Can Online Education Be Both Successful and Good for Us?

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We're witnessing the beginning of a much-needed revolution in education.

Skillshare's graphic pitch

What would it take to create wildly profitable, culturally effective online education system? How could the system reflect the marketplace demands of an era of technology, and provide tangible resources for students to find and create opportunity? What would that look like?

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Chances are it would not look quite like either the online education kingpin, University of Phoenix, or the many startups in the space. But there are elements from each that might make their way into a truly effective online educational system.

When the University of Phoenix offered its first online course in 1989, the internet was in its infancy, and for-profit online education was a revolutionary idea. Today Apollo Group, which owns University of Phoenix (UOPX), is No. 452 on the Fortune 500. Meanwhile, the internet is now ubiquitous, and next-generation educational platforms are starting to take hold across the country. The value proposition is based less on government subsidy and privileged access, and more on modern vocational training, affordability, and access as universal as broadband and mobile phones.

This new online education represents a much-needed shift away from the existing popular paradigm. Skillshare stakes its claim on the thesis that cities hold the perfect ingredients for a system of collaborative education: density, diversity, and rich connective tissue. On Skillshare, a user can host a class, at whatever price she wants, on whatever subject she wants, and anyone in the neighborhood can pay to attend. The featured curriculum has ranged from cooking classes to UX design, photography workshops to beginning Javascript. General Assembly, a co-working space in New York City, is developing a curated and rigorous curriculum. They operate as a high-technology salon, where young start-up companies and individuals rent office space, share resources, and take nightly classes in technology and design. Their online education component reflects the values of their community space, and is being syndicated gradually.

University professors have taken notice, and those in high demand have begun turning to entrepreneurship over their coursework. Sebastian Thrun, a former tenured Computer Science professor at Stanford, founded Udacity, which currently only features a dozen computer science courses. Udacity designs free university-level classes for anyone. You can program a robotic car, learn cryptography, or build an operating system. Coursera, founded by Stanford Computer Science professors Daphne Koller and Andrew Ng, offers machine learning, computer vision, and game theory. The Massachusetts Institute of Technology has entered the fray, toying with similar models of online education that award experimental certificates of completion, while iTunes University is now a rich repository of courses from Stanford, Duke, Yale, and others. Udemy's community of teachers and students create and consume online courses from each other on a web platform. Since their founding in 2010, 25,000 lectures have been created, and over 70,000 lectures are viewed a month. These numbers are not yet Fortune 500, but the industry is growing fast.

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New education platforms use technology as their distribution platform, and load their curricula with courses in technology literacy. Sir Ken Robinson describes the existing model of education as insufficient at scale, and inappropriate to a market economy that prizes creativity: indeed, if creative capital is the dominant driver of growth, our models need to be updated. And the examples above certainly have been updated. They represent an education that has returned to apprenticeship, to people teaching each other, to valuing the creative capacity of individuals -- and doing so at unprecedented scale. But they share another common trait, which separates them critically from University of Phoenix: they don't provide the credential. This matters. Credentials send powerful and important signals to future employers.

The current higher education system developed as both an economic and intellectual response to the scientific revolution of the Enlightenment. Rational principles of science and classical thought were standardized and syndicated across the globe, laying the foundation for the Industrial Revolution. The modern university became the standard-bearer for economic achievement, and indeed into the 21st century, the statistics continue to support this tradition. Employment rates double for people aged 25-35 who have a "Bachelor's degree" versus "some college or an associates degree."  The most reliable signal of future economic success was, and still is, the ability to complete a four-year college degree. Accordingly, higher education has been 'scaling up', with 20.3 million enrolled in the United States. Information technology has massively, exponentially accelerated the scaling process, and in doing so is transforming higher education.

Peter Thiel, billionaire investor of Facebook, founder and former CEO of PayPal, famously declared that we are in a higher education bubble in the United States. He said, "Education is a bubble in a classic sense. To call something a bubble, it must be overpriced and there must be an intense belief in it." According to his view, America has been moving from bubble to bubble: the IPO bubble at the end of the 90's fed into a housing bubble, which has since fed into an education bubble. He may have a point: for the first time in history, student debt has surpassed credit card debt.

The University of Phoenix is a technology pioneer, and for that we owe it a massive debt, if you'll allow the pun. They graduated 355,000 people last year, twice as many graduates as the 20 largest campus universities combined. But the school graduates only 16% of its class: the national average is 55%. In 2009, the Department of Education reported that 350,000 UOPX students paid $5 billion in loans, with a 44% repayment rate, far worse than the average.

The demand for higher education has skyrocketed, and our system has proven insufficient to meet that demand productively -- hundreds of thousands of young people have heard the news that a Bachelor's degree is the ticket, and well-marketed capitalism has taken advantage of it, to our collective peril. Meanwhile, online education has exploded in recent years, and with a broadband connection and a few hours a day, one can learn highly marketable skills in technology, design, and entrepreneurship. So what to do?

My point of view about health care applies to education, as well: the ambitious and accelerated elite face a set of challenges largely incomparable to the marginalized, underemployed, and chronically unemployed. Detractors of new education wisely point out that current approaches may only reach the recreational fringe of education, or the highly connected and motivated self-starters, most of whom are not the high-risk target audience for which online education is a serious and necessary option. That credential, which current new education platforms lack, is the very reason many enroll at University of Phoenix rather than pursuing other means of vocational enrichment.

A successful educator will prepare his students not only for the employment market that follows, but develop in them the techniques such that they can build character and be self-sufficient in a dynamic economy. Accreditation and appropriate credentials demonstrate that the student has successfully met those qualifications. Before the renaissance in online education becomes a reality at scale, there must be a system of legitimizing new online education programs, of holding them publicly accountable, and of measuring the outcomes as they prepare students for employment.

The platforms take advantage of LinkedIn, Facebook, and Twitter, but they must take it much further, and the burden falls to all of us to encourage this trend. Trust and reputation tools have taken a foothold with the rise of collaborative consumption, but need to be aggressively expanded to new education platforms. We -- all of us -- should create a way to support education outside of the traditional university and vocational models, as we have begun to outgrow them.

A handful of traditional universities are adapting, if reluctantly, to these market demands, and I imagine a future where Stanford (my alma mater) and others have a value proposition that extends their pedagogical resources much more broadly and intentionally than they currently do. But whether or not they do, the movement continues inexorably forward, so university administrators would be wise to take note. Modern employers stand to benefit hugely from a trend towards legitimizing next-generation education platforms: they will be hiring candidates whose skillsets better match their needs, and will be doing so with confidence in the new institutions that trained them. So let us focus on supporting the innovative platforms that have so fabulously responded to the challenge of education in the era of high technology.

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Kanyi Maqubela serves as entrepreneur-in-residence at Collaborative Fund. He was previously a founding employee at Doostang and field director at One Block Off the Grid. He is from Johannesburg, South Africa.

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