Note: This is Part 1 of MOOCs—The End of Traditional Universities? by Christian Simm, swissnex San Francisco, and Pedro Pinto, EPFL. Read Part 2.

Take a cumulative student loan debt in America of about $1 trillion (surpassing credit card debt), new developments in artificial intelligence, more affordable tools for video capturing, editing, and sharing, widespread availability of broadband Internet, innovative interactions enabled by social media, and visionary professors turned entrepreneurs. The result is MOOCs—Massively Open Online Courses—and possibly a major threat to traditional universities.

The Backdrop

For the past quarter-century, the cost of higher education in the US at both public and private universities has grown 440 percent, according to the National Center for Public Policy and Education?nearly four times the rate of inflation and twice the rate of increase in the cost of health care. Today, a four-year public college education amounts to 25 percent of the annual income of middle-class families. The current fees and yearly tuition at the public University of California, Berkeley is $12,800, and $50,000 at private Stanford University. These figures have sparked articles with headlines like “The End of Higher Education Enrollment as we Know It”; “Will Higher Education be the Next Bubble to Burst?”; and “Drowning in Debt: The Emerging Student Loan Crisis.”

But money isn?t the only issue. Some are beginning to question the effectiveness, democratization, and reach of a traditional university education and suggest that online learning could provide solutions. As the Chronicle of Higher Education reported, “Several studies have shown that students learn a full semester’s worth of material in half the time when online coursework is added.” Meanwhile, a Department of Education study shows online learning can be as effective as classroom learning.

Online classes have the potential to democratize education on a worldwide scale. Knowledge that was traditionally reserved for the elite attendees of Ivy League universities is suddenly made available to millions of less privileged but often more eager students in developing countries. Online education is therefore gaining traction.

Traditional Online Providers

There are over two million American students enrolled in online institutions, some of which, like the University of Phoenix, Corinthian, Kaplan, and DeVry University, have been around for years. But degrees earned from these schools don’t have the same appeal and value as those issued by Ivy League universities. Switzerland had its own online education initiative from 2000 to 2008 with the Swiss Virtual Campus, which never fully took off.

When Salman Khan, an MIT-educated electrical engineer, established a nonprofit organization in 2006 to provide video tutorials to students on a variety of subjects via YouTube, he had the vision to change the world by bringing education to places without ready access. His Khan Academy has delivered more than 164 million lessons to date and ignited the “flipped classroom” movement.

For example, several schools in Los Altos, California, now allow students to watch lectures at home, reserving the physical classroom for more hands-on activities, such as working on problem sets assisted by a teacher. Khan Academy, however, focuses on middle and high schools and is not perceived as a competitor to brick-and-mortar universities. MOOCs are a different story.

The Birth of MOOCs

A MOOC, or Massively Open Online Course, takes place online with facilitators and structured material, has start and end dates to create a community of learners progressing together, and is open and accessible 24/7 to study and comment on. Participation, at least for now, is generally free. MOOCs can cover topics from science and engineering to the humanities, while artificial intelligence assisted peer review by fellow students can produce remarkably balanced grades, even on literature essays about George Orwell?s Nineteen Eighty-Four.

MOOCS arose from anonymity when Sebastian Thrun, an artificial intelligence professor at Stanford, decided in the fall of 2011 to bring his CS221: Introduction to Artificial Intelligence graduate course online. One hundred sixty thousand students in 190 countries (from New Zealand to Azerbaijan) enrolled remotely.

That’s compared to 200 who enrolled on campus, a number that dwindled to about 30 a few weeks into the semester. The course spawned its own culture, including a Facebook group, online discussions, and an army of volunteer translators who made it available in 44 languages. Two hundred forty-eight students earned perfect 100% grades. None were from Stanford.

We can trace the current MOOC frenzy to this moment. Hundreds of articles were written about the course in the mainstream media from Wired to The New York Times and in the blogosphere from the Huffington Post to TechCrunch (see a list of references at the bottom of this article).

And universities started to take note. They also began to act. Last January, Stanford appointed a special assistant to the president charged with advising on the future of educational technologies, including MOOCs. Other top universities around the world are trying to understand how disruptive new platforms like MOOCs are going to effect them and whether or not they represent evolution or revolution.

Continue to Part 2 of this post.

MOOCs Bibliography prepared with the help of Gérard Escher, EPFL