This document proposes a strategy for a self-sustaining educational entity that would offer free higher education to everyone. It would utilize existing open educational resources and massive open online courses. An online auction system would allow optional payments for courses and determine class enrollment and scholarship levels. The goal is to revolutionize education through open access while establishing sustainable business models for institutions and instructors.

1. Angel Feijoo
May, 2012

2.  Education has the power to change everything:
Poverty, disease, crime.
 Many people in the world, mostly in developing
countries, can’t afford higher education. 100
million according to UNESCO.
 We can’t easily change poverty, disease or
crime in the world.
 But we *can* revolutionize education.
 Here is a proposed strategy for a self-
sustaining educational entity which
would offer free higher education to
everyone.

3.  MIT OpenCourseWare: Since 2002, has all of the
educational materials from its undergraduate and
graduate-level courses online, partly free. 2080
courses available as of November 2011.

4.  Open Educational Resources (OER): Term adopted
at a UNESCO forum in 2002. Is also the name of a
foundation that promotes OER.
 WikiEducator: Since 2006, collaborative
development of learning materials, which educators
are free to reuse, adapt and share without
restriction.
 Massive Open Online Courses – MOOC: Term
coined in 2006. First adopted and applied in a
Connectivism course by George Siemens.

5.  Coursera: “committed to making the best education
in the world freely available to any person who
seeks it.” As of March 2012 offers 15 online free
courses.
 Udacity: Private institution of higher education
founded by Sebastian Thrun and David Evans with
the goal of free, online classes available to
everyone. First course began February 20th, 2012.
 MITx: Will offer a portfolio of MIT courses for free
to a virtual community of learners around the
world. Planned for Fall 2012.

10.  Consider Stanford’s experience: Last fall, 160,000
students in 190 countries enrolled in an Artificial
Intelligence course taught by Mr. Thrun and Peter
Norvig, …
 Mr. Thrun was enraptured by the scale of the course, …
and an army of volunteer translators who made it
available in 44 languages.
 “Having done this, I can’t teach at Stanford again,” he
said at a digital conference in Germany in January. “I feel
like there’s a red pill and a blue pill, and you can take
the blue pill and go back to your classroom and lecture
your 20 students. But I’ve taken the red pill, and I’ve
seen Wonderland.”

13.  Requires involvement of accredited
institutions.
 Students expected to pay a cost-recovery fee
to be assessed for credit.
 Plans a limit to very few OER courses to not
threaten mainstream business model.
 Expects increased brand awareness of
institutions, therefore increased enrollments.
 Expects revenue from recruiters for providing
qualified students information.

14.  OER community members are employees in current
education industry. Those people won’t try to affect
the fundamentally flawed system that employs
them.
 They don’t seem to realize the huge power that
they have.
 They don’t seem to identify the huge importance
that assessment services will have.
 They don’t seem to have a good idea of a business
model for an OERU. They only mention things like
selling information to recruiters and cost recovery
for assessment.

16.  This idea is not really a creative or
sophisticated one.
 We just identified several perspectives,
realities and trends, which we call principles,
and we believe them to be solid truths.
 This whole project is just a logic and natural
conclusion based on those principles.

17.  Society should not charge its youth to
educate them.
 As a society, we wish that most or all of our
youth get higher education. An educated
citizen contributes way much more to society
than a non-educated one. However, as a
society, we stop that from happening by
trying to make a small profit from the few
ones who can pay for their education,
missing the tremendous profits we could get
as a whole if we just educated all of our
youth.

18.  ICT’s give us the power to educate everyone
we want.
 Most educational communities discuss about
the use of ICTs’ to improve their current
teaching.
 Most of them not realize that with current
ICT’s, in the same way they are already using
them, we are now able to change and
revolutionize the world through education.

19.  Charging money for courses which content is
freely available on the Internet must stop.
 Most private universities charge very high
amounts of money for teaching course
materials that in their most part are already
freely available on the Internet.
 Most university professors in developing
countries are not particularly good or
proficient at the courses they teach. They add
very little or no value compared to self-
learning on the Internet.

20.  Teachers who have no particular achievements on
their fields should not be the ones educating our
youth.
 On the contrary: our best minds, our best researchers
and business people should be the ones educating
our youth.
 Many of those bright minds feel a natural desire to
share their knowledge. Our concept will facilitate it in
a way much better than the current education system.
 Our system would discourage the existence of full-
time professors and instead attract successful people
from many fields to teach hourly.

21.  In developing countries there is no real incentive
for a professor to do any research. We must
provide incentive and means for research.
 The vast majority of university professors in
developing countries don’t do any valuable
research.
 Our online course auction system will allow us to
collect higher payments for courses in which the
professor has higher achievements or prestige, and
the professor would receive a percentage of that.
Therefore, professors will have the incentive of
being paid proportionally to their achievements.

22.  Value self-learning capacity in addition to
“scholastic aptitude”.
 Most universities use numeric and verbal
aptitude testing to choose their students.
 Our model will attract self-learners, and we
believe that in the 21st century, with human
knowledge growing exponentially, a
professional who is good at self-learning
would have more chance of becoming and
remaining successful compared to a person
with higher aptitude but with less self-learning
motivation.

23.  We must teach kids science and technology as soon
as they are ready.
 Many universities teach basic concepts like Ohm’s
Law or programming languages in the first or
second year of studies. But some of those students
were capable of learning those concepts probably
10 years earlier.
 We won’t wait for students to finish high school to
allow them into our courses. We would welcome
anyone who can handle the course material.
 Although we probably must wait until students
finish high school to issue a formal college degree.

24.  Affluent families will always be willing to pay
for education.
 Affluent families are more likely to know how
good investment education is.
 We will provide the opportunity for them to
pay for higher quality version of our courses.
 Professors would range from local
professionals to world-class experts,
businessmen, politicians, etc.
 Additional course value could be in form of
laboratory use, guided tours, etc.

25.  High paying students expect to socialize with
other high paying ones.
 Our online course auction system would allow
affluent students to group among themselves
around the best classes and teachers.
 It is a fact that social structure is a very
strong foundation for professional and
business success.
 Social networks formed among high-paying
students could be alike ones at current Ivy
League schools.

26.  Fixed percentage scholarships are a thing of the
past.
 Scholarships have always been a strong motivator
among top students, but we believe we can provide
more levels than just the fixed 100%, 50% and 25%.
 Our system would handle performance-based
continuous scholarship levels from 0% to100%.
 Most students would get some level of aid, thus we
would motivate much more students than the
current criteria.
 The very top students would be able to get into the
highest-paying classes for free.

27.  We must facilitate PLAR - Prior Learning
Assessment and Recognition.
 There are many people who acquired knowledge
similar or superior to college degrees through work
experience or independent study.
 It is in the interest of society to identify and
recognize the skills and capabilities of individuals.
 Our program would enable those individuals to
obtain formal degrees in a very short time and at
no cost.

28.  Our entity, code-named Mega-University,
would offer full higher education degrees, in
most areas of human knowledge, for free,
based on distance education through ICT’s.
 Payment would be optional for each course
and handled with an auction system.
 Many of the courses would use material
openly available on the Internet.
 Some courses may not include any teaching
at all, would just require self-learning.
 Assessment will be automated.

29.  This is all what we need:
 One accredited and preferably important university
that wants to become the Mega-University.
 Some legal consulting so our distance-learning
courses comply with legal requirement for credit.
 Some marketing budget to publicize the program.
 To pick one of the existing quiz/testing online
services for assessment.
 Design and develop the proposed online course
auction online application.

31.  Is a key element of this concept that handles
the following:
◦ Class enrollment
◦ Multi-level auction functionality for variable class
cost allocation
◦ Continuous performance-based partial scholarship
functionality
 This concept is proprietary to NOVAPRO. We
have not found anything close to this
anywhere.

32.  Each course would have one or more teachers, and
one or more levels of additional value added (like
lab use, physical materials or supplies, field trips,
etc.). Each combination would have a specific
student capacity. All this information would be
public days in advance of enrollment phase,
including bio and achievements of each teacher.
 Students would enter the “auction” by indicating
their preferred class groups and an amount of
money they are willing to pay for it.
 The system would update in real time statistics that
tell students the likelihood of getting into the
course with the amount they offer.

33.  After the enrollment period, the system
choose for each class its selection of students
based on a combination of higher monetary
“bid” with the calculated scholarship level of
each student.
 For each class the final official price is
estimated as the lowest offer among the
selected group, and all the group pay that
same minimum amount, less their specific
scholarship percentage.

34.  There would be prior agreement with
professors on a percentage of course revenue
going to be paid to them.
 Those percentages can be significant, i.e. 30%,
50%. Currently, professors get paid small
portions like 5% or 10% of course revenue in
private universities.
 Professors that don’t attract a minimum
revenue will be paid a standard rate.
 This model should be an incentive to
professors for achievement and research.

35.  Courses can have other courses as pre-
requisites. For each pre-requisite, a minimum
grade will be specified. For example, for
Math2 the requirement could be 80% in
Math1, but for Chemistry the requirement
could be 60% in Math1.
 Specific professors or class groups could
require higher grades.

36.  Professors would be encouraged to select
study materials already openly available on
the Internet.
 Many courses won’t have proprietary course
content.
 Some professors could create and provide
additional material if they wish to.

37.  Most courses must have a totally-free option.
In those cases, all study materials would be
in electronic form.
 Additional value for courses could be in the
form of providing physical books or
materials.
 However physical books in general would be
discouraged.

38.  No. Additional value for courses can include
in-person sessions at a local university or
auditorium, right to use study rooms for
student groups, field trips, etc.

39.  The easiness for graduated professionals to
take courses or get recognition for any
additional topics required by their employers
would make curriculums less critical.
 A basic curriculum guideline would be defined
when each major or program is announced.
Students would be free to earn credit for
courses they freely choose in other fields.
 What needs to be carefully determined is the
number of credits to award for each course.

40.  Most courses would have a test-only version,
in which the student goes directly to the
assessment of their knowledge.
 Depending on the course, some of those
courses may not offer a 100% grade option,
for example if the course required team work,
or lab or field sessions, etc. which can’t be
assessed by online testing.

41.  Some students would be tempted to “cheat” and
get help during online testing.
 We don’t see much need to validate identity in
basic courses. More advanced courses, which have
those basic ones as pre-requisites would assess
that basic knowledge anyway.
 Each major or program should define a set of
courses in which identity will be recorded in
testing. For example, in 20% of courses.
 A final small set of final courses must be taken in
person, specially those that would lead to awarding
a formal degree.

42.  We won’t have resources to validate identity on
the many students we expect to have.
 However, if unethical behavior is confirmed,
the penalties would be severe, for example
taking away credit for one or many courses.
 Professors could suggest investigation of
specific students performing too below
average.
 Recruiters could suggest investigation if they
find the graduate is not really qualified. We
could take away degrees if necessary.

43.  The country or community that first sponsor
this initiative would have the benefit of giving
priority to their people to get the college
degrees in very few years.
 This country or community will be in the
position of exporting professional services
and skyrocketing their entrepreneurial
ventures.
 Biggest countries and corporations in the
world could be interested in contracting this
newly available workforce.

45. “The future belongs to those who see
possibilities before they become obvious.”
John Sculley, former PepsiCo President and
Apple CEO.

46.  This initiative could strongly benefit if
specific law is approved to support it.
 In many countries academic credits and
degrees are tied to a number of hours of
class attendance. That must change.
 Law must evolve so credits reflect actual
knowledge, either obtained through class
attendance or not.
 Government must support PLAR - Prior
Learning Assessment and Recognition.

47.  Private universities business model would be
severely affected in less than a decade. Some
would be able to adapt, some would
downsize, and a few would need to close
doors.
 The big “college prep” industry would shrink
and end up serving only the less skilled and
less motivated students, those who don’t
succeed at self-learning.

48.  Netflix: Revolutionized video rental industry. 2011
revenue: US $ 3.2 billion.
 iTunes: Changed record industry business model.
2010 sales US $ 4.1 billion.
 Southwest Airlines: With creative business model
became one of world’s most profitable airlines.
2011 revenue US $ 15.7 billion.
 iPhone: Changed physical appearance and user
interface in cellphone industry. Estimated 2011
sales US $ 40 billion.
 Walmart: Absorbed big portion of retail industry.
2011 revenue US $ 420 billion.

49.  The US colleges and universities industry
includes about 4,400 degree-granting
institutions with combined annual revenue of
about $360 billion.
 (We don’t have worldwide information at
hand.)

50.  If our initiative can grab an equivalent of 1%
of the US colleges and universities industry in
5 years, and we end up charging an average
of 10% for those services, that would make
our annual revenue of 360 million dollars.
 That would mean equivalent savings for
students’ families in the range of billions of
dollars per year.
 Assuming a net profit of 10% and discount
rate of 10%, market value of our entity would
be around 360 million dollars.

51.  Form a small and talented team to write a
solid project and business proposal.
 Get legal help about degree and accreditation
requirements.
 Identify a established university who wants to
become the Mega-University, draft a contract
with them.
 Define specs for the auction system and
estimate development costs.
 Choose an online testing service.

52.  To re-write this same proposal in a more
formal manner: 3-person team for three
months: US $ 30,000.
 For an initial 5-person team, plus
administrative support, legal advice, public
presentations, etc. for six months: US $
200,000.
 Initial estimates are that initial working
capital should be around US $ 1 million,
which could be recovered with operating
profits after 3 years of operation.

53.  Assuming we offer 5 majors with 200 courses
in total, and operating profit of US $ 10 per
course-student.
 Assuming 12 courses taken per year per
student, yearly operating profit per student
would be US $ 120.
 Assuming we serve 200 students per course
on average, we would have 40,000 students
enrolled at any given time.
 Thus, operating profits per year would be
around US $ 5 million.

54. Angel Feijoo
May, 2012
afeijoo@novapro.pe