Innovative Higher Education
Business Models
EACUBO 2013
October 6-9
Baltimore Marriott
Waterfront
Michael Gower, Senior Vice President for Finance
Rutgers University
John Case, Director, PwC
David Hemingson, Managing Director, PwC
Higher Education and Academic Medical Center
Advisory Practice
Creating, Developing, Changing
Agenda
 Recap of Executive Summit of 2012 EACUBO
 Update: Experimentation and Breakthroughs
 Discussion: Innovations at Your Institution
EACUBO 2013
October 6-9
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Creating, Developing, Changing
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Recap of Executive Summit of
2012 EACUBO –
Innovative Business Models
EACUBO 2013
October 6-9
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Creating, Developing, Changing
Recap of Executive Summit of EACUBO 2012
 Discussed innovative business models
 Three presentations
 Southern New Hampshire University
 Kris Clerkin, Executive Director, College of America
 Northeastern University
 Sean Gallagher, Senior Strategist and Market Development
Officer
 Massachusetts Institute of Technology
 Michael Howard, Vice President for Finance
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 PwC whitepaper summarizes strategies,
challenges and successes
Creating, Developing, Changing
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Exploring new business models
 New models demonstrate willingness to
adapt
 Affordability
 Changing student demographics
 Technology to tailor learning to individual
schedules and learning needs
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Exploring new business models
 But questions remain
 Is online learning here to stay?
 Can new delivery models increase revenue?
 Will faculty accept non-traditional teaching
mechanisms?
 Will accrediting agencies validate these
models?
 Can these new delivery models shape a more
competitive workforce?
EACUBO 2013
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Innovations
 SNHU – College of America program aimed at
non-traditional students
 Northeastern – Satellite graduate campus
sites in Charlotte and Seattle
 MIT – edX, the massive online open course
(MOOC) initiative with Harvard
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College of Online and Continuing Education (COCE)
and College of America (COA)
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 Not-for-profit, regionally-accredited university with 80year history and 23,000 students with 180 degree and
certificate programs, available online
 Objectives –
 COCE – leverage NFP advantage to provide nontraditional students an affordable undergraduate
degree
 COA – piloting competency-based assessment
program to provide Associates degree for $5,000
 Goals –
 SNHU – 350,000 students by 2018
 COA – 10,000 student by 2015
Creating, Developing, Changing
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College of Online and Continuing Education (COCE)
and College of America (COA)
 Strategy –
 Establish separate businesses with the autonomy to
develop innovative business model
 Develop partnerships with employers looking to
educate their workforce
 Dedicated staff has freedom to develop cost structure,
technology, business model and sales and marketing
strategy
 Customer-driven approach including an advisor for each
student and extensive analytics of student experiences,
particularly completion rates and workplace success
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Northeastern’s Graduate Campus Network
 Private research university of 21,000 full-time students
with strong emphasis on experiential learning
 Objective – establish strategic presence in new domestic
markets where Northeastern could leverage its brand to
meet demand for graduate education programs
 Strategy – following extensive research, establish a
“lean” (15,000 sq. ft.) campus-based presence with
“hybrid” programming
 Classroom and online learning
 Northeastern-based and local faculty
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Northeastern’s Graduate Campus Network
 New campuses in Charlotte (2011) and Seattle (2013)
 Each campus offers multiple disciplines
 Close working relationships with local industries –
urban planning research in Charlotte; biotechnology
research in Seattle – have broaden Northeastern’s
network
 “Hybrid” degrees are now offered on the Boston campus
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edX, the MIT/Harvard MOOC
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 Not-for-profit owned & governed by MIT & Harvard, based
on $30M investment by each partner
 Objective – build global community of online learners
benefiting from MIT/Harvard-quality course content
 Strategy – develop strong brand worldwide, quickly and
with high quality; like amazon.com, become preferred
provider
 Features video lesson segments, embedded quizzes,
immediate feedback, student-ranked Q&As, online labs and
student-paced learning
 Technology base to learn how students learn and adapt
instruction accordingly
 Students receive “certificates of mastery”
Creating, Developing, Changing
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Update:
Experimentation and
Breakthroughs
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MOOC/Online Learning Update
 The Year of the MOOC (NY Times) + 1
 Massive online open course
 Online instruction and social networking
 Online interaction – video lectures, simulations,
exercises, labs, forums, quizzes
 Certificate of completion
 Chronicle of Higher Education survey of 100
professors teaching MOOC
 79% agreed “MOOCS were worth the hype”
 Majority thought students succeeding with MOOC
should not receive credit for their free courses
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Major Players
MOOC / OL
Update
 edX – 1.25M students
 May 2012 start-up – MIT/Harvard
 Coursera – 4.7M students
 April 2012 commercial start-up
 Udacity – 150,000 students
 January 2012 commercial start-up
 Khan Academy
 Udemy
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edX
MOOC / OL
Update
 29 partners as of September
 UC Berkeley, Cornell, Georgetown
 Partnering with Google to form Open edX and
Mooc.org to facilitate development of online courses
 Courses developed using Google’s Course Builder facility will
transfer to edX platform
 Financial arrangements and quality control under development
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Coursera
MOOC / OL
Update
 87 university partners
 Stanford, Princeton, Penn, Michigan
 Additions include Yale, Duke, Wisconsin,
Chicago
 400 courses in 7 languages
 $43M venture capital injection in July
 Laureate Education among investors
 Expands on $22M initial investment from Penn,
California Institute of Technology, among others
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Udacity
MOOC / OL
Update
 Partners at 84 universities
 Virginia, Emory, Penn, Princeton, Duke
 NSF review of San Jose State experience
 Outcomes in summer classes improved after
spring class directed at at-risk students paled
against comparable classroom-based instruction
 NSF concludes SJSU has learned from experience
EACUBO 2013
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Experimentation
MOOC / OL
Update
 Many start; few finish
 Many plan to combine online snippets with
traditional instruction or online course with
campus-based exams
 Distinguished and/or on-campus professor
instruction; courses available to others
 Focus on remedial and gateway courses
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Breakthroughs
MOOC / OL
Update
 Georgia Tech offers online masters degree in
computer science through MOOC platform
 Offered for $6,600 compared to campus-based course for
$45,000
 GT anticipates strong participation from outside US – Dean:
“Online, there’s no visa problem.” (NYT)
 60/40 revenue split with Udacity
 2014 projection: $3.1M investment; $240,000 “profit”
 Year 3 projection: $4.7M “profit”
 Full and provisional admission
 Certificates if program not completed
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Breakthroughs
MOOC / OL
Update
 University of Florida to offer online bachelors
degree
 Tuition at ¾ cost of tuition for in-state students, per
legislature’s direction
 University of Georgia System to offer general
education courses through Coursera across
all campuses
 Initial courses offered this fall
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Breakthroughs
MOOC / OL
Update
 Blackboard announces support for MOOCs at
annual conference in July
 15 institutions planned to offer MOOCs on the
platform this fall
 Competes with Instructure’s MOOC platform, Canvas
Network
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Breakthroughs
MOOC / OL
Update
 MOOC platforms offered to complement or
replace classroom instruction
 e.g., Coursera charges of $8 per student for platform;
$30 to $60 per student for course developed at
another university*
 Alternative credentialing expands
 MITx, a division of MIT, announced last month
that it will offer certificates to students who
complete a series of courses
 Equivalent of 2 to 4 courses
 Estimates 6 months to 2 years to complete
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*Rates vary
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Issues and Concerns
MOOC / OL
Update
 Impact on University brand
 Instructional quality
 Outsourcing core instruction to for-profits
 MOOCs – best investment alternative
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Competency-based Education
SNHU
Update
 In March, US Department of Education
endorsed competency-based education
 SNHU gained US DOE approval to pursue
federal financial aid funding for competencybased approach
 SNHU plans to expand College of America to
bachelors programs
EACUBO 2013
October 6-9
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New Campuses
Northeastern
Update
 Northeastern University
 Graduate campuses – Charlotte (2011) and Seattle
(January)
 http://www.northeastern.edu/graduatecampuses/
 Close collaborations with local industry
EACUBO 2013
October 6-9
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Discussion:
Innovations at Your
Institution
EACUBO 2013
October 6-9
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Creating, Developing, Changing
Thank you
EACUBO 2013
October 6-9
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