Entrepreneur Shai Reshef founded University of the People  in 2009. Headquartered in Pasadena, California, it is a tuition-free, online university aiming to provide a quality education to people in developing countries. The University has accepted 1,200 students from 121 countries including Vietnam, the Sudan, Indonesia, Nigeria, and Haiti. They have over 550,000 fans on Facebook, making them the second most popular university on Facebook, right behind Harvard. Reshef has just announced a new initiative to "educate the world" for just $6 million. With the already high cost of education going constantly higher in the U.S. and other countries, and a student loan crisis looming for American students, that sounds awfully good.
Fast Company: You've launched a new effort to "educate the world" for only $6 million. How is that possible? Especially since we are about to see American student loans go over the one trillion dollar mark in aggregate?
Shai Reshef: Currently students at University of the People pay an application fee, which is between $10 and $50 depending on the GDP of their country of residence. Students from poorer countries pay $10 and students from wealthier countries pay $50. If an individual doesn't have the money, then we waive the fee. Each year in addition to the application processing fee, students pay an exam processing fee which ranges from $10-$100 per exam, also depending on the country. So the cost for a full four-year program is $360 on the low end and $4,000 on the high end. $6 million combined with continued processing fees will make us sustainable forever starting in 2015, when we'll have 10,000 students.
We have a very lean operation. We use open source technology and open education resources. We have over 2,000 volunteer professors and our method is peer-to-peer learning. We live in an era where IT--something that used to cost a lot of money--costs practically nothing. We also don't have research or a lot of the facilities other universities have. Think of all the things you are paying for when you go to a big university--buildings and building programs, tenured professors, etc. We don't have those expenses.
But what is the quality of the education? How do you maintain a level of academic excellence?
Our goal is to open the gates to anyone who meets the minimum standards. We believe everyone should have the chance at higher education. But we also want to ensure that anyone who graduates from University of the People is good enough. Our provost is from Columbia, our deans are from NYU and Emory, and all of our instructors teach at other universities. These people know what quality is. We are definitely offering a quality education, but we aren't trying to be Harvard.
A few months ago I was interviewed by a student from an Ivy League university who asked me if we were the competition, and I wasn't sure whether I should have laughed or if I should have cried. Because if students are choosing between an Ivy League university and University of the People, it means that we've failed. We're not here to be an alternative to Ivy League universities, we are here to be an alternative for people who have no other option to get access to higher education. We hope that this model will be duplicated and adopted by universities and governments of developing countries to educate even more people around the world. We're not reinventing the wheel. We're just taking everything that's out there, wrapping it together and creating a university out of it. Everyone can do this.
Although you have real-world professors and other educational elements drawn from many established universities, the format is quite different than in a physical university. What is the experience of going to school at University of the People?
In order to be accepted, a student must have a high school diploma and strong English skills. These are challenging requirements. Ultimately, we only accept 3% of the students who start the application process. After they are accepted, students are required to take two introductory courses: English and computer skills. They need to get at least a C+ in both courses in order to be admitted into the program as a regular student. In our program each student takes 30 courses. Each course lasts 10 weeks, each week starts on Thursday and ends the following Wednesday. On Thursday morning, the student wakes up wherever they are in the world and goes into the virtual classroom. In the classroom they see the profiles of all the students in the class, the lecture notes, the reading assignment, the homework, and the discussion question for the week. The discussion question is the core of our study. After reading the material, each student posts a response to the discussion question. So let's say the first student is Chinese, he comes in and comments on the discussion question, the next student is from Indonesia, she comments, then a student from Saudi Arabia comes in and he comments on the discussion question, but he also comments on the Chinese student's comment and so on. None of this needs to be done at the same time.
We purposely don't use audio or video, so that students who don't have broadband access can participate without a problem. As the discussion develops among the students throughout the week, the instructor checks in, guiding the discussion, and answering questions as needed. Every week we expect each student to post at least one original comment and to comment several times on other students' comments. At the end of the week the students hand in their homework, take a quiz, and they get a grade for that week. After 10 weeks they take an exam and they get a grade for the course. Taking an online class is much harder than taking a face-to-face class. Online classes require self-discipline and more attention to your participation. We are a real American university. We have majors and requirements. When a student graduates from University of the People, they should be just like students graduating from any other university.
Although you are tuition-free, the admission standards are quite challenging. This must cut out a lot of people. "Educate the world," sounds like more of an aspirational goal than a practical reality, no?
This isn't the solution for everyone. And yes, a lot of people cannot meet our standards. At some point we might offer programs that could help people meet our standards. We might also expand into other languages to make it easier for more students. More people need to graduate from high school. Although that's not an area we will work in, I do think our model would work for high school education.
Academic advising and connecting students with career options are both very important parts of the college experience. How do you replicate these aspects?
We can't offer the individualized advising program that many universities have. We do follow the students' progress and alert them if they are not on track. We're planning on building an online program that will connect students with career resources. Some of these opportunities are already in place. For instance, we have a deal with HP where our students can do online internships with HP. Now we also have a relationship with NYU Abu Dhabi. After the first year of our program, our best students can now transfer to NYU Abu Dhabi and have a physical experience. These are some of the growing number of great opportunities we offer our students.
College is also traditionally a place where people build lifelong friends and often relationships for their careers. Considering that you are even more global than the most global physical university, what infrastructure do you have to connect the students and allow them to build relationships outside the classroom?
Being tuition-free is very important, so right now we can't invest in that network. We had a petition from our students asking us to build that kind of network where they could connect outside of the classroom. It's happening in some ways on our Facebook page. Communities are forming of our students from different countries. But we definitely want to build that in the future. Ideally this is one network, a network that connects the students amongst themselves, the students with our volunteers and the students with job offers.
What is the ultimate opportunity for these students?
After the earthquake in Haiti, for example, we committed to take 250 Haitian students and waive all their fees. We worked with three local NGOs, who went into tent cities and recruited students. These NGOs also built a center with good electricity and Internet access, where the students could sit and participate in the classes. The students come every day from their tent cities to the center for four hours. We now have 80 students in Haiti. These are people who live in unlivable conditions, and now they have the chance of a lifetime. It's also very good for their country. After the earthquake a lot of generous universities in the U.S. took in students from Haiti, allowing them to study there. This was great for the students, but it's bad for Haiti. No student will come back to Haiti after spending four years abroad. With our model, since students stay in their home country while they go to school, they are much more likely to stay in their country after they complete our program. In this way we're also fighting the brain drain. Since most of our students are in the developing countries, completing our program and having an American degree is something that makes them very valuable in their own country.
Note: This interview has been edited for content, clarity, and length.
David D. Burstein  is a young entrepreneur, having completed his first documentary 18 in '08 . He is also the Founder & Executive director of the youth voter engagement not for profit, Generation18. His book about the millennial generation will be published by Beacon Press in 2012.