Online education: Non-profits fight back? — infographic from onlinedegrees.org

Per Muhammad Saleem:
“For years, for-profit universities have dominated the online education space, however that’s changing.”

 

Online Education: Non-Profits Fight Back?

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Party ends at for-profit schools — from the WSJ by Melissa Korn

Excerpt:

For-profit colleges are facing a tough test: getting new students to enroll.

New-student enrollments have plunged—in some cases by more than 45%—in recent months, reflecting two factors: Companies have pulled back on aggressive recruiting practices amid criticism over their high student-loan default rates. And many would-be students are questioning the potential pay-off for degrees that can cost considerably more than what’s available at local community colleges.

For-profit college group sued as U.S. lays out wide fraud — from the New York Times by Tamar Lewin

Excerpt:

The Department of Justice and four states on Monday filed a multibillion-dollar fraud suit against the Education Management Corporation, the nation’s second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.

Colleges in Crisis - Harvard Magazine -- July-August 2011

Excerpt (emphasis DSC):

Surveys of the American public and of more than 1,000 college and university presidents, conducted this past spring by the Pew Research Center in association with the Chronicle of Higher Education, revealed significant concerns not only about the costs of such education, but also about its direction and goals.

More fundamentally, the business model that has characterized American higher education is at—or even past—its breaking point. Many institutions are increasingly beset by financial difficulties, and the meltdown since 2008 is but a shadow of what is to come. Undergraduate tuition has risen dramatically: at a 6.3 percent annual clip for nearly the last three decades—even faster than the much-decried 4.9 percent annual cost increases plaguing the healthcare industry. The full increase in the price of higher education has actually been hidden from many students and families over the years because gifts from alumni, earnings from private university endowments, subsidies from state tax revenues for public universities, and federal subsidies for students have been used to mitigate some costs. But universities are exhausting these mechanisms.


A Thriving, Disruptive Innovation
Just at the moment when these challenges to established higher education have arisen and compounded, another group of universities has arisen whose financial health is strong and enrollments have been booming. And yet the brands of these schools are weak and their campuses far from glamorous; sometimes the campuses are even nonexistent from the perspective of students, as online learning has largely driven their growth. How could this upstart group be so successful when the rest of higher education is treading water at best?

From ‘gainful employment’ to lower college costs — from The WashingtonPost.com by Matt Miller

Excerpt (extra emphasis by DSC):

But whatever happens as these new rules are implemented in next few years, for-profit colleges will never get out from under a cloud, nor make good on their potential social contribution, until they pass on to students the benefit of the lower educational cost structures they are creating. To date, they’ve been reluctant to do so, because, for public companies especially, it seems tantamount to ignoring the shareholder interest in maximizing profits.

But this is shortsighted. For one thing, it ensures a perennial political backlash, which can’t serve shareholders over time. And beyond this, as a business matter, it means there’s a huge opening for any number of “Wal-Marts of higher ed” to win a vast market of underserved or overindebted young Americans (or mid-career workers who seek training) who desperately need affordable, high-quality educational services. The strategy should be to lower costs, lower prices and “make it up on the volume.” The firms that do this and earn a reputation for quality will force the traditional college world to reexamine its own inefficient practices, to the lasting benefit of students and the governments that fund them.

 

From DSC:
Also see:

 

Gainful Employment Rule is Out: Was it Worth the Wait? — from New America Foundation

Excerpt:

Nearly a year after first proposing it, the Department of Education this morning officially issued the final version of its “Gainful Employment” Rule, which aims to stop for-profit colleges from saddling students with unmanageable levels of debt. As has been noted in numerous news stories, the Department made very large concessions to the for-profit higher education industry. As a result, the initial reaction from consumer advocacy groups has been, for the most part, lukewarm at best. Meanwhile, career college lobbyists remain — unsurprisingly — unsatisfied with the changes.

At Higher Ed Watch, we will provide our own analysis of the final regulation after we have thoroughly reviewed it. In the meantime, though, here are some helpful links to find out more about the rule, and to see what the press and various interested parties are saying about it.

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Key education issues dividing public, college presidents, study finds — from the WSJ by Kevin Helliker

The general public and university presidents disagree about the purpose of college, who ought to pay for it and whether today’s students are getting their money’s worth.

But university presidents and the average American agree that the cost of higher education now exceeds the reach of most people.

Those are broad findings from a pair of surveys released late Sunday from the nonprofit Pew Research Center. The surveys took place this March and April, one posing college-related questions to 2,142 American adults, the other to 1,055 presidents of colleges large, small, public, private and for-profit. The two surveys contained some identical questions and some peculiar to each group.

Excerpt of report:

As is the case with all Center reports, our research is not designed to promote any cause, ideology or policy proposal. Our only goal is to inform the public on important topics that shape their lives and their society.

Higher education is one such topic. The debate about its value and mission has been triggered not just by rising costs, but also by hard economic times; by changing demands on the nation’s workforce; by rising global competition; by growing pressures to reduce education funding; and by the ambitious goal set by President Obama for the United States to lead the world by 2020 in the share of young adults who have a college degree.

 

What trends really matter? Rob Reynolds presentation -- 2-9-11

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This is a presentation prepared for the “What College Students Think: Making Information Pay for Higher Ed Publishing” conference sponsored by the Book Industry Study Group on February 9.

James Morrison -- Higher Education in Transition

Example slides/excerpts:

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One example — of several great slides — regarding the old vs. the new paradigm:

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From DSC:
Re: one of the bullet points on the last slide — i.e. “Faculty work as part of instructional team” — here’s my take on what that team increasingly needs to look like in order to engage our students and to compete:

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For-profit schools are struggling

For-profit schools are struggling — from MarketPlace.com with Jennifer Collins reporting

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One from DSC:


What goes up...must come down -- by Daniel S. Christian

Abstract:
A perfect storm has been building within higher education. Numerous, powerful forces have been converging that either already are or soon will be impacting the way higher education is offered and experienced. This paper focuses on one of those forces – the increasing price tag of obtaining a degree within higher education.  It will seek to show that what goes up…must come down.  Some less expensive alternatives are already here today; but the most significant changes and market “corrections” appear to be right around the corner. That is, higher education is a bubble about to burst.

One from CNBC:

Price of Admission: America's College Debt Crisis

— from CNBC on Monday, January 3, 2011

Also see:

From DSC:
Disclosure: I work for Calvin College. However, I publish the above items in the hopes that those of us at Calvin and within higher education as a whole will choose to innovate — that we will think outside the box in order to greatly lower the cost of providing a degree within higher education. It would be very helpful to future students, families, communities, nations.

No matter how you look at it, pain — but also opportunities — are ahead. Change will not be easy, nor will it be comfortable.  It will most likely be very scary and very tough. At least for me, this posting and the topic it discusses evokes major soul and heart searching for me. Nevertheless, the questions remain:

  • What changes do we need to make so that institutions of higher education can become more affordable? Stay relevant? Be sustainable over time?
  • What should we put in place of the current “status quo”?
  • Who receives the pain? Who enjoys the opportunities?

Also see:


Addendum on 1-19-11:

Student Loan Docume -- videos on Vimeo

http://www.defaultmovie.com/


Addendum on 1/22/10:
The Bubble: Higher Education’s Precarious Hold on Consumer Confidence — from National Association of Scholars


For-profit education stocks: Winners & losers of 2010 — from thestreet.com by Miriam Reimer

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2 Leading Online Outsourcers Merge, Consolidating a Market — from The  Chronicle by Marc Parry

More and more colleges are hiring for-profit companies to build and market their online programs, a controversial practice that worries some observers. This week the online-outsourcing industry is going through a significant consolidation. Two of its leading competitors, Embanet and Compass Knowledge Group, are merging.

In the announcement, the companies billed the move as a “winning combination” for their clients, a long list of nonprofit institutions that includes well-known names like Northwestern University and George Washington University. That list is likely to grow: “In the next five years, we expect nearly four million new online learners will come into this market,” said Steve Fireng, chief executive of Embanet.

Also see:

Embanet and Compass Knowledge Group announce merger to create the premier provider of online learning services for higher education

CHICAGO & ORLANDO, Fla.–(BUSINESS WIRE)–In response to the rapidly growing and changing market for online degree programs, Embanet and Compass Knowledge Group today announced that they have merged, creating a combined company that is positioned to provide an industry-leading comprehensive suite of online learning services to universities and colleges. Effective today, the new entity is operating under the name Embanet-Compass Knowledge Group.

“In the next five years, we expect nearly 4 million new online learners will come into this market”

Embanet-Compass Knowledge Group brings together two of the leading organizations serving the not-for-profit online higher education market. Embanet and Compass share a common mission and service model to help colleges and universities ensure quality outcomes for students and expand their reach through online degree programs, both nationally and internationally. The combined strengths of these two organizations will create the stability and agility required to meet the growing global demand for online learning. The mission of Embanet-Compass is to assist traditional institutions in launching and managing large, successful online degree and certificate programs in a highly competitive environment.

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Shares of for-profit colleges tumble

Shares of for-profit colleges tumble — from the LA Times
Investors flee the sector after Apollo Group predicts a plunge in enrollment, citing the U.S.’ attack on high student loan defaults.

Shares of for-profit education companies plunged Thursday after industry leader Apollo Group Inc. shocked Wall Street by predicting a sharp drop in enrollment amid growing government pressure in the industry.

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Blackboard to sell online courses through new partnership — from InsideHigherEd.com by Jeff Young

Anaheim, Calif.—Blackboard announced today that it is teaming up with a for-profit education provider, K12 Inc., to sell online courses to colleges that want to outsource their remedial offerings.

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