Sal Khan, the founder and CEO of Khan Academy, announced this week the launch of the Khan TED Institute, a joint venture with TED and testing giant ETS that will offer a low-cost, AI-focused degree designed to rival elite institutions like Harvard and Stanford.

“Higher education has served many, many people very, very well. And we think there’s many good reasons to go to a traditional university, but not everyone has access to those opportunities,” Khan said in a video announcing the program. 

“On top of that, the world is changing very, very, very fast. We want to make sure that there’s ways even for people with traditional degrees to continue to reskill to supplement those degrees to make sure that they are optimally prepared for an ever-changing future.”

Khan TED Institute is expected to launch within the next 12 to 24 months and will seek academic degree accreditation. Its price tag is projected to come in under $10,000—a fraction of what students pay at the country’s most prestigious schools. By comparison, tuition alone at Stanford is set to reach $67,731 next academic year, while Harvard’s is $62,226.

The program will launch with a bachelor’s in applied AI and expand over time, targeting everyone from recent graduates to mid-career professionals—especially those shut out of traditional universities or looking to layer in-demand tech skills onto an existing degree. Khan said the goal is not to replace traditional higher education—but to expand access and better align learning with a rapidly changing job market.

Gen Z is having second thoughts about higher education. Sal Khan thinks he has a solution

Young people’s relationship with higher education is increasingly strained as the financial burden of a degree continues to climb. More than 42.5 million Americans hold federal student loan debt, with the average balance exceeding $39,000. 

Simultaneously, many graduates are struggling to gain a foothold in the labor market: 5.6% of recent college graduates are unemployed, while 42.5% are underemployed—working in jobs that typically don’t require a degree—according to the Federal Reserve Bank of New York. 

This dynamic has left some 51% of Gen Z graduates with regrets about pursuing a degree altogether, a 2025 Indeed survey found. 

Khan said the new institution aims to close that gap by working directly with corporate partners—including Google, Microsoft, Accenture, Bain, McKinsey, and Replit—to shape curriculum and ensure it reflects the skills employers actually value. This includes a focus on both in-demand AI and technical skills as well as soft skills like collaboration, community, creativity, and communication.

This isn’t the first attempt by Khan to try to adapt education to a rapidly changing, tech-driven world. Three years ago, he launched Khanmigo, an AI-powered chatbot designed to act as a tutor for students and an assistant for teachers. But the rollout fell short of expectations.

“For a lot of students, it was a non-event,” Khan told Chalkbeat earlier this month. “They just didn’t use it much.”

The new institution represents a more ambitious bet—that AI-driven skills-based learning can be built into the structure of a degree itself, not just layered on top.

“This really could make a positive dent in what the world needs,” Khan said in his announcement video. “We can create a world where more people really do have access to their potential and access to opportunity.”

At Khan’s new school, students won’t graduate by showing up—but by proving their skills

Much of the coursework of the new institute will be online and asynchronous, which could pose a challenge for young people seeking to build communication and collaboration skills in a world divided by social media. A 2024 LinkedIn report found that one in five Gen Z workers hadn’t had a single direct conversation with someone over 50 in their workplace in the past year.

However, ETS CEO Amit Sevak said the program will be specifically designed to replicate some of the less tangible benefits of college—like networking, socialization, and personal growth—but in a format that mirrors how people actually work today.

“Many of the most meaningful professional relationships today are formed in distributed teams, across time zones, and through shared problem-solving,” Sevak told Fortune. “So, with this reality in mind, learners work in structured teams, tutor peers, engage in dialogue sessions, and collaborate on team-based applied AI projects with people from around the world.”

Moreover, rather than measuring progress by seat time, students advance by demonstrating that they’ve actually mastered the material. Sevak sees that as the core reason the model can work where traditional higher education has fallen short—and why it stands a real chance of delivering on its promise for future generations skeptical about the ROI of education.

“Lower cost matters, but access without outcomes does not expand opportunity,” Sevak said. “When learners can see momentum and employers can see readiness, persistence and completion improve. That alignment is what gives this model a real chance to work.”