Meet the Startup Trying to Save You from Going Thousands of Dollars Into Student Debt

Photo to accompany story about student debt startup. Courtesy Outlier
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College is becoming more and more expensive—the cost of a four-year degree rose by 25% in the decade that ended in 2019, according to the College Board. With the onset of the coronavirus pandemic earlier this spring, campus closures around the country have made the value equation even tougher. 

Is it really worth it to shell out an average of $21,000 a year for public-university tuition, or almost $50,000 for a private school?  

A startup called Outlier says it wants to help students get the credits they need for an undergraduate degree, but without the price tags resulting in student debt that can be carried for decades.

That has earned Outlier a spot on Time’s 100 Best Inventions of 2020 list.

Outlier offers online college classes for $400 including digital textbooks, compared to the $594 per credit hour, on average, Student Loan Hero says you’d have to pay otherwise. Courses currently include entry-level classes in calculus, astronomy, psychology and statistics, and are taught by professors from schools such as Yale University, the Massachusetts Institute of Technology and Duke University.

If you pass, credits are granted by the University of Pittsburgh. They’re then transferable to other universities that accept University of Pittsburgh credits. If you don’t pass, you get a refund.

The goal? Make college more affordable, Outlier says, and lower student debt in the process.

Outlier founder Aaron Rasmussen had previously co-founded MasterClass, a platform for people to learn new skills in classes taught by experts from around the world — photography with Annie Leibovitz, for example, or cooking with Gordon Ramsay.

Rasmussen grew up in rural Oregon and attended Boston University, using transferred credits from a community college to help lower the cost of his tuition, according to a company spokesperson. After co-founding MasterClass, he took some time off to travel, the company says, and later decided to start Outlier because he was struck by how many people were struggling to afford a quality education, just as he had.

Outlier, founded in 2018, has raised $16 million in venture capital funding, according to TechCrunch.

The startup held its first classes during the fall 2019 semester, and while it won’t disclose student numbers, it says signups increased by almost seven times during the summer term. Its students “achieved a C grade or better at the same rate as those in comparable courses within traditional classrooms,” it says.

Outlier has had some pushback, though. In June, Melinda Ciccocioppo, a psychology lecturer at the University of Pittsburgh, wrote an opinion piece in the campus newspaper claiming Outlier offers “sub-par” classes. She argued that “what the Outlier course is lacking is a human connection” — you can’t directly email your professor a question, since lectures are pre-recorded and aren’t taught by a single instructor. At least within the psychology department, Ciccocioppo claimed there had not been any oversight by Pitt faculty, nor was the course designed by anyone on staff.

“We have worked closely with Pitt to make sure that course material meets department standards,” a spokesperson for the company says in response, “and all of our courses have been thoroughly reviewed and approved by department heads.” Outlier and the university recently signed a new five-year agreement, she added.

Outlier also just announced a new Frontline Workers Scholarship in partnership with Pitt. It’s also pledging to give 1,000 essential workers free courses, equivalent to $3.8 million in credits.

While there are certainly a few kinks to be ironed out, Outlier shows plenty of promise. If anything, it’s shaping up to be a worthwhile competitor to a traditional college education, especially in today’s virtual learning environment.