Letter from President Reif: A new future for edX

To the members of the MIT community,

I write to share important news about the future of edX, the nonprofit that MIT and Harvard launched together in 2012 to offer the world an open-source online learning platform for university-level courses.

I will begin with the news and then offer some context and detail.

The news

After a thorough and thoughtful process, and with the support of the senior leadership of MIT and Harvard, the edX board has agreed to sell the assets of edX to 2U, Inc., a publicly traded company that provides a platform for lifelong learning.

Through this acquisition, edX will become a 2U subsidiary as a “public benefit company,” which will allow edX’s long-standing commitment to the public good to be embedded in its new charter. The overall agreement actively sustains the mission of edX through a series of provisions that protect learner data, ensure free and low-cost access to courses, preserve choice for partner universities and faculty, and continue the open-source platform Open edX.

The proceeds of the transaction – $800 million – will flow into a nonprofit entity with a refreshed educational mission and a new name. Governed by MIT and Harvard, this nonprofit will steward and enhance the Open edX platform and explore promising new ideas for making online learning more effective, engaging and personalized.

Why this move now?

In broad strokes, Covid drove an explosion in remote learning, which spurred huge investments into edX’s commercial competitors. This put edX, as a nonprofit, at a financial disadvantage. This new path recognizes this reality and offers a solution that allows edX to continue to support and maintain the key aspects of its mission.

I know this news is a surprise and will take some time to absorb. So I would like to provide some background and share the process behind this decision.

How edX began and grew

Nine years ago, when massive open online courses (MOOCs) were just becoming popular, we joined forces with Harvard to seize the opportunity to launch edX. Building on the spirit of MIT OpenCourseWare, we set out together to provide a clear public good: an open-source, nonprofit platform that we and other institutions could use to teach our own students and to provide free, interactive college-level course content for learners around the world.

Since then, with leadership from edX CEO and MIT professor Anant Agarwal and his team, edX has engaged 160 partner institutions, reached more than 39 million learners across nearly every nation, exceeded 110 million course enrollments and pioneered new online credentials including the MicroMasters.

Key aspects of edX’s founding vision have also become signature features of the educational landscape. By its very existence, edX established the expectation that online learning should include free access to rigorous college course content. edX also helped pioneer the idea of aggregating courses from many institutions.

All of us can take pride in what edX has accomplished, including – and perhaps most significant – edX’s role in helping create a thriving market for online learning.

A changing landscape

In recent years, as global demand for online learning rose sharply, the field was already drawing intense interest from investors. When Covid hit, and remote learning became the dominant avenue for delivering education everywhere, the commercial platform companies became magnets for outside investment on a startling scale.

This infusion of funds is fueling an arms race, in which competitors strive to out-do each other in improving their online platforms, in marketing to learners and in providing financial packages to recruit partner universities to supply course content.  

Observing this trend almost a year ago, the members of the edX board – including senior leaders from both MIT and Harvard – came to see that the scale of the dollars had radically tipped the playing field. As a nonprofit, edX could no longer keep up. So the board began a systematic review of alternative ways to try to sustain edX’s mission in the future.

In the midst of this review last fall, edX received a confidential inquiry from 2U, a well-established publicly traded platform company. (2U already works with MIT: The School of Architecture and Planning, the Sloan School of Management, the Media Lab and CSAIL all offer courses on 2U’s platform.) 2U was interested in a deal with edX.

A new pathway

The offer crystallized the board’s understanding that it was time to stop straining to keep up with supercharged commercial course-aggregation platforms and instead reembrace edX’s role as a channel for influential innovation in online learning.

Seeing the 2U proposal as a promising opening but not yet a finished solution, the board members shared their initial thinking with me and other senior leaders at MIT and Harvard.

I now understand that this path is very much in the best interests of MIT – but the idea took some getting used to. We had never set out to have edX become part of a commercial enterprise. We worked together with the board through a process of due diligence to assess alternatives, including philanthropy or a partnership.

A key concern was how to preserve the privacy of learner data. edX has long set a standard for protecting learner data; giving up those protections would be unacceptable. We knew it was also crucial to make sure faculty could choose the platform their courses would run on.

At the same time, the transformation of the landscape was undeniable. Finding a new path forward was a must – and focusing on educational innovation felt obviously right.

It took several months of reflection and negotiation to work through our questions and confirm that the board had indeed arrived at the best option. A great frustration through this period was that because 2U is a publicly traded company and therefore subject to securities regulations, we were legally prohibited from consulting our communities broadly. Given that, we were especially grateful to tap the wisdom of a small group of faculty leaders and experts on digital learning and data privacy.

Through this process, we were pleased to find a path agreeable to both founding universities, to edX and to 2U: a future for edX as a public benefit company that will pair the resources of a for-profit player with a formal mission to serve the public good.

Late last week, Provost Marty Schmidt and I met with a number of faculty leaders to share the high-level details and hear their thoughts.

Which brings us back to today’s announcement.

The transaction we announce today

Pending approval by the Office of the Massachusetts Attorney General and other government regulators, the transaction will have two major outcomes:

1. As a subsidiary of 2U, edX will become a “public benefit company.” The public benefit designation emerged about a decade ago as a way for a for-profit company to commit, in its charter, to focus on achieving one or more public benefits in addition to serving its shareholders. Familiar examples of public benefit corporations include Patagonia, Kickstarter, Ben and Jerry’s and, close to home, The Engine.

In this new incarnation, edX will operate under a set of guidelines that will preserve its mission to make rigorous university-level courses accessible and free for learners everywhere, and that also reflect MIT and Harvard’s standards and values around learner data.

Joining 2U will allow edX to offer learners a broad new array of benefits and services and to provide faculty members and universities with much greater reach and more options for how to share their classes, without restricting them to any one platform.
 
2. 2U will provide $800 million to fund a nonprofit governed by MIT and Harvard that will focus on reinventing digital learning. Except for funds edX will use to repay loans from MIT and Harvard, the proceeds from this transaction will flow directly to the nonprofit – not to Harvard and not to MIT.

Freed from competing in the course-aggregation race and equipped with these significant new resources, the nonprofit will have the power to do what edX could not: invest at the necessary scale to sustain Open edX as a fresh, vital, open-source learning platform for the world, and help tackle the next great research challenges in online learning.

It could, for example, invest in the potential of AI and other tools to make online learning more responsive and personalized to the individual learner; I believe this is a critical path to meet the needs of people that online learning often leaves behind, including students and workers of any age seeking the skills to keep pace with a shifting economy. We also expect the nonprofit to collaborate with and learn from organizations that have a direct, hands-on understanding of the learning needs of various communities.

The nonprofit’s detailed mission, name, research and activities will be developed following consultation with the faculty of both universities and edX partner institutions. I will work together with the chair of the faculty to develop a plan for engaging faculty on these important matters.

We also hope that it will be possible for faculty and other stakeholders to help shape the nonprofit’s agenda by applying to it for research grants. Its overall mandate, however, is already clear: to create a new public good commensurate with the legacy of edX.

As soon as we can, we will share more about how faculty will be engaged in contributing to the nonprofit’s focus and aspirations.

Learning more

Given the scale of these changes, I expect you will have many questions.

As a starting point, I urge you to read the complete story on MIT News, which summarizes the commitments at the heart of the arrangement that preserve the edX mission. There is also an FAQ that offers more detail.

As we begin this exciting new chapter, I would like to express my deep appreciation to edX CEO Anant Agarwal and the entire edX team for nearly a decade of creativity, perseverance and accomplishment against the odds, and to share my great admiration and gratitude for all the MIT faculty, instructors and staff who have built so many compelling courses on MITx.

I also want to recognize the exceptional efforts of everyone who helped define and improve this new path, including the MIT members of the edX board and their Harvard counterparts. Their thoughtful stewardship and creative thinking have been indispensable.

For me – and perhaps for many of you and our Harvard colleagues who envisioned, shaped and nurtured edX along with us – turning this corner is naturally bittersweet.

Yet at the same time, I am extraordinarily proud of edX and the impact it has had on learning, I am convinced that this decision represents the best path for MIT and I am extremely enthusiastic about what the future holds, for MIT, for online learning and for education as a whole.

With high hopes for how our community can continue to help advance the frontiers of online learning,

L. Rafael Reif

Originally published on MIT News: Original article

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