Breakup in Florida?

UF Online has told Pearson it may terminate controversial 11-year deal, but both sides say negotiations continue about a possible continued role for the company.

September 14, 2015

The University of Florida has told Pearson that it may terminate a much scrutinized deal under which the company provides numerous services to market and manage UF Online, which was created by the Florida Legislature to offer online degrees.

But both the university and Pearson say that discussions continue on a possible continued role for Pearson. The university says it has the right to back out of the deal because UF Online -- while exceeding overall enrollment goals -- is not enrolling the target number of out-of-state students, who would be paying more in tuition than Florida residents do.

The deal, for 11 years, has been one of many in higher education in which online program management companies, also known as "enablers," provide services that help colleges and universities more quickly launch major online initiatives. Florida had a very tight deadline to create UF Online -- the kind of deadline that makes the use of outside companies attractive to administrators.

Some faculty members and local journalists have suggested that the contract provides too much money to Pearson and that the university should have been more open about revealing the terms, which set metrics under which Pearson is paid. The university has classified details of those metrics as "trade secrets," and refused to release them.

The Gainesville Sun, which has fought for access to the records, has reported that if all goals were to be met, Pearson could receive up to $186 million over the course of the contract, while Pearson officials have suggested that the figure gives an inflated view of the contract and that many do not understand the expenses associated with the work Pearson is doing. Everyone agrees that millions of dollars a year for the next decade are at stake.

Evangeline Cummings, the recently named director of UF Online, said in an interview that "the thing we are looking at now is, given our growth, asking if we have the right vendor partnerships in place to assure success."

She said that the contract with Pearson "was designed with key performance indicators and if certain key indicators were not met, that would trigger a conversation." In this case, she said out-of-state enrollment figures triggered the conversation.

Asked if that discussion could lead to the end of the contract, she said that "UF has given notice of intent to terminate the contract." But she added that "we're in active negotiations right now" and that the termination notice did not mean the university had ruled out a continued (but changed) relationship with Pearson.

Pearson issued a statement on Friday describing the state of the relationship with the university.

"In November 2013, Pearson and the University of Florida signed a landmark agreement to deliver UF Online, a collection of fully online bachelors’ degrees. As this program enters its second year, Pearson is working with UF to reevaluate the ideal mix of support services the university will need to meet the demands of this growing online program," the statement said. "Pearson has made a significant up-front investment in this program, shouldering much of the risk, including building a Florida-based staff and developing the marketing effort around the program. We are highly invested in this effort and are committed to the success of UF Online for the university and the students it serves. It is important to note there have been successes thus far.

"UF saw an 84 percent increase in UF Online student enrollment this fall when compared to fall 2014 and continues to expand the number of online undergraduate programs with a total of 19 majors from six colleges slated to be offered by next fall. Due to the reduced in-state tuition offered through UF Online, Florida students have saved over $3.5 million in tuition since the inception of the program. These are complicated programs and there are always challenges when launching innovative programs such as this, especially at highly competitive institutions and with such a short timeline to launch."

Asked about reports that Florida might terminate the deal, a spokeswoman for Pearson said via email: "We have every indication that the partnership will continue with some level of support from Pearson. The level of support is what is on the table."


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