The following interview is with Burck Smith, chief executive officer of StraighterLine. StraighterLine has partnered with a number of different institutions over the past few months, providing their students with access to low-cost, high-quality introductory courses, to the benefit of both the students and the institution. In this interview, Smith shares his thoughts on how low-to-no cost courses could be operationalized as marketing channels for higher education institutions, and explains the challenges in service adult students are facing today.
1. When looking at non-traditional students today, what differentiates them from the student of 20 years ago?
There are a number of things. I think the biggest … and I’m not the first one to note, the non-traditional students of today are the largest part of the market. So, there are more non-traditional than there are traditional students. And, I also think, and this isn’t new, but non-traditional students are … usually more focused on the economic returns of their degree. They are working adults, they are looking to take that next step in a career, or if they are unemployed, to get back in the workforce. So, those are the primary considerations.
I think the biggest change for them is, really, in the last 10 years, is the amount of opportunities that are available to them with the growth of online learning, both among colleges and increasingly among unaccredited options that have pathways to colleges. Non-traditional learners now have lots of choices at lots of different price points in a set of ways that they didn’t really have 10 years ago.
2. Are accredited colleges and universities successfully meeting their needs and expectations?
Certainly, some more than others, which is appropriate. There are some institutions that are more focused on adult learners and many that aren’t. So, it really depends on an institution’s mission. The growth of online learning really is across all sectors — whether it’s public, private or for-profit — but online learning has really been focused on the adult space. And what they have done … a very good job of creating flexibility. So, more ways to take classes, different types of session links, different compressed schedules; all sorts of ways to give increased flexibility for adult students.
What they have not done is focus on price. So, the last 10 years, the growth of online learning has really been driven by flexibility and convenience but price has stayed the same. I think the next wave over the next decade is where you’ll see pricing change. And that will be in part forced by some of the unaccredited providers, but I think as the accredited providers follow suit. You’re already seeing it with some of the competency-based programs in addition to places like StraighterLine in the non-accredited side.
3. What would you say are the most significant barriers standing in the way of colleges and universities being able to reduce costs for their non-traditional students?
A lot of it is legacy expectations. Over 90 percent of colleges charge the same or more for online courses than for their face-to-face courses and that’s because colleges have been organized as kind of a bundle of offerings, so online and face-to-face.
So they don’t want to have lower prices for online courses because then they fear that students might migrate from high revenue face-to-face courses to low-revenue online courses.
As long as the colleges are operating under a bundle — as a bundle of courses online, face-to-face — you’re seeing the profits the colleges derive from online courses being funneled into face-to-face programs or other programs at the college. So, being able to rethink the business model around lower price points for course and service delivery, I think, is the next phase that will also have implications for accreditation or maybe vise versa. Accreditation implications for colleges; I think that’s the next big thing.
And then, lastly, tying programs much more directly to the needs of employers. Whether those are full degree programs or those are competency programs or certificates and credentials that are smaller than an entire degree.
4. Do you see partnerships as being a major factor to building an institution’s ability to overcome these obstacles that are standing in the way?
Maybe. And I think it’s going to depend on the school. I think what you’re seeing in the unaccredited space, the StraighterLines and MOOCs [Massive Open Online Courses] and others, we are pricing online courses much closer to their cost delivery rather than using it as a profit-center to subsidize other parts of the college. This is very appealing for students, particularly online students, who can choose from a whole variety of different options. So, they will choose the pathways that make the most financial sense for them. And StraighterLine, MOOCs and others present this low-cost pathway for students. So, colleges that are seeking to attract these students are going to need to partner with providers to create these low-cost pathways. If they don’t, students will go to places that do.
So, to the extent that this is something that is not the core value proposition of a college — whether it’s general education courses, like what we provide, undergraduate courses, whatever it is that colleges are looking to use as a pathway in — there’ll be very strong incentives to partner with other providers. It may not be folks just like us; it could also be community colleges and the like. But to create multiple pathways and multiple points of entry into whatever the core value proposition is that particular college brings to the student.
5. What kinds of responsibilities do vendors have, outside of the provision of services, when it comes to supporting institutions?
I think vendors have, certainly, responsibilities of what they agree to an institution; you can look to your agreements, hopefully exceed them. That will vary depending on the type of arrangement that’s constructed, if it’s a licensing arrangement, like a school buying a learning management system [LMS], then the LMS has to live up to the contract that it creates and service levels and things of that nature. If it’s a partnership where it’s simply people agreeing to take each other’s courses, but there’s no financial transaction, then you’re hoping that there’s mutual benefit to the two parties; that they can work together.
I don’t think there is anything out of the ordinary that one would expect, beyond being a good company or college or living up to your agreements and hopefully growing your talents and growing your business over time. …
There are other things you can look at in service levels and things like that that a college or a provider could offer to students if that was useful in the delivery of their courses.
6. Is there anything you’d like to add about the potential for low-to-no cost courses being used as a marketing channel for institutions?
Well, I think that’s where things are moving pretty rapidly. The MOOCs, I think, for elite colleges are being used as brand extension. So, while they have little interest in awarding credit for these courses, what they do have interest in is making people aware of their name. For adult students who are picking and choosing and have a lot of choices from which to choose from, they are looking at low-cost pathways — so whether it’s StraighterLine or MOOCs or others — we can be pathways for these students.
It’s also a way for students to have very low-risk entry points. Many students don’t succeed in college and, right now, they’ll enroll and take up significant debt and then not succeed and it’s a bad outcome for everybody. But low-cost and free pathways allow the students to start college with much lower financial risk than they would otherwise. So, I do think you’ll see a lot of partnerships, whether that’s with folks like us or MOOCs or more, but this is something students are clearly looking for before they arrive on campus or arrive in an accredited program.
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