Blackboard Co-Founders Says Online Education Set To Put Price Pressure On Traditional Schools

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One of the early pioneers of online education, Blackboard co-founder Michael Chasen, was one of the speakers at Startup Festival in Montreal today, and while he’s focused on a new startup called SocialRadar that isn’t education-focused, but he still had lots to say about the future of the education industry. Massively open online courses (MOOCs) represent the biggest disruption in the education space since colleges and universities started getting online, he said, and that’s going to mean a lot of upheaval to come.

Chasen said that the changes he’s seeing now in the industry remind him of those that were going on at the time that he started Blackboard, when colleges were realizing for the first time that putting course materials and course management tools online made a lot of sense. Change was happening fast and haphazardly, and the results weren’t necessarily clear at the time. With MOOCs provided by startups like Udemy, Coursera and more, there’s a chance to flip everything on its head again.

According to Chasen, he’s heard often that education institutions are now struggling with demand, especially in fast-growing markets like China. Schools there literally can’t build enough buildings to put people in their colleges, he said, and are trying to figure out how to handle issues like students that are sometimes seven hours away from their nearest physical campus. Online education means you can scale immensely without worrying about growing the physical plant and those costs, and it also means students need only a phone to participate, lowering costs immensely.

MOOCs might not take over for traditional colleges entirely as some are suggesting, he said, but they will have one very specific impact on existing schools: extreme downward price pressure. Adding much-needed competition into the education industry will cause everyone to be more cost-conscious, and that’s great for students. Who it won’t be good for are publishers, Chasen said. Most young profs and educators Chasen has spoken to are excited about the prospect of expanding their reach, despite the big changes it presents. It’s local small colleges and publishers who will really feel the pinch, he believes, and who will most strongly resist the change.

There will always be a special place for Ivy league schools and the top tier of educational institutions, Chasen said, but there’s going to be a lot of pressure on the lower level schools to adapt their approach to students who have opportunities for choice, especially once accreditation issues start getting worked out. It doesn’t mean we’ll all be getting degrees by email in five years’ time, but it does mean we’re only seeing the start of the changes that will result from the rising popularity of MOOCs.