The biggest higher education story of 2023 might just be the Education Department’s review of the rules that allow schools and companies to enter into tuition revenue–sharing agreements. Coursera is working with a growing number of universities on degrees, partnerships that include a revenue-share component. Jeff Maggioncalda, CEO at Coursera since 2017, graciously agreed to provide his thoughts on the value to universities and to learners of revenue share agreements.
Q: Can you provide an overview of the current portfolio of degrees with university partners that are offered on the Coursera platform? What role does tuition revenue share play in those partnerships, and how (if at all) does Coursera’s approach to revenue share differ from traditional OPMs?
A: Coursera was founded in 2012 by two professors from Stanford University with a vision to provide universal access to world-class learning. Since then, we have grown into a global online learning platform offering access to a wide selection of online courses and job-relevant degrees.
College degrees remain the most valuable credential for social and economic mobility. However, we must reimagine the current structure of college degrees and find new ways to make them accessible and affordable to everyone.
We host over 40 degrees, including 16 from accredited U.S.-based institutions in job-relevant fields like computer science, business management, public health and engineering. All U.S. degrees provided through Coursera are priced at or below the cost of on-campus degrees. Our vast learner base of over 100 million learners (including 70 percent of new learners who came to the platform organically in 2022) enables us to match students with degrees that are better aligned with their career goals and aspirations, reducing the need to overspend on marketing. Our platform has helped universities broaden access to education and attract working adults who may not have considered the program otherwise. Our efforts have also increased gender equity in higher education by allowing more women in the workforce to pursue accessible and high-quality degrees. This is particularly significant as women often take on a disproportionate burden of child- and elder-care responsibilities.
Unlike traditional program management, we support degree programs without managing them. Coursera doesn’t take on any academic functions for degrees on the platform. Our university partners independently design the curriculum, set admission criteria and tuition, make admission and financial aid decisions, instruct students, assess their performance, and award degrees. Unlike pure-play OPMs, our service fees are among the lowest, and universities retain 60 to 75 percent of tuition in our tiered revenue-sharing model.
Q: My assumption is that you think it would be a mistake for ED to eliminate the current exemption to the bundled service exemption and therefore disallow revenue-sharing agreements. Can you explain your reasoning?
A: Online learning that provides learners the flexibility they need in a fast-changing digital world is the most effective and scalable way to meet the urgent demand for emerging skills. Retaining a bundled service model for online degrees will mean increased choice, flexibility and affordable tuition for the millions of students who are unable to participate in on-campus programs.
Forcing universities into a one-size-fits-all, fee-for-service financial model will ultimately benefit wealthy institutions that can afford the up-front costs associated with creating and launching an online program, while universities with limited resources could struggle to self-fund. A revenue-sharing model enables universities without substantial financial resources to enter the online learning marketplace—especially because the provider typically takes on a disproportionate share of the launch and start-up costs.
Delivering a high-quality and engaging online learning experience requires significant investment and technical know-how to incorporate mobile compatibility, cross-device functionality, hands-on exercises, virtual reality integration and academic integrity features. This model allows universities to focus on academic excellence while taking advantage of Coursera’s cutting-edge technology and platform innovations. We also assist with marketing, enrollment support, instructional design and student support. However, universities have full control over academic matters, including admissions, curriculum and advising.
Q: Is there a middle ground? Can you articulate some system that would meet ED’s concerns about student debt, completion and aggressive marketing practices while preserving the ability of schools and companies to enter into revenue-sharing agreements?
A: Some of the concerns being surfaced seem to stem from the marketing practices and student outcomes from a small number of for-profit degree-granting institutions. This is a separate issue from the practices of nonprofit colleges and universities, such as the degree partners on our platform, who use external providers to assist with functions that support (but don’t supplant) their core academic functions.
Further, we believe that it is critical to capture accurate, comprehensive data on student outcomes and debt across different models to inform ways to enhance the current systems. We also support the recommendations in the GAO’s May 2022 report, to enhance guidance for those auditing revenue sharing arrangements.
Finally, we fully support tuition-sharing arrangements, but there are ways to provide increased protection to students. We suggest that the ED consider a series of “student-first” principles for bundled service arrangements to enhance transparency around these arrangements, including:
- Affordability: universities should offer tuition rates that are lower than equivalent on-campus programs, and providers’ tuition sharing rates should be lower than 50 percent for industry-standard bundled services.
- University control of programs: universities should be in charge of admissions, curriculum, graduation requirements, faculty, tuition and financial aid.
- Universities’ oversight over providers: universities should approve student marketing, student and prospective student communications plans, and verify compliance with incentive compensation requirements.
- Marketing and recruiting transparency: providers’ employees should identify themselves to students and should not use the university’s area code or email domain to mislead students. Providers should follow existing consumer protection laws, such as federal laws covering telemarketing.