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MITx: Ivy League Education is Going on Clearance

Last month, I discussed how professor and Google (Nasdaq: GOOG) engineer, Sebastian Thrun, decided to give up his tenure at Stanford and begin a new online university called Udacity.

The main benefit of this platform is that it’s completely free. So anyone in the world can learn from an Ivy League professor, no matter how little money they have.

As I mentioned, though, a site like Udacity is limited since it’s not backed by an accredited institution. So whatever certificates students receive won’t carry as much clout as an actual degree.

Luckily for cash-strapped students who hunger for Ivy League labels, MIT is gearing up to launch an online course of its own.

MITx Will Accelerate the Shift in Higher Education

In an effort to expand its educational reach beyond the campus, MIT has developed MITx, a platform allowing students to take entire courses online.

And like Udacity, it offers a few key benefits over traditional universities…

  • Unlike attending traditional colleges or even most online courses, MITx doesn’t require an entrance application. And since college applications – along with SATs – were the most stressful part of my high school career, I doubt anyone would miss them.
  • The courses through MITx are automated. Meaning each class occurs on your schedule.
  • And most importantly, classes through MITx will be completely free.

But MITx trumps Udacity because credits earned come with MIT’s venerable stamp of approval.

Its prototype course, Circuits and Electronics, kicks off in March. And if all goes well, the university expects to “roll out courses in areas such as biology, math and physics,” according to the BBC.

But how can these free online classes measure up to courses taken on campus?

MIT claims that the online offerings won’t be any less challenging than what students would experience in person. So prospective students shouldn’t think they’re getting an easy ride.

However, since the online course is free, MIT says the credits won’t get the same level of distinction as campus credits. Which is only fair to the students paying big bucks every year to take courses in person.

Eventually, though, this model has the potential to drive down the cost of college tuition across the board.

The End of Insane Student Loan Debt?

Currently only 44% of students enrolled in undergraduate courses right now are paying less than $9,000 a year, according to The College Board.

And almost a third are paying $36,000 or more. That works out to $144,000 after four years.

The spikes in tuition costs are building momentum, too. Considering that between 1999 and 2009, tuition fees rose by 32%, while this year alone tuition is up 8%.

Many factors are to blame, from inflation to cuts in state funding. Like Molly Corbett Broad, President of the American Council on Education, says, “It has become all too common for state legislatures to dip into the pockets of students and families to balance state budgets.”

No matter the reason, the $0 price tag at MITx is going to be more and more attractive to students around the world.

Granted, the MITx label isn’t going to look as impressive on a resume just yet. But that might change as more institutions follow MIT’s lead.

And as more students embrace the shift, institutions might be convinced to offer full-fledged degree offerings online, instead of basic certifications.

Of course, this would mean that these online courses wouldn’t be free anymore. But the sheer number of online enrollments would at the very least allow institutions to offer tuition at a discounted rate. Which would give students the ability to receive a top-notch education without accumulating such a boatload of debt.

True, it might not happen overnight. But as more elite institutions adopt programs like MITx – and I’m convinced they will – you can bet that it’s going to happen faster than anyone realizes.

Good investing,

Justin Fritz

Justin Fritz

, Executive Editor

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