Bigger than Facebook: The rise of online education

I don’t know if either of these new business models–MITx or Coursera–is going to become the new model for higher education. Maybe both will be. But a lot of people are now at work on this problem, and they will eventually come up with the right combination to burst the higher education bubble and take down existing universities in the same way that the Internet has taken down the old newspaper publishing business.

That’s the comparison used by billionaire entrepreneur and investor Mark Cuban in a blog post that makes several important points. He describes how “the crush of college debt has taken an entire generation of graduates, current and future, out of the economy” by forcing them to spend all of their meager entry-level earnings on a giant monthly loan payment, at a time when they would normally be buying cars and houses and starting to build up savings. He also paints a vivid image of what the higher-education crash will look like when it hits: “Students will stop taking out the loans traditional universities expect them to. And when they do tuition will come down. And when prices come down universities will have to cut costs beyond what they are able to. They will have so many legacy costs, from tenured professors to construction projects to research, they will be saddled with legacy costs and debt in much the same way the newspaper industry was.”

More important, he names the attitude that will bring down the universities…