Price Fixing Profs and the Law of Supply and Demand in Higher Ed

by Staff Writers

The idea of offering accredited courses at a discounted rate is revolutionary and has made an important player in the online education world. I have written favorably about the company in this space previously, particularly about their fixed price, first-year of college offerings. A December 12, 2012 Chronicle article about StraighterLine's new platform, which allows professors to set the prices for their online offerings, may indicate the beginning of a revolution in online education. Here is a look at their free market model of education as well as that of rival Udemy and what this concept might mean for the future of higher education.

About StraighterLine's Professor Direct and Udemy
The model is simple. Put your course online through the institutions' websites, set a price, promote the course through social media, and cash in! Almost sounds too good to be true, particularly when the Udemy site claims that professors can make thousands of dollars per month and Best Colleges Online blogger Michael Keathley recently wrote that some Udemy faculty are making upwards of $100,000 per year. But the sources reporting this are reliable and this model, given the rock-bottom pricing of some of the courses available on both platforms, may just be the future of delivering affordable education to the masses. If, as the StraighterLine website claims, several colleges are already accepting these courses for transfer credit, the model could explode and provide a new alternative for career adjuncts in the process.

Part of the attraction of this model is also that several faculty members from top-tier schools are offering courses for free through these platforms. How this meshes with other offerings that charge a fee is still unclear as the concept is relatively new. It could eventually become a situation in which all offerings from these sites become free or the free courses become housed in a different location to minimize competition. For the moment, the free courses exist alongside the paid ones.

In addition to MOOCs, this model of instruction is gaining in popularity. While it may not overtake the traditional residential college model or even online offerings from established for-profits, it is going to make an impact on the market, particularly because it has some significant advantages over the established model of higher education.


  • Competition: Both in price and content, these classes have the potential to infuse the marketplace with something that higher education has rarely seen – direct competition. Students can choose from increased offerings that better match their budget and interests if the proliferation of these courses continues.
  • Low Cost: While many of the offerings through Udemy are free, others – including all of the StraighterLine offeings – charge a fee. But those fees are generally low, between $50 and $100 per course – significantly lower than traditional college credits. If these classes become popular enough and accredited, this could drive down prices in all of higher education.
  • Diversification of content: This is the most intriguing part of these programs for me personally. Institutions are not always supportive of diverse course offerings. These sites provide an opportunity for new courses on less-frequently taught subjects to be taught and possibly gain in popularity. 
  • An open door for career adjuncts: This model also provides an opportunity for faculty members, particularly adjuncts, to peddle their talents beyond the traditional higher education establishment. If adjuncts could make a reasonable, livable wage teaching for Udemy or StraighterLine, they could flee their residential positions in droves and force a change in what has become a very exploitative situation.
  • Personal contact: One of the things that the StraighterLine site promotes is that these courses offer a personal touch from the faculty members teaching them. I am a bit skeptical about this claim given the need for professors to make money off of the courses. That invariably means more students are better for the instructor's bottom line, while more students also equates to less individual contact.

While these are all potentially game changing benefits of this model, there are also some significant limitations that should be weighed before diving in too deep.

There is great promise in this model for students, faculty, and education as a whole, but there are limitations that need to be addressed before the freelance faculty member becomes a common occurrence.

  • Competition: Competition is a two edged sword in this context. While it provides many benefits, it also has the potential to dilute the quality of the products being sold. Will professors cut corners and sacrifice quality to offer their courses cheaper than others? Will large institutions take over the marketplace and force out the "little guy"?
  • Lack of institutional support: While StraighterLine and Udemy provide some support for the faculty members offering courses through them, they lack the structures such as research libraries and support staff that help make professors jobs easier.
  • Limited accreditation: While some of StraighterLine's course are currently accredited, many are not and there is going to be a struggle before all of the free and low cost college alternatives gain mainstream acceptance and become a real vehicle for credentials.
  • Quality control: Finally, the more courses and institutions offering them, the more possibility that low quality or shady offerings will enter the marketplace. The Internet is an excellent vehicle for fraud, and there is nothing inherent about education that makes it immune.

Is Free Market the Future of Higher Ed?
There are many variables to weigh in this debate and many reasons to think that there is hope in this model to reform higher education in meaningful ways that will benefit students and faculty members alike. As with all changes to systems that have been successful for centuries, this change is not easy or painless. Higher education will resist this model because it alters the status quo and threatens their monopoly on learning and their stranglehold on the cheap labor of adjuncts. Regardless of the higher education establishment's opposition to this model, the future of learning may well be an online model obtained piece meal through a variety of sources and compiled with something like the Digital Lifelong Diploma. I say, bring it on and set learning free.