University of Texas Joins Harvard-MIT EdX Online Venture

The University of Texas System plans to put up $5 million to join the EdX online venture, started by Harvard University and the Massachusetts Institute of Technology, to help meet demand for low-cost college courses.

The Texas system, based in Austin and overseeing nine universities, will quadruple the number of schools involved in EdX, which offers free online courses to anyone over the Internet. The state-supported Texas schools have been encouraged by Governor Rick Perry to cut the cost of college education.

“The UT System’s partnership with EdX is great news for Texas and exactly the type of effort I hope more schools will consider as we aggressively pursue the goals of improving graduation rates and making a college education more accessible and affordable,” Perry, 62, said today in a statement.

Texas follows the University of California, Berkeley, in joining EdX. Harvard and MIT, both based in Cambridge, Massachusetts, announced the venture May 2. The two founding schools each chipped in $30 million to finance the not-for- profit organization. A “modest fee” will be charged for those who want certificates for completing a course in the future, according to a statement on the EdX website.

Currently, students pay nothing to enroll and take classes online, while those who pay tuition to attend the participating schools can earn credit by completing EdX courses.

Cutting Cost

Perry, a Republican, has pressed public colleges and universities in Texas to offer $10,000 bachelor’s degree programs and to freeze tuition levels for four years for each incoming class, to provide cost certainty and an incentive to graduate on time.

After raising tuition by an average 7 percent annually over the past 30 years and seeing student debt soar, U.S. universities face a fiscal cliff with state and federal aid declining, said Steven Mintz, executive director of the Texas system’s Institute for Transformational Learning. In addition to its stake in EdX, the system plans to set aside another $5 million to design online courses, he said.

“Students already are taking many online classes, but many are of poor quality,” Mintz said. “This is an effort in part to ensure students take courses we consider to be rigorous and effective.”

The shift to online college-credit courses is occurring three to five years faster than expected because of demand from students and universities, said Anant Agarwal, president of Cambridge-based EdX and an MIT professor.

Not Enough

Most universities realize major structural changes are needed, though moving lectures online doesn’t go far enough, said Jeff Sandefer, a Perry adviser who taught entrepreneurship courses at the University of Texas and started the Austin-based Acton School of Business, which offers graduate management degrees. EdX and Coursera, another university group offering free online studies, “will hasten the flight of full-price customers to less-expensive alternatives, accelerating the demise of traditional academia,” Sandefer said by e-mail.

The University of Texas System plans to offer introductory courses at first, such as those typically taken by 100 or more students in lecture halls at its flagship Austin campus, Mintz said. Programs will be added from other campuses including the medical school in Houston. The classes will start next year.

Coursera, started by two Stanford University computer scientists last year, has signed contracts with 33 schools including Stanford and Princeton University, spokeswoman Iz Conroy said. Coursera received a combined $18 million in initial funding from venture capital firms Kleiner Perkins Caufield & Byers and New Enterprise Associates, plus a combined $3.7 million from the University of Pennsylvania and the California Institute of Technology, Conroy said.

“EdX is as well-funded as any startup and better funded than almost anyone else,” Mintz said. “We aren’t without arms in this arms race.”

To contact the reporter on this story: David Mildenberg in Austin, Texas, at dmildenberg@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.