Price is right for the next generation of digital courses

Free tuition is too costly for many business schools to sustain, so modest fees have been introduced
Cost benefits: paying students are motivated to finish the course © AFP

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When massive open online courses emerged four years ago the thing that really caught the public imagination is that they were free. Thousands of people enrolled on courses provided by academic institutions on third-party Mooc platforms such as Coursera and edX and started studying subjects they would never have been able to access before.

But high-end online programmes require substantial investments of time and money. Also, with such large numbers of participants, many business educators and students questioned whether standards could be maintained. Some institutions, such as Oxford’s Saïd Business School, decided not to offer Moocs or other online courses at all.

Today, many that did offer free programmes have switched to charging fees. HEC Paris ran free and open Moocs in 2012 via the Coursera platform. Now it offers a number of programmes on Coursera. But “free courses are expensive to deliver”, says Nathalie Lugagne, HEC’s associate dean for executive education. “So we decided to find new ways to monetise.”

She devised an online corporate finance programme that costs €1,800 and awards a certificate on completion. It consists of three courses, featuring case studies and webinars, lasting six weeks each. Students sit a final exam. So far two cohorts of 400 students each have taken the programme.

Others have taken a hybrid approach. Harvard Business School runs HBX CORe (Credential of Readiness), an online course designed as a primer on the fundamentals of business. It costs $1,800 and completion requires students to pass a final exam. The course combines Harvard’s case-study approach to teaching with an online, community-based curriculum.

Patrick Mullane, HBX’s executive director, says the course is not a Mooc. Instead he describes it as an extension of Harvard’s premium offering, which students are willing to pay for. “We were not interested in creating another Mooc platform,” he says.

But do courses such as those at HBS and HEC go against the egalitarian nature of Moocs? HEC’s Prof Lugagne says the courses are “inspired” by Moocs, but they are a different product that essentially offers already well-educated professionals a chance to extend their skills or prepare for an MBA.

Mr Mullane adds: “Our goal was to create a sustainable business model, which ensures we are able to continue to produce the highest quality business education courses.”

Richard Barker, professor of accounting at Oxford’s Saïd Business School, says Moocs should be a way for universities to contribute to society. An effective, non-commercial model would provide a great opportunity to share knowledge beyond those who attend the institution. “But it has got to be done well,” he says. “[Some institutions] use Moocs as a marketing outreach tool, as a way for people to get to know the brand. But there’s no need for us to do that.”

Paid-for online courses might deliver high-quality education, but are they worth students’ money?

Prof Lugagne argues that they are good value. She says the price of HEC’s executive online certificate is still “very affordable” and helps the school fulfil its mission to provide education to the largest number of people. The certification awarded at the end of the course carries credits that can be put towards some of the school’s degree programmes.

“In our experience, people expect to invest in the quality of education and interactive experience provided by CORe,” says Harvard’s Mr Mullane. He says HBS believes that when a student is paying for something, they are more motivated to get the most out of it, and the model is working.

“To date our completion rate for HBX CORe is about 85 per cent — far exceeding the average completion rate for Moocs,” he says.

A University of Pennsylvania Graduate School of Education study of a million users of Coursera published at the end of 2013 found that completion rates averaged only 4 per cent.

For business schools, any online course, free or otherwise, is an expensive business. Academics have to take time to construct a course and gather teaching materials, while institutions are also funding research.

“Developing and funding Moocs or online programmes has a cost and charging for them seems inevitable and reasonable,” says Prof Lugagne. The challenge, she adds, is finding the right business model that will preserve the quality of both teaching and learning, while keeping the courses affordable.

“The idea is easier than the execution,” says Prof Barker. “It’s expensive and time consuming to build a course that’s worth doing.”

He points out that HBS is not just pulling content out of text books. The goal, he says, is to deliver high quality, case-based learning to a wider audience, while also creating a sustainable business model.

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