'Huge Deal for a Small School'

At Simmons College, two online degree programs launched less than five years ago are about to become the greatest source of tuition revenue on the campus.

February 27, 2017
 

Simmons College is a storied women’s college with a strong presence in the graduate degree market. Or is it the other way around?

The Boston-based private college has for more than a decade enrolled more graduate students than undergraduates -- one recent count put enrollments at 4,000 and 1,700, respectively. But since October 2012, when Simmons began offering some of its existing graduate degree programs online, the college’s balance sheet has seen a rapid transformation.

During the 2014 fiscal year, which ran from July 1, 2013, to June 30, 2014, Simmons’s online graduate programs generated about $5.4 million in total tuition revenue. Last fiscal year, the college collected nearly 10 times that amount -- $45 million.

The revenue generated by the college’s online programs is this year on track to reach the budgeted $55.9 million, surpassing that of the roughly 30 graduate programs Simmons offers on ground, which are expected to bring in about $53 million. With growth for next year projected in the mid- to high teens, revenue from online programs is about to catch up with the revenue generated by the college’s 60 or so undergraduate majors, this year budgeted at $64.2 million.

Since Simmons first began collecting tuition from online education, undergraduate tuition revenue has grown by about 10 percent, graduate in-person by about 2 percent and online by nearly 1,000 percent. As of fall 2016, the college enrolled 2,569 full- and part-time online students.

Perhaps just as strikingly, virtually all of the roughly $100 million in tuition revenue that Simmons has brought in from its online degree offerings has been generated by two master’s degree programs: one in nursing, the other in social work. Together, they enroll more than 2,500 students.

“To me, that’s the story,” said Helen G. Drinan, who became the college’s president in 2008. “If I think about 10 years at Simmons, looking for revenue growth beyond the very incremental growth that comes from tuition increases, discount rates, being as productive as you can -- all those things -- nothing would compare to taking two programs that already have a great reputation locally and getting them to a national market.”

It’s a recipe for success that sounds too simple to be a true -- take existing programs, offer them to a larger audience and watch revenue skyrocket -- and, unfortunately for other small colleges hoping to replicate it, Drinan said, it is.

“I wish I could say there’s a panacea in here for a small college, but there isn’t,” Drinan said. “The Simmons model doesn’t work for a small institution that doesn’t already have strengths in graduate education.”

Simmons’s nursing and social work programs already had a track record in the Boston area before the college began offering them online. The college also benefited from timing -- the market for online nursing and social work programs continues to get more crowded as more institutions launch their own offerings. And Simmons also chose to work with a for-profit partner -- in this case, the online program management firm 2U -- a decision that at some campuses has proven controversial.

Moreover, the decision to offer graduate programs online was not born out of desperation, but a strategy to capitalize on the college’s strengths, Drinan said.

“Survival cannot be the question that drives our thinking,” Drinan said.

Dana Grossman Leeman, associate professor of practice, became the director of the online social work program in April 2014. She described three “whirlwind” years of working to run a “machine that never stops” -- auditioning instructors, making rapid programmatic changes, surveying students for input and admitting more every 10 weeks.

The social work program has grown from 54 students in July 2014 to more than 1,200 students today, she said. The college now employs nearly 300 adjuncts -- a mix of faculty members at other institutions, Ph.D. holders and experienced practitioners -- in the program alone.

“I’m tired of folks saying this is the way of the future,” Leeman, associate dean for online education, said about online education. “It’s not. It’s now.”

The growth Simmons has seen is bringing changes to the college, many of them positive but some potentially problematic, Leeman said. For example, the online and on-ground programs are managed separately, she said, which works well today but in the future could lead to a greater sense of division.

Ultimately, Leeman said, the issue is a logistical one. The online and on-ground programs use different platforms, which will need to be addressed if the college wants to integrate the programs.

“There are lots of ways we could collaborate,” Leeman said. “If there were more ways to create interactions between online and on-campus faculty, we could enrich both programs.”

Bringing students in the programs together could also shed light on how people in different locations practice social work. Leeman said the online program has attracted a more diverse group of students, with larger shares of students with military backgrounds and in rural locations. People of color make up 45 percent of the students in the online social work program, compared to 25 percent on the campus.

Simmons’s undergraduate operation, meanwhile, has been virtually untouched by the college’s foray into online graduate education, Drinan said. And while faculty members are discussing what the online expansion is doing to the college’s brand, Drinan said, “I would say that it is changing the way we think about ourselves more than the way other people think about us.”

Simmons is giving a substantial portion of its tuition revenue to 2U. Drinan said the details of the college’s revenue sharing agreement with 2U are confidential, but she did describe it as “progressive” -- meaning that the college’s share increases as enrollment goes up.

It is not uncommon for online program management firms to collect half or more of the tuition revenue generated from programs they help launch -- especially in the first few years after launch, when the companies are looking to recoup start-up costs, which they often front (and did in Simmons's case).

Students in 2U-powered programs pay the same for tuition as those who study on campus. At Simmons, for example, tuition rates run at $1,315 a credit hour in the R.N.-to-M.S.N. nursing program and $1,010 a credit hour in the social work program.

2U has since its launch passed $1.5 billion in attrition-adjusted tuition, meaning the total amount of tuition generated by former, and projected for current, students in its programs, CEO Chip Paucek said in an interview. The company reported stronger than expected quarterly results Thursday.

Some colleges have relied on online program management firms to get their programs off the ground, then terminated the contracts once they feel comfortable handling the operations on their own. In 2015, for example, the University of Florida canceled an 11-year deal with Pearson, outsourcing a handful of functions (such as marketing) but assuming responsibility for admissions, advising and recruitment, among other services.

Drinan said the college's partnership with 2U is the reason it has been able to grow the programs quickly, adding that it would be “difficult to envision” the college offering the same level of service on its own.

“This is a huge deal for a small school that doesn’t have the money to invest in either the resources ourselves to compete with what 2U is investing or a partnership that doesn’t result in this kind of exposure,” Drinan said. A large university such as Florida may have the resources to handle the workload that comes with launching and maintaining online programs that enroll thousands of students, she said, but “a small school like us really does not.”

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