According to this article, "the Online Instruction Pilot Project has become another expensive example of the ineffectiveness—so far, anyway—of once-vaunted plans to widen access to college degrees by making them available online, including in massive online open courses, known as MOOCs." To be clear, in this particular project, "to make the program self-sustaining, non-UC students were allowed to enroll, too—for $1,000 to $2,000 per course—and to earn academic credit." So here's what the story really is: calling courses 'open' and then charging thousands of dollars for them didn't work, so, blame MOOCs.
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