Online Higher Education: reality check

Presentation at The New England Association of Schools & Colleges Inc, 128th Annual Meeting and Conference

December 4, 2013

© 2013 Eduventures, Inc. 2

Past & Future

Past. For the past 8 years, through end of November 2013, I led Eduventures work in online higher education

Future. From January 2014, I will be Director of Performance Analytics in North America for Tribal Group

© 2013 Eduventures, Inc. 3

Agenda

• Online Higher Education- some characteristics• Online Higher Education- reality check

Current varieties of “Online Higher Education”

4

B. Online Courses External

Recent surge- MOOCs

A. Online Courses InternalLongstanding, commonplace,

least “disruptive”- supplementary, hybrid, uneven

C. Online Programs External

Most dynamic over past 15 years- 100% online degree market

D. Online Programs Internal

Least activity, biggest opportunity- core strategic

hybrid

Internal

External

Online Courses Online Programs

Online program supply has increased rapidly, slowly turning back early-market consolidation and aligning online/offline brands

Type 1 (zero) Type 2 (<1,000 online headcount)

Type 3 (1,000-3,000) Type 4 (3,000+)0%

10%

20%

30%

40%

50%

60%

70%

80%

69%

26%

4% 1%

47%41%

10%2.4%

40% 42%

15%

3.3%

Est. % of Schools 2005 Est. % of Schools 2010

Est. % of Schools 2012

5

Est. Online Market Share 2012 Type 1= 0% Type 2= 24% Type 3= 26%

Type 4= 50%

Master’s remains sweet spot for online. Scale/tradition inhibit Bachelor’s (beyond completion) expansion

Associate Bachelor’s Master’s Doctoral 0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

0%

5%

10%

15%

20%

25%

30%

35%

40%

736,412

1,062,101

683,524

68,750

16.0%

10.3%

15.7%

8.4%

16%

9%

35%

14%

Est. Online Students, Fall 2011

Est. Y/Y % Growth

Online Share

6

Source: IPEDS/NCES, SEC filings, school data, Sloan-C and Eduventures analysis

© 2013 Eduventures, Inc. 7

Agenda

• Online Higher Education- some characteristics• Online Higher Education- reality check

© 2013 Eduventures, Inc. 8

Incumbents starting to slip? Differentiation bar getting higher

WGU

Full Sail

Grand CanyonAPUS

SUNY Empire

Liberty

U

Kaplan U

Ashford

UUMUC

Thomas Ediso

n

Walden U

National U

Keiser U

Nova Southeastern

Columbia Southern

Indiana Wesle

yan

Academy of A

rt UTro

y U

Capella U

Embry-Riddle

Webste

r U

Colorado Tech

DeVry U

U Phoenix-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

42%

27%

19%14%

9% 8% 6% 5% 3% 2% 2%

0% -1% -1% -1% -2% -2% -5% -5% -5% -6% -8%-12%

-19%

Adult/Online Market Incumbents- Enrollment Growth Fall 2012 v. 2011

Source: IPEDS and Eduventures analysis

© 2013 Eduventures, Inc. 9

Why aren’t these numbers shifting? Is the online value proposition stuck?

2006 2007 2012 20130%

5%

10%

15%

20%

25%

30%

35%

40%

19% 19%

23%

18%

37% 38% 38% 37%

Wholly OnlineWholly/Majority Online

Source: Eduventures May 2013 survey of c.10,000 U.S. adults

First Preference by Higher Education Delivery Mode

© 2013 Eduventures, Inc. 10

Shouldn’t this data be going in the other direction???

Enroll if

Time/M

oney No Object

All Interest

Plus Asso

ciate In

terest

Plus 25-54

Plus Bach

elor's In

terest

Plus Maste

r's In

terest

Enroll N

ext 3 Years

0%

5%

10%

15%

20%

25% 23%

18% 17%14% 14%

12% 11%

Preference for Wholly Online Study- by Characteristic

Source: Eduventures May 2013 survey of c.10,000 U.S. adults

© 2013 Eduventures, Inc. 11

Blended outpacing wholly online- but mixed signals; traditional age undergraduate prospects still show little interest in latter

18-22 23-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65 and above

0%

10%

20%

30%

40%

50%

60% Even mix- campus/online

Campus only

Online only

Most campus, some online

Most online, some campus

Delivery Mode Preference By Age

Source: Eduventures May 2013 survey of c.10,000 U.S. adults

© 2013 Eduventures, Inc. 12

Eduventures review of “pedagogy positioning” at 20 leading colleges and universities in the online market

Assertion• “Online is just as good as face-to-face.

Look at the DoE meta-analysis!”• “Our online programs are state-of-the-

art, interactive, multimedia…”• “Our online programs are quality because

we have a nice campus, a faculty member won a Nobel, faculty have to train, we use QM…”

• “We’re a top online school…”• “Finish your degree, get a great job, get a

promotion!”• “We use best-in-class technology, work

with top firms…”• “It’s still 2005. Trad online is the biggest

innovation in town…”

Reality?• Deference to Campus- online not valued in

its own right• Ordinary Reality- we rely on text-based

discussions, and standard LMS• Quality by Proxy- actual online experience

is under-described, basic and/or inconsistent

• Almost No Real Online Brands- pedagogic specifics too vague

• Outcomes Vague/Scattershot- data not collected, benchmarks unclear

• Riding Alone- rare to see specific, non-standard alliances that matter pedagogically

• Not Facing the Competition- as if MOOCs, competency, adaptive learning don’t exist

© 2013 Eduventures, Inc. 13

To reignite growth, online needs to tackle harder objectives

© 2013 Eduventures, Inc. 14

Artisan faculty model under strain in mass higher education. Online enables fresh view on what can and cannot be standardized

Mediocre Course

Best-in-Class Course

FacultyArtisan

Collation/Team/ Third Party

Improbable? Most 4Y schools imply this position. But inevitably the exception not the rule? Or not scalable?

Reality for most courses at 4Y schools?

More Promising and Realistic? This position is an accurate view of what can and cannot be valuably standardized in contemporary pedagogy

Approach to Course Development

(relative standardization)

Course Quality

Feared Scenario that inhibits move away from artisan approach

© 2013 Eduventures, Inc. 15

Next-stage online higher education brands will be built on a combination of technology and implementation innovation

Next-Stage Online Higher

Education Brands

Technology Innovation Implementation Innovation

Adaptive Learning

Simulations/Games

Collaboration Tools

Greater use of Synchronous Delivery, including f2f

“Bigger/Bolder” Course Shell; concentration of resources; consistent implementation

Adoption of Best-in-Class Tools, Materials and Courses

Most faculty focus on teaching, not development

Flipped Classroom- for quality and efficiency

© 2013 Eduventures, Inc. 16

Is online higher ed like a 1980s cell phone?

Thank you

For Eduventures, now I have left, please contact:

Mark Nemec, CEO- mnemec@eduventures.com

From January 1st, 2014, Richard Garrett’s new position is:

Director of Performance AnalyticsTribal Group- i-graduate & Benchmark PlusRichard.Garrett@i-graduate.org