Posted by The Chronicle of Higher Education Jan. 15, 2013.

By Jeffrey R. Young

State universities in California, looking for creative ways to reduce education costs at a time of budget stress, are turning to MOOCs to offer low-cost options for students.

On Tuesday, San Jose State University announced an unusual pilot project with Udacity, a for-profit provider of the massive open online courses, to jointly create three introductory mathematics classes. The courses will be free online, but students who want credit from San Jose State will be able to take them for just $150, far less than the $450 to $750 that students would typically pay for a credit-bearing course.

If the project continues beyond the pilot, the university will keep 51 percent of any revenue after costs are covered and Udacity will keep 49 percent, said Mohammad Qayoumi, president of the university, in an interview on Monday.

The University of California system may eventually decide to work with MOOC providers as well: Leaders of Udacity and Coursera, another for-profit MOOC company, are scheduled to appear before the university’s Board of Regents on Wednesday.

The California State University project began when the state’s governor, Jerry Brown, e-mailed Sebastian Thrun, the founder of Udacity, to say “We need your help,” recounted Mr. Thrun during a news conference on Tuesday.

The governor, a Democrat, said at the news conference that student debt is a “huge problem” and that “online is a part of that solution.”

For Udacity, a key goal of the experiment will be making sure a critical mass of students completes the courses. Free online courses have enjoyed huge enrollments but have frequently reported dropout rates of about 90 percent, since many students sign up out of curiosity but do not complete many assignments. To deal with that concern, Mr. Thrun said his company would hire mentors to check up on students enrolled in the courses for credit and to be available to answer their questions.

The mentors will most likely be student workers, said Ellen Junn, San Jose State’s provost, in an interview on Monday. “They’re not instructors, they’re not TAs, but they will be there to provide additional support and tracking to students,” she said. “They do not provide any instruction. They are there for social support and mentoring support.”

Faculty Intellectual Property

Courses in the pilot project are aimed at high-school students and students enrolled at community colleges in the state.

Mr. Thrun pointed out that in large university classes, the amount of contact each student has with professors is quite small, and that he is interested in finding low-cost ways to give students in MOOCs some help, such as a phone hotline or a system of mentors. “If it really works,” he said, “then we might actually be able to help a whole bunch of students become college-ready.”

Professors at San Jose State will each be paid $15,000 to develop the pilot courses, said President Qayoumi during the news conference on Tuesday. Faculty members will retain the intellectual-property rights to the course materials, said Ms. Junn.

As the number of MOOC experiments has grown, some professors across the country have expressed concern about the role companies are playing in their development.

David Parry, an assistant professor of emerging media at the University of Texas at Dallas, said that efforts to increase access to education are laudable, but he wishes that fewer experiments were being led by for-profit companies.

“It almost treats students like they’re industrial products, like ‘How many widgets can we get through those programs?'” he said. “States are defunding education, but leaders are saying, How can we still meet our obligations and check the box of providing education?”

San Jose State is also working on another MOOC pilot with a nonprofit provider, edX, which is led by the Massachusetts Institute of Technology and Harvard University.