The disruptive effects of ‘free’ education

After reading Wired Chris Anderson’s (2009). Free: The Future of a Radical Price (available but ironically only for free to residents from the world’s richest country, the US, from SCRIBD), I spent some time reflecting on the disruptive effects of ‘free’ on higher education provision and opportunity.

Free has not only effected media consumption, publishing, and software production but also has capacity to create very disruptive, low end challenges to higher education. A low end disruption offers a service to a large new market by providing satisfactory (but not necessarily equivalent, at least at the beginning) services to large new groups of consumers. The most publicized example in higher education is the University of the People, founded by Israeli entrepreneur Shai Reshef. UoPeople is headquartered in California and is now registering students for its first courses to begin in September 2009. Mr Reschef provides a good overview of his vision and the logistics of operating a very low cost institution in a recent Higher Ed podcast.

The model being developed is a cohort based with 15-20 students following a set online curriculum. Each section has a tutor (some of whom are volunteers,) but most importantly students are encouraged and taught how to question, support, and teach each other. The curriculum (Business and Computer Science to date) seems quite traditional in terms of content with two and four year paths. The site claims that tuition and exam fees will be low, and for startup has waived all fees. Mr Reschef has intentions to earn accreditation for programs and thus ability to offer degrees through one of the US Regional Accrediting Boards.

I am increasingly concerned that the high tuition fees charged by accredited institutions, including my own Athabasca University, are resulting in us pricing ourselves out of even the Canadian market- much less the market and opportunity of serving those from developing economies. Too often, older open and online universities are so concerned with looking, feeling and smelling like REAL universities, that we have not realized the true potential of online education.

As U of People model demonstrates the combination of:

  • low cost delivery (online)
  • low cost content development (Open Educational Resources) and exploitation of readily available online resources
  • strong peer support through social networking and group interaction
  • development of lifelong, self directed learning skills
  • combining paid and volunteer labour
  • transparency in content and activity

It thus exploits (or serves) a very strong and compelling opportunity. Such a model de-couples teaching from research, allowing staff to focus exclusively on providing high quality learning designs and experiences.  The model also does not meet the needs of 18-24 year olds from rich countries for whom education is as much a social as an educational experience. But if it meets its potential, it will create opportunity for millions of new learners at costs they can afford.

Anderson writes “The most destructive way to enter a market is to vaporize the economics of an existing business models. … The world will beat a path to your door and you can sell them something else” p. 43. He covers the various ways that profit can be extracted from free services besides bait and switch, noted in this quote. The vast reduction in costs to develop, share and use digital resources and services creates opportunities for very different models such as providing additional premium services, marketing for other non free products and selling the attention of users to advertisers (Google and radio model).

Obviously the fee scale of the University of the People has potential to ‘vaporize demand’ for expensive online programs. The challenge that especially public higher education institutions face is to constantly implement means to reduce costs at all levels of the organization. In addition, to compete with ‘free’, public institutions will have to devise additional review streams – beyond government subsidy and tuition so that they are able to continue to serve disadvantaged citizens and meet their continuing “open” vision and mandate.

9 thoughts on “The disruptive effects of ‘free’ education

  1. Hi Terry,

    Interesting to read your take on this new form of “free” education, particularly as it relates to open access institutions such as yours.

    I’ve just come back from a conference in Scotland, where the notion of imposing any student fees at all (let alone high ones) on what has been a state-supported version of “free” higher education is still being hotly debated. What do you think of this older model of “free” higher education as compared to the supposedly “free” education offered by the University of the People?

    Interesting to think of this new development in the light of Ivan Illich’s (Deschooling Society, 1971) eerily prescient discussion of the replacement of educational institutions by four kinds of “educational networks.”


  2. Thanks Walter for your comment and question.

    The older mostly European and Latin American model of “free higher education” has always had problems with scaleability. Often there are very high standards that becuase of problems in secondray schools for the less wealthy, the ‘free’ became a subsidy for the rich and never really helped (and some say hindered) access to the majority of citizens. One big difference that I did not note in the University of People model, is that it is designed as a non profit (I beleive) but not subsidized and scalebable. Supposedly it acquired $5 million US capital startup funding with $1 million US from the founder.

    Yes, interesting how Illich’s work and use of the term network seems to be well ahead of his time, but did you realize how technophobic he was? Supposedly, he refused to use microphones as too highly mediated for him, thus limiting the quantity (but not quality??) of those who could hear him at one time.

  3. Hi Terry,
    Where there is a challenge, there is an opportunity….
    Would this be an opportuanity for all higher education (HE) institutions to re-conceptualise what higher education could and should offer to society, from a social, multi-cultural and “free-open” perspective?

    Would HE institutions be able to provide alternative models which go beyond the traditional egalitarian or elitist, cost-based educational model?

    MIT, Stanford and Yale Universities have all opened their doors to this movement of free open educational resources. This trend has great implications for all HE institutions since its inception. Any HE or educational authorities could exploit such resources and leverage the movement to create an “education economy”.

    This coupled with the various social media networking, communities of practice development and Web 2.0 application have benefited hundreds of millions or even billions of people around the globe, for people nearly of all ages. This movement would just accelerate with an exponential trajectory, under the current ecology.

    So I see the University of People launch as just one move in the emergent “chess” competition.

    What would be the next strategic move for most HE institutions in the chess play?

    Would this be the critical moment to develop innovative and emergent social and educational “universities” that could better serve the community? I have included a few questions and comments in HE in my post.

    Thanks Terry for this wonderful post.

  4. “I’ve just come back from a conference in Scotland, where the notion of imposing any student fees at all (let alone high ones) on what has been a state-supported version of “free” higher education is still being hotly debated.”

    Then you have the issue that in many countries in the majority world, parents are charged school fees for all levels of education – not the free state education we expect in the West. The fees are prohibitive for many parents – which kind of puts us just paying for Higher Ed into some form of perspective.

  5. From

    “Canonical research findings suggest that American entrepreneurs who establish popular online markets for customized education will catalyze the creation of many good jobs in America, and will end the reign of America’s kleptobankers. Some of the researchers: Clayton Christensen, Paul Romer and Paul Krugman.”

    The write-up also addresses ways to increase affordability…

  6. Very interesting

    It is interesting that the U of People states several places on their site the following…

    At present, University of the People is not an accredited institution. The University of the People plans to apply for accreditation and for authorization from recognized agencies and authorities in accordance with the rules, regulations and timelines of said agencies and authorities.

    I wonder what roadblocks they may encounter as they seek to be recognized. Does the “free” model get in the way of more global acceptance particularly if you are starting from scratch as these folks are? There is a cost for all the services we expect but what is the price of recognition?


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