I think that the biggest effect of prestige in the college market is that it is a barrier to entry for new colleges and universities.  Forget MOOCs for a second.  Just think about new, regular colleges.  If half the faculty of Harvard quit tomorrow and started a new university (say, &quot;New Cambridge University&quot;), accepting half the number of new students that Harvard did, even though the education would be obviously on par with a Harvard education, the new university still would not have the prestige of Harvard.<p>This effect is what is allowing the rent seeking behavior of administrators and contractors which is driving the increase in college costs [1].  The wages for professors, who provide the primary paid labor for the educational process, has not increased, and the move to reduce the cost of professors by switching to adjuncts has been extensively noted e.g. [2].<p>If professors felt free to simply start up a new college whenever they felt that the cost of administration was getting out of hand, they would be able to bid up the cost of their labor in step with the increase in tuition.  But because the prestige effect is so strong, they have less power in the relationship than the administrators. Note that professors with star power reputations do not have this dynamic, as they have prestige of their own.<p>I think that MOOCs may be the wrong direction to look for a solution.  Prestige is strongly correlated with the age of an institution.  The Ivy League was originally called such because the buildings were old enough to have ivy covering their walls, unlike the newer colleges of the time.  It is also correlated with the accomplishments associated with an institution. A MOOC is just asking for trouble in the prestige department!  Just look at how people with a  Georgia Tech online masters have to explain it as being equal in worth to an in-person experience.  You don&#x27;t need to explain to your mom why Yale is close to Harvard in prestige. Maybe someday that will change, but it&#x27;s not an answer to the problem today.<p>Instead, a more low-tech but more likely to work answer is to restore control of the prestige to the faculty and take that power away from the administrators.  This may take the form of internal changes to the existing universities, or maybe things will get bad enough that there will be a mass exodus of professors starting their own colleges.<p>[1]<a href="http:&#x2F;&#x2F;www.washingtonmonthly.com&#x2F;magazine&#x2F;septemberoctober_2011&#x2F;features&#x2F;administrators_ate_my_tuition031641.php?page=all" rel="nofollow">http:&#x2F;&#x2F;www.washingtonmonthly.com&#x2F;magazine&#x2F;septemberoctober_2...</a><p>[2]<a href="http:&#x2F;&#x2F;www.thenation.com&#x2F;article&#x2F;why-is-college-so-expensive-if-professors-are-paid-so-little&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.thenation.com&#x2F;article&#x2F;why-is-college-so-expensive...</a>