New Platform Lets Professors Set Prices for Their Online Courses

December 12, 2012

Professors typically don't worry about what price point a course will sell at, or what amenities might attract a student to pick one course over another. But a new online platform, Professor Direct, lets instructors determine not only how much to charge for such courses, but also how much time they want to devote to services like office hours, online tutorials, and responding to students' e-mails.

The new service is run by StraighterLine, a company that offers online, self-paced introductory courses. Unlike massive open online courses, or MOOC's, StraighterLine's courses aren't free. But tuition is lower than what traditional colleges typically charge—the company calls its pricing "ultra-affordable." A handful of colleges accept StraighterLine courses for transfer credit.

Instructors who offer courses on Professor Direct will be able to essentially set their own sticker prices, as long as they are higher than the company's base price. One professor teaching an online mathematics course with a base price of $49, for example, plans to charge $99. For each student who signs up, the company will pocket the $49 base price, and the professor gets the remaining $50.

The instructor in that math course is Dan Gryboski, who has previously taught as an adjunct at the University of Colorado but is taking the year off from traditional teaching so he can stay home and take care of his three young children. He views Professor Direct as a way to keep up his teaching within the time windows he now has for professional work.

It's also up to each professor using Professor Direct to decide what services to offer students in addition to a core set of materials prepared by the company. Mr. Gryboski says he is promising students who sign up for his two math courses that he will quickly respond to any e-mail questions they have about the material, that he will be available for online office hours for two hours a week, and that he will create additional tutorial videos to supplement the existing materials for the courses.

Valuing Their Own Work

The instructor thinks he can do that e-mailing in short bursts throughout the day, and handle the other tasks when his children are napping or after they've gone to bed at night. He decided to cap enrollment in his courses at 50 students each—which he makes clear on the course pages so students know that he won't be spread too thin. It is up to each professor to set the caps for their courses.

"Students pay a premium to have professor contact," Mr. Gryboski explains. He sees two major selling points: that students can talk with someone who knows the specifics of the course they are taking, rather than an outside tutor, and that students can consult someone who is familiar with exactly what will be on the tests in the course. "I know from teaching that's what students want the most," Mr. Gryboski adds.

The service puts instructors in the novel position of setting the value of their work, even as they seek to reach students who can't afford traditional options. Mr. Gryboski says he decided to start by seeking to make about what he has been paid as an adjunct, but he hopes to raise how much he earns in the future if things go well. "I see it kind of like an introductory offer," he says of his current pricing strategy.

StraighterLine also offers professors commissions for students they attract to the courses, says Burck Smith, the company's chief executive.

Mr. Smith adds that he hopes professors will devise a number of teaching models at a variety of prices. "You'll have very expensive high-touch, high-cost courses. You'll have low-touch, low-cost courses. You'll have everything in between," he says. "You'll have branded people who can charge premiums."

Think tanks and associations have also expressed an interest in using the platform, he says.

For instance, the Ashoka Foundation, which hopes to create a new generation of social entrepreneurs, is considering running four courses with StraighterLine and offering an entrepreneurship certificate to those who complete the bundle of courses. "It allows them to be a college in a way but not have to do all the stuff that colleges do," Mr. Smith says.

A post on the company's blog describing the new service argues that the idea "draws remarkably on the earliest history of the university, when outstanding scholars attracted a following of students and were paid directly by students."

All Kinds of Instructors

StraighterLine is not the first to try such an approach. A company called Udemy also runs a platform that lets professors teach courses for personal profit—though none of the company's courses are approved for college credit.

Most people teaching on Udemy have no connection to colleges or universities. Many are book authors, consultants, or just people passionate about a topic or discipline. They can charge any price they want; 30 percent of any fees go to Udemy, and the rest to the instructors.

More than 35 professors at traditional colleges are using the platform so far, though most of them are offering their courses at no charge, Eren Bali, a co-founder of Udemy, said in an interview this fall.

One professor who has put a price on his Udemy course is David Janzen, an associate professor of computer science at the California Polytechnic State University at San Luis Obispo. He priced his course at $89 per student. His goal was not to rake in money, he says, but to bring in about the same amount per hour as he does with his consulting work. And his price is lower than that of the typical Udemy course, many of which cost $99.

"It seemed to be a good, reasonable price," Mr. Janzen says.

His course builds on a series of online labs he has created as part of his research, using what he calls "step based" exercises. "You can't go to the next step until you pass this step," he explains.

The labs are all free on his own Web site for anyone to use. But his Udemy course adds instructional videos he created that prepare students to work through the online labs. "I'm charging them for the videos I've created," he says.

But if you e-mail Mr. Janzen, he'll give you a pass to his course—he has gone out of his way to hand out free coupons to high-school students or anyone who he thinks can't afford the tuition.

"It's kind of an honor system at this point," he says.