Requiem for a Heavyweight – Lessons to Learn from the Problems at UC Online

In 2009, the University of California finally decided to offer online education with a system-wide initiative called UC Online. Based on an article in the Chronicle that echoes a previous article in the Daily Californian, we learn that just three years later, UC Online is facing significant hurdles to survive the pilot phase and establish a sustainable online option. After raising just 1/8 of the promised private funding that would have avoided significant internal UC investment, UC Online has already borrowed $6.9 million from the system and is facing expenses of $7 million budget over the next year. Despite plans for 20 courses as of January 2012 for current UC students, UC Online has just eight courses available this fall (although only three are listed today). As the pilot expands in January 2013, there are serious questions about the feasibility of enrolling the thousands of non-UC students needed to avoid additional budget shortfalls.

Given the supposed tsunami of online education that many claim to be revolutionizing higher education, how could such a high-profile initiative from an elite system face such problems?

Despite an otherwise excellent article, the answers lie not so much in xMOOCs (e.g. Coursera, Udacity, edX), but rather in the underlying assumptions about what constitutes quality. Elite brand names may draw hordes of people willing to sample free content, but that doesn’t mean brand names will automatically draw tuition-paying students looking for credit.

First, some background on the financial situation.

Online education was going to revolutionize the University of California system, drawing thousands to the selective institution’s online courses and bringing in new revenue to help allay budget cuts.

That was the pitch for UC Online, started three years ago [sic] with the belief that millions in seed money could easily be raised from foundations or other private sources to get the bold effort off the ground.[snip]

University of California officials failed to rustle up those private donations and were forced to take out a $6.9-million loan from the system’s Office of the President last year to prop up the effort, with strong opposition from faculty members who did not want university money used for the project. [snip]

Despite Mr. Edley’s assurances, though, UC Online has raised only $748,000 in private financing for the project—through a Next Generation Learning Challenges grant by the Gates foundation and the William and Flora Hewlett Foundation. [snip]

Meanwhile, expenses loom. UC Online spent $4.6-million on developing the project in the 2011-12 academic year, and expects to spend about $7-million this year in additional development and marketing efforts, said Shelly Meron, a University of California spokeswoman. An 18-month contract with the course-management software company Blackboard took up a significant portion of that spending—$4.3-million, Ms. Tran-Taylor said.

And background on course development:

 But the project has fallen behind schedule in providing those benefits. In April 2011, The Chronicle reported that the pilot project would seek to offer up to 20 undergraduate courses by January 2012. But only six courses were offered last spring, and eight are available this fall. As of now, students are only able to take online courses offered through their home campuses. Because each campus has its own registration system, cross-campus enrollment will not be available until 2014, project leaders say.

The Chronicle then asked the question “Has MOOC mania become the biggest obstacle to California’s online vision?”, which is unfortunate, because there are some much more important lessons right in the article.

Lesson 1) Institutional brand name does not equal quality

As Sir John Daniel’s wrote in his comprehensive review of MOOCs, shared in Tony Bates’ blog:

A first myth is that university brand is a surrogate for teaching quality. It isn’t. The so-called elite universities that are rushing into xMOOCs gained their reputations in research. Nothing suggests that they are particularly talented in teaching, especially teaching online.

Although Daniels was describing the xMOOCs, this lesson applies to UC Online. This is not to say that UC Online does not or cannot provide quality online education, but simply stating that ‘we’re the University of California’ does not ensure quality. And even if UC Online succeeds in high-quality online course and program design, where is the evidence? All we have right now, as seen on the UC Online web site, are declarative statements and references to UC face-to-face courses:

The University of California offers one of the best undergraduate educations in the country, spread across nine different campuses. Now we’re bringing this education into your home, your office, coffee shop, or wherever you prefer to learn. Meaning that you get the best of both worlds: a great, convenient education.

Lesson 2) You can’t get something for nothing

The strategy of being able to develop a high-quality online program for no internal investment – justified by the UC brand name – seems naive at best.

From my experience in consulting, one of the most important success factors for a system-wide online education initiative is having a registration system that enables cross-campus enrollment. UC does not have such a system and will not until at least 2014.

Quality online education costs real money – registration systems, instructional design, course instructors, academic oversight and quality assurance, LMS and collaboration systems, student services, marketing and enrollment support. Someone has to pay.

Contrast this approach from UC with the Arizona State University partnership with Pearson. ASU realized that online education is not free, but like UC, there was not an appetite for significant internal investment. Steve Kolowich wrote of this program at Inside Higher Ed in 2010:

The relationship between Arizona State and Pearson will be different, says Philip Regier, dean of ASU Online. The university is not so much outsourcing to Pearson as going into business with it. “In this case, we really looked at it as a joint venture,” Regier said in an interview Monday. “Both sides have expenses, and at the end of the day if there’s a residual [revenue], we decide together what to do with it.”

UC, by contrast, seems to assume that they could get others to pay without any true partnership. I’m not arguing that UC should have followed the ASU model, but there are examples of brand-name public universities taking a more realistic business model for online education.

Lesson 3) xMOOCs are not the competition for UC Online

Yes, we have millions of students willing to enroll in xMOOCs and sample content from elite universities. But this is a very different proposition than students being willing to pay elite universities tuition in order to get credit towards their degrees. Early demographic studies have shown that the majority of current xMOOC students are in professional development situation -already having an undergraduate degree or not pursuing a degree – whereas the goal of UC Online targeted students is “to earn transferable credit that can be applied at any UC campus”.

It is true, however, that the “era of free courses” brought on by xMOOCs, as the Chronicle describes, will create price pressures for other online programs. Again quoting Daniels regarding the MOOC movement, “It could also create a welcome deflationary trend in the costs of higher education”, which actually goes beyond online programs.

Lesson 4) Potential transfer credit is not a proven business model

The promised life-blood of UC Online is the stream of non-UC tuition-paying students in the future, but what do they really get? They get the potential of transfer credits, not actual credits. From the UC Online website:

Presenting The University of California Online, a chance to take classes developed by some of the university’s most outstanding faculty and to earn transferable credit that can be applied at any UC campus. We believe that a UC education isn’t about how you learn but what you learn – and how you apply it to make California and the world a better place.

Please note that registering for one of the UC Online classes does not admit you to a University of California campus. Also, participating in this educational program does not in itself provide preference in admission to the University of California. Students interested in applying to UC should refer to the UC Admissions website or the admissions office of the UC campus they wish to attend for details about the admissions process.

So the student is being asked to take the risk of paying for courses based on the possibility of enrollment at a UC campus in the future. Pay me now, maybe you can benefit later. This approach seems risky given the economic climate in California, where tuition has risen 53% in 5 years while enrollment rates have dropped by 20%. Will students really want to take this risk?

Lesson 5) If the original assumptions behind an initiative prove to be false, then ‘full speed ahead’ is a dangerous approach

Consider the assumptions that have proven to be incorrect:

• UC Online can raise $6 million from private sources
• UC Online can avoid internal UC investment
• UC Online can develop 20 courses by January 2012
• UC Online can get significant faculty support for the program

What then is the response from UC Online?

Mr. Williams [interim director] said his goals for the project remain the same as those of his predecessor. In an online update about the program, he praised Mr. Greenstein’s “vision, persistence, and energy” and said he remains “committed to continuing the project as he and his team have developed it.”

This gets to project management 101, or leadership 101. Perhaps UC Online could still succeed, but I would argue that success would only be possible with a careful reconsideration of what other assumptions might be incorrect, and to adjust the initiative based on reality and lessons learned.

Given the track record of the initial assumptions, how likely is it that the future assumptions are correct?

• UC Online will complete the development of 35 courses in progress
• UC Online will offer over 100 courses within a few years
• Non UC students will pay $1,400 – $2,100 for these courses
• UC Online will attract at least 3,000 non-UC students paying $1,400 – $2,100 per course this year
• This number  of non-UC students will grow at a rate of at least 1,000 students per year
• UC Online will develop registration systems supporting cross-campus enrollment by 2014

Unfortunate Situation

Not only as a blogger, but also as a California taxpayer and parent, I sincerely regret this situation. The UC system needs to develop a strategy around online education, determining how to support the UC mission and how to gain effective backing to allow the program to succeed. Online education does have tremendous potential to transform higher education, but it doesn’t come free, and a brand name does not automatically confer quality.

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