UC System Takes Out Loan for Online Program

The University of California is using a $780,000 grant and a $6.9 million loan to fund the UC Online Instruction Pilot Project, an initiative where online UC courses will be offered to take the place of some large, lower-division lectures.

The research project will rely on UC education experts’ interpretation of test scores, professor input and student interviews to determine whether the classes are comparable to more traditional, classroom-based courses.

“It’s mostly higher-enrollment courses, like Chem 1A, lower-division calculus, and Psych 1A,” UC Online Instruction Pilot Project project manager DoQuyen Tran-Taylor said. “We’ve heard some students are having trouble getting into these courses, and not getting these courses can put students behind a quarter or more. We’re trying to address a bottleneck.”

Twenty-nine online course proposals will progress to the planning stages out of roughly 70 letters  A 10-member committee — comprised of administration and academic senate members —selected 29 course proposals to advance to the planning stages out of the roughly 70 received. The only letter of intent selected from UCSD was written by Associate Professor of Music Shlomo Dubnov for a class called Acoustics and Digital Music Creation and Production.

The program will be funded in part by the grant from the Next Generation Learning Challenges program, which received funding from both the Bill and Melinda Gates Foundation and the William Flora Hewlett Foundation.

“We’ve been looking for foundation and external funding,” Tran-Taylor said. “[The grant should fund 10 of our courses, but not quite enough to really fund everything we have.”

The 10 funded courses have not been selected, but will be determined by course design and faculty availability.  All course materials will be available to the public, although only UC students will be allowed to take the courses for UC credit.

The project will also benefit from a $6.9-million internal UC loan funded through the Strategic Investment Program, which draws from the budget of the UC Chief Financial Officer.

The Chief Financial Officer pays the interest with its budget, so the program does not need to pay interest.

UCOP spokesperson Steve Montiel said the loan will give the project’s coordinators time to seek additional grants. The loan is a seven-year, zero interest loan. Each course is estimated to cost roughly $75,000 due to equipment, programming, faculty and staff costs. Enrolled UC students will not have to pay for the classes outside of their standard tuition. The loan will fund the difference between the cost of the project and the amount of funding the program receives from grants.

“We can draw $6.9 million,” Tran-Taylor said. “It doesn’t mean we’re using all of it, and it certainly doesn’t mean that we’re using it all this year.”

Montiel  said the loan was acquired within the last three weeks but is more similar to a line of  credit that can be drawn on over a period of time as needed. The project managers are unsure of when they will pay back the loan, according to Tran-Taylor.

“When we pay the loan back depends on how much we borrow,” Tran-Taylor said. “We expect to pay back the loan well before the [seven-year] deadline.”

After the loans are paid back, the revenue from online courses will fund individual departments across all UC campuses.

“The purpose of this project isn’t designed to maximize revenues and bring in a large cash flow,” Tran-Taylor said. “It is about whether or not it makes sense to move into online education.”

The team is still working to reduce the project’s dependence on loans.

“We’re still continuing to look for other grant opportunities,” said Tran-Taylor.  “We are very determined to look for more external funds.”

The first classes, which are still being reviewed and largely based on input from professors will be open to enrolled all currently enrolled UC students for the 2011-12 academic year.

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