The future for mega universities

The University of Arkansas System emerges as a suitor for University of Phoenix as competition tightens in online education. Also, updates from National University and Purdue Global, two large online institutions that are seeing growth with corporate partnerships.

Phoenix Goes Nonprofit?

The demise of for-profit universities with national footprints continues with news this week that a nonprofit affiliated with the University of Arkansas System is in talks to buy the University of Phoenix.

Competition in online education has tightened in the pandemic’s wake, with increased price sensitivity from prospective students and growing dominance by nonprofit universities. Having read the writing on the wall, the University of Phoenix had pared back and was preparing for a sale to a public university system a little over a year ago.

Andy Morgan, 2U’s senior vice president of corporate development and strategy, told a group of reporters last week that the online market is maturing amid flat or even shrinking interest in the overall pool of prospective students.

“We’re seeing dramatically increased competitive intensity,” he said. “Being online is no longer a differentiator.”

Big for-profit chains have perhaps the gloomiest outlook, after years of losing regulatory battles and as well as money and students. Many have shut down or exited the degree-issuing business by pursuing sales or nonprofit conversions.

Last year, when Amazon chose universities with large online programs as “national partners” for its Career Choice education-benefits program, the company snubbed for-profits and instead tapped four nonprofit institutions: Western Governors University, Southern New Hampshire University, Colorado State University Global, and National University.

The ascendancy of WGU and SNHU, both of which have seen surging demand with working learners and now have enrollments that top 150K students, has some experts questioning whether there’s much room for other mega universities (aka nationally focused online institutions).

In addition, online students increasingly are going local, with two-thirds enrolling in programs that are administered within 50 miles of their homes.

Yet ASU Online also is posting record growth, creating hope for other research universities and public systems with attractive brands. (Arizona State just announced that it would soon offer courses on YouTube that will lead to transferable college credits.)

Even the national market has plenty of wiggle room, argues Mark Milliron, National University’s new president. (Click over to Work Shift for a Q&A with Milliron.)

“This isn’t a zero-sum game,” says Milliron, who previously held senior roles at WGU, Civitas Learning, and the Bill and Melinda Gates Foundation. “If we open our aperture to the real need beyond right–from–high school students, there is a lot of work to be done out there, and it’ll be better taken on together.”

Specifically, Milliron says National has distinctive strength with its online programs for early-college students in high schools, community college transfer students, recent college grads enrolling in law school, and master’s degree holders pursuing cybersecurity doctorates while deployed in the U.S. military.

The university also is poised to offer customized hybrid programs in partnership with employers and community colleges, what National calls “CoLearning” space innovation.

The Kicker: “Even if they’re in fully online classes, so many learners need a safe place to learn, high-speed internet, just-in-time academic support (and tech support), childcare, and a place to connect — a place to belong,” says Milliron.

Workforce Education in Arkansas

The University of Phoenix is the original mega university. With a pioneering focus on working adults and career education, Phoenix also was the most important early innovator in online education.

Enrollment at the university crested at more than 470K students in 2010. Its subsequent decline was driven in part by damaging PR over aggressive student recruiting and the collapse of lower-quality programs, particularly two-year degrees.

The university appeared to have stabilized with a narrow approach, modest growth goals, and valuable assets when Work Shift took its pulse in December 2021. It featured 170 programs, down from about 1,700 four years earlier. Enrollment was growing slowly and stood at around 88K students.

Debra Hale-Shelton of the Arkansas Times broke the news Tuesday about a University of Arkansas System–affiliated nonprofit’s interest in purchasing Phoenix. A system spokesman told Hale-Shelton those conversations were ongoing. He also confirmed what sources had told me about the possible sale being all-encompassing, meaning that the unnamed affiliate would buy the university and all of its assets.

If the deal goes through as reported, the University of Phoenix would gradually transition to nonprofit status.

The system said it was exploring opportunities like an affiliate purchase of Phoenix to advance its mission of providing affordable and relevant education to a broad range of students while getting an introduction to “new educational markets.”

Meanwhile, Arkansas has become a state to watch on workforce education experiments.

• The Ready for Life program, created in 2021 by former governor Asa Hutchinson, seeks to create a unified, central workforce system to link job seekers with employers and education providers. With an initial $15M in federal pandemic funds, it features labor-market data and information about in-demand careers and makes recommendations to LinkedIn Learning for skills development.
• The University of Arkansas System recently moved to fold eVersity, an online, adult-serving institution, into the new online university it created in 2021 with the $1 purchase of Grantham University, a small for-profit online university. The system launched eVersity in 2015 with $7M in startup funding.
• SmartResume from iDatafy is among a handful of startups experts have identified as promising in the comprehensive learner record space. The company has focused on Arkansas as a laboratory, with 20 higher education partners across the state, including the University of Arkansas System, which collectively educate about 75% of the state’s college graduates.

B2B Success for Purdue Global

Purdue University charted new territory with its 2017 acquisition of Kaplan University. The complex deal to create Purdue University Global, which featured fine print outside of the reach of public disclosures, included a long-term operational support role for Kaplan Higher Education.

As many expected, it has taken time for the online university’s enrollment declines to level off as its approach and business plan emerged. Purdue Global lost $21M in the financial year that ended in June 2020, reported Phil Hill, an ed-tech industry analyst.

Purdue Global appears to have hit the bottom, however. It posted a modest increase of $4.3M in its net financial position in 2021, according to a report from Purdue University. And Kaplan’s holding company said in a recent federal filing that Purdue Global’s enrollment was “essentially flat” for the first three quarters of last year. It enrolled 43K students in fall 2021.

The university has seen growing student demand through its relationships with employers, says Frank Dooley, Purdue Global’s chancellor. It also is enrolling more students through a partnership with Guild, a major player in administering corporate education benefits.

Roughly 17% of the university’s total enrollment in FY 2022 were students who were participating in Guild-managed benefit programs, says Dooley. And Purdue Global’s overall business-to-business enrollment share (meaning from partnerships with Guild, the military, corporations, nonprofits, and governments) grew to nearly 66% last year from 47% in FY 2019.

A draw for companies and the military, according to Dooley, is the university’s emphasis on quickly issuing credits for prior learning based on the training they provide to workers and service members.

“We typically can evaluate training programs and show articulation within three weeks,” he says. “For an individual student, our goal is to identify how transfer credit articulates in three days.”

Prior-learning credit also is key to Purdue Global’s evolving collaboration with Ivy Tech Community College, Indiana’s two-year college system. Thanks to transfer agreements between the two institutions, a student who earns an associate degree from Ivy Tech can apply those credits toward bachelor’s degree programs at the online university.

“We have nine degree programs that are truly 2+2, in that the community college coursework satisfies a degree requirement at Purdue Global,” says Dooley.

Open Tabs

College ROI

Measures of the value of a college education fall short by failing to explicitly center race, according to a new report from the Institute for College Access & Success, which proposes a new race and economic mobility metric. The analysis by TICAS found that at institutions serving greater shares of students of color (aggregated) and Black students, graduates earn less and owe more in debt compared to their peers.

HR Shifts

More workers are using college tuition benefits, according to a survey of HR professionals by Wiley, with 69% of respondents saying more than 5% of their workforce tapped education benefits, up from 61% in 2021. While 81% said a bachelor’s degree enables candidates to access better jobs, 74% said they would interview job seekers without degrees who had five years of experience, a certificate, or microcredentials.

Learning Loss

Gretchen Whitmer, Michigan’s Democratic governor, will ask the Legislature to back her $280M plan to offer one-on-one tutoring to the state’s children to help counteract learning loss and to better prepare them for the workforce, reports Tracie Mauriello for Chalkbeat Detroit. Research has found that children in the state’s large urban districts lost the equivalent of a year or more of learning during the pandemic.

Last week I asked about directories that list education and career options other than pursuing a four-year degree. The SkillUp Coalition sent over a free career navigation tool it recently began offering to young people in Dallas–Fort Worth. Several of you asked me to share what I find, so please keep them coming. Reach me directly at pfain.highered@gmail.com.

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— Paul Fain