Over her 20-plus years developing accessible and scalable academic programs, Archer Education vice president of strategy and development Melanie Andrich has seen it all. From leading Rutgers University’s first fully online professional master’s degree program to working closely with colleges and universities to define, implement and grow online enrollment initiatives, Andrich has witnessed tremendous change in the higher education landscape.
These experiences afford Andrich unique insight into the economics of growing online programs. We talked about how institutions can navigate the next five to 10 years’ macroeconomic shifts to not just survive but thrive by optimizing academic innovations to best serve student and adult learners.
Q: How are today’s economic and market factors impacting higher ed online learning? Some institutions report strong online enrollment while others struggle with declining applications. Beyond the obvious macroeconomic pressures, what structural shifts are you observing in how students calculate ROI, and how should universities think differently about value proposition in this environment versus five to 10 years ago?
A: You’re right to call out the contradiction. Rather than simply shrinking, the market is splitting. Winners are pulling away from everyone else. Five to 10 years ago, an online M.B.A. program with reasonable tuition could fill seats. Now with so many options, prospective students are shopping like pros. M.B.A.s don’t just compete with other M.B.A. programs anymore. They compete with programs like master’s in health care, master’s in public administration, master’s of legal studies and more.
The biggest structural shift that we’ve seen is that prospects (students and parents) don’t automatically trust in degrees. They’re assessing outcomes and pathways. They’re not asking, “Which bachelor’s/master’s should I invest in?” They’re asking, “What will get me a job, get me promoted, help me switch careers or increase my salary? Is it college or an alternative path that is faster and more direct?”
This impacts the value proposition of graduate school, for example. “Renowned faculty” and “rigorous curriculum” may not land quite the same way as before. Program outcomes that rely on highly academic or accreditation-inflected language may not compel. Prospects need proof. What can I do with what I learn? What is the expected salary lift? Where did alumni actually land? Students want skills that show up on Monday morning in addition to intellectual enrichment.
Pricing pressure is real. Time matters. Flexibility is critical. Programs that aren’t crisp on these points start to get compressed. You either prove premium value or compete on efficiency in many cases.
The bottom line is that today’s prospective students buy outcomes. The institutions that haven’t recognized the shift or aren’t attempting to measure and communicate those outcomes are the ones at risk.
Q: What is the role of market research in defining an institution’s unique online learning programs? Many institutions approach market research as a validation exercise rather than as a genuine discovery. When you’re working with a university on portfolio strategy, how do you help them define what success looks like and even how to anticipate areas of opportunity?
A: I could talk about this all day because it gets at a common trap: Institutions sometimes use market research to confirm what they want to do instead of discovering what they could or should do.
Market research shouldn’t be a box to check as quickly as possible. It should be the starting point for market and portfolio strategy, including defining what winning even looks like. Instead of asking, “Should we launch this program?” Archer asks, “What opportunity or problem are we trying to address, and what would success look like five years from now?” From there, we can get concrete. We can discuss student profiles, intended outcomes, program type and design, enrollment targets, anticipated costs, and levels of financial contribution to the institution.
Then we bring in multiple lenses, and this is where things get exciting. Yes, we look at demand data like search trends, completion and provider trends, and workforce trends. We determine competitive positioning. We review the institution’s strengths and goals to determine portfolio fit and differentiation opportunities. But we also convene focus groups with target employers and prospective students for real-time market input and even co-design the programs with faculty. This kind of market conversation allows us to look around corners a bit. What are pain points for prospects and employers today? What do they see coming in the next few years that they are preparing for? Sometimes the best opportunity for an institution isn’t the idea we started with. Sometimes it’s adjacent, and sometimes it’s something we would never have thought of on our own.
If I had to summarize it: Good market research reduces risk and supports institutional decision-making. Great market research builds connection and community today for the future.
Q: What financial modeling considerations are often overlooked for academic programs and portfolios? What are some of your tips and techniques when you help higher education institutions with financial and scenario modeling?
A: Financial models may look precise, but many models aren’t grounded in how programs operate today or in what needs to be true a few years down the road. This goes back to our conversation about what winning looks like.
The most common issue is that institutions model revenue in detail and treat costs as an afterthought. The model looks clean, but it doesn’t hold up in reality.
A few things I always emphasize:
- Instructor economics: Are you using full-time faculty, adjuncts or course overloads? What is the mix of instructor types? What is the section size cap? Are you filling sections now? Small changes here can completely swing margins.
- Enrollment projections: Some models assume a smooth growth rate. In reality, programs can take time to build awareness and yield. They can also experience surges of pent-up demand. It’s worth taking the time to model out a few scenarios for enrollment projections so you can plan accordingly.
- Student behavior: Retention rates, average course load and time to completion matter. An unexpected drop in retention rates can erode your entire business case.
- Hidden or shared costs: For example, student support, marketing efficiency, clinical placement, technology infrastructure and support. These costs are often underestimated or excluded, but they are real and tend to grow with scale. Estimating these types of costs often requires conversation with multiple departments.
I’m a big believer in scenario modeling, not one-and-done forecasts. What happens if conversion drops 10 percent? If cost per enrollment increases? If you cap your section size? You need to understand sensitivity, not just the base case. You should tie the model to decision-making. A model should tell you what levers matter most. Price, speed to completion, marketing spend, instructional cost structure and more. If the model can’t inform action, it’s just a spreadsheet.
