120 and 150 courses by the end of November, when it is planning a hard launch. WEU is buying most of these -- about 100 courses centered on trade skills for jobs in health care and legal professions -- from a for-profit college for an undisclosed sum. The college, which is accredited by an agency recognized by the U.S. Department of Education, did not want its name used because it did not want to risk running afoul of its accrediting agency in advance of a renewal assessment, according to its president, to whom Inside Higher Ed spoke.

Not everybody is encouraged by WEU’s arrival on the scene. In the eyes of many online advocates the emergence of the “elite” MOOCs through Coursera, Udacity and edX has finally legitimized online learning as integral to the future of even the most prestigious, financially secure institutions in the business. But the buzz around MOOCs also may open a door for entrepreneurs who, regardless of their intentions, may be tempted to make promises they will not be able to keep.

“I don't know that I would call it ‘snake oil’ exactly,” says Ellen Wagner, executive director of the WICHE Cooperative for Educational Technologies (WCET), a nonprofit that promotes the effective use of technology in education.

“But it is certainly naïve,” she wrote in an e-mail. “And opportunistic.”

Wagner says she has seen a number of burgeoning companies offering some form of free or über-cheap online education in the wake of Coursera and Udacity, which have each raised millions from venture capital firms on the assumption that they will figure out some way to turn all those registrations into dollars.

“If the internet bubble and subsequent social media tiny-bubble has taught us anything, it's that you need not have a product that you can sell to make money,” says David Cormier, manager of Web communications and innovation at the University of Prince Edward Island and a pioneer of the previous generation of MOOCs. “You just need a way to convince investors that you might possibly be able to make money someday.”

Education Outsiders, Proudly

WEU, for its part, makes no secret of its intention to make money at least in part by giving advertisers access to its students. The company's materials for students note that it “may share your information with any third party outside of our organization as necessary to underwrite free educational offerings” and “may contact you via e-mail or telephone in the future to tell you about specials, new products or services.”

Hines, the chief operating officer, says WEU plans to attract faculty to design courses by offering them a cut of the advertising revenue generated by those courses. He says the personal information about WEU’s 50,000 prospective students is sitting in a database -- untouched, for now.

The company’s business ideas are not much different, in substance and lack of definition, from those of Coursera and Udacity. But unlike those companies, both started by former Stanford University professors, the Rancho Mirage mayor and his partners are outsiders -- and proudly so. “We don’t have a single person involved in education who is invested,” says Hines, a former Air Force intelligence officer who has master’s degrees in public management and organizational management. “We have business leaders, primarily, and philanthropists.”

Another key difference is the company’s professed goal of offering licensed degree programs. “WEU will offer a full range of higher education courses to the general public immediately, and eventually full degrees, diplomas and certifications once full accreditation and licensure is achieved,” the company says on its website. In a promotional video on YouTube, one beaming interviewee outlines (in the present tense, oddly) a bold vision. “The WEU has preschool starting at age three,” she says. “Can you imagine? … And the kids can learn all the way to get their -- to graduate from high school, and then go on to get their bachelor’s, their master’s, and their doctorates all for free!”

Wagner, the WCET director, can’t imagine it -- at least not any time soon. “I like that breakthrough business model schools are starting to get the traditional academy worked up because that’s what it takes to get the conversation going in serious ways,” she says. At the same time, Wagner adds, “I also believe that there is naïveté about [how] the academy actually works, which makes it exceedingly hard for schools run as businesses to fit in with schools that are mission-driven.”

Accreditation can be a struggle even for aspiring universities that have no commercial entanglements. Shai Reshef, the founder of University of the People, a nonprofit online institution that aspires to offer bona fide degrees for little or no cost, has been building toward accreditation for several years. It has been a laborious and expensive process, he says, and it has forced the institution to take a very conservative -- and not at all lucrative -- approach to growth. Only last year did University of the People get permission, in California, to issue degrees.

And only at that point can any company or nonprofit rightfully call itself a “university,” says Alan Contreras, a former watchdog for Oregon’s Office of Degree Authorization. Until then, a company like WEU is merely the sum of its marketing rhetoric. “If they are not issuing degrees or academic credits, they are not a degree mill,” Contreras wrote in an e-mail.

At the same time, “They are not a university, either,” he says. “They are a sack of vapor until they get authorized.”

More precisely, they are a sack of vapor with 50,000 leads. For-profit education companies such as Kaplan and the University of Phoenix historically have made their money by taking government-backed tuition dollars. But a recent theme among entrepreneurs in online education has been to get away from relying on those sources, which come with regulatory strings attached.

Companies such as StraighterLine and New Charter University, operating outside of academe, offer courses for $100 or $200 per month and stress autonomy among their students. Coursera and Udacity, by charging only exam fees, could push that price bar even lower. And while college credit, accreditation and bona fide college degrees remain the coin of the realm, these alternative models have generated buzz for “alternative credentials” that some believe could eventually have purchase among employers.

And as long as they keep their prices low enough so that customers can pay out of pocket, companies need not obtain permission from regulators or accrediting bodies to offer those credentials. And if they can operate without partnering with universities, neither will they be bound by the Family Educational Rights and Privacy Act (FERPA), which bars universities from sharing certain information about their students.

“Title IV means nothing to us,” says Hines, the COO of WEU, referring to the legislative shorthand for federal financial aid programs. And while the company does plan to pursue accreditation and degree authorization through the official channels, it is already hedging against being locked out. “WEU is committed to achieving accreditation from an agency recognized by the U.S. Department of Education,” the company says in a legal notice on its website. “At this time no assurances can be given as to when, or if, accreditation might be granted.”

Fortunately for Hines and his investors, satisfying higher ed regulators and government watchdogs is not crucial to WEU’s success. “Ultimately, accreditation is not the end-all goal for us,” says the Rancho Mirage mayor. “We see value in accreditation, but it is not core to our business model. Our core [goal] is to serve students who have no options for education.”

The fact that such underserved populations exist, and might benefit from the existence of an entity like WEU, whether it gets accredited or not, is the trump card for any company offering online education for free. When any benefit at all is a net gain, accountability to students seems almost beside the point.

“I think that we're going to see more organizations like this succeed,” wrote Cormier, the MOOC pioneer, in an e-mail, “because people will not be able to tell the difference between an organization whose actual aim is to help you improve at something (whatever that might mean to them) and one that is solely focused on getting investors.”

Hines brushes off skeptics who worry that WEU cannot fulfill its promises. He says the company’s forthcoming academic program, and quantifiable investments in the accreditation and degree licensure processes, should persuade the world that they take their educational mission seriously.

“Time will tell,” says Hines. “But it’s not easy to be innovators. It’s not easy to be disruptive. And it would be natural and healthy in many ways for skeptics to voice [their] concerns. But we’re O.K. with that.”

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