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Communications of the ACM

Technology strategy and management

Are the Costs of 'Free' Too High in Online Education?

2012 MIT symposium on The Future of Education

In fall 2012, MIT hosted a symposium examining the influence of technology on new teaching and learning methods in higher education.

Credit: Dominick Reuter

Considering the economic implications as educational institutions expand online learning initiatives.

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"This seems positive but may lead to potentially negative effects and unintended consequences: Elite universities need to ensure the true costs of their MOOCs do not become too high for society as a whole by destroying the economic foundations of less-prominent educational institutionsor of themselves."
says the professor at the MIT Sloan School of Management.
"Boo hoo, we want to continue charging enormous fees but will not be able to do so due to these pesky idealists and the damn thing called the Internet! The best excuse I could come up with despite being author of a fancy-titled book is saying we really care for less-prominent educational institutions; of course not our bottom line. Please buy this lame excuse so that we could continue feel prominent!"

This is an amazing article and ACM should be congratulated for publishing it. The goal is to expose those who are not fond of people gaining knowledge, right? Wait.., did I misunderstood?

Seriously, it is a new world and it will be better for everyone (as intended consequence) except people who have a vested interest in the current system and their lame apologists (unintended consequence). Don't worry about "less-prominent" institutions, I am sure they will be fine.

An asst. professor in a top 50 university, who does not mind finding another job in the future if it means giving his sons a chance to access knowledge without paying a fortune to such people when they grow up!

PS: I am curious to see if this will be rejected as a violation of your ACM comments policy! We would not want to offend our distinguished colleague, right ;)


Tuition is too high at elite schools and our costs need to come down, I agree and say in the article. But nothing is really free and someone has to pay for what universities do, at least for credit courses and degrees. Otherwise we could end up with a bunch of Google-like institutions crowding out alternatives. I also spent my freshman year at Montclair State in NJ before learning about financial aid and moving on to another school. It was very important for me to have this alternative.
--Michael A. Cusumano
Massachusetts Institute of Technology

Isaac Christoffersen

We're witnessing the commoditization of educational classes and more people are gaining access to quality content at a lower cost. This is a good thing.

Free learning via the Internet is here to stay, but without a doubt be a "pay-for" premium version will evolve out of these or similar courses.

People pay for quality content and as the article mentions - the Music and Publishing industry have adapted to survive while also being able to charge for content.

Melanie Jutras

This was a great article and raises some thought provoking points. The current availability of distance learning and free quality online courses is truly incredible.

I do not believe the problem of high tuition at elite schools will be affected any time soon. A four year
program completed on site with collaborative efforts (and the resulting credentials earned) is considered by enough people as "priceless", to prevent a meaningful drop in tuition rates to accommodate those who view the online completion of coursework as an equal experience. Completing all of the degree reqirements online is simply not the same as the traditional scenario. Furthermore, if tuition is not charged and degrees are not granted then the end result is in fact less "valuable".

As noted, however, nothing is really free. I see the associated costs manifesting in various ways. Perhaps after taking some free courses, a student will decide to pursuit a degree or certificate program with the institution. Maybe advanced courses will require contributions to open-source or university sponsored programs as part of the course content. In this way, the student will "pay" by participating in research and development that is not compensated.

The availability of quality online courses to those who might not otherwise have the opportunity is what makes the concept so powerful. Pioneers in this effort are to be applauded, and I imagine more good than negative will come their way as a result.


"Tuition is too high at elite schools and our costs need to come down, I agree and say in the article. But nothing is really free and someone has to pay for what universities do, at least for credit courses and degrees. "

Dear Michael, sorry if I was a bit too harsh in my previous comments. You are making two wrong assumptions above:

1) Information is free; it was always free. That is why we stand on the shoulder of giants in science. What would happen if there was a patent/copyright on Newton's law or Einstein's works and a Disney-like corporation extended it over decades/centuries?! When will the copyright on Mickey Mouse end, by the way? Will I live to see it (I am in my late thirties)? How about the scientific publishers who exploit scientists? They would lock information and throw the key away if they could! These are the crooks you are being sorry about (or defending?)...

2) The idea that only a person who has a degree from an "elite or regular" university has "proper" knowledge will be obsolete in this century. These days the universities are unfortunately managed by people who are in the business of selling a piece of paper (based on the reputations built by real scientists whom they ironically abhor!). The modern university is made of crooked businessman in managerial positions, stale buraucracy, clueless students in the business of buying the piece of paper (if possible by not bothering to learn anything) to get a job, and poor scientists/teachers who are caught in the middle. It is not about knowledge/learning/science anymore in majority of the universities. I have seen the system in multiple countries, believe me I know from the experience of an insider...

In at most a few decades, the businesses and public will wake up to the scam and you are right, it will be over even for the "elite" ones. No, it won't be a bad thing that it is over. Actually, having those businessman taking their hands off universities may turn out to be a good thing for real science, in my optimistic opinion. This whole tuition/grant scam scheme was not there before first half of 20th century, I have read. I wish I was working at a university in those days when teachers were teachers, students were students, and scientists were scientists. I am pretty sure the only thing I would have missed would be technology.

The same asst. professor in a top 50 university, who does not mind finding another job in the future if it means giving his sons a chance to access knowledge without paying a fortune when they grow up!


Freely available is not the same as free or costless to produce.

Michael Cusumano

Peter McCombs

The author makes some good points. First is that free education is here to stay, and that it is a good thing. I'm presently enrolled in a MOOC along with about 50,000 students from around the world. It has been a good experience and there has been much in the way of collaboration. It is clear that time and effort went into the production of the course and that its costs were certainly not zero. However, the class is being leveraged as an introduction to a more in-depth, paid online course, and I believe this is going to become the model employed with an increasing number of MOOCs.

The criticisms leveled against free education are legitimate and do not simply amount to so much complaining. As with anything worth having, there is a good deal of care and craftsmanship that goes into proper education. There is much of it that can be mass-produced, it is true. While this may create education that is "good enough" for many who would otherwise not have the opportunity, it also creates a challenge when it comes to the sort of education that isn't ideal on a "massive" scale.

Melanie Jutras

I think the author and commenters agree that free education will continue to grow. The comparison with other industries being "damaged" by offering content for free raises the interesting and debatable questions at hand. Will increased access to high quality free education ultimately result in the high cost of "destroying the economic foundations of less-prominent educational institutions"? Might it even destroy the foundations of elite institutions?

Although the comparision to digital music and publishing industries raises these interesting concerns, I wonder if this is the best analogy. We do have to keep in mind the target market of a traditional college education. For the graduating high school seniors, it seems the traditional model offers an experience that has yet to be matched by online options. Also for many students seeking graduate degrees, the traditional model will be preferred. This is not to discredit collaborative possibilities of online coursework as may have been misunderstood in my previous post. The target market of a free online education is virtually anybody who wants to learn anything (including, of course, some of those graduating high school seniors and graduate students).

I think both models are here to stay for the foreseeable future. The pricing and ultimate "cost" to all involved remains to be seen.


"Freely available is not the same as free or costless to produce."
Michael Cusumano

OK, I have just checked the overall MIT budget
and when it comes to the actual operation of a modern university, you are right; tuition income does not cover expenses even with zero overhead. Let's adopt this assumption.

But does this mean it has to be always this way? If we are talking about generation of information, the capital expenses have already been paid over centuries or more recently paid by governments and industries. What is the marginal cost of information dissemination when using online courses and assessment? Very very little. Suddenly, we have a very different picture.

I think a book analogy is appropriate. What is a book? Is it dead trees or words and sentences?
What is a university? Bunch of stone buildings or a "place" where the knowledge is stored and communicated?*** What if we can duplicate and communicate information with very little marginal cost (using computers and the Internet)? Do we still need the dead trees to tell a story? Do we need the stone buildings?

*** The university is actually an ideal, a culture of knowledge sustained by idealist people who are in love with knowledge (anyone who thinks the scientists are in it for money must be out of his mind). This ideal does not need stone buildings and dusty libraries and selfish businessmen when it can live in bits, in its purest form. The people who are in love with knowledge don't need any of those or even be there physically as long as they can communicate the knowledge across continents at the speed of light.
Admittedly, some investment is needed in physical infrastructure in experimental sciences. However, those will not be a significant expense item in the balance sheets, especially when the lab. infrastructure is efficiently generated, used and shared due to good communication.

Linda Polin

MOOCs don't threaten degree-granting universities. They threaten their continuing ed or extension depts. MOOCs are for folks who want a course, not a program.

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