After reading Wired Chris Anderson’s (2009). Free: The Future of a Radical Price (available but ironically only for free to residents from the world’s richest country, the US, from SCRIBD), I spent some time reflecting on the disruptive effects of ‘free’ on higher education provision and opportunity.

Free has not only effected media consumption, publishing, and software production but also has capacity to create very disruptive, low end challenges to higher education. A low end disruption offers a service to a large new market by providing satisfactory (but not necessarily equivalent, at least at the beginning) services to large new groups of consumers. The most publicized example in higher education is the University of the People, founded by Israeli entrepreneur Shai Reshef. UoPeople is headquartered in California and is now registering students for its first courses to begin in September 2009. Mr Reschef provides a good overview of his vision and the logistics of operating a very low cost institution in a recent Higher Ed podcast.

The model being developed is a cohort based with 15-20 students following a set online curriculum. Each section has a tutor (some of whom are volunteers,) but most importantly students are encouraged and taught how to question, support, and teach each other. The curriculum (Business and Computer Science to date) seems quite traditional in terms of content with two and four year paths. The site claims that tuition and exam fees will be low, and for startup has waived all fees. Mr Reschef has intentions to earn accreditation for programs and thus ability to offer degrees through one of the US Regional Accrediting Boards.

I am increasingly concerned that the high tuition fees charged by accredited institutions, including my own Athabasca University, are resulting in us pricing ourselves out of even the Canadian market- much less the market and opportunity of serving those from developing economies. Too often, older open and online universities are so concerned with looking, feeling and smelling like REAL universities, that we have not realized the true potential of online education.

As U of People model demonstrates the combination of:

low cost delivery (online)

low cost content development (Open Educational Resources) and exploitation of readily available online resources

strong peer support through social networking and group interaction

development of lifelong, self directed learning skills

combining paid and volunteer labour

transparency in content and activity

It thus exploits (or serves) a very strong and compelling opportunity. Such a model de-couples teaching from research, allowing staff to focus exclusively on providing high quality learning designs and experiences. The model also does not meet the needs of 18-24 year olds from rich countries for whom education is as much a social as an educational experience. But if it meets its potential, it will create opportunity for millions of new learners at costs they can afford.

Anderson writes “The most destructive way to enter a market is to vaporize the economics of an existing business models. … The world will beat a path to your door and you can sell them something else” p. 43. He covers the various ways that profit can be extracted from free services besides bait and switch, noted in this quote. The vast reduction in costs to develop, share and use digital resources and services creates opportunities for very different models such as providing additional premium services, marketing for other non free products and selling the attention of users to advertisers (Google and radio model).

Obviously the fee scale of the University of the People has potential to ‘vaporize demand’ for expensive online programs. The challenge that especially public higher education institutions face is to constantly implement means to reduce costs at all levels of the organization. In addition, to compete with ‘free’, public institutions will have to devise additional review streams – beyond government subsidy and tuition so that they are able to continue to serve disadvantaged citizens and meet their continuing “open” vision and mandate.