Southern New Hampshire University is probably the fastest-growing nonprofit institution in the country, driven by the expansion of our longstanding online program. When it comes to large-scale online programs, for-profit colleges dominate the list, which includes only a handful of national nonprofit players.
That may change soon. Eduventures, the marketing research firm, predicts that hundreds of nonprofits will seek to move online more aggressively. A good number of them have been visiting us.
From small private tuition-dependent colleges to flagship public universities to elite high-brand schools, we have hosted institutions that are exploring how they might enter the online education market or expand their existing programs. It’s not as easy as it was even just a few years ago, and with some frequency they ask if we might contract with them to help them grow their online programs.
We thought about offering such a “services business” and partnering with these institutions to provide everything from marketing expertise to call center support to advising to course development and more, but discovered that we can’t. U.S. Department of Education rules prohibit one institution from offering “bundled services” to another for a share of tuition revenue (the only sensible way to be paid since services contract and expand with enrollments). Ironically, while the rule was designed to thwart for-profits institutions trying to circumvent prohibitions on incentive compensation for enrollment activities, it inadvertently keeps nonprofits from working together while protecting that market for a new breed of for-profit players.
While Southern New Hampshire has abandoned the idea of creating a services business, we learned in investigating it that major for-profit companies are rushing into the breach, claiming millions of tuition dollars, and blurring the boundaries between them and their nonprofit partners.
Though for-profit colleges themselves are reeling and seeing steep declines in enrollment, bundled services providers, as I call these entities, represent a new for-profit sector quietly gaining substantial ground in higher education. Because this sector is doing so in willing partnership with nonprofit institutions, its presence is largely unrecognized and poorly understood.
A new generation of owners and shareholders is being enriched with tuition dollars, and the nonprofit higher education sector may well be compromising its integrity and values. This major new for-profit presence is now becoming established, is a magnet for investors, and in many ways raises more difficult questions for higher education and for regulators than did the for-profit institutions that have been so often vilified.
Bundled services providers are for-profit companies that help institutions establish and grow online programs. While they can help with course development and conversion, platform and IT needs, compliance and reporting, their real added value is marketing and student recruitment. As more and more nonprofits look to expanded online programs as a way of extending their reach and offsetting loss of other revenues (state support for publics, shrinking net student revenue for privates), the BSP industry has heated up.
Publishing behemoth Pearson acquired EmbanetCompass for $650 million. John Wiley & Sons acquired Deltek, another BSP, for $220 million. A number of new BSPs have entered the market place in the last few years -- companies like 2U, Learning House, and Academic Partnerships -- joining longer-term players such as Bisk; heavyweights like Blackboard have announced plans to jump in.
For-profit institutions also have a stake in this business, with Kaplan owning Colloquy and Ivy Bridge College being owned in part by Altius. Udacity, best known for MOOCs, recently announced a partnership with Georgia Tech that really looks like a bundled services deal if you read who will provide what, based on details provided in this recent Inside Higher Ed article.Coursera this week unveiled partnerships with nine state university systems and flagship campuses in which it will provide a suite of services and products including its MOOC platform, entire courses, technical assistance consulting, and analytics – in short, bundled services.
While for-profit institutions have yet to earn much respect from traditional higher education, the BSPs are working with scores of highly reputable nonprofits. EmbanetCompass works with Boston University, Deltak with Purdue, 2U with the University of Southern California and Georgetown, Pearson with Arizona State University, Bisk with Notre Dame -- and the list goes on.
Eduventures estimates that about 200 nonprofits have partnerships with BSPs and another 500 will entertain such partnerships in the next 12 to 24 months. BSPs generally take 50 percent of all tuition revenues for their services, so this is a very lucrative market.
How lucrative? According to the Texas Observer, Academic Partnerships collects 70 percent of the tuition revenue from partner Lamar University, the third-fastest growing university in Texas (it started at 80 percent), more than $33 million in fiscal 2012.
In its partnership with Arizona State, Academic Partnerships collected just short of $4 million or 50 percent of tuition, over $10 million in its partnership with Florida International University, and $18 million, or 50 percent of tuition, for Ohio University’s nursing program. With hundreds of nonprofits hoping to grow online programming and finally shaking off their hesitancy about online education (the real gift of elites offering MOOCs), the bundled services market stands to outgrow the for-profit higher education sector over time. In short, it could be huge.
Why do nonprofits turn to BSPs for help and thereby surrender huge amounts of tuition revenue (and effectively pass through to the for-profit world federal and state financial aid dollars)? There are three primary reasons:
They have tried to launch online programs and had limited success, or they have never done an online program, so they know there is a lot they do not know;
They do not have the internal capacity, whether it be the right people (often the case), technology, systems, data analytics, or processes;
They do not have the financial resources to build capacity and support a necessary marketing effort.
So while the prospect of giving up so much of their tuition revenue is not attractive, these institutions have little other recourse. The BSPs, on the other hand, recognize that they will make major investments to launch and grow these online programs and that over time the institutions will learn from them, so they insist on long-term contracts. Ten years is not uncommon.
Outsourcing parts of what we do is not new to nonprofit higher education. We often outsource food service, bookstores, and maintenance. We increasingly outsource IT, or portions of it anyway. Outside vendors often create our marketing materials. We may outsource some HR functions, such as payroll.
There is little tradition of outsourcing core academic functions and the key engagement with students that begins with recruitment/admissions and extends through the learning experience and advising. Yet nonprofits are increasingly doing just that in their partnerships with BSPs.
I have elsewhere written about the disaggregation currently under way in higher education and could argue that this is the best example of the phenomenon. Essentially, BSPs do the marketing, student recruitment, data analytics, course conversion, and other functional processes far better than most nonprofits can. Disaggregating those functions and paying an entity more expert than you to do them makes a lot of sense, and I could argue that doing so provides access to more students, strengthens the participating institutions by building enrollments and increasing revenues (even if they give up a good portion of them), and ostensibly allows the institution to stay focused on what it does best: develop intellectual assets that the BSPs then help to extend to the world.
Yet, the rise of the BSP industry raises a number of important questions that invite exploration by policy makers, higher education leadership, reporters, and others. To my mind, they are as follows:
Are for-profit companies in the process of claiming another large portion of the higher education pie and doing so largely under the radar screen?
Are BSPs important enablers that will allow nonprofit higher education to reclaim the online marketplace from the huge for-profits, or we trading one kind of for-profit – institutions that are easy to recognize and understand - - for another that is more insidiously embedded within our sector?
What does it mean for any institution to give over so many of its activities to a third-party provider?
How will accreditors and regulators come to think about these disaggregated structures given that the regulatory environment is largely built on the notion of the integrated institution?
Are institutions that enter into BSP contracts sufficiently safeguarding their authority over key functions and decisions and against the recruitment abuses that plagued so much of for-profit higher education?
Are we comfortable with so much tuition revenue leaving our institutions to enrich shareholders and owners of for-profit companies? Put another way, how much do we give away to for-profits before our institutions lose their standing as nonprofits and become fronts for what in reality become much more mixed entities?
BSPs make their profits and meet shareholder expectations by driving growth, and one could argue that when an institution contracts with a BSP there is a perfect alignment of goals: both want to see more enrollments and more tuition revenue. If the BSP is making a lot of money, so too is the institution: an ostensible win-win. Conversely, when a BSP so entirely takes over the management of a nonprofit’s program, how much nonprofit is left?
If non-profit Institution X contracts for a BSP to:
convert its courses for online delivery;
provide all learning materials;
market and recruit students;
process admissions files;
hire faculty and oversee the teaching of the courses; and
what is then left for Institution X to provide? Its name, accreditation, Title IV approval, and intellectual property in the form of the syllabuses and program. Is that not then a kind of franchising in which the student largely engages with the for-profit side of the partnership and very little with the nonprofit? Is such an effective hybrid program truly nonprofit?
On the other hand, many nonprofits have little alternative. They lack the combination of know-how, capital, and infrastructure they need and a BSP contract gets them in the game and generates new tuition revenues. While the contracts may be lengthy, the arrangements give them time to learn what they need and to eventually take back some or all of that for which they contract. There is an alternative.
I propose a BSP cooperative, a nonprofit entity in which nonprofit institutions can be owner/members. From such an entity an institution could buy all the services it needs at a lower cost with a number of benefits:
Because it is a co-op it would have to distribute any “profits” back to the members, thus keeping all tuition dollars within the nonprofit sector;
Institutions would have not have to surrender such large portions of their tuition revenues and, by extension, federal financial aid dollars would stay within the nonprofit sector;
All co-op “profits” could be funneled back into institutions as need-based scholarship support.
Because all members are owners, the earlier cited Department of Education bundled service affiliate rule would prohibit a co-op as just outlined, but I think the idea is compelling enough that (a) the department should find a way to make such a co-op possible and (b) institutions would readily sign on if they could. In the end, a partnership of accredited nonprofit institutions might not address all the boundary and definitional questions that the new for-profit BSP sector raises, but I would find such a partnership more reassuring than our current state of affairs.
Paul LeBlanc is president of Southern New Hampshire University.
This month's edition of the Pulse podcast features an interview with Max James, national sales manager for education at Citrix, which provides GoToMeeting, GoToWebinar, and other web conferencing tools.
What is the future of MOOCs and how will they blend into the higher education landscape — specifically, into the community college landscape?
The "deMOOCratization" of higher education content, making courses readily available to millions of individuals who can sign up for courses online, developed and taught by faculty from the most elite institutions – Harvard University, the University of Michigan and Massachusetts Institute of Technology, just to name a few -- is now a reality. And no "entry" requirements needed. It is not difficult to understand the appeal. Now anyone can participate in education proffered by a name-brand university.
While it is too early to measure the long-term potential of these cyborg courses, MOOCs already have reignited conversations around student access, content, the delivery of content, and student learning outcomes. In some instances, policy makers and educators are looking to MOOCs to fill gaps resulting from the scaling back of course offerings due to budget cuts and high student demand driven by the last economic recession, enrollment growth and accelerating demographic shifts. California is a case in point. Governor Jerry Brown has shown strong interest in MOOCs and online learning as potential stopgaps against enrollment strain and course shortages plaguing California’s community colleges and students.
But do MOOCs represent a panacea for community colleges? Data from the Community College Research Center (CCRC) at Teachers College, Columbia University offer a cautionary tale about traditional online courses now being used at community colleges.
The result of a longitudinal study of students in the Washington Community and Technical Colleges dating back to 2004, the CCRC study raises serious questions about the efficacy of online learning — and by implication, MOOCs — for community college students.
The CCRC study found that community college students enrolled in online courses were more likely to drop out of or fail those courses. Researchers controlled for the customary factors that can predict success, but the fact remains that students struggling academically in college are most at risk for failure in online courses. While many other factors influence success in online learning, a fundamental question remains: can such courses replicate the enduring effects of student and faculty interaction — particularly in the many special circumstances typical of community colleges?
And in regard to community colleges’ greatest challenge – remedial education – MOOCs with their high-powered instruction and fast-paced delivery, but devoid of real-time faculty-student interaction, appear to offer little if any promise in helping students with the greatest needs overcome their academic deficits.
At this point, we have more questions than answers, including those related to the very nature of MOOCs. What exactly are they? It is difficult to quantify the seemingly eclectic collection of courses into a program of study, assess their relationship to quality, and most important, their impact on student learning. More vexing perhaps, what is the relationship between MOOCs and student success and completion? Already, significant numbers of students who sign up for MOOCs fail to complete them. The latter question is of particular concern to community colleges, but also to higher education in general because of the new imperative to increase educational attainment rates in America.
While MOOCs have garnered considerable attention in the media and within higher education, it is premature to draw any conclusions about their eventual landing place in the community college ecosystem. But thanks to the extraordinary work of the Liberal Learning & America’s Promise initiative by the American Association of Colleges and Universities, we would do well to refresh our memory banks about the hallmark practices that result in student success and achievement.
Through AAC&U efforts, we can revisit those timeless values that undergird effective student learning, dating at least as far back as Socrates and the Socratic method of inquiry. These values include hands-on, rigorous learning opportunities, programs with purpose and cumulative by design, a learning-centric community and emphasis on mentoring, and student/faculty interaction and feedback. We in the community college sector have embraced these same values while at the same time recommitting to fostering student success and completion.
It is important to demystify MOOCs, to separate the wheat from the chaff; that will happen, but we aren’t there yet. In the meantime, most community colleges are already offering online education, which has proven, even when combined with traditional resources like staffing, tutoring and faculty interaction, not to work well for low-income and educationally disadvantaged students. It’s as though we’ve forgotten the digital divide still exists, and nowhere more so than for community college students.
The CCRC data suggest that MOOCs cannot simply be substituted for more traditional courses, regardless of credit-worthiness, when our goal as educational institutions is increased student performance and academic progression through community colleges and not simply ticking requirements off a list regardless of outcome.
Moreover, what’s fundamentally different about MOOCs is that their content is developed by faculty and experts who are external to the "home" institution. As a result, while anyone can sign up to take a MOOC, no credit is given unless the MOOC is recognized by some credit-granting entity. That’s where the American Council on Education has jumped in.
ACE has thus far approved a number of MOOCs offered through Coursera for college credit. This is one step toward an answer of whether a student will be able to apply credit earned through MOOCs to specific college degree programs where a student is matriculated. This raises larger, yet unresolved credit transfer issues and articulation agreements, issues we in the community college sector are seeking to address through the Voluntary Framework for Accountability. The fundamental question for MOOCs is how they will be integrated into community college curriculums and degree programs. And, who will determine their quality and "fit" vis-à-vis with community college curriculums?
Returning to California again, Senate President Pro Tem Darrell Steinberg introduced legislation to create a process for awarding credit for online courses. Senator Steinberg’s legislation, Senate Bill 520, would create a "statewide network of faculty-approved online college courses for credit." The stated goal is to supplement the current shortage of classroom seats with online learning opportunities to allow more students, and in particular community college students, to further their studies. The legislation has ignited a controversy around the mechanism for approving courses for credit. Specifically, a nine-member appointed faculty council would review and approve the courses for credit under the proposal.
Senator Steinberg’s legislation is the latest flashpoint in the current debate surrounding MOOCs — namely, who decides the quality and applicability of the content relative to a college’s curriculum and its faculty? The resolution of this issue leads directly to questions of institutional governance, accreditation, accountability, faculty roles and responsibilities, and ultimately to institutional autonomy. There are good reasons for having institutional faculty involved in the review of curricular content, which has been the model in higher education since its inception.
Democratic learning is central to the community college mission — access to higher education has always been the unique hallmark of community colleges. If the MOOC revolution turns out to be more than a "DeMOOCrazy" experiment with technology, then community college governing boards will need to weigh in on MOOCs — and the sooner the better. The discussions won’t be easy, and even coming up with the best questions to ask at this point is a challenge. But when community college trustees delve into this new world, I hope that they balance issues of demand and expediency with those relating to quality, accountability, institutional autonomy, and above everything else, student success and completion.
J. Noah Brown is president and CEO of the Association of Community College Trustees and author of First in the World: Community Colleges and America’s Future.
The recent announcement from the California State University System regarding its embrace of edX massive open online courses (MOOCs) is interesting and depressing at the same time. As with many aspects of the MOOC phenomenon, it comes packaged with good and bad aspects bundled up together. Instructors will offer a "special 'flipped' version of an electrical engineering course ... where students watch online lectures from Harvard and MIT at home." So the good is the flipped part because it's more interactive and dynamic and there's less lecture-based didacticism in the classroom due to watching videos at home? Really? The 1970s just called: they want their Open University courses back.
This model perhaps moves the Cal State system forward as it offers more accessibility to content for working adults in a hybrid format. I wish they would just step away from the MOOC terminology, which is, let’s be honest, copying and lending out a videotape in another name. MOOCs have been so beaten up and stolen for self-serving means that the original premise has been lost. As Stephen Downes, one of the forefathers of original MOOCs, stated in a recent blog, "These arguments miss the point of the MOOC, and that point is, precisely, to make education available to people who cannot afford to pay the cost to travel to and attend these small in-person events. Having one instructor for 20-50 people is expensive, and most of the world cannot afford that cost."
The MOOC spirit has been eroded by institutions and individuals who see an easy way to sound (or just seem) tech-online savvy. MOOCs are being used by many institutions to avoid actually having to discuss issues like ownership of curriculum, scalability and strategic online growth. In a (MOOC) swoosh, difficult governance issues regarding intellectual property, scalability and ownership are gone. Corrupted MOOCs circumvent the need for anything other than talking (lecture-style) to a camera with the hope that the "nice young guys and gals at CoursEdXra" drop me into a backdrop of the Parthenon and/or animate the background with pen cast versions of napkin sketches. There’s no building of an online community, facilitation of discussion threads, not even grading of papers, just, "I’m done — here’s my MOOC!"
MOOCs were originally intended to educate the Masses (M): hundreds of thousands who “cannot afford to enroll or travel to classes.” They were all Open (O): Open Content provided or supported by Saylor.org, Creative Commons and others. Now Open no longer means open resources — it has been unofficially changed to mean "open to anyone." Don’t get me wrong. Being more available to more people isn’t in itself a bad thing, but it does move the focus away from the original intent, which was to provide free, quality educational materials. The second O stands for Online — unless it’s a hybrid offered in a flipped classroom in which students have watched a video before coming to class (sigh). C = Course. Well, I guess one out of four is not bad if 10 percent retention is acceptable.
Original MOOCs (oMOOCs) were free, or at least extremely affordable, fully online, well-crafted and contained a lot of interesting pedagogy and instructional design. The target demographic was the underserved, both nationally and internationally. Per Downes, they were "not designed to serve the missions of the elite colleges and universities...." but rather "designed to undermine them, and make those missions obsolete."
Hijacked MOOCs are flagship (institution)-led, starting to cost (increasingly), often hybrid, faculty headshot to camera, tech sophistication layered on, little-to-zero impact on faculty member revisiting / learning? pedagogy (in any format) and not very massive. They're mostly taken by education technologists, already-qualified individuals and Tom Friedman.
It’s the strategic analysis and "nuanced discussion" that I want us all back to. Proper MOOCs may work for some, others may just choose to use open online materials and some may even have a mission to support affordable education for underserved communities (my favorite). But let’s not kid ourselves. Co-opting a MOOC label does not make an offering edgy. Get strategy and rationale nailed first, worry about the acronym later.
Kevin Bell is the executive director for online curriculum development and deployment at Northeastern University's College of Professional Studies. This essay is adopted from a posting at the blog Aspire.