Edtech Companies Weigh In On Obama’s Free Community College Plan

Two years of community college for free? Education watchers and politicos have been debating about that proposal from President Obama since he announced it early this year. Is it worth the estimated $60 billion that would be spent over 10 years by the federal government? Will the America’s College Promise program really help students break into middle class jobs, as Obama hopes?

But a different question interested me as a business reporter. If this ambitious proposal passes, would it be a bonanza for educational technology companies? If the first two years of college tuition cost nothing to students, would the nation’s more than 1,100 community colleges need the edtech industry’s help to handle a tidal wave of new students?

Dennis Yang, CEO of San Francisco-based online education marketplace Udemy, applauded Obama’s proposal even though he has doubts about its chances given the current contentious mood in Congress.

“I think it’s a great step in the right direction for all of us even to be talking about this,” Yang (pictured above) says. “We all need to develop new skills, and we need more accessible, affordable means to get these skills.”

Pearson Education, the huge global textbook publisher with an expanding digital learning business and thousands of online courses, already has many partnerships among the nation’s public two-year colleges, says the company’s Jonell Sanchez, vice president of global employability and career success. Sanchez welcomed Obama’s initiative, which was inspired by new tuition-free community college programs in Tennessee and Chicago.

“It aligns very much with where we have been,” Sanchez says. “Pearson works with most of the community colleges in the country.”

Pearson’s partners include Indiana’s multi-campus Ivy Tech Community College, which was cast into the spotlight by the president’s public campaign for his free tuition proposal. Obama chose Ivy Tech’s Indianapolis campus as the site for a Feb. 6 forum where he touted the plan.

Under Obama’s program, the federal government would pay 75 percent of the average community college tuition while participating states would cover the rest. If all states join in, the program would assist 9 million students, and save full-time community college students an average of $3,800 in tuition per year, the White House said in a statement when Obama’s proposal was announced Jan. 8.

“Students should be able to get the knowledge and the skills they need without taking on decades’ worth of student debt,” the administration said in the statement. The nation’s student debt from attending colleges of all types now exceeds $1 trillion.

The Obama proposal has become the focus of an ongoing national discussion about the fundamental value of college, and community colleges in particular, as affordable training grounds for the careers of the future. Members of the edtech industry take varied positions in this debate. While edtech companies are partnering with community colleges, some industry players are also competing with those schools to offer low-cost programs.

One advocate for online education says the Obama plan will funnel students into established community colleges instead of supporting innovative programs that could cut the cost of tuition for both students and taxpayers. In a commentary for CNN, Michael Horn, co-founder of the Clayton Christensen Institute for Disruptive Innovation, says the actual cost of community college is about $13,000. Horn says that’s roughly four times as much as tuition at a community college that charges students $3,300 a year. Government aid is already covering the difference, he says.

By comparison, Horn points to Oakland, CA-based Patten University, an accredited institution operated by the for-profit San Francisco social venture company UniversityNow. Patten offers self-paced, two-year associate’s degrees in business and criminal justice for a tuition of $350 per month, for as many courses as the student can handle per term. That amounts to $1,400 a term. Patten hasn’t sought to qualify its programs for federal student loan programs. UniversityNow’s investors include Kapor Capital, University Ventures, Novak Biddle Venture Partners, and Bronze Investments.

Horn says community colleges, as a class, can’t point to high success rates among their students. Only 28 percent graduate from two-year programs within four years, and of those who do earn an associate’s degree, Horn says, many would profit more by pursuing a professional certification instead.

Udemy’s Yang makes a related argument. Although he thinks the federal government should do more to support post-secondary education, Yang says the Obama administration should first invest in a careful study of its goals and the best means to achieve them in a fast-changing job market. That might mean funding novel, affordable solutions outside the college system, and credentials other than a degree, he says.

“It’s getting harder and harder to actually predict where the economy is going, and what the jobs of the future will be,” Yang says. “People are calling into question whether a college degree is the guaranteed, risk-free ticket to the middle class.”

The Udemy marketplace allows anyone, from traditional college instructors to workplace experts to hobbyists, to offer online courses and set their own price—which can be zero. If there is a charge to students, Udemy shares part of the fee. A student could design a course of study to include, say, programming in the computer language Java, beginning Chinese, time management skills, critical thinking, and an “elective” in yoga or Spanish guitar lessons. The fee per course can be as little as $20.

The idea behind such direct-to-consumer edtech marketplaces is that career-minded individuals can pursue the skills needed by employers in their own regions. Companies can also conduct corporate training by buying packaged access to certain courses through Udemy for Business, Yang says.

But Yang acknowledges that edtech programs in general currently work best for motivated, savvy students, rather than those who need to fill in educational gaps that leave them unprepared for higher-level learning.

Pearson estimates that more than half of new students at two year colleges need remedial courses—as do almost 20 percent of students on their arrival at four-year institutions. Part of Pearson’s U.S. business is aimed at preventing those knowledge gaps with products to support Common Core, the challenging new K-12 educational standards being adopted in most states. One of the goals is to make young people better prepared for the 21st century workplace, which requires critical thinking skills as well as mastery of basic subjects such as English and math.

But that new K-12 educational initiative doesn’t help young people who have already finished their school years without gaining key skills.

If Obama succeeds in making community college free for two years, there could be an influx of new applicants needing remedial courses, says Jason Jordan, senior vice president of digital strategy at Pearson. “It would draw from a population that is not as academically prepared,” Jordan says.

At Ivy Tech and other community colleges, Pearson offers a resource called MyFoundationsLab to get students up to speed in reading, writing, and math. It’s designed to help anyone catch up, no matter how far behind they are. The starting point for the math sequence is not simple addition, but counting. In language arts, the starting point is not beginner’s reading, but letter recognition, Jordan says.

For many new students, the road to college readiness may not be that long, Jordan says. Their early schooling may not have been severely deficient. But many community college applicants are returning students, he says.

“The average age of a community college student is 27,” Jordan says. “You’re talking about a large percentage of the population coming back many years after they took their last class in high school.”

Some colleges run summer boot camps to get these students ready for class quickly using Pearson courseware, Jordan says.

But would Obama’s proposal create a bigger market for edtech companies that provide these remedial programs? It may not. Under the program, free tuition would only be provided to students enrolled in academic programs leading to credits accepted at four-year colleges and universities, or in occupational training programs that lead to degrees and certificates that are in high demand. Students would need to maintain a grade point average of at least 2.5. That’s about a C+. They would also have to attend school at least half-time.

The proposal appears to leave it to the states to fund better college readiness preparation in the public schools, and remedial coursework at community college.

However, Pearson’s product line covers other bases, including occupational training. Its workforce education unit develops courses that help community college students prepare for exams that lead to industry-created credentials, like those offered by NCCER, a non-profit educational foundation supported by the building construction industry, Sanchez says. Ivy Tech has access to Pearson occupational courseware in subjects that include construction, information technology, hospitality, and manufacturing, he says.

While Obama’s proposal for nationwide community college tuition support may not fly due to partisan politics in Washington, Sanchez says a market already exists for edtech companies supporting those schools. Both Republicans and Democrats in many states are recognizing the importance of workforce development to their economies, he says.

In the United States, Pearson is a partner to degree-granting colleges and universities. But globally, Pearson is part of an overall movement in edtech to develop credentialing models outside traditional college and university systems. Pearson offers instructional programs via mobile devices in countries with thin academic infrastructures. In the United Kingdom, Pearson is among the entities authorized to award credentials, he says.

“In some parts of the world, we do grant our own degrees,” Sanchez says.

While edtech companies might benefit if Obama’s community college proposal passes, they’re not necessarily waiting for governments to fully support the market for education that helps students get better jobs. Nor are they relying solely on traditional colleges.

“There’s a greater pressure for community colleges—or four year colleges—to look a student in the eye and say, ‘This degree leads to something,’ ” Sanchez says. “People are recognizing that alternative means of learning and validating knowledge are here to stay.”

Bernadette Tansey is Xconomy's San Francisco Editor. You can reach her at btansey@xconomy.com. Follow @Tansey_Xconomy

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One response to “Edtech Companies Weigh In On Obama’s Free Community College Plan”

  1. Michelle says:

    Interesting article. The NYEdtech Meetup is hosting a panel on Edtech at Community Colleges next Tuesday March 3rd http://www.meetup.com/NYEdTech/events/220624424/