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!