Online higher education has a long history, but seems to be always good for surprises. In 2011, the speaker took his Stanford graduate level class online, and 160,000 students signed up. 23,000 graduated at Stanford level. Underlying this class was a teaching model that emphasizes student engagement, problem solving, and free online access. The speaker recently created Udacity, a new online university, which offers university-level courses free of charge. With half a dozen courses underway, Udacity has enrolled north of 200,000 students. The speaker will discuss details of this approach, the underlying pedagogical ideas, the ramification this work may have for the students in the world.