BRADENTON, Fla. – The Georgia Institute of Technology’s recent announcement that it will offer the first low-cost online master’s degree in computer science is a credit positive, according to Moody’s Investors Service.

The degree, expected to cost less than $7,000, will be earned through a so-called massive open online courses platform offered by Udacity Inc. and AT&T.

It will provide higher education access “to an exponentially larger number of people from around the world” than can be accommodated on a physical campus, Georgia Tech said.

“The new online course is credit positive because it offers the university a burgeoning platform to expand its brand, gain expertise in the online delivery model, and potentially grow and diversify enrollment and tuition revenue on a large scale,” said Moody’s analyst Emily Schwarz.

Moody’s rates $900 million of direct debt sold by Georgia Tech and its affiliated organizations.

The obligations of the nonprofit Georgia Tech Facilities Inc., which constructs campus facilities, are rated Aa3 by Moody’s and AA-minus by Standard & Poor’s. The facilities bonds are typically issued by the Fulton County Development Authority.

Though many universities offer online degrees, Georgia Tech’s announcement is “an important marker in the evolution of online education” since it is the first global research university adopting a massive online platform to provide a low-cost degree, Schwarz said.

Research universities represent more than 80% of the institutions currently participating with Coursera and edX, two of the larger massive online course platforms in the United States, according to Moody’s.

Georgia Tech is “particularly well suited to offer a master’s degree online because as a technology and engineering university, part of its mission is to advance new technology,” said Schwarz.

The university initially plans to admit a limited number of students to the online master’s program and increase enrollment gradually. The courses will be free to those not seeking a degree.

Moody’s said the new course may detract from GT’s in-class master’s program but if the platform is leveraged to increase online enrollment on a larger scale “the increase in students will more than compensate for the lower price point.”

The economies of scale by massive online courses could support the ongoing efforts being made by universities across the country to lower costs and increase revenue, Schwarz said. “If GT expands enrollment significantly, the university will also benefit from revenue growth and lower costs of delivering education.”

Moody’s said it’s not certain if online degrees will hold the same reputational value as traditional degrees, though GT’s online program will require students to apply for admission, sit for proctored exams, and receive passing scores.

Georgia Tech, one of the nation’s leading technology-oriented educational and research institutions, has 21,500 students enrolled in its six colleges. Its main campus is in Atlanta. The institution ranked seventh among top public universities by U.S. News & World Report, and is a leader for research awards with about $689 million in expenditures.

The university has been involved in online education for more than 30 years, and stepped up its role in the last year. The master’s degree is the next step in expanding Georgia Tech’s online offerings, university officials said.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.