Coronavirus Forces $600 Billion Higher Education Industry Online

(Bloomberg Businessweek) -- Analisa Packham, an economist who studies health and education, would seem ideally suited for teaching in the age of Covid-19. Yet last weekend the 30-year-old assistant professor at Vanderbilt University in Nashville realized she had a lot to learn—about technology.

Packham taught herself two popular software programs for videoconferencing, Zoom and Kaltura. She plans to hold office hours via Skype and produce TikTok videos to explain the importance of food stamps in the current economic crisis. She’s already recorded a video lecture for her 41 students, but is far from satisfied with it. “If I was a student, I would not want to watch this,” she says.

America has 1.5 million faculty members, and, like Packham, 70% have never taught a virtual course before, according to education technology researcher Bay View Analytics. To promote social distancing during the pandemic, universities are sending students home en masse to learn on their laptops. In a matter of weeks, as spring breaks end, the $600 billion-plus higher education industry must suddenly turn to an approach many have long resisted: online education.

Coronavirus Forces $600 Billion Higher Education Industry Online

Evangelists of distance learning have lauded its promise of expanded access and lower costs. They hope the crisis could spur reluctant institutions to fully sign on to the web, but also fear a potential disaster if things go poorly. “Schools that haven’t historically embraced online education are now being forced into it,” says Michael Horn, co-founder of the Clayton Christensen Institute for Disruptive Innovation and a higher education consultant. “Rather than becoming a crowning moment for online education, this crisis could provoke a backlash.”

The nation has had a previous experience with mass emergency education. That was after the devastation of Hurricane Katrina in 2005, which disrupted about 20 colleges. The Sloan Consortium, an association of colleges supporting online education, offered free virtual classes originating from more than 100 schools. The so-called Sloan Semester enrolled more than 1,700 students, helping many keep on course with their studies. Still, professors lost track of students who dropped out as they scrambled to find a safe place to live or found they couldn’t concentrate on their work. “The biggest problems were the ‘life happens’ issues,” says Bay View Analytics Director Jeff Seaman, who worked on the consortium then.

In that disaster, many students could, at least, rely on family and friends beyond Louisiana and the Gulf Coast; not so today, when the virus is wreaking havoc worldwide. And poor students or those living in remote regions with spotty web access suffered then—a challenge facing educators today.

Online education has since grown steadily. Some 2.4 million undergraduates, or 15% of the total undergrad student body nationwide, studied entirely online in the fall of 2019, according to research and consulting firm Eduventures. An additional 3.6 million enrolled in one or more online courses while otherwise studying on campus. “Twenty years ago, there was practically nothing,” says Brad Farnsworth, a vice president at the American Council on Education, which represents colleges.

Coronavirus Forces $600 Billion Higher Education Industry Online

Many universities already offer some online classes to on-campus students when courses don’t fit into their schedules, or to free up faculty so they can concentrate on smaller sessions. And many schools use a “learning management system” from companies such as Blackboard Inc. or Instructure Inc., which operates a popular platform called Canvas. Students can log on to access course materials, hand in assignments, see their grades, and converse online.

Pearson, John Wiley & Sons, and other publishers craft more tailored online programs for universities, helping develop curriculum and recruit students. So does 2U Inc., which works with well-known schools such as Georgetown, Northwestern, the University of North Carolina at Chapel Hill, and the University of Southern California.

Such offerings can require millions of dollars in investments, according to Trace Urdan, managing director of Tyton Partners, an education-focused investment banking and consulting firm. And some faculty have been enraged by contracts with education tech businesses that allow the companies to keep 50% or more of revenue from classes. In some setups, students learn at their own pace, logging on at will and chatting online. In others, professors hold classes in real time, where students can speak via video feeds and virtually raise their hands.

Coronavirus Forces $600 Billion Higher Education Industry Online

A relative handful of institutions, including major public universities and private nonprofits such as Southern New Hampshire University, enroll a disproportionate number of U.S. online students, making them ideally positioned for this environment. Last fall, Arizona State University enrolled 45,000 online students, mostly undergraduates—more than the total number who attend the University of California at Berkeley in person. One-fifth work for Starbucks Corp., which pays their tuition. Phil Regier, the ASU dean overseeing these initiatives, says schools that suddenly adopt virtual learning will encounter new challenges, such as securely offering tests to avoid cheating and holding students’ attention. “Here’s the first lesson,” he says. “There’s nothing more boring than a 45-minute video. They’re horrible; nobody can get through those.”

Studies have reached mixed conclusions about the efficacy of online courses, which vary widely in quality. Concerns include low completion rates, especially among underprivileged and less prepared students. With a few notable exceptions, such as Georgia Tech’s roughly $7,000 online computer science master’s degrees, institutions often charge about the same for an online degree as an in-person one, undercutting the promise of lower costs via technology.

Distance learning dates to 19th century snail-mail correspondence courses and has long had a dubious reputation, often for good reason. After the government in 2006 dropped anti-fraud provisions that barred federal aid for fully online programs, for-profit companies—many of them publicly traded—jumped into the fray. The companies, such as Corinthian Colleges Inc. and Apollo Education Group Inc.’s University of Phoenix, said they were reaching out to lower-income, minority students ill-served by the education establishment. But many were, in fact, hard-selling expensive degrees of questionable value, leaving students with crushing debt, government investigators found. After media scrutiny and congressional inquiries, that market started collapsing a decade ago, and traditional nonprofit and state colleges stepped up their online games.

Many elite colleges, including small liberal arts schools, have resisted online classes. They’ve always justified their cost, which can top $70,000 a year, by trumpeting their small classes, mentoring from professors, and extracurricular activities. But the coronavirus is forcing them to embrace distance learning for likely the rest of the school year.

Students and families aren’t thrilled at the prospect, either, even after some schools—including Harvard, Princeton, and Middlebury—offered room-and-board refunds. Amelia Pollard, a 21-year-old junior at Middlebury, has already been told by her history of American conservatism professor that the seminar’s scheduled time may not work anymore because her own young child’s school was shut because of the virus. “There’s a lot of moving parts that were not anticipated,” Pollard says.

Lab sciences and music classes present special challenges. Nora Heaphy, a 20-year-old junior at Yale, expects her Arabic language class will be fine online, but she isn’t sure about her introductory physics course. “That’s going to be a hard one, mostly because I and many other students heavily rely on office hours and study halls to complete the homework,” she says. “I don’t know how that’s going to work.”
Read more: MBA Class of 2020 Faces Tough Summer or Worse as Recession Looms

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.