It's Time to Give Back
Shai Reshef, a self-made millionaire, has a lot of experience starting businesses. In 1989, he helped to transform a small Israeli test-prep company, Kidum Group, with only $100,000 in yearly revenue into the largest for-profit educational services company in Israel. Reaching nearly $25 million in revenue, the company was snapped up by the larger test prep giant Kaplan in 2005. Reshef is also credited with starting the first online university in Europe in 2001. The venture, based in the Netherlands, wasn't very successful but was acquired by Sylvan Learning Systems, now Laureate Education.
Reshef has now turned his sights to starting the first tuition-free online university for disadvantages students. The new school has opened its doors, figuratively speaking, and is open for enrollment beginning this week. Reshef, the founder and president of The University of the People (UoP), visited Inc.com's Nicole Marie Richardson in New York City to discuss his new venture and its intriguing tuition-free business model.
How did you come up with the idea for University of the People?
Shai Reshef: I started the first online university outside of North America, in the Netherlands, in 2001. And while it was clear that it could reach people from all over the world, it was also clear that it was expensive and most potential students could not afford it. Additionally, I became the chairman of Cramster.com [an online study community]in September 2008. It was the first time I realized how strong the education community is--how people really jump in and help each other with answering homework questions and understanding material. I said, well, that is the combination that is needed: Taking what the Internet can offer and bringing it to the people.
How will you tap into this community to attract students and teachers?
Reshef: I want students that don't have any other alternative. I'm going to the Third World to look for students who have graduated high school, who have twelve years of education, have the proper English, have access to a computer--however, they were unable to attend university because they don't have the financial means or access to higher education institutions. I don't have a huge marketing budget. We believe that because we are tuition free, people will find us.
As for the professors, I believe that there are a lot of retired professors or even full-time professors who would like the cause and be willing to devote even one to two hours per week to help students from the Third World or even students from their own countries who need help. Going back to the community--people really want to help each other.
Will you compete with other accredited universities?
Reshef: Definitely. We're seeking accreditation as soon as we can, and we will be competitive with any other accredited school. We will offer a great education, but we're not planning to be an Ivy League university.
How will classes work?
Reshef: Students will choose the courses they want, and each course will be divided into 14 different lessons, 20 students per lesson, over 14 weeks. Each week will start with an online text-based lecture to ensure that students without broadband can read it. Then some reading material will be assigned with discussion questions. During the week, students will discuss the topics between themselves, and the entire online education community with volunteering professors, graduate students and experts are made available for those who have questions. The following week, students will take a quiz to make sure they understand the material and, at the end of the 14 weeks, they will take a physical exam that is graded, which determines if they go on to the next course.
How do you make sure that students don't cheat on tests?
Reshef: That's a temptation. The simple answer is, when you finish a course, you go to a physical location, a testing center, where someone checks your photo ID and then the test is sent to us. When you attended school did they ever check if you were the student you said you were?
For big exams, yes!
Reshef:Did they check I.D. when you handed in an assignment or check if you wrote it?
No, of course not.
Reshef:The point is that it's important to have physical locations and verification of ID. But, the truth is, the university system is built on honesty. And if you want to cheat, you are able to cheat.
So the cost of attending the university is totally free?
Reshef: Not completely. Students are paying a nominal fee to be accepted to the university, and take a class. If they decide to take an exam in order to get credit, they have to pay for it. Each exam will cost between $10 and $100, depending on the country the student is in. Students from poor Third World countries will pay about $10; those from a rich country, surprise, surprise, it will be about $100. A degree is issued after about 40 courses. So the cost is $400 for a Third World student, and about $4,000 for students from rich countries. Scholarships and loans will be offered also, but again, it's up to the community to be able to support the students.
However, we are waiving all costs for the first 300 students that enroll for the first and possibly the second semester. We appreciate them taking a chance on this experimental education model.
I read that start-up costs for this endeavor are running about $5 million. Where will you raise the money from?
Reshef: I myself put a million dollars in to start it. The rest will come from two sources: Either from people who donate small amounts of money, using PayPal to donate directly from our website or rich people who think that it's a great cause, as well as companies.
Who's helping to raise money?
Reshef: [Laughing] Unless you are the one willing to do it… Well, at this point, it will be me. You know, it's funny, well, it's not funny, but I have no experience in raising money! All my life, I did things for profit. And I never asked people to donate. I sold stuff, and people paid for what I sold. It's a new experience for me. So I guess a year from now I will be able to tell you if it's easy or hard, or if I can't do it and I need someone who can do it better than myself.
Are some people already on board?
Reshef: Oh yeah, actually, the non-profit company, called The University of the People, is registered in California already. We have our headquarters in Pasadena. And we have people working all over the world on this. So I have a few academics working on the academic program; technological people, both looking at the different technologies and starting design. We're open for enrollment beginning the week of April 20th for 300 lucky students to begin in September. Interested students and professors can learn more at www.UoPeople.org.
Why are you doing this?
I've made enough money. Now, it's time to give back.
NICOLE MARIE RICHARDSON | Staff Writer | Executive Editor, Special Projects, Inc.com
Nicole Marie Richardson is the executive editor for special projects at Inc.com. She manages the website's largest projects, including the Inc. 5000, an annual list of the fastest-growing, privately-held companies in America.