College tuition: Pay $10,000 for four years?

Recently, Alex Stenner, a sophomore at the University of Wisconsin – Green Bay, saved hundreds of dollars on tuition and hours spent in class. He signed up for a free online introduction to psychology course offered by Education Portal, of Mountain View, Calif.; crammed his studying into two weeks over the Christmas holidays; and then took the College Board's College Level Examination Program (CLEP).

After he passed that exam, his university awarded him academic credit for the psychology course. That meant he'd obtained the course credits for only $90 – the cost of taking the CLEP – versus "having to pay $750 [to] $900 to take the course from the university," says Mr. Stenner.

He now hopes "to be able to take up to four more courses this way."

As college costs mount, Americans are looking for creative ways to cut tuition bills. Two recent initiatives are getting lots of attention. One is the advent of massive open online courses (MOOCs), which are free courses open to anyone. The second is the debut in Texas of the $10,000 tuition plan.

"If [widely] adopted, those two ideas would certainly lower students' cost of college," says Richard Vedder, director of The Center for College Affordability and Productivity in Washington. "They're clearly viable plans, since they exist in some forms already."

The $10,000 tuition plan addresses college costs directly. Proposed in 2011 by Texas Gov. Rick Perry, the plan calls for creating a degree program capped at $10,000 for tuition and textbooks at Texas' public colleges and universities. Colleges could accomplish this through a variety of methods, such as using online courses, followed by competency-based exams; partnering with community colleges that offer a year of courses before the student transfers to a four-year institution; and having students enroll in some college classes while still in high school.

The idea is sparking "a revolution," says Thomas Lindsay, head of the Center for Higher Education at the Texas Public Policy Foundation in Austin.

Already, 13 Texas public universities have adopted some variation on the $10,000 degree. In November, Florida's Gov. Rick Scott challenged his state's community colleges to offer $10,000 bachelor's degrees. California Assemblyman Dan Logue has introduced a bill that would limit tuition to no more than $10,000 for undergraduate science, technology, engineering, and math degrees at California's state universities.

Not everyone is a fan. Critics point out that the tuition cap may save money for students, but it does little to help colleges and universities shave costs. It's "a populist gimmick by lawmakers," says Daniel Hurley, director of state relations and policy analysis at the American Association of State Colleges and Universities in Washington. This "diversionary rhetoric" is destined to "be short-lived."

Voters seem skeptical, too. Only 29 percent of Florida voters in a December poll by Quinnipiac University in Hamden, Conn., believe it's "somewhat" or "very" likely that Florida colleges will be able to offer four-year degree programs for $10,000.

The other cost-cutting initiative, online MOOC offerings, has been surging in popularity, especially over the past year. These free courses offer anyone, anywhere, the chance to obtain instruction from big-name schools, in many cases.

Among the best-known providers in the United States are edX, which developed out of Harvard University and the Massachusetts Institute of Technology; and Coursera and Udacity, which originated out of Stanford University. These MOOC providers partner with top colleges and universities, or specific professors, to obtain their materials.

In addition, some universities are creating free online courses for their own use. Some businesses have also begun offering online courses, although the courses aren't always free.

More than 2.4 million people are enrolled currently in offerings of Coursera, based in Mountain View, Calif., while Udacity, of Palo Alto, Calif., has some 1 million enrollees – including fully 240,000 in Udacity's introduction to computer science course, says its chief executive officer, Sebastian Thrun. In addition, edX, of Cambridge, Mass., claims close to 600,000 students.

The catch: MOOCs are rarely accepted for college credit – although they may provide certificates of course completion. They also have very high (some say 90 percent) dropout rates.

And for colleges, they raise troubling questions about how online courses fit into an overall college experience, how to maintain educational quality in cut-rate college courses, and how to raise revenue if more students migrate to free online courses.

Those are questions colleges will have to answer if these cost-cutting initiatives are to gain traction. •