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Identifying Opportunities in Online Higher Education: The 30,000-Foot View

When it comes time for a school to make decisions about online education, proper in-depth analysis of existing trends in education is critical to getting the desired outcome.
When it comes time for a school to make decisions about online education, proper in-depth analysis of existing trends in education is critical to getting the desired outcome.

As a market research company specializing in higher education, one of the most frequent questions we’re tasked with answering is about the demand for various online programs. Typically, these projects consist of three parts: an analysis of student demand, an analysis of labor market demand and a competitive analysis. We’ve found that this approach is good for identifying the opportunities around specific programs. But in terms of identifying broad strategies that lead to success, some additional foundational indicators answer some big questions relatively quickly. 

The 30,000-Foot View

If we take a moment to zoom out, we can clearly see opportunities and risks emerge around online program optimization.

Let’s start by defining potential students. These persons would be in occupations that align with a given program subject, with the level of educational attainment expected of a student in a given program, who are interested in upskilling and open to an online program. 

Our analysis of data from the U.S. Bureau of Labor Statistics, proprietary survey data and data from AWS and Gallup reveals that the most significant market in terms of potential students lies in business certificates—with over 19 million potential students. Other significant opportunities include associate-level business programs with more than 15 million potential students, STEM certificates with almost 14 million potential students and associate-level STEM programs with over 13 million students. Notably, the smallest potential student populations are for Bachelor of Education programs with just over 600,000, doctoral healthcare programs with just over 600,000 and doctoral human services and studies (liberal arts and humanities) programs with just over 700,000. 

Now that we’ve looked at the potential student market, we move over to the estimated actual student market in online programs. For this exercise, we analyzed data from Best Colleges, EducationDynamics, NC-SARA, Wiley University Services and Ruffalo Noel Levitz. 

Because specific, program-level enrollment data is not available specifically for online programs, we roughly estimate these numbers. A few takeaways emerge from scanning the data. First, the largest markets are bachelor’s-level business and bachelor’s-level human services and studies programs with almost 500,000 enrollments each. The next largest markets in terms of estimated actual online enrollments are bachelor’s-level STEM programs and associate-level human services and studies programs, each with around 400,000 enrollments. After these, the next largest categories are master’s-level business, STEM and human services and studies programs, each with between 350,000 and 400,000 students.

When we marry the two data points of potential and actual markets, we can derive the saturation of each one of these program groups.

The first thing that jumps out is the extremely high level of saturation for online Bachelor of Education programs (48%). As saturation increases, growth becomes more difficult and expensive. This means we anticipate that bachelor’s-level education programs will have the hardest path to profitability. The other market with a high level of saturation is master’s-level human services and studies programs, with 28% of the market being saturated. This would be another market where the path to profitability is expected to be particularly difficult. 

A number of markets can quickly be identified as good opportunities as well. Notably, the associate degree markets for business and STEM programs and doctoral and certificate programs in general.

The Conclusion

When universities (or organizations helping universities) are making decisions regarding online programs, in-depth analyses remain crucial. At the same time, a good amount of learning can take place from the 30,000-foot view. For example, from this data we can say the following:

  1. There are ample opportunities for associate degrees to grow, although success has been limited in the past.
  2. At the bachelor’s-level, education programs no longer seem like a great idea for increased investment. Schools of education should instead focus on graduate programs.
  3. There remains ample runway for certificate programs in several fields, particularly business and STEM.

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