With the cost of college education on the rise and unemployment still high, many students might be questioning the value of a traditional college education. Enstitute, a New York City-based non-profit, is attempting a new spin on higher-ed with two-year apprenticeship programs in some of the city’s most prominent companies.

The goal: instead of just reading about or being lectured on specific industries, students can actually get their hands dirty with some real-world experience, while also being mentored by notable thinkers and entrepreneurs.

Today, Enstitute is announcing that it’s partnering with The Huffington Post, General Assembly, and Buzzfeed as it expands the focus of its apprenticeships beyond tech startups. Now Enstitute is also offering apprenticeships in digital media and advertising as well as non-profit and social good organizations. You can check out a full list of participating NYC companies here.

I had dinner with Enstitute’s current class of fellows a few months ago (above), and I was struck by how excited they all were to be involved with the program. If they were terrified about straying from the traditional college route, they certainly didn’t show it. The program’s fellows can still go off to attend college once they graduate, but at least then they’ll have far more real work experience than typical college students.

More partners will be announced leading up to the February 3 application deadline for Enstitute’s 2013 program. Anyone over 18 with a high school diploma can apply to Enstitute’s program.

Jasmine Gao, an Enstitute fellow working at Bit.ly under its data scientist rockstar Hilary Mason, had no regrets about leaving college to pursue the program. In a statement today, Gao said, “The current state of higher education has you waiting 4 years to apply the abstract concepts you learn in class with no guarantee of any measurable impact on your career or the world you’re trying to change — in Enstitute, there is no buffer time, and you learn very quickly whether or not something works or brings any value to what you’re trying to do.”

Other Enstitute entrepreneur mentors include LocalResponse CEO Nihal Mehta, Tracks CEO Vic Singh (both of whom are partners at Eniac Ventures), and Ben Lerer, CEO of Thrillist.

Ironic, isn’t it, that one of Coursera’s slogans is “Higher education that overcomes the boundaries of geography, time, and money.”

Coursera, which was started by Daphne Koller and Andre Ng, two professors at Stanford University, currently offers 198 college-level courses for 1.7 million registered students, or “Courserians.” The project is funded by legendary venture capitalist John Doerr, of Kleiner Perkins, and Scott Sandell, a VC at NEA.

The organization’s goal is similar to MIT OpenCourseWare, except that Coursera is for classes from top universities all over the world.

A spokesperson for the Minnesota’s department of education told The Chronicle, a journal of higher education, that Minnesota Statutes 136A.61 to 136A.71 prohibit Coursera from offering instruction in Minnesota. Those regulations have been in place for “at least 20 years,” but, the spokesperson insisted, covered both offline and online education.

If that’s the case, Minnesota legislatures were ahead of their times, at least in some ways.

Coursera, of course, says the legislation was intended only for degree-granting institutions and that no other states have similar restrictions. But the organization has been forced to amend its terms of service, which now include:

Notice for Minnesota Users:

If you are a resident of Minnesota, you agree that either (1) you will not take courses on Coursera, or (2) for each class that you take, the majority of work you do for the class will be done from outside the State of Minnesota.

That, of course, is as ridiculous as it is ineffective. Coursera is delivered by the free and open Internet, so unless the state of Minnesota wants to start censoring the Internet, good luck.

I wonder if MIT OpenCourseWare is next on the hit list. While the Khan Academy should be safe — most of its courses are not university-level — I guess the lesson here is to never underestimate the power of bureaucracy.

Even over space and time.

Image credit: ShutterStock

Bill Gates has been dubbed the planet’s most generous person, and when he makes investments, the world pays attention. His foundation has given away billions of dollars in grants and donations to nonprofits working global health, poverty and development, education, and special projects like emergency response.

Very rarely, foundation money serves venture capital, but today is one of those days. The Bill & Melinda Gates foundation has made an additional investment in education startup Inigral. This follows $2 million from last year, when Inigral became the first for-profit company to receive Gates money, as well as its first investment in education technology.

Inigral is the creator of the Schools App on Facebook. It is a white-label platform that universities can use to engage students once they have been admitted in a college or university, and it monitors their progress throughout the enrollment process. Getting into college may seem like the hard part. But for many students, the acceptance letter is just the beginning of a daunting journey. Inigral functions so that students who are accepted to school go to school.

“Getting admitted to college is a big deal, but schools used to just send a letter and invite students to a terrible admission portal,” Staton said. “What we do is give them an outlet to be excited, make friends, find mentors, and get geared up. We allow schools to better serve students when and how they need it the most.”

A recent Harvard University study called “The Forgotten Summer” found that social anxiety and informational barriers are the primary reasons accepted students do not enroll. Inigral zeros in on this time between the acceptance letter and arrival at campus to smooth this transition, as well as give the institutions the information they need to retain their students.

In its inception, Inigral was designed as a communication tool, a private social network where people could build relationships and get involved with their college or university. Its data shows that students who use the Schools App are far more likely to continue down the road of higher education, and yet an increasing number of students are changing their minds in the middle of the summer. Inigral realized that universities could put its information to constructive use and is shifting to a more data driven approach.

“We are moving our product towards enrollment intelligence,” Staton said. “We look at how demographic and behavioral data relates to actual engagement. We want to find a secret algorithm that says which students need more information about what and what kind of support they need.”

One of the goals of the Gates Postsecondary fund is to increase the number of low income and minority students that are graduating with the credentials they need to succeed in the job market. Inigral’s core mission aligns with this goal, and the financial boost will help develop the analytic technology to the point where it can make a real difference.

Since the $4 million round closed last year, Inigral has expanded its platform from 15 to 110 schools, with a goal of 200 to 300 by next year. Other investors include Retro Venture Partners and Founders Fund.

For the founders, “social” is the missing ingredient in the way that loans operate. By taking advantage of social networks, SoFi is turning wealthy alumni into lenders who pocket a check every month. Students connect with real people (not faceless banks) and default less, and SoFi can offer them a fixed interest rate of 5.9 percent. It’s far lower than a private bank loan or Federal Stafford/PLUS loan.

“The value proposition is obvious to students and alumni,” said Mike Cagney, the company’s cofounder and CEO. “For us, the opportunity is to fix a broken market.” Read more about the company’s recent fundraise here.

SoFi cofounder and CEO Mike Cagney.

SoFi originated at Stanford’s Graduate School of Business (“the GSB”), where over 60 percent of students take out loans to fund their education. It’s the ideal testing-ground for SoFi: Many alumni are engaged, entrepreneurial, and have cash to spare. Before I jumped on the SoFi bandwagon, I had a few questions for Cagney about the challenges of launching a new lending model, and where the company plans to go from here.

VentureBeat: When did you decide to uproot traditional student loan models?

Mike Cagney: We piloted the idea during my fellowship at the GSB, but I have been thinking about this problem when I was in the hedge fund world. [Cagney is the cofounder of Cabezon Investment Group, a global macro hedge fund] At Stanford, everyone was talking about the intersection between social and finance.

We decided to borrow from the microfinance model: The lender is engaged not because of the economics but the affinity as well.

We raised a $2 million fund and lent out $20,000 dollars to 100 students. We were able to deliver a lower loan rate and return a piece to SoFi. After, we sat down with the students and alumni to talk about how we could connect them. On the back of that success, we expanded to a broader number of schools and expect to be in 250 in a couple months.

VentureBeat: It sounds promising. But what happens when a student defaults on a loan?

Cagney: No one has defaulted, yet. There are a few things worth mentioning here: If your income falls below a certain level, or if you’re unemployed and can’t pay your payments, they are deferred out for you. There are the same protections from a legal standpoint as private education loans. We’ll use similar methods to collect, like a civic action. Ultimately, the alumni are taking the default risk. But if a student defaults, their alumni network will see to that — their reputation will be at risk.

VentureBeat: Not all students are the same. Stanford students have a higher earning potential and a lower rates of student loan defaults. How much could you really learn from that pilot?

Cagney: It’s a unique place to pilot, but you can get myopic that the rest of the world looks like that — it doesn’t.

VentureBeat: On that note, why not be flexible with the interest rate? Shouldn’t it depend on the school?

Cagney: We like this whole egalitarian interest rate. That said, there are schools where the default rate is so high, it would never work. If you can’t get SoFi to work in your school, you might want to look long and hard at what the education costs relative to the opportunities it brings.

VentureBeat: How will SoFi make money?

Cagney: We raise money from alumni, put it in the fund, and collect a management fee of .75 percent and service fee of .5 percent from the fund. We were a revenue-generating business on day one.

VentureBeat: One of your investors is the CEO of Renren, China’s largest social networking site. Any international expansion plans?

Cagney: The next thing we’ll do is set up an alumni fund for international students to attend school here in the U.S. Further down the road, we may expand to other countries, but I don’t have the luxury of thinking that far ahead.

VentureBeat: Would you connect alumni lenders with students based on their major or professional goals?

Cagney: We’re not that granular yet. Each school has its own fund, which serves both undergrads and grads. But if a student wanted to go into the nonprofit world when they graduate, and an alumni wanted to support them, there’s a capability to be specific about ways to help.

VentureBeat: Are your investors SoFi lenders?

Cagney: They are. I think it went a long way to validate the thesis of what we were trying to do. Steve Anderson from Baseline is an alumni investor in the Stanford Fund. [Anderson is also an investor in the series A and B rounds] It gave him a front row seat, and he got a check every month on his investment.

VentureBeat: What’s next for SoFi?

Cagney: We’ll build out the customer support side of the business. Also, we plan to set up a balance to prefund loans. When we go into a school, we will set a dollar limit. We will stop when we can raise enough alumni capital to take our million dollars out. It gives us a balance sheet that can make us aggressive.

Image via Shutterstock 

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

It may not make up for the years of student loan payments, but freshman students at Seton Hall University are getting a big freebie: their very own Nokia Lumia 900 Windows Phones.

Seton Hall is handing out the devices as a part of a larger technology push spearheaded by the university’s Center for Mobile Research and Innovation. Along with the phones, students will also get prepaid service that will last them through their first semester.

Much of the benefit with the program will come in the form of two particular apps: SHU Mobile, and the Freshman Experience Hub. While the former is multi-platform, the latter was designed specifically for the Lumia 900, and allows students to message each other, check on their housing situations, and look for peer advisors.

Seton Hall also plans to make use of Nokia Data Gathering, which will allow the school to get a sense for how the devices are being used.

But the big question is, why the Lumia 900? David Middleton, Executive Director at Seton Hall’s Center for Mobile Research and Innovation, said in an interview that the decision was the result of two primary concerns: The university wanted a device that was both durable and integrated well into Seton Hall’s existing IT infrastructure. It also didn’t hurt that the school had already been working with Microsoft on other initiatives. With these things in mind, the Lumia 900 seems like a pretty obvious choice.

The program, however, does seem a tad wasteful, seeing as how most college kids nowadays already have their own smartphones. As far as how much the whole deal costs, the numbers probably look something like this: The average Seton Hall class is 1325 students. Multiply that by the $450 for an off-contract Nokia 900, and you have a final price tag on the order of $600,000. (This comes to $131,000 if the devices are subsidized.)

Photo: Shutterstock

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Students learn in totally different ways now that the age of the Internet is upon them. The knee jerk reaction after receiving an assignment is to consult Google, as opposed to hopping off toward the library. Not surprisingly, 93 percent of students prefer using online search to surfing the card catalog at the school library. In fact, 83 percent turn toward the Internet not just for convenience, but because the library itself is actually closed. E-education has become a form of self-teaching, as has been the regular Wikipedia visit.

But it’s not only students who are getting into the e-education. Teachers are taking advantage of social media to connect with their students. 90 percent of teachers use social media in their classes, and 20 percent of those faculty members actually assign projects that involve commenting or posting on social media websites.

Whole universities are starting to set up programs dedicated to the Internet. Well known schools such as the University of Virginia, New York University and the University of Texas already provide classes for learning about search engine optimization and marketing. These have otherwise been in-the-field learning experiences, that are now being taken inside the classroom.

Indeed, admissions offices are putting the word out about their universities through social media as well, and no doubt learning more about their candidates through Facebook and Twitter.

Check out the infographic below to see how the Internet is helping to evolve our education practices.

Young student photo via Shutterstock

Pete Thiel, who was an early investor in Facebook and co-founder of PayPal, doesn’t subscribe to the traditional notion of finish high school, getting a degree and then moving into the working world. It makes just as much sense to the Thiel Foundation, Peter Thiel’s organization focused on protecting freedoms, to buck the traditional timeline and head straight for entrepreneurship, if the time is right for you. That’s why the Thiel foundation has opened its doors to the 20 under 20 fellowship for the second year, to find and breed innovation in pre-college thinkers.

“Every moment in history happens only once. If you have a good idea, the right time to work on it is right away,” said Thiel in a statement, “Our first class of fellows is busy working on difficult challenges to improve the lives of people across the world, and we’re looking forward to helping 20 more people skip college and start changing the world.”

The fellowship will offer 20 youngsters born after December 31, 1991, $100,000 each to fuel their scientific, technical, non-profit or otherwise imaginative ideas. Teams of up to four are accepted, and must apply by December 31, 2011 at 11:59 pm, Greenwich Mean Time to be considered for the 2012 class.

Those accepted into the program then have two years to develop their ideas under the tutelage of the Thiel Foundation.

“Our world is suffering from a lack of innovation,” said Thiel Foundation president Jonathan Cain in a statement. “And you can’t build a world-changing company in between classes or while servicing six figures of debt.”

[Peter Thiel photo via The Thiel Foundation]

Collegians are getting more attention with companies like Chegg and CampusBookRentals, which recently raised $20 million, taking over the textbook rental market. But what about textbook innovation? Sure, the ability to hack down prices is A+ (get it?), but Inkling thinks interactive elements are key and believes the publishing industry soon will as well.

Inkling builds digital textbooks from scratch, using only the print publication as the ground floor. These textbooks, only available on their iPad client, allow students to interactively read and subsequently learn by doing.

“There will be two music titles where you can listen along to the symphony while the app walks you through the points of interest along the way,” according to Inkling chief executive Matt MacInnis,

Additionally a new architecture title, launching in the fall, will allow students to view famous building and monuments in rotating 3D.

But in the tablet-based textbooks space there is a new giant elephant in the room: Amazon.

“The Kindle announcement was a bit of a red herring,” MacInnis said. “Their technology isn’t really suited to this. It’s difficult to scan a 3D molecule on a Kindle screen.”

But MacInnis knows Amazon, among others will mature their offerings. “Folks like Amazon, where today [the Kindle] is not sufficient, they’re smart people,” he eluded. “Even Chegg knows the future of publishing is not really about the print book or a replica on a device, it’s about redefining that product and giving an engaging experience”

Price-wise, Inkling is already competing with textbook rental companies. Downloading a textbook is already almost 40 percent off its in-print price. But more importantly, students can download single or groups of chapters for as low as $2.

“If a student only need 15 chapters for the first semester, which is common, they can do that,” said MacInnis. “And they can keep it, it’s not like a 30 day trial.

Educational software company Kno is undoubtedly their biggest competition at the moment. Its 70,000 strong digital textbook offerings are backed by Andreessen-Horowitz and offer a very similar reading and interactive experience.

With competition in mind, Inkling will be using the majority of the $17 million to hire software developers. Currently, the company has 60 employees based in San Francisco, with hundreds working offshore.

In addition to the funding, Inkling is adding Tom Banahan, general manager at Tenaya Capital.

The company was looking for someone dedicated to the long haul and carefully chose Banahan.

“We’re really inventing a new medium and it’s going to take a while for the publishing industry to catch on,” said MacInnis. “We’re building a really big business and [Banahan and Tenaya] are going to stay the course.”

Inkling was founded in 2009. The company does not disclose all financial rounds. Investors include Tenaya Capital, Jafco Ventures, Pearson Education, and Sequoia Capital.

Dubbed Gig.U, the project aims to attract cutting-edge startups to college communities, in addition to delivering fast Internet speeds to college students, the New York Times reports.

“These zones would ideally function as hubs for building a new generation of faster computer networks, which could make the United States more competitive internationally,” wrote John Markoff of the New York Times.

The project includes participation from schools like Howard University, Duke University, the University of Michigan, and George Mason University. Gig.U participants are still trying to figure out the best way to bring gigabit networks to their communities, which would allow people to download high-definition movies several gigabytes large in less than a minute. Doing so would likely involve costly outlays from telecom companies to roll out fiber networks.

Blair Levin, formerly the staff director of the FCC’s National Broadband Plan, is spearheading the project as a fellow at the Aspen Institute. “We’re not asking for government money,” he said. “We believe the right approach is to have the private sector fund the networks.”

Many Gig.U participants come from heartland states that don’t normally get access to cutting-edge network speeds. The project could serve as an effective way to convince telecom companies to pay more attention to those communities. And potentially, it could also spur on technological growth and entrepreneurship in those areas.

“We will use a “revolution of the ants” to take down our education institutions and replace them with something better. We all have to start participating and engaging in educating each other,” he said.

Since then, there have been several hacking education events for entrepreneurs, developers and educators where the thrust seems to be to find ways to invert the system, transferring power from educational institutions and giving it to learners instead.

It’s great to have smart people and money helping to discover and build innovations in education. But does Fred Wilson really advocate getting rid of schools entirely in favor of teaching each other on the internet? If not, then how far do we want to go?

Indeed, we need to make distinctions here. Education is a many fangled thing, not all of it served well by hacking. In some areas, our kids will be better served if we stack (that is, double down on what already works) instead of hack their experiences. Asked by Newsweek how his high school was ranked in the Top 10 Miracle High Schools in the country for 2011, director Todd Dickson said, “Nothing magical, just a lot more time and great teachers.”

For instance, you can’t hack the social nature of schooling and the necessary role it plays in identity trial and error or the learning that comes from the joy and despair of it all. Socialization is cognitively demanding. It only really works in-person among dynamic groups of fleshy rather than digital people. Conclusion? Stack it for most by keeping kids in schools. Hack it for social misfits, savants, autodidacts and for kids who live somewhere where there is no reasonable school to go to.

What about different subject areas and skill sets? I suppose test prep is hackable. That’s why there are so many tech companies such as Grockit and Knewton doing well in this space. You don’t see any of them teaching literature, art or music. So hack test taking skills and basic math and sciences by throwing kids part of the time into massive multiplayer video games and digital social learning environment platforms, fine, but make sure to stack arts, letters and music education as well as interpretative subjects like history and philosophy, as well as relationship intensive areas like special education.

Fred Wilson admits there are great teachers, but says there are also lazy ones who know less than Wikipedia does about their subjects. This may be true, but isn’t it so in every profession? Aren’t there lazy and crappy doctors and lawyers out there among the good ones? Aren’t there good and bad accountants? Helpful and predatory VCs? This is life, but instead of responding by hacking at our education institutions in favor of choice education on the internet, stack this problem. Raise teacher salaries and pressure the unions to alleviate tenure rights. This combination will increase the ratio of good teachers to lazy ones. Then hack professional development to help teachers learn how to use the latest technology in their classrooms and stay up to date on the most effective teaching/assessment techniques.

Parent/teacher communication — hack it.
Extra curricular sports and activities —  stack it.
Business, entrepreneurship and personal finance education — hack it.
Internships and real-world experience – stack it.
Vocational and skills training – stack it.
Writing – stack it.
Foreign language – hack it.
Civics and government – stack it.
Gym – stack it.
Higher education – hack it but make sure to go short on Anheuser-Busch if you figure it out.

I’m not just another brick in the wall. I was a teacher and I came up with a hack for curriculum development called TeachersPayTeachers where hundreds of thousands of teachers are circumventing the educational publishers and buying/selling/sharing their original content with each other. I know how many amazing teachers there are in this country–there are more than you think–and I know that tearing down the walls and giving power to the students is not the best answer, at least not for everything.

Paul Edelman is a former NYC public school teacher and the founder of TeachersPayTeachers. He previously argued against the tech-centric Khan Academy taking over classrooms.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

We’re still waiting for the student tablet company Kno to deliver on its innovative dual-screen tablet design, but for now iPad owners will be able to get a taste of Kno’s textbook marketplace with its newly launched iPad app.

The free app, which is still in beta testing stage, gives users access to over 70,000 titles at 30 to 50 percent off their list price. But it will likely be a while before Kno can compete with even cheaper used textbooks, which remain the best way for college students to save money on books.

The Kno app lets students organize books and PDF files by course and term, as well as annotate them with highlights and sticky notes. There are also rudimentary social features built-in, letting students post comments, ask questions and alert study buddies to their location.

In my brief testing, the Kno app appears to be a rushed affair. The user interface is nice, but the app is still very slow and unpolished. It’s certainly not a fluid enough experience to tempt students away from paper books. The company likely rushed to get the app out so students would know it’s an option for their next semester — and to give them time to convince their parents to buy them iPads. Kno would have been better served spending another month smoothing out the app’s rough edges.

The release of the app comes on the heels of a recent injection of $30 million in Kno from Intel Capital and others. With that funding came the news that Kno would begin to focus more on making its software available on the iPad and Android tablets. There’s still no word on availability for the company’s iconic tablets (although it will be getting some help from Intel on those).

Santa Clara, Calif., based Kno has raised a total of $86 million. Previous investors include Andreessen Horowitz, First Round Capital, Mike Maples and Ron Conway.

The company is building an all-in-one tablet for the higher education market that combines digital textbooks, course materials, e-mail, and the web into a dual-screen, notebook-shaped device.

Although the price of the device is not yet confirmed, CEO Osman Rashid estimates that it is likely to be under $1,000.

The advent of a “digital” textbook in schools and colleges is something that’s been talked about since the early days of the computer, although it has never had a chance to crystallize. But now, with devices like the iPad breaking new ground and technology finally catching up to the dream, it’s an exciting time to be a student.

The challenge for Kno will be in making its education-focused device comparable to a general-purpose option like the iPad, or for that matter, its many upcoming competitors. Students are unlikely to carry two tablet devices, so the tablet needs to either replace enough features of devices the iPad to merit its replacement, or offer a particular use-case, like the Kindle has achieved with its E Ink-based reading experience, to earn its extra space in the backpack.

So far, options for college students looking to replace their eight pound textbooks on the iPad have been emerging, but limited. A company called Inkling offers an iPad app for interactive textbooks customized specifically for the form factor, while CourseSmart, already established as a popular eTextbook-retailer, has bought out an iPad app to bring its catalog to the device.

Through personal experience as a college student, however, I’ve found their current catalogs to be too limited or prices unreasonably high to justify throwing away the eight pounders — as ideal as that would be. Time and competition, hopefully, will be instrumental in fixing both as more textbooks are available for cheaper prices (at the very least, cheaper than their hardbound alternatives).

With competition both on the device and textbook front, Kno clearly has its work set out for itself, but it seems to be making promising headway.

The company has announced partnerships with publishers like Cengage Learning, McGraw Hill, Pearson and Wiley, and will be launching a student beta program in fall with a number of universities and colleges across the US. It hopes to use its new-found capital to assist it in bringing the tablet into market by the end of this year.

Kno is based in Santa Clara, California. With its previous two rounds last year, it has raised $55 million to date. The company is led by Osman Rashid, who previously co-founded Chegg, a startup in a similar space offering textbook rentals.