The Coming Paradigm Shift in Higher Education

If you’re like me, when the topic of online education comes up you can’t help but think of institutions like the University of Phoenix, and the less-than-stellar education these “colleges” provide.

But that’s not stopping more and more students from jumping on the online higher education bandwagon.

According to a study by Marketdata Enterprises, in 2010, enrollment for online education jumped 11% over 2009, and 385% since 2002.

And by the fall of 2010, 30% of all higher education enrollments were online – a figure that the firm expects to grow to 37% by 2015.

By the looks of it, they may end up getting an education that’s as good – if not better – than traditional universities.

Here’s why…

Take Ivy League Courses for Free

The online education landscape is changing at a rapid pace, thanks to new platforms that allow students to take full, quality courses online.

Take Apple’s (Nasdaq: AAPL) iTunes U, for instance. This program allows college professors to make entire courses available for download through the iTunes store. The most popular course – for example, Developing Apps for iOS – includes video lectures for each class and related assignments.

Then there are websites like Massachusetts Institute of Technology’s OpenCourseWare and Coursera. Similar to iTunes U, these websites offer courses ranging from Introduction to French and Developmental Psychology, to Computer Graphics and Game Theory.

What’s great about these platforms is that you’re not learning from someone with zero credibility. In fact, many courses are taught by professors from institutions like Stanford and MIT (in the case of MIT’s OpenCourseWare, all the material is by MIT’s faculty).

Not to mention, they’re free. So anyone with an internet connection can take Ivy League-level courses without accumulating massive student loan debt. Which is one reason a Stanford professor is ditching his tenure and starting up an online university of his own.

Online Students Showing More Dedication

Inspired by another website that offers free courses and tutorials, Khan Academy, Stanford professor and Google (Nasdaq: GOOG) engineer, Sebastian Thrun, decided to offer his Introduction to Artificial Intelligence class completely free to anyone who wanted to take the course online.

Essentially, students around the world could listen in, complete assignments and take quizzes – right along with the students that were physically in Thrun’s class.

On Monday at the Digital Life Design (DLD) Conference in Munich, Thrun said that an astonishing 160,000 students signed up for the class. It ended up being so good, that most of his paying students started taking the online class instead.

One of the biggest benefits of this model is that students can revisit lectures at any time to ensure they understand the material. As a result, Thrun noticed that the online students were actually the most dedicated, watching each video sometimes up to 40 times.

In fact, of the 248 students who received a perfect score in the class, none of them were actually enrolled at the college. I’d say that’s pretty solid evidence that – as long as it’s done right – an online education is certainly a worthy alternative.

And Thrun thinks so, too. Which is why he’s leaving Stanford and jumpstarting the online university Udacity next month. (Its first offered course – seven weeks long – will teach students to build a search engine similar to Google or Yahoo!.)

The one problem is that since Stanford isn’t participating in this initiative, taking these courses won’t land you an actual degree. (The same goes for the other platforms mentioned previously.)

But more colleges are beginning to realize that online learning isn’t a passing fad.

According to Marketdata, 67% of college administrators now “rate the learning outcomes in online education as the same or superior to those in face-to-face education.”

And very soon, once sites like Udacity gain popularity – and credibility – you can bet universities will begin to back them.

So eventually, anyone in the world might be able to receive a quality degree, no matter where they’re from, how much money they have, or how well they performed on the SAT.

Of course, whether that education will remain free once colleges get involved is another story.

Good investing,

Justin Fritz

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If you’re like me, when the topic of online education comes up you can’t help but think of institutions like the University of Phoenix, and the less-than-stellar education these “colleges” provide. But that’s not stopping more and more students from jumping on the online higher education bandwagon. According to a study by Marketdata Enterprises, in...

Justin Fritz

, Executive Editor

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