Are Startup Schools Like Minerva and Udacity Changing the Higher Education Model?

Posted By Donna Fuscaldo on May 3, 2016 at 12:20 pm
Are Startup Schools Like Minerva and Udacity Changing the Higher Education Model?

Colleges and universities may be steeped in tradition but when it comes to modern living they are failing to give businesses what they need: qualified graduates. Frustrated with the slow rate of change when it comes to a higher education, a handful of college professors and entrepreneurs are leaving their jobs to try to change the way college students learn. Some are creating courses with the companies that need the talent while others are getting rid of traditional lectures. But either way, they are showcasing what could be future models of higher education learning.

“We have constricted goods with huge demand and it’s costing an enormous amount of money and providing questionable value,” says Ben Nelson, founder of Minerva Schools at KGI. “The combination of those things winds up generating a lot of interest in creating alternatives.”

For some time now, a debate has been waging about the value of a college degree. Countless students are dropping tons of money, sometimes as much as a $100,000 to earn degrees that are either useless or create a situation where they are under-employed. At the same time, demand to attend college is growing even though schools are almost maxed out, creating skyrocketing costs to earn a four-year degree. It doesn’t help that some of the degrees students are pursuing could be earned in six months to a year rather than in four years. That is ushering in a handful of schools that want to do it differently.

Minvera turning elite schools on their head

Take Minerva for starters. Designed to prepare students for the global economy, the fully accredited school boasts small interactive seminars, the ability to live and study in seven cities around the world and admits students based on merit alone. No consideration is given to gender, nationality, ethnicity or social status.  After the first year of study in the school’s San Francisco campus, students get the chance to transfer to another global location each semester. The school, which is highly selective, costs $10,000 in tuition an academic year, with room and board around $18,000 a year – much lower than a year at Harvard or Yale, which all in all costs more than $60,000 a year.

“We don’t care where mommy and daddy went to school or how rich you are,” says Nelson. “Those things drive the majority of admissions at these schools and it ends up 40 to 50 percent of the student body comes from the top 1 percent of society. It’s a better model than the elite institutions.”

Minerva opened its doors to students two years ago and is already getting a lot of attention. According to Nelson, they have more than 16,000 applications from 169 different countries and selected 306 of them to get in, which is three times the number of applications for California Institute of Technology, says Nelson. “Universities are basically stuck in the 1960s and have made education worse, not better,” he says. “Along comes an institution that is designed for the students for a one-quarter of the cost.”

Udacity’s online course prepare students for nanodegrees

While Minerva is focused on a global education at the fraction of the cost, Udacity, the online university, has created a model in which its online programs are aligned with what employers actually need out of their graduates. That is particularly important because studies have shown that college graduates don’t possess the basic skills needed to get an entry level job in corporate America. Frustrated employers are forced to train people who already have a four-year degree.

Dubbed a university created by industry, Udacity works with Google, AT&T, Facebook and Salesforce, among other companies to create Nanodegree programs that enable students to become web developers, data analysts, mobile developers and other technology-driven career paths. Students gain the skills through online courses and hands-on projects.

Udacity was born out of an experiment by Stanford University professor Sebastian Thrun and Google director of research Peter Norvig, who offered their “Introduction to Artificial Intelligence” course online for free. More than 160,000 students in more than 190 countries enrolled soon after Udacity launched. “Udacity Nanodegrees are the only credential built for and by industry. Top companies including Google, Amazon, Facebook, GitHub, AT&T and Accenture work with Udacity to bring curriculum and projects that teach the skills needed for in-demand jobs like machine learning engineer and Android developer,” says Shernaz Daver, CMO of Udacity.

“The majority of Udacity Nanodegree students are college graduates who are employed while pursuing their Nanodegree credential.” Udacity Nanodegree programs cost $199 per month with half back on tuition upon graduation in 12 months or less. The Udacity Nanodegree Plus program costs $299 a month in the U.S. and a full tuition refund if graduates don’t get a job within six months of graduating. In China and India, pricing is localized, says Daver.

According to Daver, Udacity plans to continue to expand both online and offline, focusing on new locations and subject matter. Daver says Udacity’s model is already proving to be successful with one company hiring Udacity graduates in sights unseen. “FlipKart is hiring Nanodegree graduates as Android developers without interviews, simply based on their Udacity profiles and projects, a move they dubbed ‘interviewless hiring,’” says Daver.

While Minerva and Udacity are already trying to change the way college students learn, more educators are starting to get in the game. Earlier this year, Massachusetts Institute of Technology Professor Christine Ortiz, a dean for graduate education, is taking a year off to create a new school in Massachusetts. Her vision: it will be void of lectures, majors and classroom, rather focusing on project-based learning.

Donna Fuscaldo
Donna Fuscaldo is a freelance journalist hailing out of Long Island, New York. She has also written for,,,, Business Insider, Dow Jones Newswires and the Wall Street Journal.

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