The terms “outsourcing” and “workforce development” are rarely allies in Rust Belt states like Indiana, where the loss of manufacturing jobs has driven an increase in demand for postsecondary degrees that point to vocations that will not soon be exported overseas.
But Indiana’s leaders have embraced an outsourcing solution to the state's outsourcing problem. In the aftermath of 2008's financial bloodbath, Indiana was facing a challenge shared by many state governments. The state needed to gut its budget while simultaneously increasing capacity at public universities, especially for adult learners who needed training for new or better jobs. Gov. Mitch Daniels decided that, instead of paying to expand online programs at its existing state institutions, Indiana would contract with a private university outside its borders. In lean times, it would boost workforce development by outsourcing part of its higher education system.
Enter Western Governors University , a private, nonprofit, regionally accredited institution headquartered in Salt Lake City, Utah. Founded in 1997 with seed money from the governors of 18 western states, Western Governors had been, until recently, a sleeping giant. But last June, Daniels signed an executive order  bringing Western Governors into the fold as Indiana’s “eighth state university.” Under the deal , Western Governors would create WGU Indiana : a locally branded (yet still remote, save a satellite office in Indianapolis) version of the university, to which Hoosiers could take their state financial aid dollars just as they would to Indiana's other institutions. In late April, Washington State's legislature passed a law creating WGU Washington. Other states are rumored to be in talks to create similar partnerships, including California, Texas, Arizona, and Louisiana.
Anointing a Utah-based institution as a state university of Indiana and Washington might strike some as odd, but that is not the most unusual thing about the arrangements between the states and Western Governors. (Distance-learning programs have become commonplace, not least at public universities.) The main difference between Western Governors and other state-sponsored higher education programs has to do with the pedagogical model. Western Governors focuses not only on teaching new skills but also on awarding credits for existing ones. There are no classes, no lectures, no fixed academic calendar. For what students can prove they already know, they get credit. For what they can't, they are given learning materials and some light guidance. Students are charged tuition every six months and take exams whenever they feel they are ready.
The model, called “competency-based learning,” has some champions in the policy world. The Council for Adult and Experiential Learning has advocated for "prior learning assessment" as a way of making sure students -- especially low-income ones -- do not pay any more to complete a degree than they have to. The Center for American Progress has praised Western Governors as a beacon of innovation in an industry entrenched in the tyranny of the credit hour. The Stanford Research Institute recently rose to the defense of a competency-based associate degree program in nursing at Excelsior College, noting in an extensive study suggesting that its graduates are on par with those of more traditional programs.
But resistance from educators in Washington and Indiana suggests that Western Governors, and its novel approach, might have some political battles ahead as it looks to expand its state-by-state strategy. The concerns that have been raised in Washington and Indiana -- that Western Governors will not be held to the same standards of transparency and excellence as other public universities, that it will be taking student financial aid dollars that normally flow to truly in-state institutions, that it could create the illusion of addressing the capacity issue without really making much of a dent -- might foreshadow debates that could soon play out in legislatures across the country.
Competencies, not Courses
It is fair to say that the state-branded versions of Western Governors do not fit the mold of the traditional public university.
For one thing, students do not have professors. The university awards credit based on how well students can demonstrate “competencies” -- skills that students know already, from previous education or work experience, or should be able to learn without any real hand-holding. Its students, whose average age is 36, work through course material on their own, with occasional guidance from “mentors” (75 percent of whom hold graduate degrees) who advise them online or by phone every week or two.
The university’s academic heavyweights  are relegated to figuring out what students need to prove they have learned by the end of each unit, and designing exams accordingly. The total size of the full-time faculty is 700, according to WGU.
“We do not develop any of our own courses,” says Bob Mendenhall, the president of Western Governors. “We develop the competencies required for a degree and the assessments to measure those competencies. Then our faculty go and find the best courses available to … teach that content.” Western Governors licenses course modules from commercial providers such as Pearson and McGraw-Hill and borrows from open courseware sites, Mendenhall says.
Western Governors offers bachelor's and master's degrees (no associate degrees) in four general areas: business, education, health care, and information technology. Students do not need to wait until the end of a semester to take an exam; they can pay to take one at the nearest bricks-and-mortar testing center anytime they think they are ready. Beyond course materials, testing fees, and various other program-specific fees (some of which are $1,000 or more), the amount of tuition students pay depends on how much time it takes them to prepare for and complete all their exams. Tuition  is a ticking clock: every six months, students are charged between $2,890 and $4,250, depending on the program.
In other words, students who know the most coming in, or are able to learn the quickest, will probably end up paying the least. Students who take longer -- because they are slow learners, or do not learn well on their own, or have especially demanding jobs or home lives, or are merely lazy, or some combination -- will probably end up paying the most.
About 40 percent of Western Governors students graduate the university with a degree within four years. (Given the large number of nontraditional students at Western Governors -- the average age is 36, and two-thirds work full-time -- the university calculates its own graduation rate that, unlike the federal rate, includes part-time and non-first-time students.)
Those who do graduate take an average of 30 months, or five pay periods, to do so. Five percent of students default on their student loans within two years.
In its 2010 annual report,  Western Governors emphasized students’ high satisfaction with its curriculum: 72 percent of students stick with the program after a year; 96 percent say they are satisfied with their experience; 97 percent say they would recommend Western Governors to a friend. The university scores higher than average on the National Study of Student Engagement. In a recent survey (conducted by the university) of 120 employers, nearly 80 percent judged their employees who graduated from Western Governors to be equal to or better than their employees from other universities.
The news media, too, have tended to focus on narratives that show how the university has enabled some students to pull themselves up by their bootstraps. In 2009, as part of a series called “What Works,” "NBC Nightly News" aired a segment  on Western Governors that highlighted several success stories: an elementary school teacher in Miami who was able to get a graduate degree while tending to her two young children at home; a veteran computer specialist in Sacramento who had been “in and out of community college” for 20 years before finally finding, in Western Governors, a degree program that would allow him to get a degree necessary for a promotion “with very little studying.”
But not all graduates can relate.
Tima Huseman, 25, teaches second grade at a school outside Houston. Shortly after earning an undergraduate degree in early childhood education from Texas Tech University, Huseman enrolled in a master’s program at Western Governors with a focus on K-8 math education. She graduated promptly and is well on her way to paying back the $12,000 she took on in debt.
There’s only one problem, Huseman says: “I didn’t learn anything to further my teaching.”
The first three months of the program were great, says Huseman. “You watch videos, you have to do worksheets, you plan lessons,” she says -- exercises she felt were actually helping her become a better teacher. But the subsequent 14 months were devoted to a research paper that Huseman felt was too narrow and theory-based to have any practical application. She had expected more in the way of teaching strategies. The process of collecting data and drafting her paper made her a better writer and researcher, she says, but not a better teacher.
“I felt like I wasn’t learning anything, but I stayed because I didn’t want to waste the money I had spent already,” Huseman says, adding that her mentor had to talk her out of quitting on three separate occasions.
Huseman says she liked her mentor, whom she spoke to every few weeks by phone. Still, the elementary school teacher found Western Governors' “hands-off” model of instruction off-putting, and even a bit disturbing. “No one comes to check on you," she says. "I know they can’t have people everywhere, but I don’t know -- I could literally have made up everything.”
Huseman is just one story, no more or less valid than the more uplifting ones from the NBC segment. But the contrast of her narrative with the others brings into sharper relief a caveat that is duly acknowledged by the university and its champions, but rarely illustrated: Western Governors is not for everyone.
Model of the Moment?
The nationwide push for college completion has two main parts. The first is getting high school students into, and through, postsecondary degree programs. The second is getting college degrees in the hands of adults who never earned one to begin with. That second group stands to become more important to completion goals as the proportion of high school graduates shrinks.
Research has shown that the most promising degree candidates in the second group are those with some college already under their belt. And this population is Western Governors’ specialty.
States have begun aggressively pursuing these errant learners. Texas, for example, has compiled a database of dropouts who have at least 100 hours’ worth of college credit and instructed their alma maters to try to coax them back, says Ray Paredes, the state’s commissioner of higher education.
Meanwhile, Texas -- whose governor recently challenged  state institutions to come up with a four-year degree that would cost students less than $10,000 -- has been in talks with Western Governors about a potential WGU Texas, according to Paredes. (Some back-of-the-napkin arithmetic puts the cheapest Western Governors degree at a shade under $15,000 if completed in the average amount of time.)
“The whole issue of competency-based instruction … is all part of the national movement, that’s gaining a lot of steam, to look at ways to deliver high-quality education at a reasonable price,” says Paredes. “Because the model we currently have is unsustainable.”
The model appears to be gaining momentum in some policy circles, even as the Obama administration, in its efforts to reduce fraud and abuse in federal financial aid programs, has taken steps  to enshrine the traditional credit hour in federal law.
The Center for American Progress, meanwhile, has published several harsh critiques of the credit-hour  as a standard for measuring progress toward a degree. “Policy efforts … that intentionally or unintentionally lock in the credit hour as the unit of measure based on seat time, for example, hold back the innovation in some significant ways to the detriment of students,” wrote the authors of one report published earlier this year.
“Policymakers must first address higher-education budget constraints by helping low-cost disruptive universities -- public and private -- gain market share by eliminating barriers and partnering with them to grow enrollments and capability,” says the report.
It goes on to laud Western Governors for marrying competency-based learning, which allows students to skip the stuff they already know, and online learning, which allows students to move at their own pace rather than the pace of their classmates and professors. The two innovations are, they say, a natural fit.
The Center for Adult and Experiential Learning last year published a huge study  that suggested students who were allowed to earn credit via "prior learning assessment" were far more likely to complete a degree. This was particularly true of Hispanic and black students. "Awarding college credit for significant life learning could be an effective way to accelerate degree completion, while lowering the cost, for underserved populations,” the center wrote in a follow-up research brief last month.
Even before the eggheads started weighing in, Western Governors had quietly started to boom. The university's early years, in the late 1990s, were plagued by accreditation woes and underwhelming growth. In 2003, its enrollment stood at 500 students. Now it claims an enrollment of 23,000 students. Between 2006 and 2010, its yearly revenue shot from $32 million to $111 million.
The university’s recent shift to state-by-state colonization could mean even quicker growth. In the year since Daniels, the Indiana governor, announced the partnership with Western Governors, the number of Indiana residents enrolled at the online university has leaped from 300 to 1,200 -- more than 20 times the growth rate of the entire student body.
“The strategy is not only to be a state resource, but also to spread the model,” Mendenhall, the Western Governors president, told Inside Higher Ed in February. “So a state might choose to say, ‘OK, we’re going to create our own technology-based, competency-based university using the WGU model.’ I don’t know that states have the resources to do that right now. A faster, cheaper way for them to get to the same end would be essentially to private-label WGU and let us run it for them.”
Mendenhall knows that state governors are under pressure to increase college access and completion while slashing college budgets, and has tailored his sales pitch accordingly. He gave Inside Higher Ed a brief demo:
“Look, two-thirds of your jobs are going to require a college degree by 2013 [according to an oft-cited Georgetown University study ], and 40 percent of your adults have a degree,” says Mendenhall, speaking as he would to state officials. “…You’re not going to get to 66 percent of your workforce having a postsecondary degree just by educating more people coming out of high school. You’ve got to go back and recover a lot of those adults. We fill a hole in your system that allows you to reach working adults and educate them for the jobs of the future -- and we’ll do it at no cost to the state.”
So far in Indiana, the move has been a strategic boon for both the governor and Western Governors. Daniels got kudos for showing a forward-thinking approach to meeting Indiana’s college completion goals without spending a dime on infrastructure: “All in all, Western Governors University appears to be a good fit for a Midwestern state with lots of busy, cash-strapped aspirants to higher education,” wrote The Indianapolis Star in an editorial. (The Washington deal also garnered praise from the area's most influential newspaper: "Bringing this vision to Washington state will be a plus for our economy and citizens," read The Seattle Times.)
Western Governors, meanwhile, got a lot of free publicity, including a television ad  featuring Daniels himself. The deal also opened the door to conversations with other state governments. Mendenhall said in February that Western Governors officials have been in talks with about a half-dozen other states, including several in the east. “Over the next five years we’ll aim to do 10, 12 states and then see where that takes us,” he says.
‘Not a College Education’
But while the arrangements have worked out well for state politicians and Western Governors administrators, some educators in Indiana and Washington say such partnerships are unnecessary and inappropriate.
In an op-ed  published in The Seattle Times shortly before the WGU Washington bill became law, Johann Neem, an associate professor of history at Western Washington University, wrote that the competency model “threatens what makes our system successful.”
“A college education is about going through a process that leaves students transformed,” Neem wrote. “That’s why it takes time. Learning is hard -- brain research demonstrates that real learning requires students to struggle with difficult material under the consistent guidance of good teachers. WGU denies students these opportunities. In fact, its advertisements pander to prospective students by offering them credit for what they already know rather than promising to teach them something new.… Whatever WGU is, it is not a college education.”
Neem was not alone. Because Washington created its locally branded version of WGU by legislative means, rather than by gubernatorial fiat, it invited a counter-lobbying effort in the run-up to the partnership. Professors at state institutions came out of the woodwork to object, says State Sen. Jim Kastama, who championed the bill.
“Behind the scenes, it was a difficult bill to get through,” says Kastama. Some people tried in vain to block Western Governors from ever being eligible to collect in-state aid from Washington students, he says. But the law that created WGU Washington does indeed permit the university to cash tuition checks paid with those in-state grants and scholarships, pending a review by the Higher Education Coordinating Board. Kastama says he does not expect that to be much of a hurdle.
Some academic leaders in Indiana, meanwhile, were miffed that the governor did not give them a chance to weigh in before partnering with Western Governors.
“What disappointed me beyond understanding was that the state would put resources into another program at the same time as they are cutting resources to every other nursing program in the state,” says Marion Broome, dean of the school of nursing at Indiana University.
Jerry Pattengale, an associate provost at Indiana Wesleyan University, an independent nonprofit institution with a significant online presence, wrote in an e-mail that while he is a big fan of Governor Daniels, “There’s an uneasy tension between the new federal regulations on credit integrity and the competency-based WGU approach.” (Pattengale allows that “if the WGU approach is indeed valid, and legitimately sidesteps the extreme federal accrediting logistics, then Mitch is brilliant and over 60 Indiana campuses need to make a radical shift and follow suit.”)
Anointing Western Governors as the state’s “eighth public university” also raises questions about to what extent WGU Indiana is beholden to the same standards of curricular scrutiny as the other seven, Pattengale says.
Many existing public institutions offer flexible, online degree programs for adult learners. And most institutions also still count credits those adults earned long ago. In many cases, returning students would not have to log redundant credit hours if they want to finish their degrees.
“It was cast as if people suddenly had an opportunity to get a degree in a convenient manner, which simply wasn’t true,” says Pattengale, whose own institution, Indiana Wesleyan, owes a great deal of its recent growth to such programs.
A Red Herring?
Supporters of Western Governors' state-partnership model have dismissed such criticisms as petty and territorial. Of course public and other nonprofit institutions would be put off by Western Governors swooping in and snatching up students and their state-sponsored aid, they say -- the existing institutions want those students and tuition dollars for themselves.
But other critics say competition has nothing to do with it. They say the addition of Western Governors to the state university system could do more to distract from the problems of capacity and access than to solve them.
The Washington State public higher ed system currently struggles to accommodate traditional-age students, says Marsha Riddle Buly, professor of elementary education at Western Washington University. Each year, Washington’s public institutions turn away many qualified high school graduates, Buly says. What the state needs to do is increase capacity in programs aimed at those recent high-school graduates, she says.
“Those kids are going to have trouble succeeding in a program that is designed for older, working adults, who already have education and work experience,” says Buly. The hands-off, prior learning-focused model of Western Governors "is not going to help get an 18-year-old freshman or a 20-year-old community college student to really do well and get a degree,” she says.
Buly may have a point. Western Governors does much worse with first-time, full-time students than it does with its general population, whose average age is 36. The university's graduation rate for first-time, full-time students is 22 percent, according to the most recent Education Department data.
The addition of Western Governors to the roster of state-endorsed universities could be insidious, says Karen Stout, an associate professor of communication and the incoming faculty senate president at Western Washington; not because the online university is illegitimate, but because it pays lip service to the capacity and access issues without doing much to fix them.
“It really doesn’t improve the access issues,” Stout says. “It’s an illusion of access. If we want to provide more access for students and really address the needs of high school graduates … we need to expand access at the universities that they want to go to. And they’re not seeking out WGU.”
More likely, WGU Washington will attract community college students looking to upgrade to a baccalaureate program, who might have otherwise enrolled at a for-profit institution like University of Phoenix or Kaplan University, says Cable Green, the former director of e-learning for the Washington System of Community and Technical Colleges. For-profit institutions, which in recent years have fallen under intense scrutiny from federal watchdogs, tend to graduate students at similar rates and with more debt than the nonprofit Western Governors. And Mendenhall, the president, points out that while his university's 5 percent student loan default rate is higher than the rate at most public universities, it is substantially lower than at for-profit institutions.
Kastama, the state senator who led the effort to create WGU Washington, says he has no illusions that Western Governors will solve all his state’s problems. “No, it’s not the cat’s meow,” Kastama says. And it is true, that the online, competency-based Western Governors University does represent “uncharted territory” in the constellation of state-backed higher education models.
But budget cutbacks are forcing state universities to raise tuition by more than 15 percent next year, with further hikes likely to come, Kastama says. New investment in instructors, classrooms, and online infrastructure -- which some educators see as the ideal way to address the capacity, access and completion issues -- is not coming any time soon. In such times, Kastama says, what harm is there in making room for alternatives?
For the latest technology news and opinion from Inside Higher Ed, follow @IHEtech on Twitter .