Yesterday I had the opportunity to testify before the Senate Health, Education, Labor, and Pensions Committee about the reauthorization of the Higher Education Act to explore the barriers to and opportunities for innovation. My full written testimony is here.

In my remarks, I clarified what disruptive innovation is, as the theory is all too often misunderstood and misapplied. I explained that disruptive innovations carry four rules worth noting. They typically start by serving nonconsumers outside of the mainstream—areas where the alternative is literally nothing at all. They tend to be simpler than existing services, so the elite and the sector’s leading organizations tend to dismiss them. Accordingly, they both redefine the notion of what is quality and performance, and they don’t fit neatly into existing regulatory structures. Third, incumbent organizations cannot successfully adopt them within their core operations. And finally, they predictably and reliably improve over time to tackle more complex problems to transform a sector into one that is more affordable and accessible.

In education, online learning is the first disruptive innovation since the advent of the printing press. Combined with competency-based learning—in which students progress upon true mastery of their learning, not because of an arbitrary time-based measure— there is a big opportunity to transform our higher education system into a more affordable, student-centered one that is able to serve many more students.

True to form, we are seeing a variety of potentially disruptive organizations powered by online learning emerge from outside traditional higher education. These upstarts are reaching those students who need more education but for reasons having to do with convenience and accessibility, simplicity, and cost, are, at that point in their lives, nonconsumers of traditional higher education. The organizations are generally simpler, more focused institutions than our traditional colleges and universities and do not look like traditional higher education; they do not have four- or even two-year programs, they lack breadth, they do not do academic research, and they don’t have grassy green quads. Accordingly, the existing regulatory structures do not know how to judge them. Even as many of our traditional institutions of higher education have paid lip service to the innovations these new entities are unlocking, by and large they have not harnessed their disruptive potential themselves. And although they are starting by solving simple problems, we can predict with certainty that this upstart sector as a whole will improve to solve more complex problems and further blur the lines around what is higher education.

Exciting innovations are emerging from colleges and universities using online, competency-based learning, but given that President Paul LeBlanc of Southern New Hampshire University was testifying about that sector, I focused my remarks on three other groups of organizations that are, in classic disruptive fashion, emerging from the fringe outside of traditional colleges and universities.

One such group is broadly known as the coding bootcamps, although they are moving beyond simply teaching coding skills. They typically combine online learning with brick-and-mortar co-working experiences to offer students short, intensive, focused programs to help students find jobs with their new skillset. And they are growing fast. As a result of their length and focus, they are far more accessible than traditional higher education for thousands who cannot go or return to a traditional institution of higher education for the length of time it would take to receive the corresponding skillset. In many cases, this just-in-time education is offering learning opportunities that would not even be available on many traditional campuses. And alternative financing mechanisms are emerging to help students afford the experience and send students signals about which programs offer the more promising pathway to success. General Assembly is arguably the poster child for the sector. It reports having a 95 percent job placement rate into a student’s field of study and is transforming higher education from a destination into an experience that one returns to over and over again through a journey of lifelong learning.

Another group of emerging programs is powered strictly by online learning and also helps students skill up in their career journeys. Udacity presents an interesting case study, as it pivoted to teach the IT skills that employers need today—sometimes with employers building the courses themselves—and it has created a credential—the nanodegree—that many employers have endorsed. What’s particularly noteworthy about Udacity beside that it is also seeking to turn education from a one-time event to a lifelong experience, is its work in creating the Open Education Alliance, an industry-wide alliance of educators and employers that include Google, AT&T, and Intuit. This alliance amounts to a de facto accrediting organization, as the employers’ participation lends credence to the nanodegree credential that Udacity offers. Organizations like Udacity—as well as online, competency-based providers—will ultimately build their credibility not from traditional accreditation, but from the reputations they develop based on the success of their students with employers.

Finally, some critics of these new programs observe that many of them are serving students who already have traditional degrees and therefore are well prepared to take advantage of the offerings, but that these programs are not useful for the majority of students who have not completed a college degree. Disruptive innovation theory suggests that there are several reasons that this pattern may not hold in the future, and, at least in some programs, that future is already present. A new program called The Guild is launching that explicitly plans to give adult students the skills and support to succeed in the middle skills economy. Another organization, LearnUp, presents an even starker counter-example, as it educates entry-level job seekers in America through leveraging online technology. Born from the experience its founders had in 2011 when they spent months in unemployment lines to understand why potential employees were struggling to get hired, LearnUp has now trained over 95,000 people for entry-level jobs, and it reduces the risk for its students because its employer partners, such as Staples and Old Navy, pay for the training.

As U.S. Department of Education Under Secretary Ted Mitchell has noted, these disruptors pose particular problems to the existing regulatory structure that has long governed postsecondary education. In my testimony, I noted three specific challenges.

First, traditional accreditation was not built to assess these new kinds of providers. As incumbent institutions built around the existing order of higher education, we should not necessarily expect them to be able to do so in the future.

Second, these programs are emerging in a wide variety of fields that are constantly changing. As such, if the government is interested in funding low-income students to attend them, determining their quality through common, government-mandated assessments will be difficult and could stunt innovation. But leveraging new financing mechanisms and employer-led de facto accreditation could present promising paths forward. Moving beyond today’s all-or-nothing access to federal dollars that allows many students to avoid making rational quality-cost trade-offs may be important as well.

Third, these institutions collectively challenge the definition of higher education enshrined in current law, as they are programs and courses but not institutions. In the years ahead, they will increasingly push us to ask the question: what is college?

At the conclusion of the testimony, Senator Lamar Alexander asked the panel for help in identifying the regulations that are stunting online, competency-based learning. My sense is that many of the time-based policies that are implicitly woven into law and regulations from the Department of Education and Office of the Inspector General are the big limiters here—and therefore the innovators in the field worry about the backlash from the traditional accreditors and are designing programs with one foot in the old seat time way of doing things and one in the competency-based world. If we want to carve out space for innovation, then great, but we need to strip out these old regulations and move to ones that incentivize affordability and quality so that these innovations are done correctly without problematic regulations that create perverse incentives. But I’d love to learn from everyone to gather a list of those regulations that are most problematic, so please submit them in the comments here and then I’ll pass them along. Together we can recommend the changes needed to unleash the power of online, competency-based learning to transform higher education to make it more affordable and student-centered.


  • Michael B. Horn
    Michael B. Horn

    Michael B. Horn is Co-Founder, Distinguished Fellow, and Chairman at the Christensen Institute.