Udacity's deal with San Jose Sate University to provide low-cost online classes to students has been temporarily put on hold. In a joint statement, the pair revealed that the innovative scheme to bring low-cost education to, as The Wall Street Journal puts it, "unusually needy students" had seen high failure rates. No more than 44 percent of Udacity students passed any of the three courses on offer, compared to a 74 percent pass rate for regular students.

"We stacked the deck against ourselves," San Jose State Provost Ellen Junn tells Inside Higher Ed, referring to the target group's high-risk nature. The group was a mixture of un-enrolled high school students and San Jose State students who had already failed a remedial math course.

Although it's a set back for the company, which has support from the Bill & Melinda Gates Foundation, Udacity's deal with San Jose State isn't over entirely. Although there's no firm timeline, the University hopes to resume offering the courses in time for next year's January semester. In the meantime, San Jose State and Udacity will work together to "retool" their offerings, "make improvements and adjustments," and ensure their "processes are all in alignment."