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How Online Strategy is Creating ‘Winners’ and ‘Losers,’ What that Means for Traditional Continuing

Education, and Why it Matters to UPCEA

Robert J. Hansen, Ph.D. CEO UPCEA

Regional Conferences, 2013

Driving Institutional Change:

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The not so new normal. The strategic convergence of fiscal

sustainability, the adult market, and online learning.

Five basic online “leadership” models and mini-case studies.

Key takeaways for Presidents & Provosts. Why it is important—to CE and UPCEA.

Overview

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The Not So New Normal; or, the All Too Familiar Facts of Life for 21st Century Universities

Declining enrollments nationally:

o Enrollment dropped last fall for first time in 15 years – down 1.8%.

o This past spring, it declined 2.3% (National Student Clearinghouse).

Massive erosion of state support for public institutions continues.

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Unsustainable growth of Pell grants.

Declining NSF and NIH grants impacting even great research

universities.

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Average Annual

Cut

5-Year Cut %

R&D Budget Lowest Since…

Total R&D $11.5 billion -8.4% 2002

Defense $6.7 billion -9.1% 2003

NIH $2.3 billion -7.6% 2002

Energy $917 million -8.2% 2008

NSF $421 million -7.6% 2010

NASA $705 million -7.6% 1988

Agriculture $175 million -7.6% 1998

Constant FY 2012 dollarsSource: Budget of the United States Government FY 2013

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Is higher education the next bubble?

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201180

90

100

110

120

130

140

150

160

170

180

Sources: College Board, US Dept. of Education, Census Bureau, and Citi Research. Note: Both tuition and earn -ings were weighed in 2010 dollars, and tuition and fees were enrollment weighted.

Average Tuition & Fees, Public Four Year Average Earnings for Full-Time Workers Aged 25-34 with Bachelor's Degree Only

72% Growth Since 2000; 5.6% annually

14.7% Decline Since 2000; -1.6% annually

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NACUBO’s cost/revenue solutions:

The Convergence of Financial Sustainability, The Adult Market, and Online Learning

• Faster Completion• Tuition Pricing Strategies• Reform Student Financial Aid• New Market Outreach• Online Education

• Centralized/Shared Services• Consolidations• Expense Flexibility• Programmatic Review• Space Utilization

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Five Basic Models

for Online

“Leadership”

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Global or System Campus.

Decentralized every college/school

on its own

Centralized faculty support unit – mostly limited to individual course design

Centralized administrative support unit – assisting colleges/schools deliver fully online and blended

programs

Managed by School of Professional and/or Continuing Studies

charged with serving adult market.

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“It’s a conundrum”: the Classic Bind of the

Great Research University

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Institution imposed cap on enrollment Financial aid generous Shrinking federal dollars from NSF &NIH Adult market not a priority Focus on traditional teaching and

research = zero sum game

Profile: Leading private research universityModel: No model at all!

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Revenue: North by Northeastern

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Profile: Leading private research universityModel: Standalone School or College

Chartered College of Professional Studies in 2006.

300+ staff and faculty.

65% graduate.

Huge online provider with national market.

So successful in Boston market, NU has branched out in

Charlotte and Seattle.

Brave new world … potential impact on for-profits?

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Shrinking to Excellence? Death spiral of declining enrollments and state funding.

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Yet: Largest metro area in region, with little local

competition and stable adult population.

Few full programs online.

No rewards for teaching online.

Out of state rate for online – not competitive.

Instead of being aggressive, the strategy: shrink to

“sustainable enrollment”.

Profile: Regional Public UniversityModel: Faculty support for individual courses

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Oasis

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The smallest of UI campuses, shrinking enrollment until 2000. Rise of online programs, now 44% of credit hours are online. Most enrollments out of market (77 different Illinois counties, 47

states, 10 countries). Departments too small for majors now offer programs (philosophy,

English, math). Higher GPA for online programs elevates brand! Strong commitment to partnerships with community colleges.

Profile: Regional Public University (University of Illinois-Springfield)Model: Centralized support for programs offered by traditional

schools/colleges

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TodayHappy Valley.

Tomorrow...

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Penn State recently announced a $20M investment in its World Campus, despite state support dropping to just 4%!

Fulfill access mission and generate net revenue to lift all boats.

Goal is to go from 12,000 students online to 45,000—same as State College campus.

Same price as in-state because that is what market bears (some public schools still charge out of state tuition despite ubiquity of in-state rates in national market).

Has projected Penn State brand nationally and even internationally.

Profile: Public Research University—Penn State World CampusModel: Global or System campus

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MOOCThe Willing Suspension of Disbelief

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Term coined in 1817 by the poet and aesthetic philosopher Samuel Taylor Coleridge, who suggested that if a writer could infuse a “human interest and a semblance of truth" into a fantastic tale, the reader would suspend judgment concerning the implausibility of the narrative. Suspension of disbelief often applies to fictional works of the action, comedy, fantasy, and horror genres. ~ Wikipedia

Profile: America’s leading universities experimenting with MOOCs

Model: “TBD”

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Key Takeaways for Online Models & Strategy:What We Want Provosts & Presidents to Know

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Whichever model you choose, be intentional and secure broad institutional buy-in (board, president, provost, deans, faculty).

Don’t domesticate online by pretending it’s “just another learning modality.” It’s truly disruptive innovation that requires bold response and strategic thinking.

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Experiment, but don’t be distracted by MOOC mania.

Make sure you have an entrepreneurial leader in charge of this critical strategic opportunity.

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What this means for traditional

Continuing Education

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If online leadership and strategy is centralized (apart from existing CE unit), CE is at risk of being a “legacy” unit with little energy or vision behind it.

Migration of credit bearing programs to online, leaving CE with only non-credit.

Repurposing personnel and financial resources online.

Possible elimination of CE unit.

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New focus on online means traditional CE mission of serving non-traditional market no longer seen as marginal but vital.

Potentially more funding and more buy-in.

Entrepreneurial skills and knowledge of the adult market position CE professionals to lead complex new online initiatives.

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What this meansfor UPCEA

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ServingNon-

Traditional

Students

ContinuingEducation

OnlineLearning

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Summit for Online Leadership and Strategy in partnership with ACE (San Diego, January 29-31)

Online Management and Design Network

UPCEA Online Initiatives

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Shameless plug for our new Director.

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Center for Online Leadership and Strategy under Director Ray Schroeder

Major study on online student success in partnership with NASPA

Study on online finance and administration with NACUBO

National e-Learning Alliance (NeLA)

Thank you! Questions? rhansen@upcea.edu

UPCEA Online Initiatives