UC Online Strives to Compete in an Era of Free Courses

Paul Sakuma, AP Images

Christopher Edley Jr., dean of the Berkeley School of Law, pitched the idea of a systemwide online-education program in 2010, suggesting private support. When that backing never materialized, the project was financed from within, to the chagrin of some faculty members.
October 01, 2012

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 two years ago 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.

But UC Online now appears to be struggling, even as other highly selective colleges rush to offer their courses online at no charge (and, unlike the University of California, with no credit).

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. And key figures driving the project have stepped back or moved on, including Daniel Greenstein, formerly vice provost for academic planning, programs, and coordination in the university system, who left this summer to take a job at the Bill & Melinda Gates Foundation.

The online effort will face its toughest test this winter. That's when it will first open its virtual doors to students not already enrolled at a University of California campus. It needs to attract at least 3,000 non-UC students this year and add 1,000 more each year until it reaches 7,000 non-UC students to pay back its loan on time, said DoQuyen Tran-Taylor, project manager for UC Online.

The hope is that the project will draw on the strength of the system's brand and the promise of University of California course credit. If UC Online is successful, students at campuses in the system will reap the benefits, its leaders say. Students will be able to expand their options while studying abroad, gain greater schedule flexibility, and take courses for credit from any UC campus.

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 pivotal question is whether people will choose to shell out money for UC Online courses rather than for already-established online programs or one of the many free online courses, known as massive open online courses, or MOOC's, offered by a growing number of well-known colleges.

Richard Garrett, vice president and principal analyst at the consulting group Eduventures Inc., and an online-education expert, described student demand for UC Online courses as "questionable" at best. "They will have a hard time generating a lot of interest given the range of choices available," he said. "They're entering an already crowded market with nothing particularly distinct being offered."

Richard A. DeMillo, director of the Center for 21st Century Universities at the Georgia Institute of Technology, said he has heard "relatively little" about the UC Online project. "Our peer institutions have looked at the business plan, and decided to go in a different direction," he said.

Has MOOC mania become the biggest obstacle to California's online vision?

'Credit That Transfers'

In July 2010, Christopher Edley Jr. pitched the proposal to create a systemwide online-education program to the University of California's Board of Regents. Mr. Edley, dean of Berkeley's law school and senior policy adviser to Mark G. Yudof, the system's president, stressed the potential for an online program to bring in revenue and deliver undergraduate courses to a wider audience. He predicted that officials could raise about $6-million from private donors relatively easily. "If we can't raise some private money to tackle something this important for all 10 campuses, I should be shot," he said at a news conference after the meeting, according to a report in The Daily Californian.

 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.

Private companies leading free online-education efforts, meanwhile, have been raking in investment cash. Coursera, for instance, boasts more than $22-million from investors.

The "terrible shape" of the economy combined with potential donors' perceptions of the UC system made securing the money difficult, Mr. Edley said in an interview. "Many donors felt that with the size of the UC, we should be able to finance these investments internally," he said. "They apparently weren't sensitive to the serious effects of state budget cuts." He added that foundations tend to take a "bottom up" approach and were "not interested in supporting elite institutions—even public ones."

Mr. Edley has recently stepped back from UC Online, acting as a peripheral adviser to the project while focusing his efforts on online initiatives at Berkeley School of Law.

The task of making the project financially sustainable lies in the hands of its interim leader, Keith R. Williams, a professor on the Davis campus who served as chair of the UC Committee on Educational Policy and has been involved in the project since its inception. Mr. Williams 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."

Mr. Williams said the program has applied for a grant from the National Science Foundation and that it will "continue to try to be competitive" in searching for private funds. Other potential revenue streams are being discussed, but are not "fleshed out," said Ms. Tran-Taylor, the project manager.

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.

About 700 University of California students have taken UC Online courses over this past spring and summer, in subjects like pre-calculus and freshwater policy. Those students did not bring in additional revenue to the system, however, since they were already enrolled and paid normal tuition.

Mr. Edley and others are banking on the attraction of UC credit. Beginning this winter, non-UC students can join in by paying $1,400 to $2,100 per online course. About 35 courses are under development, and Mr. Edley predicts that well over 100 courses will be available within a few years.

The UC Online Web site pitches its services to four non-UC student demographic groups: high-school students, graduate-school prospects, transfer students, and lifelong learners. "Here, you'll get the opportunity to take classes from some of the best professors in the world, while earning credit that transfers to any UC campus, and may even transfer to other colleges and universities," says the site.

High-school students hoping to gain admission to UC campuses and prospective transfer students studying at overcrowded California community colleges may be especially drawn to the program, although a lower price point would make UC Online courses more "compelling" for community-college students, said Mr. Garrett of Eduventures.

A portion of the tuition that non-UC students pay to take the online courses goes into operating costs like paying teaching assistants, developing the courses, and paying back the loan to the UC Office of the President, Ms. Tran-Taylor said. Any revenue from the tuition is funneled back to the campus department that hosts the course, and individual campuses can decide how to distribute the funds.

The head of the project's online-advisory committee, Gene Lucas, said in an e-mail interview that market research indicated enough student interest to go forward. Mr. Lucas, who is also executive vice chancellor of the Santa Barbara campus, said "it remains to be seen" whether this student interest will translate into a successful financial model.

Getting Faculty to Buy In

Some professors within the university system have serious doubts. Wendy Brown, a political-science professor at Berkeley and a former co-chair of its faculty association, has long been a critic of the project, questioning why students would choose a more expensive University of California online course over those offered by community colleges, California State University campuses, or other institutions. In July, she posted an indictment of the online program on the Faculty Association's Web site entitled "Where's UC Online Now and How Will We Get Our $7-Million Back?"

"Shouldn't we be able to see the loan repayment schedule for UC Online?" she wrote. "And is it possible that we should stop throwing good money after bad, fold UC Online, sign on to Coursera, and get back to the important business of protecting what remains of UC on-campus instruction?"

Mr. Edley acknowledges that MOOC's could present a challenge to the university system's ability to generate revenue from large undergraduate courses, but he thinks the system is better equipped to handle large classes than are private universities. "Our best defense will be quality," he said. "The private institutions developing MOOC's do not have large-scale access in their institutional DNA, so I doubt they will put the effort into building comprehensive programs to deliver quality and scale."

And Mr. Williams, UC Online's interim director, noted that most MOOC's offer only informal certificates to those who complete them, whereas UC Online grants college credit for its offerings.

The project also faces the challenge of getting buy-in from a key stakeholder—the faculty. The relationship between UC Online's leadership and the systemwide Academic Senate has "continued really well over time," Mr. Williams said. But past documents show a clash of opinion over how the project should proceed.

On May 11, 2010, Henry C. Powell, then-chair of the universitywide Academic Council, sent a letter to officials stating that the council unanimously endorsed the pilot project "contingent on the procurement of external funds." He added that the "Council does not endorse the redirection of existing funds to his effort."

After the revised UC Online plan supported by the loan from the system's Office of the President was announced, faculty-senate leaders expressed "serious reservations" in another letter to UC officials. The professors said they wanted to see a more defined financing model and examination of the project's impact on the system.

The project continued despite professors' reservations. Mr. Edley contends that faculty perceptions of UC Online have "turned a corner," but Daniel Simmons, a former chair of the Academic Council, disagrees. "They just had a pie-in-the-sky vision," he said. "I don't think people's views have changed."