The Signaling Value of MOOCs

As part of his long look at the U.S. education system, Wonkblog’s Dylan Matthews dives into the world of Massively Online Open Courses (MOOCs). He notes that there haven’t been many academic studies on MOOCs and their performance compared to traditional college classes. Can an online class really provide the same level of education as one with an in-person professor? Matthews writes:

[T]he evidence shows that MOOCs have tremendous potential, especially for math and science and professional training. But it’s too soon to say if MOOCs are well-positioned to replace universities as a whole. To show that, one would need to somehow find out how to measure learning in topics as diverse as history or French language or theoretical physics, and conduct randomized comparisons of learning outcomes in all of them.

I’m sure in the coming years we’ll know more.

Matthews continues on to point out one of the common critiques of MOOCs: their signaling problem.

Signaling is the value in broadcasting your competence to potential employers and others. Graduating from college may help you get a job not just because it taught you particular skills but also because it makes employers confident that you’re the sort of person they want to hire.

MOOCs may become as good as traditional universities at building human capital. But they have a long way to go before having the same signaling value. Taking an MIT course on edX doesn’t do as much to get you a job as actually going to MIT would.

That’s true right now, but I see no reason why it needs to be the case. The problem is that in order for employers to value MOOCs at the same level as normal courses, you need to be able to credibly signal that you’ve learned the material from the course. At traditional colleges, that signaling comes in the form of the course credit and the grade you receive. The few colleges offering MOOCs for credit require you to be enrolled in the university and take a proctored final exam. If you have to pay tuition to earn credit, that eliminates the most valuable aspect of MOOCs: their price.

The ultimate goal, then, is to offer credit to students who take just an individual online course with no enrollment in college required. Students will have to take a final exam to demonstrate proficiency in the course so that credits are not just given away, but are earned by actually learning the material. And that final exam cannot be taken at the person’s house or a coffee shop. It must be proctored to eliminate cheating. Employers aren’t going to value course credit if they know students can easily cheat on the final.

Thus, the next step is to figure out how to proctor final exams for hundreds of thousands or even millions of people. That sounds like a logistical nightmare. Except it’s eminently doable. Pearson test centers already offer a number of different exams (GMAT, GRE, etc.)  at locations throughout cities all around the country. You pay a fee to take the test and Pearson offers a testing center that is extremely secure. The same system should be employed on a much larger scale for MOOCs, allowing students to receive credit for online classes. Even more, the tests could be designed like any standardized test so that every student would receive a score and percentile and employers could easily compare all applicants. Students at traditional colleges could quickly be tempted to take these exams too as a way to demonstrate their knowledge of the course material as well.

This will require a much larger infrastructure of online courses and Pearson testing centers. It’ll take some time to develop it all, but there’s no reason that MOOCs should have a problem with signaling. Let the MOOC revolution begin!

“Who Are We Really Affecting With All These Cuts? It’s The Future”

I spent yesterday morning at the Center for American Progress (CAP) where a panel discussed sequestration’s effects on the Head Start program and the thousands of kids harmed by cuts to it. The panel was moderated Christina Samuels from Education Week and included participants from CAP, the Head Start Program, the Office of Management and Budget (OMB) and the Center on Budget and Policy Priorities (CBPP).

Carmel Martin, the Executive Vice President for Policy at CAP, and Yasmina Vinci, the Executive Director of the National Head Start Association, kicked off the program by running through some of the numbers about sequestration’s harmful effects. More than 57,000 kids have lost access to Head Start, including 6,000 infants and toddlers and 51,000 3-4 year olds. Another 87,000 kids have fewer days to attend Head Start, with programs cutting an average of 15 days per child. Yet another 11,000 kids have shorter days (approx. 1.5 hours less each day). Head Start was allowed some flexibility in their cuts and they passed that flexibility on to individual programs. Thus, some programs decided to cut days altogether or eliminate transportation to and from the site while others laid off employees or kicked students out.

But that flexibility will end in 2014, when more scheduled cuts are due to take effect. Colleen Rathgeb, the Director of Policy at Head Start, warned that future cuts will harm children even more.

“These one-time fixes aren’t available in the future,” she said. “This is unsustainable.”

The sequester cut Head Start by 5.27% – equal to $405 million – and more is coming next year unless Congress finds a way to make a deal that undoes the law.

Yet, while the cuts have been steep, they have caused less damage than expected. In February, the White house predicted that 70,000 kids would be kicked out of the program. Fortunately, “only” 57,000 actually have been. Of course, that number will certainly grow next year if the cuts aren’t replaced. And while most of the panelists offered optimistic takes that Congress will find a way to undo the sequester, Michael Linden, the Managing Director for Economic Policy at CAP, offered a more negative view:

“It’s also important to note that while there’s a growing awareness among some policymakers that sequestration is bad, others are saying that it wasn’t as bad as expected to be,” he said. “They have to understand that sequestration is not the status quo.”

Martha Coven, the Associate Director for Education, Income Maintenance and Labor at OMB, emphasized that the Obama Administration does not support the sequester  and is determined not just to undo those cuts, but to add additional funding for early childhood education.

“One thing to be very clear: the cuts to sequestration and Head Start in general were very much not part of the Administrations plan,” she said. “We’re very much trying to put ourselves on a path to reverse that. Moreover, our plan for early education is very much one of investment.”

Investment was a major theme throughout the discussion, with all of the panelists noting that funding for Head Start was not about the present, but was about the future. Head Start has a strong record of improving the quality of neighboring early childhood programs as well, said CBPP’s Sharon Parrott. In addition, states have trouble funding programs like these as they face different budget restrictions than the federal government does, Coven added. For that reason, it’s important for the federal government to fund Head Start and other such programs.

Yet, Congress is gridlocked and the federal government’s budget expires on September 30th. If it can’t reach a deal by then, the government shuts down. And any deal on a budget will have to figure out what to do with sequestration’s cuts. If Republicans and Democrats can’t come to an agreement and instead pass a continuing resolution that keeps the government funding at current levels, Head Start will have to start looking ahead to cuts it will have to make in 2014.

Linden summed up the dangers of the sequester’s effects on Head Start the best:

“Who are we really affecting with all these cuts? It’s the future.”

Do Obama’s Higher Ed Reforms Have a Chance in Congress?

Jonathan Chait is pessimistic:

But the comparison raises the question of whether his higher-education agenda will repel Republicans just as his health-care agenda did. Finding ways to get the government to spend less on education sounds pretty conservative.

If you put more weight on the ideological explanation [for Republican opposition to the ACA] , then Obama’s higher-education agenda stands a chance of attracting Republican support. Republicans might even take some visceral pleasure in making their cultural enemies in the academy squeal. If you put more weight on the political explanation, then Republicans will convince themselves that Obama’s plan is evil no matter what. Republicans will find themselves believing that free-market principles require that whatever money the government spends on college access must have absolutely no conditions attached.

Josh Barro is more optimistic:

I view scorched-earth Republican opposition to health care reform as having been driven mainly by neither ideology nor animus toward the president. I think the key was a desire to protect Republican constituencies who benefit from the health policy status quo: doctors and Medicare recipients.

In the case of higher education, the constituency getting its ox gored by cost control will be college professors and administrators, hardly a fixture of Republican fundraisers or Tea Party town halls. That bodes well for bipartisan compromise on this issue.

Hmm, I want to side with Barro here, but I can’t for one big reason: Republican rejection of the Medicaid expansion. A quick refresher: Obamacare expanded Medicaid to cover all individuals with income up to 133% of the federal poverty line. Since Medicaid is a state-run program, the government agreed to cover the full costs of the expansion until 2017. From 2017 to 2020, the federal government covers 95% of the costs and thereafter it’s 90%. It’s a great deal for states. But the Supreme Court ruling last summer allowed states to opt out of the expansion. This leaves a gaping hole in Obamacare. Individuals with incomes between 100 and 133 percent of the federal poverty line will still be eligible for tax subsidies, but those with incomes below 100% of the federal poverty line who aren’t eligible for Medicaid already will not receive coverage.

Why does this matter to whether Obama’s higher ed plan has a chance of passing in Congress? Because, as Barro and Chait write, it depends on whether Republicans will immediately reject the plan out of opposition to anything President proposes or whether they will be open to it. Barro’s optimism is based on the fact that Republican opposition to Obamacare was not just pure nihilism, but was also a play to protect their favored constituencies. Except Republican rejection of the Medicaid expansion shows that it was more nihilism than anything else.

That’s because rejecting the expansion will hurt one of Republicans favored constituencies: hospitals and doctors. Obamacare discontinues Disproportionate Share (DSH) payments, which were used to offset uncompensated health care costs of the uninsured pre-Obamacare. When Obamacare expanded Medicaid, those payments became unnecessary. Medicaid would now cover everyone up to 133% of the federal poverty line so uncompensated costs would basically disappear. Thus, there was no need for DSH payments to continue. Except hospitals in states that rejected the Medicaid expansion are still going to face significant costs of treating uninsured patients and now they receive no DSH payments to recoup those expenses. That’s why hospitals have been aggressively lobbying Republican states to expand Medicaid. There’s a lot of money on the line for doctors and hospitals.

But that lobbying has proved ineffective so far. Twenty one states have already rejected the expansion with six still debating it. It’s a great deal from the federal government that allows millions of poor Americans to receive health care coverage. Even more, hospitals are crying out for the expansion. Nope, Republicans are dead set against it. No matter how much hospitals and doctors favor them, Republicans aren’t budging. Republican opposition to Obamacare is less based on protecting Republican constituencies than rejecting anything the President proposes. I don’t see Republicans treating Obama’s education proposal any differently.