By Javier Ortega-Araiza
“Online learning is not the next big thing, it is the now big thing”
– Donna J. Abernathy
Lord Peter Brougham, one of the pioneers of educational reforms and self-education, said once that “Education makes people easy to lead but difficult to drive: easy to govern, but impossible to enslave”, recognising the potential that education has to empower individuals to improve their lives and collectively better their communities. In the United Kingdom, Brougham was one of the founders of the Society of the Diffusion of Useful Knowledge, a frontrunner in the idea of making literacy in a variety of subjects available for everyone. Although this happened in the times of the Industrial Revolution, before the idea of a computer was even conceived, the benefits that society could reap from making education accessible to everyone were outlined.
Fast-forward to our times, and we can see that the main premise behind this idea: empowering individuals through education, is at the core of some of the world’s most innovative platforms, among which we can find: Coursera, Skillshare, Udemy, Khan Academy, and edX. Although the way they manage their operations is varied (some are non-profit and some are for-profit, for example), they have all transformed the way people can learn, and by doing this, are enabling individuals to boost their career progress, either by enhancing specific skills or by taking courses from some of the world’s most recognized Universities and institutions from anywhere in the world and at little or no cost.
These innovations come at a perfect timing. The education system is under siege, particularly as there is an increasingly higher number of students who graduate with overwhelming amounts of debt, only to find themselves unable to get a job that pays it back. In 2015, financier Mohamed El-Erian, said that “over the past 10 years, the combination of higher tuition fees, more student enrollment, and greater reliance on loans has caused the stock of outstanding student debt nearly to triple”, adding that “today, seven out of 10 students graduate with debt, with the total volume exceeding debt from credit cards and auto loans combined”. The figure quoted by the Consumer Financial Protection Bureau placed the total outstanding debt in a number higher than $1.2 trillion US dollars, and according to the U.S. Department of Education, only 37 percent of the 43.3 million borrowers nationwide were making payments of time. To add to the shocking statistics, the same department added that 41 percent of students who start college will not finish their degree, in accordance to their metrics. Not very stimulating numbers.
However, where the real problem lies is not in the debt itself, but in the fact that in many occasions, it fails to produce a return, leaving on its trace a generation full of under-performing, cash-strapped, and now indebted youth who on the beginning took a risk on the pursuit of better opportunities. Investor Jim Rogers, on his book Adventure Capitalist, says that “there is nothing wrong with borrowing huge amounts of money, as long as you’re putting it into productive assets, building for the future”, and places the United States as an example, “In the nineteenth century, the United States borrowed stupendous amounts from all over the world, mainly from Europe. We were a gigantic debtor nation. We put the money into productive infrastructure such as railroads and factories. And by 1914 we got our payoff. We became a creditor nation for the first time in history. We then became the world’s largest creditor nation and the most powerful country in the world”. The question is: Is education something worth taking the risk of debt? Can it be considered a productive asset that will pay off in the future? The answer may not be as certain as the $1.2 trillion outstanding in student debt makes it look.
While acquiring debt to pursue a program at Harvard, Wharton, or Stanford might very likely produce a positive return on investment, the truth is that the majority of borrowers do not go to these schools. A report for Forbes from Jeffrey Dorman points out that “the main source of defaults is for-profit colleges, followed by community colleges, the latter one because of lack of completion of the degrees”. This presents a very interesting point of discussion. I have nothing against the concept of for-profit colleges per se if profit is looked as a mean of sustainability without deviating from its core purpose: providing top-notch, quality education that makes it worth it to spend money in the institution, which many times in the form of taken loans. Nevertheless, most of for-profit colleges are operated in a devious manner, presenting very suspicious schemes and hidden costs. As Dorfman said, “Unfortunately, many for-profit colleges deliver a below-mediocre standard of education and have very high dropout rates.” There are many examples: University of Phoenix, and in the UK, the LSBF Group, which operates schools such as the London School of Business and Finance. (The latter one was suspended by the UK government from the publicly-funded loan program after concerns on its quality).
A turning point occurred when in 2015, for-profit education company Corinthian Colleges Inc. filed for bankruptcy, leading to a revolt that began with the refusal of thousands of students to pay their outstanding loans, arguing that the school had deceived them and their degree was worthless, and created groups such as Debt Collective to fight for loan forgiveness. Many students and former students from other for-profit schools joined the claim, prompting their governments to take action. In Canada, the Ontario province promised OSAP forgiveness to former students of Everest College, a Corinthian-owned institution. In the USA, the same case cost the government about $28 million from 1,300 former Corinthian students, and according to the Wall Street Journal the figure could go up to $164 million from more than 7,500 borrowers who have applied to have their loans forgiven arguing that their colleges deceived them. Not a very good investment for anyone, and once again, it was the taxpayer who bare the cost of greed and corporate misbehaviour.
Based on this, we can agree with Mohamed El-Erian when he said that “the return on investment in education is falling”, and as a response to this downfall, we find that online education is becoming a cheaper, practical and functional alternative. This powerful new tool is becoming a key part of the student and professional life, and today we can find numerous sites offering e-learning courses about thousands of subjects either for free or at a very low-cost. Coursera offers MOOC (Massive Open Online Courses) from universities as prestigious as Stanford, Yale, University of Michigan, Johns Hopkins, and Duke, which can be taken for free or as a $130 Verified Certificate offered conjointly by the University and Coursera. Udacity offers courses by industry leaders, such as Google or Facebook focused on specific topics. And Harvard and the Massachusetts Institute of Technology (MIT), two of the most recognised schools in the globe, have co-founded edX, making many of their courses available to the public. For a way lower investment (in case they want a verified certificate) or even for free, young people can now take courses from the best schools and take certified concentrations in the areas that they need to help them in their career. Not only that, but they can also interact with people from all around the globe, and have their ideas discovered by some of the world’s leading minds.
That was the case of Battushig Myanganbayar, known as “The Boy Genius of Ulan Bator”, a Mongolian teenager who was discovered by the Massachusetts Institute of Technology after achieving a perfect score in a MOOC offered by the University. We also have the example of the Khan Academy. Backed by giants as Google and The Bill and Melinda Gates Foundation, Khan Academy embodies the truth and fact that you can learn anything. The organisation produces short lectures and has interactive exercises to foster learning on a wide variety of topics. The Khan Academy concept has proven so successful that their videos and tutorials have been translated to a variety of languages to make them accessible in many parts of the world.
On the other hand, what online platforms involved in education are also achieving is democratisation. Platforms such as Skillshare and Udemy are empowering everyone to share their knowledge and talents with the world by becoming instructors, and be rewarded financially for it. For very little cost, or a membership in the case of Skillshare, everyone can take courses and acquire specific skills. And on the other hand, everyone can become a teacher too. There are courses on Skillshare that are followed by tens of thousands of students. In pure alignment with the purpose of the Internet, platforms such as Udemy and Skillshare have democratised not only access to education but also access to being providers of education, creating a collaborative environment where everyone can showcase their talents and everyone can learn from everyone. Plus, these platforms encourage and reward meritocracy. Students are free to choose to learn from the best, whether the best is a freelancer individual or an established institution. By creating competition through technology, institutions are also pushed to better their offering and to avoid slacking on quality.
Without a doubt, online education is now a reality and it aims to keep disrupting the learning system by increasing the opportunities to access education as a basic need. As Elliot Masie sentenced, “we need to bring learning to people instead of people to learning.” So far, the market seems to be in line. Skillshare has raised $10.75 million from different investors including Union Square Ventures, and Coursera raised a staggering $146 million from investors that include the World Bank and Kleiner Perkins Caufield Byers. And not-profits such as Khan Academy and edX have not had any struggles with funding either. If all these organisations prove successful in the long-run, we might get to a point where everyone can learn the skills they need and want to succeed without the need of getting into any debt at all, and the whole educational system might present a significant improvement and more inclusion as a whole.