Mapping the Transformation of the Online Education MarketplaceChip Paucek | Chief Executive Officer, 2U
The online education marketplace is increasingly merging into higher education’s mainstream. More and more students are looking at the improving quality of online offerings and seeing that there are alternative pathways into academics that don’t require the massive opportunity cost of a full-time, residential program. In this interview, Chip Paucek shares his thoughts on the direction the online education marketplace is moving and reflects on the role online program management companies are playing—and will continue to play—in this evolution.
The EvoLLLution (Evo): Why are so many colleges and universities turning to the partnership model for the development and delivery of online offerings?
Chip Paucek (CP): When it comes to developing online programming, asking faculty—and institutions more broadly—to do something completely different from what they’ve done before is no small feat. It requires a series of competencies, some of which are technology-based and some of which are more business focused, which allow them to achieve quality at scale.
Evo: What are the fundamental characteristic differences between a partner and a vendor?
CP: A partnership signifies a long-term alignment of interest between two different parties to try to drive a really high-quality outcome. In our example, we are funding the programs, but all of the key academic decisions are made by the universities. Through our model, every academic function you’d want your university to do, it’s doing. We do some of the unglamorous things that are critically important and expensive. As such, we’re effectively co-managing a program with the school.
Now, when I say partnership, we’re the subservient partner. Students are enrolling in Georgetown or UC Berkeley programs, not 2U programs. That’s pretty critical—we have established a company culture that understands the nature of the relationship and understands the subservient nature of our role. People don’t go to UC Berkeley for their operational efficiency—they go to Berkeley to be taught by the incredible faculty members, to be associated with a great network of people that’s been around for hundreds of years and to achieve the outcome they’re looking for from that experience. That’s all Berkeley. We don’t touch admission decisions, we don’t touch any instruction whatsoever, and the faculty members all come from the institution.
Evo: How do you see the online education marketplace trending?
CP: Getting over the preconceived notions of online education has been a challenge. Those preconceived notions are terrible and finally we are starting to see some improvement where people are not immediately presuming that online education is bad.
Online education today is where online dating was a decade ago. A decade ago, online dating was scandalous and people immediately attached a stigma to it. Today, however, if you’re not married, online dating is simply how people are finding somebody. There’s no stigma whatsoever to it.
We think online education will eventually get there. As more and more high-quality institutions come into the online marketplace—whether they work with us or not—it is advantageous to us from a business perspective because it’s helping to overcome preconceived notions of online education. Getting past that stigma puts more wind at our back than the competitive headwinds from somebody bringing a program online and not doing it with us.
Evo: What are some of the most significant roadblocks that often stand in the way of online program management partnerships?
CP: Not all online partnerships are created equal, and not every online program management company is doing what we’re doing. There are many different models in the online program management space and each institution has to align its business decisions with its unique goals. As such, there are some institutions that we don’t fit with. For example, our focus on scale means our model works really well if a school is interested in having 300 students or more every year. It doesn’t work as well for schools that want 25 students.
Some folks come into a conversation with the thought that scarcity and quality are linked—that being small is inherently better. Our partners, I think, are proving that scale—as long as they’re not sacrificing quality—really improves their school because of the additional resources and the additional students coming through the door.
Evo: One of the major critiques of program development partnerships is the loss of academic control. Do you feel that this is a fair concern for academic leaders?
CP: The critique around the loss of academic control is a concern but, for us, once we’ve engaged with a school in a process it becomes evident very quickly that that’s not our model. So it’s actually not a problem for me. We have absolutely no academic control. I’m sure that causes other companies issues but, for us, these programs are controlled by the school. Our role is in supporting the management of online programs and we have a real impact there.
Evo: What are some of the long-term benefits of partnering with an online program management company when trying to get new online programs to market?
CP: Higher education institutions face a series of very real challenges. Getting into the online space is not easy but if you look across our portfolio you can see incredible examples of people that have achieved both quality and scale at the same time and have really transformed their institutions in the process.
Online education can be great, and you can make a reasonable argument that 20 years from now graduate education will be mostly delivered this way. After all, from a student’s perspective, why should you pick up your life, quit your job and move to attend school? Especially if you can achieve all of your goals and not uproot your life while still becoming a full member of the institutional community. For institutions, it’s not worth sacrificing when trying to move online. This isn’t about a shortcut—this is about transformation for your school and delivering what you’re great at in a modality that can reach many more people.
Evo: What are some of the core expectations a non-traditional student has for their institution when it comes to advancing their own learning earning that next credential in achieving their academic goals?
CP: A student who is a little later in their career or in their life can achieve their goals without sacrificing quality and they can become a full member of the academic community. In order to do that, however, it’s up to the institution to give them the same rights as their campus students—and therefore the same responsibilities of a campus student.
The whole idea is equality: ending the segregation of the online student. More non-traditional students need this kind of access. The biggest cost to graduate education for non-traditional students is the opportunity cost of the job that they’re giving up to enroll. We’re also seeing, frankly, that the audience is bifurcated. Schools have many people enrolling in their online offerings that look exactly like their campus students, as well as those people who are farther on in their careers. This model is applicable to both.
This interview has been edited for length and clarity.
Author Perspective: Business