Online Program Tuition, Netflix-Style

SEATTLE -- More than 300,000 residents of Idaho either have an associate degree or attended college but never attained a degree. (Sound familiar?) A substantial portion of the state’s population lives in rural areas far from Boise State University's campus in the state capital.

Half a decade ago, Boise State administrators convened to figure out how to reach that population and others outside the university's demographic. Pete Risse, associate dean of extended studies, knew one of his relatives worked at, as he put it, “a subscription-based retail company based in Issaquah, Wash.” (Amateur detective work indicates he’s talking about Costco.)

Conversations with executives there didn’t go very far -- the company wasn’t interested in education, and Boise State would have struggled to scale offerings to the company’s 91 million subscribers, as administrators had optimistically envisioned. But the seed of the idea was planted, Risse said last Thursday during a presentation at the University Professional and Continuing Education Association's annual conference here.

Three years after the initial Costco talks, the dean of the university’s College of Innovation and Design received a grant for work-force development programs. He met with Risse to discuss it, and on that day, both happened to be wearing the same shirt -- from Costco. Right then and there, they revived the idea for subscription-based education; work-force development seemed like a natural fit.

In the meantime, Boise State was in the middle of a $6 million, five-year push to increase its suite of online programs, which now number more than 40. The institution enrolls 3,500 fully online students, and approximately 9,500 students take at least one online course. The staff for the university's extended studies department has grown since 2014 from 42 to 135 members; most of the new entrants are instructional designers.

“Conditions were finally right to deal with this,” Risse said.

Last fall, Boise State rolled out Passport for Education, a new approach to tuition offered to students in two of the university’s online bachelor’s degree programs: applied science and multidisciplinary studies. Rather than paying up front per semester, students make a year-round commitment and pay in monthly installments.

They’re also paying less over all than peers in other Boise State online programs. For an 18-credit year, students pay $425 per month -- 18 percent less than standard tuition. For a 27-credit year, the tuition reduction is even steeper -- 30 percent off regular tuition, for a total of $550 per month. The university also installed a “tuition lock” so that students enrolled in the Passport programs pay the same amount for seven years before tuition increases.

Administrators had heard over the years from students, particularly at a distance, that they had committed to tuition and federal financial aid at the start, only to six months later find a “huge bill” that took them by surprise. The subscription model allows students to know what they’re paying and plan around when they’re paying it.

Institutions like Western Governors University and alternative providers like StraighterLine have in recent years begun experimenting with subscription-based models, particularly for competency-based education programs, which students complete on flexible schedules. The fervor around the adult student market stems from concern that the population of traditional-age college students will decline in the next decade, coupled with the increasing support for online as a viable mode of delivery. Boise State's experiment represents an effort to break down barriers between students and opportunities for learning and professional development.

How It Works

The Boise State model is made possible through a partnership with CapEd, a Boise-based credit union that advertises the university’s online program and subsidizes fees incurred by students in the Passport programs. To take advantage of Passport, students are required to open an account of any type with CapEd and to set up the subscription’s automatic deduction through CapEd. As of this fall, students will be permitted to set up automatic deductions from a non-CapEd account, as long as they also have an open CapEd account.

Other than that, CapEd gets no revenue from the university or anything else out of the partnership, except an opportunity to serve the state’s residents, according to Rebecca Morgan, director of Boise State X, a division of the College of Innovation and Design devoted to expanding the university’s affordable education options. She admitted the credit union's apparent altruism at first seemed too good to be true for the university.

Getting more business is “way down on their list of priorities,” Morgan said. “It’s very weird to sit with their Board of Directors and hear them say, ‘We’re trying to help people get education.’”

Serving this population can be tricky, administrators admitted. Students who haven’t been to college in decades often need a refresher on the basics of “how college works,” according to Morgan.

“Students ask questions like, ‘Do I still look up a book on the library card catalog?’” Morgan said. “If they’ve been out for 10 to 15 years, things have changed.”

The academic programs currently available through Passport lend themselves to their intended audience, according to Jon Schneider, director of the programs.

The applied science degree is geared toward students with a technical associate degree, which counts for as many as 60 credits in the 120-credit program. The multidisciplinary studies degree offers flexibility to students “looking for something they can apply to their life,” Schneider said. Both programs went online in 2016; courses unfold in seven-week sessions.

How It’s Going

As expected, a few complications have arisen in the early days of Passport. One student found the payment system so confusing that he offered to draw up a handout diagram that the university could provide to other students. A quarter of the state’s residents can’t access the internet, which means the program isn’t reaching everyone who might benefit from it.

Another challenge also ended up being a blessing. Administrators had predicted that some students might end up enrolling in fewer than the number of credits they had signed up to do. But almost every student has completed 100 percent of their commitment thus far. Similarly, administrators thought the 18-credit option might be more popular, but slightly more than half of students who enrolled through Passport opted for nine credits per semester, or 27 over all.

“They were taking off faster than we were taking off,” Morgan said. “That was a fun assumption to know that we were wrong.”

Twenty-seven students have opted for Passport; Morgan expects "significant accelerations" from the institution's recruitment funnel. A third of current Passport students are eligible for federal Pell Grants. Eighty percent of them live in Idaho; many of the remaining 20 percent likely attended Boise State but have since moved out of Idaho, Morgan said.

The goal for next spring is 100 Passport students, and 250 by spring 2021, according to Morgan. For every 250 new Passport students, the institution has committed to adding a new faculty member. CapEd recently received federal certification, which could open the door to offering Passport beyond Idaho. Administrators are also considering converting more degree programs to the Passport model.

Administrators said they feel grateful for support from their superiors, who have encouraged them to take risks and assured them that falling short of success is different from failure. If something goes wrong with a program, according to Morgan, the dean of the innovation and design college reliably responds with a wink, “That’s what I thought it would do anyway.”