3. Is the innovation simpler to use, more convenient, or more affordable than existing offerings?

Yes. WGU has held undergraduate tuition more or less steady at just under $6,500 per year and has driven down student loan debt per graduate to less than half of the national average. WGU’s online competency-based model allows students to determine the pace of their learning and move ahead once they demonstrate mastery in a concept. This offers students flexibility on when and where they are learning. Indeed, WGU’s mascot is the owl, in recognition that the majority of its students are ‘night owls,’ working and caring for their families during the day and pursuing their studies at night. It also offers students the flexibility to personalize their educational journey, spending more time on concepts they struggle with, and less time on areas they are able to master quickly.

4. Does the offering have a technology that enables it to improve and move upmarket?

Yes. The online model used by WGU not only enables a lower-cost business model for delivering coursework, it also creates a stream of data that is used to continually test new approaches and improvements to the curriculum, and rigorously measures the impact of these changes on student outcomes.

For instance, based on insights that soft skills correlate with long-term academic and professional success, WGU recently tested curriculum on leadership, self-management, and motivation with a small group of students in the College of Health Professions. These students had significantly improved engagement and retention rates, and based on those results, WGU quickly scaled the course to a much broader group of students. To date, over 10,000 nursing students have taken the course.

5. Is the technology paired with a business model innovation that allows it to be sustainable?

Yes. The profit formula at WGU is unique: students pay tuition for each six-month term, rather than paying for each credit hour as in the traditional model. During each term, WGU students must complete a minimum of 12 competency units to demonstrate adequate academic progress—but there is no limit to how many competencies they can complete. On average, WGU graduates complete bachelor’s degree programs in five terms, which dramatically lowers the cost of a WGU degree.

Here are six reasons why the 30-year-old WGU is a disruptive university #highered

Processes and resources are also aligned to support WGU’s value proposition. WGU’s cost structure eliminates areas, like research, that don’t directly contribute to student success, enabling the university to spend more on areas that do. WGU’s instructional model is specifically designed to support working adults, employing coaching and mentoring to a much greater degree than traditional schools do.

6. Are existing providers motivated to ignore the new innovation and not feel threatened by it at the outset?

Yes. While some research suggests that a large number of schools are interested in exploring a competency-based approach, only a handful have actually done so. Most schools continue to be motivated to attract the highest paying, most academically accomplished students they can, in order to maximize their prestige and their financial sustainability. That same focus on prestige and the demands of the traditional business model push most schools to recruit faculty based on their research abilities, not their teaching abilities.

Although higher education has long been resistant to disruption, WGU fits the definition of a Disruptive Innovation. WGU’s data-driven focus on self-improvement has steadily improved the quality of its offering, as demonstrated by a range of metrics, including student satisfaction, retention, and graduation rates. Since its founding, WGU has pioneered new approaches, new technologies, and new business models, all with the aim of bringing high-quality education to underserved adult learners.

[Editor’s Note: This article originally appeared on the Christensen Institute’s blog.]


About the Author:

Alana Dunagan leads the Clayton Christensen Institute’s higher education research and works to find solutions for a more affordable system that better serves both students and employers. In this role, Dunagan analyzes disruptive forces changing the higher education landscape.

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