This week the New York City Council approved a massive construction project for New York University, designed to add hundreds of thousands of square feet in classrooms, office space, and dormitories. Opponents of the expansion plan, many of them residents of NYU's Greenwich Village neighborhood, gathered to protest, holding signs that read, "Wrong for the Village. Wrong for NYU." On the latter point, at least, they were almost certainly right.

Over the last decade, a population boom hit universities and their enrollments swelled. Many universities responded with ambitious and costly expansion plans, buying up land and building massive new buildings. In New York City, for instance, Columbia and NYU -- the city's two flagship universities -- have each made plans for multi-billion dollar expansions. But if these universities were wise, they would be selling off real estate, not buying it.

The hot topic among educators today is the potential for online education to transform higher education as we know it. The general sense is that technology has reached a tipping point -- advancements in interactive web technology now make instruction over the Internet increasingly feasible and effective. Leading universities such as Harvard, MIT, and Stanford have channeled this technology into new massive online courses, which they are making available free-of-charge to hundreds of thousands of students around the world.

These new interactive online platforms have made it possible for a single professor at a leading university to reach, in some cases, tens of thousands of students at once. Lectures are accompanied by computer-graded quizzes designed to monitor student learning. Students can post questions and create discussion groups and interact with other enrolled students from around the world.

This new way of distributing knowledge has tremendous economic advantages. Lectures are limitlessly scalable and it costs virtually nothing to stream course materials over the web. This method of education is still in its infancy, and has not yet advanced to the point that they pose a threat to the traditional residential college model. But that time may soon be coming.

The current model, centered on the residential college experience, has remained largely unchanged for a thousand years. For all its merits, however, traditional college education is increasingly unaffordable. Tuition costs have risen at a rate above inflation for decades. For many students, this spells hard times, high levels of debt, and uncertain financial futures.

All that remains is for more elite universities to begin to offer meaningful credentials through their online platforms -- something MIT has already begun to do. A world of learners, eager for affordable access to high-quality education, awaits these changes.

Other industries that rely on the sale of information -- such as the book publishing industry, which has been transformed by e-books, or the music industry, which has been transformed by the iPod -- have been utterly transformed by technology. It is not hard to see that the education industry is poised to undergo changes every bit as dramatic.

Online education may not be able to duplicate the in-classroom experience in every way. But studies have shown that it can effective. For most mainstream universities, online education remains a mere sideshow. But the potential for online instruction to make high quality education accessible to the masses at very low cost, means that online education is poised to become the main event.

Many leading universities seem to be unaware that these changes are coming. Columbia and NYU, for example, have undertaken controversial, debt-leveraged expansion projects totaling more than $6 billion. Yale is also presently building two new luxury dorms at a cost of more than half a billion dollars.

Investing hundreds of millions of dollars to build additional physical space is wasteful and retrogressive -- like building a factory for horse-drawn carriages at the dawn of the automobile era, or like building a compact disc factory in the age of the iPod. If universities truly want to bring affordable education to as many students as possible, they should be pouring every spare dollar into developing online education. Creating a premier, interactive, credentialed, online educational platform would be a far better investment for any university that wants to be a leader in the higher-ed landscape of the future. And it would cost a lot less than $6 billion.

Nathan Harden is editor of The College Fix. His latest book is, SEX & GOD AT YALE: Porn, Political Correctness, and a Good Education Gone Bad. He is a Robert Novak Fellow at the Phillips Foundation. Follow him on Twitter @nathanharden