Not From The Onion: Minnesota Bans Stanford’s Unauthorized Free Online Education

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This story of government overreach is so outrageous that we have to re-iterate that it is, in fact, real: the State of Minnesota has banned popular free online education site, Coursera, and has sent warning notices to its institutional partners, such as Stanford and Princeton, for providing high-quality instruction without paying a registration fee. According to Slate, Minnesota manager of institutional registration, George Roedler, says the law is meant to protect students from substandard online education, and that top-tier universities would have no problem obtaining permission (after paying a $1,200 registration fee). The issue, as Slate correctly points out, is that no organization could provide free education if they had to pay off every city, state, and federal agency aiming to cash in on the permission granting process.

Coursera Co-founder, Daphne Koller, says that most Coursera students are simply looking to brush up on their skills without obtaining a degree, so Minnesota officials shouldn’t be worried. “The law’s focus is on degree-granting programs as opposed to free, open courseware,” she told The Chronicle of Higher Education. Nonetheless, she has updated their site with a warning

Notice for Minnesota Users:
Coursera has been informed by the Minnesota Office of Higher Education that under Minnesota Statutes (136A.61 to 136A.71), a university cannot offer online courses to Minnesota residents unless the university has received authorization from the State of Minnesota to do so. If you are a resident of Minnesota, you agree that either (1) you will not take courses on Coursera, or (2) for each class that you take, the majority of work you do for the class will be done from outside the State of Minnesota.

Coursera is one of many new large-scale online education organizations aiming to provide universal access to the world’s most exclusive universities (otherwise known as Massive Open Online courses, MOOC). Building off the mega-success of MIT’s groundbreaking experiment in free online lectures, MIT OpenCourseWare (with 125 million lifetime views), an increasing number of high-profile educational establishments began offering similar services. Earlier this year, MIT partnered with Harvard for its EdX project, to expand its online course roster and augment lectures with Interactive quizzes and peer-support communities.

Recognizing the limits of the nonprofit sector, two Stanford professors launched Coursera, a for-profit venture of online learning, with the aim of using its capital to expand the reach and sophistication of online services. Coursera has seen over 1.5 million users, continues to add more partners (most recently Duke and Caltech), and raised $22 million in venture capital. Eventually, Coursera plans to monetize with services like certificates so that it can continue to grow its offerings.

Under Minnesota law, university partners of EdX, Coursera, or any other MOOC are education vigilantes. While it’s unlikely that Stanford or Harvard will bow to legal threats, or that Minnesota could enforce the law, the silly incident underscores a widespread problem between government regulators and startups: 20th century consumer and worker rights laws are hindering innovation. Just this week, on-demand driver service, Uber, had to shutter its smartphone app for NYC cabs, since it violated taxi unions’ rules related to pickup fees. New York policymakers also went after popular house-renting service, Airbnb, alleging that users who rent out their rooms are creating “illegal” hotels that threaten the profitability of the hospitality industry.

Ultimately, the rules must be re-written or governments must use their discretionary powers to overlook antiquated laws. Otherwise, we’re going to have the unfortunate pleasure of notifying more and more readers that their beloved services are now illegal.