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The University of Florida is retooling its effort to offer fully online undergraduate degrees to first-time-in-college students, stepping back from its goal to enroll tens of thousands of students in favor of a smaller, though perhaps more pragmatic, plan.

It’s been a little over a year since Florida canceled a massive contract with the education company Pearson, which the university had tapped to provide services such as instructional design, marketing and student support. Since then, the university has been in a transitional phase, searching for a mix of departments and offices on campus and other outside firms that can handle the many responsibilities it had initially leaned on a single company to provide.

In the meantime, UF Online is growing. Last academic year, compared to the year before, it received more than twice as many applications and admitted about 70 percent more students. It added more than 400 new courses and nearly 300 new instructors. It even made a small profit.

The success of UF Online will have broader implications than simply influencing the continued growth of the university. For example, the State University System of Florida, which did not respond to a request for comment, last month announced a goal of delivering 40 percent of its total undergraduate credit hours through online education by 2025, which would mean roughly doubling the amount of education delivered online today. And on a larger scale, online education experts are closely watching UF Online as it searches for a suitable way to offer fully online education to students right out of high school -- a tricky market that few universities have attempted to tackle.

Now UF Online is looking past its launch and growth phases and toward greater expansion starting in 2018. But the goals outlined in its amended business plan, approved on Oct. 13, are still a fraction of what analysts initially thought possible.

“Our vision for UF Online is expanding the campus to continue to deliver on our land-grant mission,” said Evangeline J. Tsibris Cummings, the former U.S. Environmental Protection Agency supervisor brought in to lead UF Online a year and a half after its January 2014 launch. “Originally there was a plan for what I will call ‘exponential growth,’ but we are focused on how we continue to pace our faculty and student growth so that we’re ensuring quality instruction, an academic adviser for every student and a remarkable student experience.”

The original business plan, approved in 2013, estimated UF Online would by 2023 enroll more than 24,000 students, nearly half of them (43 percent) from outside Florida. Since those students pay nearly five times as much for tuition compared to in-state students ($552.62 per credit hour versus $129.18), the reliance on students residing outside Florida would generate nearly $77 million in revenue and net the university an estimated $14.5 million.

The amended plan only looks as far ahead as the 2019-20 academic year, when it projects UF Online will enroll about 6,500 students, the vast majority of them (89 percent) in-state students. That plan doesn’t make any predictions concerning the university’s net margins, but estimates that a head count of roughly 6,500 will generate $15.6 million in tuition revenue.

“The original business model … underestimated the number of Floridians who would be seeking an online option, and it overestimated the number of students from out of state that would be coming to the program,” Cummings said. “That still presents us with a fundamental challenge. … How do you build and grow a credible online program that relies on the same faculty, that offers the same degrees -- and then you only charge 75 percent of [the cost of] tuition?” (By law, the university can charge in-state online students no more than 75 percent of what residential students pay.)

UF Online this year posted a profit of about $66,000 after losing more than half a million dollars last year. Cummings said she expects UF Online will keep its profit margins small by investing tuition revenue in advising, course design and giving faculty members incentives to teach online.

While its revenue projections are more modest than three years ago, the university will pocket all of it now that it is no longer working with Pearson. The company, like most firms that provide online program management services, typically pays for start-up costs and then recoups its losses by splitting tuition revenue with the university -- usually starting at 50-50.

Howard Lurie, principal analyst of online and continuing education for the higher education consulting and research firm Eduventures, said the amended business plan suggests a less aggressive approach that is influenced by the pressures of a competitive online education market.

“Three years is a lifetime in this market,” Lurie said in an interview. “It’s not uncommon for programs to start at one point and then down the road move the goalposts.”

At the moment, UF Online’s student body looks more like that of a traditional online college than one that caters to first-time-in-college students. About three-quarters of the students (73 percent) transferred in, and about half (55 percent) study part time. The average student is 28 years old, though a significant share -- about one in every five students -- is below the age of 20.

The university has taken several steps to make fully online education more attractive to students just out of high school. The first is a program known as Pathway to Campus Enrollment (PaCE), in which students avoid the enrollment bottlenecks of introductory courses by finishing about half of their college education online before transferring to residential programs to finish their degrees. Last fall, 258 students enrolled in PaCE programs.

Cummings said she expects a “leveling off” of students enrolling in PaCE programs, however, as upper-division courses have space limitations of their own. The university expects enrollment to rise to between 450 and 500 and remain at that level for the next three years, according to the plan.

This spring, UF Online also introduced an optional fee package for students who study online but want a traditional campus experience. For about $46 a credit hour, students can access campus amenities such as recreation centers and shuttles and receive a discount on tickets to athletic events. Additionally, the university is launching a virtual campus community where online students can interact with one another.

“There’s still some residual confusion about whether you can apply as a freshman into UF Online,” Cummings said. “Over time students and families will see it’s the same package, it’s the same degree. … I see our job as providing them with the best, strongest academic offerings and options for enrollment. We will see where they gravitate toward.”

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