Still think college degrees earned online are universally cheaper and less esteemed in the job market than traditional ones? In the case of graduate degrees offered by universities collaborating with a company called 2U, you’d be dead wrong.
Karla Pasos paid $34,000 tuition—the same as her on-campus counterparts—to earn an M.A. from the University of Southern California Rossier School of Education via the 2U platform. One of more than 1,000 alumni of Rossier’s three-year-old online program, she landed a job after graduation this year teaching U.S. history at a Los Angeles charter high school.
“When I made the decision to go back to school to get a graduate degree I didn’t consider online programs,” says Pasos, who had worked in advertising after graduating from UCLA in 2006. “The most important thing was finding the best program I could for the overall value.” As an aspiring educator, Pasos considered exposure to an innovative learning method and the chance to hone her technology skills to be plusses. And she saw no downside to online enrollment. “There wasn’t a compromise. All the libraries are online, I had access to all the same content, I was taking classes with all the professors who are teaching on campus,” she says. Though she lives only 20 minutes from the USC campus, Pasos says she dropped in only once per term, mostly “for the atmosphere,” but never felt deprived of campus-life benefits. She wrote for the student blog, hung around online after class to get to know her professors, joined video-chat study groups after hours, and developed Facebook relationships with classmates.

Chip Paucek of 2U

2U, headed by former Hooked on Phonics CEO Chip Paucek, is ushering in an era in which getting a degree online will be on par with, if not preferred to, on-campus education. The four-year-old company has facilitated the graduate education of nearly 6,000 students in 30 countries so far.
To be sure, more than 6 million students in the U.S. are now taking at least one course online, and 65 percent of higher education institutions say online learning is a critical part of their long-term strategy, according to a 2011 report from the Babson Survey Research Group.
But many remain skeptical about the caliber of online education. Babson reports that a “substantial minority” of chief academic officers view online learning outcomes as inferior and 66 percent of college professors say learning outcomes for an online course are “inferior or somewhat inferior to those for a comparable face-to-face course.”
Paucek’s response: “An overall challenge as a company is dealing with preconceived notions of what online education is. But when people see it, we start to change the conversation.” In May, Forbes’ Ilya Pozin listed Paucek’s company, which has since changed its name from 2tor, among 10 startups—including Zappos, Square, and Pinterest—that are “changing the world.”
Paucek says he and company chairman John Katzman, founder of The Princeton Review, started 2U “based on the notion that the world was ready for preeminent online degree programs.”
USC’s Rossier School was 2U’s first partner. The school’s Vice Dean of Academic Programs, Melora Sundt, recalls that she and her colleagues had been skeptical about online pedagogy: “We thought it was flat and boring and alienating.” She now considers the approach “completely transformative.” Seeing the technology “started a snowball effect of wondering what else we could do with it,” she says. “It changed the way we think about teaching … and has had an interesting bleedover into the way we teach generally now.”
Sundt also points to evidence that it is effective: Rossier’s surveys of its online graduates reveal that within 9 months of graduation more than 90 percent have jobs in their field or are pursuing additional graduate level education.
USC’s School of Social Work now also offers an advanced degree through 2U, as do Georgetown University’s School of Nursing and Health Studies, University of North Carolina’s schools of business and government, and Washington University’s School of Law. 2U will partner with just one school per discipline and has only collaborated with graduate programs. But Paucek has “all intentions over time to power all aspects of higher education.”
Several things set 2U apart from other online education platforms, such as Coursera, Udacity, and EdX, that offer courses from top-tier universities. Instead of exclusively canned—or, in industry lingo, “asynchronous”—content, 2U offers weekly live online (synchronous) classes and a sophisticated social networking platform that lets students and instructors interact. Most degrees offered through 2U also require completion of physical components such as global MBA residencies, student teaching apprenticeships, and, for nursing students, operating room training on campus and clinical experience in their communities.
There is no crossover between online and on-campus courses or registration, but 2U students get student IDs, have access to on-campus gyms and libraries, and earn the same degree that bricks-and-mortar students at those schools do. They even walk in campus commencement ceremonies. Paucek credits 2U CTO James Kenigsberg with having built a learning management system that allows students and faculty to connect as effectively as they would in person. Indeed, a Sacramento-based student in the USC Masters of Social Work program recently became engaged to marry a classmate in San Diego.
Another difference is that 2U classes are small—just 10 to 15 students and a professor onscreen in a Brady Bunch grid—so admission is selective. Prospective students apply to the university as they would for regular enrollment. Compare that to one of Coursera’s “massive open online courses.” More than 15,000 are registered for the University of Virginia’s first “MOOC”—a 5-week Darden Business School course that starts in January.
But the biggest difference between taking classes through 2U versus Coursera or even online programs from lower-tier institutions such as the University of Phoenix, is the cost. Coursera, for instance, offers more than 20 medical classes from schools including Caltech, Duke, Johns Hopkins, and Penn for free. A master’s of science in nursing from the University of Phoenix costs up to $32,000. But total tuition for Georgetown’s online master’s of science degree in nursing comes in at around $77,000.
Shouldn’t eliminating on-campus costs such as classrooms, dorms, and parking lots translate to savings for students? Paucek says, “The notion that online is somehow a cost-saving mechanism is simply incorrect. You’re only saving cost if you make the experience low quality. We partner with a school that wants to become preeminent in their field online. We will not partner with a school if they expect to see online be discounted in any fashion.”
He says 2U spends up to $20 million ramping up a single school’s program before seeing a return. The company, which started with $98 million in VC funding, employs more than 400. Between 50 and 80 are dedicated to each degree program, and 2U offices on every partner’s campus offer services beyond IT. For example, for Georgetown’s online midwifery M.S., Paucek notes, “there’s no digital baby; we find a critical placement for the student in Iowa or Oregon or Florida or wherever they are.”
Students aren’t complaining about the pricetag. Russ Pool, a 39-year-old active duty Marine enrolled in UNC’s online MBA program, says he’s “completely content” with the $97,500 tuition he’ll pay for the two-year degree. Based in the DC metro region, Pool says it was a “magical moment” when he discovered a quality MBA program that would accommodate his work schedule. He has attended 2U classes from England and Bahrain. “The technology is amazing. The ease and fluidity with which we can experience this program … are testament to how incredible it is,” Pool says.
The platform isn’t just revolutionary for students, but for faculty too. Paucek says professors have taught courses from locations as remote as Cambodia and a houseboat in Montana. “When you unleash a great school from its geographic boundaries it doesn’t just apply to the students, it also applies to the faculty. These schools start hiring worldwide,” he says.
Karla Pasos can attest to that. Today, she can tap former classmates in Croatia and Thailand to create international exchanges for her high school students, and she Skypes with prospective USC students worldwide as a program ambassador.
“A significant portion of higher education will go online over the next 10 years,” Paucek says. “And once you see how we’re doing it, it’s really hard to go back.”