Higher-education leaders are learning that starting a virtual program is a wholly different venture than opening a traditional campus, and the recipe for success requires a different approach. Among the chief mistakes many schools make: Not investing heavily enough in marketing and recruiting, and not getting faculty buy-in and support.
Last semester, nearly a year after its launch, an $8.6 million online campus created by the University of Illinois had just 121 students enrolled in only five degree programs–far short of the 9,000 students that officials had anticipated within the project’s first five years.
Earlier this decade, New York University’s online school faltered when officials struggled to find a balance between profit-driven business and the traditional, not-for-profit educational model. NYUonline spent $25 million and produced just seven courses.
At the other end of the spectrum, the University of Massachusetts recently received a coveted award from the state Technology Leadership Council for its excellence in business and technology. UMassOnline brought in $36.9 million in revenue during fiscal 2008, and its enrollment grew two and a half times faster than the national average for online enrollments during this period.
Building a successful online college requires a sound, well-disciplined business model, experts say, and marketing postsecondary degrees that expand graduates’ earning power should be the cornerstone for any startup distance-education program.
Researchers and online entrepreneurs say the proven roadmap for success–to the dismay of college faculty–largely strips professors and academic deans of their control in exchange for a model that uses millions of dollars in startup funds for massive marketing campaigns and aggressive student recruitment drives.
University faculties have proven proficient in portions of the planning stages for a web-based college. They often use tens of millions from university coffers to mold rigorous course options designed to challenge students the same way their campus-based peers are challenged in the lecture hall. But many startup online schools falter when enrollment staggers.
Even the country’s big-name universities, it seems, need to advertise their new product. Having little or no money left for ad campaigns after developing their online courses, some schools struggle, request an influx of more campus funds, or simply close shop.
"They don’t do a thorough market analysis, and they just want to expand their enrollment and expand their revenue," said Alfred Rovai, an education professor at the online Regent University who has written books about distance-education programs. "They have the ‘build it and they will come’ mentality and … they just haven’t done their homework. … [Large universities] basically are reluctant to spend a lot of money on marketing and recruiting."
Striving to boost enrollment numbers with online courses, Rovai said, has led to the downfall of several high-profile programs–providing lessons for smaller ventures that can’t draw from plentiful campus endowments.
"If that’s the limit of their thinking, they’re starting in a foundation of quicksand," he said.
Focus on ‘real-world’ academics
Some business leaders believe online education programs can thrive when decision makers shed courses that interpret and analyze ancient literature, for example, and instead train students to master a skill and add to their resume.
"If we’re going to take somebody’s money and time, we better deliver a degree that helps them live a better life right away," said Michael Clifford, a California-based entrepreneur who has founded five online colleges since the late 1990s. "We’ve seen philosophy and theology courses fail online. I try to focus on real-world academics."
For example, online schools might offer comprehensive, overlapping coursework in areas such as information technology and accounting, Clifford said. Merging these two topics helps students understand the burgeoning IT industry and how to track finances and IT purchasing, he added.
"People are teaching courses that no one will buy, that no one wants," said Clifford, who also founded Chancellor University (formerly Myers University), based in Cleveland.
Moving away from an institution’s educational roots and embracing a for-profit model for online schooling has proven elusive to many of the country’s elite universities. In the late 1990s, colleges large and small looked to New York University’s startup venture called NYUonline, a distance-education offshoot that the university spent $25 million on over three years. After creating only seven courses and forming partnerships with just a few businesses, NYUonline shut down in 2001.
A slumping economy was partially blamed for NYUonline’s downfall, but media reports in the months and years after the program closed revealed an expensive venture that was not run like a for-profit business.
For instance, NYUonline officials did not conduct market surveys that could have pinpointed what degrees students desired, forging a clearer path for administrators as they pieced the school together. There also was limited communication between the officials creating the online college and the sales force charged with advertising the school to businesses whose employees sought a better education and higher-paying jobs.
"[Large schools] have failed miserably, because they raise [millions], and it will all be spent designing courses, not recruiting students," Clifford said.
John Ebersole, president of Albany, N.Y.-based online institution Excelsior College, said regardless of affiliation, partnerships, or bank accounts, online programs should pour resources into targeted marketing campaigns.
"If there’s a single, solitary thing that separates those that have success from those that have not, it’s marketing," Ebersole said.
Give-ups and do-overs
Several upper-echelon universities–including Columbia University and the University of Illinois–have been forced to abandon online programs or arrange for a major facelift.
The University of Illinois’s Global Campus was pitched as a for-profit business that would offer a bevy of in-demand degrees for adults hoping to advance in the professional world. A small group of Illinois professors backed the plan, but faculty leaders at the university’s three campuses expressed public opposition to the Global Campus initiative.
The newest model of Illinois’s Global Campus is a nonprofit venture that will see its academic departments guided by faculty members–a departure from the path taken in the school’s previous incarnation. The university’s newly named Global Campus Partnership started last year by offering only degree and certification programs designed by experts at all three Illinois campuses. University President B. Joseph White said last spring that the Global Campus could one day offer classes in collaboration with other colleges and universities.
White was one of a host of university leaders across the U.S. who looked to capitalize on recent struggles by online education giant University of Phoenix. Last year, the online program announced it did not expect the double-digit revenue increases that shareholders have enjoyed over the last three decades.
"I think the timing of the University of Phoenix running into problems is ideal if we have the courage to move forward," White said last spring. "If anybody here thinks that we’re not going to do a far, far better job, then there’s no confidence in the university."
University of Illinois officials said all is not lost in their drawn-out launch of a sustainable online program. By fiscal year 2011, the university will begin turning a profit on the school and recovering from a $20 million loss on the failed Global Campus initiative, according to university projections.
While some of American’s largest universities have stumbled in the creation of web-based colleges, online learners have gradually increased over the past decade. About 1.5 million students–about 8 percent of all U.S. college students–take all their classes online, according the latest market research, which also shows that more than 60 percent of schools that offer traditional graduate courses also offer online graduate options.
Interactions from a distance
Rovai of Regent University said his research has shown that student interaction is essential to maintaining a viable online course. A decade ago, when online classes were new to college educators, few believed students could achieve the kind of interaction they receive in the lecture hall. Not so, Rovai said.
Rovai examined student-professor interaction at online and traditional colleges and found that when instructors hosted vigorous, consistent online discussions of class readings or lessons, students felt more connected to the classroom and fared better overall.
"[Interaction] was sometimes even better in an online course," he said.
Some web-based courses, Rovai said, had detailed syllabi, but professors did not facilitate any discussion on class chat forums. In one class, only eight comments were posted in an entire semester, compared with hundreds or sometimes thousands in other classes.
"A lot of distance students don’t feel like they’re part of the university," said Rovai, who has hosted national and international forums on distance education and instructional technology. "And consequently, they can become alienated. … If all you have are lectures and no discussion, you’d probably say the learning wasn’t that great."
Many online schools are finding ways to enhance student interaction. At the University of South Florida, for example, students can purchase headsets made by education-technology company Elluminate and interject in real time during professors’ lectures.
A University of Houston study released last May reported that students in "hybrid classes"–courses that use elements of traditional classroom and web-based work–scored a letter grade higher than their peers who took the same classes on brick-and-mortar campuses. Students in jam-packed auditoriums–who rarely got to ask questions during lectures–actually were more alienated than students who could talk with their teachers online, according to the study.
"Their formal evaluations of the class indicated the traditional class didn’t take advantage of instructional technologies available, and that these technologies could give them additional help and access to course material outside of class time," said Brian McFarlin, an assistant professor in the university’s Health and Human Performance Department who headed the study.
Example of success
Virtual degree programs headed by officials who took deliberate steps in creating a top-rate curriculum while also marketing these courses effectively have become models for schools entering the online arena.
The University of Massachusetts’ UMassOnline–a consortium that works closely with the brick-and-mortar institution–has emerged as a top online college this decade. The school recently announced that its online program had 33,900 enrollments and revenues of $37 million during the last fiscal year.
With success have come partnerships and grants.
In November, UMassOnline received a $650,000 grant from the Sloan Foundation that will be used to expand the school’s blended learning initiatives. All five UMass campuses will now have blended learning courses–allowing online students to occasionally attend class in a traditional lecture hall.
UMassOnline has also marketed wisely, attracting state residents and gradually bolstering enrollment numbers. The school now ranks as the largest provider of online education in Massachusetts, a trend consistent with the findings of a 2007 study conducted by education information services company Eduventures.
The study revealed that students seeking online courses are most likely to enroll with institutions closest to their home. Launching more blended learning classes would cater to the market of students enrolling in schools with familiar brand names, UMass officials said.
"Since the majority of our online students live and work in close proximity to a UMass campus to which they can easily commute, the blended learning option presents an ideal way for them to benefit from some limited class time while also enjoying the benefits of course work that is predominantly accomplished online," said Jacquie Moloney, associate chancellor at the UMass-Lowell campus.
Ebersole, president of Excelsior College, headed the launch of Boston University’s online program when he was hired as the dean of extended education in 2000. Rallying support among veteran professors and deans, Ebersole said, was a key in securing funding and cooperation for the university’s online classes.
Training professors how to run online courses also was critical in maintaining campus support for Boston’s first web-based classes–a not-for-profit venture.
"Faculty members are very worried about embarrassing themselves," he said, adding that once revenue from the online venture begins flowing into the school’s campus, more professors will throw their support behind a more comprehensive online course menu.
"They need to benefit from the risk they’re taking," he concluded.
University of Illinois Global Campus