6. Political, Social and Economic Drivers of MOOCs

6.6. It’s the Economy, Stupid!

Of all the reasons for MOOC mania, Bill Clinton’s famous election slogan resonates the most. It should be remembered that by 2011, the consequences of the disastrous financial collapse of 2008 were working their way through the economy, and particularly were impacting on the finances of state governments in the USA.

The recession meant that states were suddenly desperately short of tax revenues, and were unable to meet the financial demands of state higher education systems. For instance, California’s community college system, the nation’s largest, suffered about $809 million in state funding cuts between 2008-2012, resulting in a shortfall of 500,000 places in its campus-based colleges (Rivera, 2012). Free MOOCs were seen as manna from heaven by the state governor, Jerry Brown (see for instance, To, 2014). 

One consequence of rapid cuts to government funding was a sharp spike in tuition fees, bringing the real cost of higher education sharply into focus. Tuition fees in the USA have increased by 7 per cent per annum over the last 10 years, compared with an inflation rate of 4 per cent per annum. Here at last was a possible way to rein in the high cost of higher education. By 2015 though the economy in the USA had picked up and revenues were flowing back into state coffers, and so the immediate pressure for more radical solutions to the cost of higher education began to ease.