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Trends in Higher Education: An Overview 2013 Prepared by: Pat Sabosik, President Elm City Consulting, LLC April 2013 NFAIS Workshop: Trends in Higher Education: Content, Services and Business Models © Elm City Consulting, LLC 2013

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Trends in Higher Education:

An Overview 2013

Prepared by: Pat Sabosik, President

Elm City Consulting, LLC

April 2013

NFAIS Workshop: Trends in Higher Education: Content, Services and Business Models

© Elm City Consulting, LLC 2013

Elm City Consulting, LLC

Elm City Consulting is a management consulting firm with expertise in digital content and product strategy and product management. We advise business-to-business information companies on strategic direction, market segmentation, go-to-market solutions and acquisitions. With more that 20 years of operational experience in Fortune 1000 companies, we bring an analytic and operational approach to every assignment.

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Our work is at the intersection of information, technology and applications. Our experience in corporate planning helps us identify the right solutions for our clients.

Snapshot of High Level Trends

More online programs Increase in online courses and MOOCs drives institutions to

have an online strategy

More emphasis on “self-directed” learning Increase in the number of self-paced, competency-based

programs

Southern New Hampshire University’s College for America: Direct assessment of learning program

US Department of Education endorses competency-based education

Shift in faculty hiring processes Increase in part-time faculty

Demand for master teachers for online courses

22 April 2013 © Elm City Consulting, LLC 2013 3

Source: Fox Business, Higher Education Trends to Watch for in 2013 http://www.foxbusiness.com/personal-finance/2013/01/28/higher-education-trends-to-watch-for-in-2013/ http://www.insidehighered.com/news/2013/03/19/feds-give-nudge-competency-based-education

Move towards a $10K college degree, TX and FL making plans

Online and competency combo

Trends in Higher Education 2013

Macro View

22 April 2013 © Elm City Consulting, LLC 2013 4

Financial/

Economic Technological

Demographic Political

“Political” category from Jeffrey Selingo, CHE Views March 8, 2013

Technological Trends

Wired campus

Bring your own device (BYOD)

Student analytics Adaptive Learning

Predictive Solutions

Learning informatics

Online & hybrid courses

Multi-user open online course (MOOC)

Mobile Apps

eBooks, content models

Course management systems

22 April 2013 © Elm City Consulting, LLC 2013 5

Technological

Student Behavior & Technology

22 April 2013 © Elm City Consulting, LLC 2013 6

Financial Trends

Tuition costs

Textbook costs

Research funding

Workforce planning/training

$10K Degree

Endowment values

Decreasing state & federal funding

Student debt

College bankruptcy

Corporate partnerships

Services

23 April 2013 © Elm City Consulting, LLC 2013 7

Financial/

Economic

Political Trends

Pell Grants

For-profit colleges

Increase in state funding for research vs decrease in federal dollars -- FL

Academic appointments

Competency vs knowledge-based degrees

Public regulation of post-secondary programs

DOEd and Lumina Foundation for Education goal: 60% of American workforce with a high-quality post-secondary credential by 2025*

23 April 2013 © Elm City Consulting, LLC 2013 8

Political

* Certificates: Gateway to Gainful Employment and College Degrees, report by Georgetown University Center on Education & the Workforce 2012

A Word About Certificates -- As a MOOC

Outcome and Revenue Opportunity

Shift to credentialing down to a certificate level, followed by an

Associate degree and then Bachelor’s degree

Potential opportunity for private, non-profit institutions to play a

role in certificate and training programs

22 April 2013 © Elm City Consulting, LLC 2013 9

* Certificates: Gateway to Gainful Employment and College Degrees, report by Georgetown University Center on Education & the Workforce 2012

“The rapid growth of certificates over the past 30 years is a promising signal that students and institutions are recognizing the value of certificates at an increasing rate.”

Demographic Trends

Student populations Decreasing

Older

Demand for “life-long learning”

Tenured faculty retirements Impact on Accreditation

Adjuncts standing, the majority of instructional faculty

“Outsourced” education

Courses and employment Skills and Competency

22 April 2013 © Elm City Consulting, LLC 2013 10

Demographic

Student Demographics Forecasted Increase Drives Online Course Delivery

22 April 2013 © Elm City Consulting, LLC 2013 11

Source: Campus Technology; LoudCloud Systems Presentation 2013

Driving institutions to have an online strategy

Trends at Classroom & Course Level

“Content View”

Online

Courses

Adaptive

Learning

Services

22 April 2013 © Elm City Consulting, LLC 2013 12

Online Hybrid MOOCs

Platforms Analytics New Content Models

Recruitment Retention

Tutoring Services Competency/

Assessment Course Dev Tools

Course Dev Services Hosting Platform

Asset Management ePortfolios

Alumni Services

Platform: LMS Adaptive Learning Publisher MOOC Combination

Adaptive Learning Solutions Personalizing Learning for Individual Students

22 April 2013 © Elm City Consulting, LLC 2013 13

Test Prep

+

Cengage

Mix of traditional publishers, new publisher entrants, and platforms shaping new learning solutions

Business Models for Adaptive Learning

22 April 2013 © Elm City Consulting, LLC 2013 14

Disrupts traditional assessment & textbook-test model

New entrants with new business models

Services business

Online Course Growth What’s Happening on Campuses Today

6.7 million students enrolled in one or more online courses

in the fall 2011 term, an increase of 8.5%, 570,000

students

10% growth rate for online enrollments which far

exceeded the 2% growth in overall HE student population

31% of HE students now take at least one online course

65% of HE institutions now say that online learning is a

critical part of their long-term strategy

MOOCs driving this

Stevens Institute of Technology, including Web Campus, in

new 10-year strategic plan, as example

22 April 2013 © Elm City Consulting, LLC 2013 15

Source: Going the Distance: Online Education in the US 2011 http://www.babson.edu/Academics/centers/blank-center/global-research/Documents/going-the-distance.pdf

Online Course Platforms (Including MOOCs and Hybrid Courses)

22 April 2013 © Elm City Consulting, LLC 2013 16

Big 3 from top brand institutions

Blackboard initiative

Consortium of 12 UK institutions

“Connected” learning environment

Distance learning

Tools to build online courses, fee-based

Course development tools Course fees, instructor revenue

Online course network Tools and platform

http://www.mooc-list.com/ Growing list of online courses

Business Models for Online

Courses: A Few Views on Revenue

Big 3 MOOC course providers:

"The most significant short-term benefit

to the top-tier universities [from MOOCs]

is blunting public criticism that wealthy

universities do not provide enough

service to fulfill their public mission and,

therefore, maintain their tax-exempt

status in the United States" ("Shifting

Ground," September 2012, page 4) Moody's Investors

Services.

Wall Street Journal: “Online Courses Look

for a Business Model”by M. Korn & J.Levitz

http://online.wsj.com/article/SB1000142412788732433

9204578173421673664106.html

Foundation and venture funding

May not be free for long

New entrants and service providers

Venture funding

Building service and revenue

programs

22 April 2013 © Elm City Consulting, LLC 2013 17

Platform fees

Hosting fees

Course fees

Driving innovation in instructional material

Foundation Funding for Online Courses Foundations Support Educational Innovation

22 April 2013 © Elm City Consulting, LLC 2013 18

Institution Financing Sources

California, State of $10M/yr

Entry level courses

State funding

MIT $35M Hewlitt, Mellon, MIT

Harvard $30M w/MIT for edX

Yale $3M Hewlett

Carnegie Mellon $5.6M Hewlett

UC Irvine $1.6M Hewlett, Boeing, UCI

Open Learning Initiative ~$20M Various foundations

Sources: CHE, “How 4 Colleges Support Online Courses, Oct 12, 2009; Harvard Magazine, “Online Evolution Accelerates” March-April 2013

What Do Faculty Think About Teaching MOOCs?

Chronicle Study

22 April 2013 © Elm City Consulting, LLC 2013 19

http://chronicle.com/article/The-Professors-Behind-the-MOOC/137905/?cid=at&utm_source=at&utm_medium=en#id=overview

Economic implications of MOOCs may be more far-reaching than changing content models

Services – Online Course Development

Institutions hiring publishers to build online courses & Publishers partnering with software companies

Investment and scale

Pearson & Rutgers partnership building online courses on eCollege platform: virtual classrooms, curriculum, course materials*

John Wiley’s purchase of Deltak.edu, partners with colleges to build and run online courses

Cengage Course 360, a customizable online classroom

McGraw-Hill acquires Tegrity, lecture capture software that enables professors to embed lectures in courses

22 April 2013 © Elm City Consulting, LLC 2013 20

*http://chronicle.com/article/Dont-Call-Them-Textbooks/136835/ Elm City Consulting Data

Services Beyond Courses: SaaS,

Program Design, Recruitment, Retention

Macmillan launches Digital Science division and partners with

companies to provide software tools and services to scientists

SureChem, BioData, Simplectic, Labtivia

Pearson’s acquisition of Embanet& Wiley’s acquisition of

Deltak.edu go beyond course development

Program and curriculum design, online course development,

recruitment, retention, hosting

Changes the relationship between publisher and institution

Shifts value proposition

Changes revenue and cost models for institutions, service

providers, and publishers

22 April 2013 © Elm City Consulting, LLC 2013 21

Workforce Readiness: College Majors with the Highest & Lowest Employment Rates

23 April 2013 © Elm City Consulting, LLC 2013 22

http://www.upworthy.com/do-you-know-which-college-majors-have-the-highest-and-lowest-employment-rates-2?c=ufb1

Highest in 2012-2013 Agricultural Sciences Pharmacology Educational Administration School Student Counseling Biological & Geophysical Engineering Astronomy & Astrophysics Teacher Education Agricultural Economics Medical Technologies Technicians Atmospheric Sciences & Meteorology Naval Architecture & Marine Engineering Environmental Engineering Nursing Public Policy Industrial Radiology Biological Technologies

Alignment of Industry and Academy for

Workforce Readiness – Ivy Tech

Ivy Tech (Indiana) Corporate College, education & training partner.

Online training, workforce development, partnership with Disney

Institute for brand loyalty and leadership excellence

23 April 2013 © Elm City Consulting, LLC 2013 23

http://www.ivytech.edu/corporatecollege/

Summary

22 April 2013 © Elm City Consulting, LLC 2013 24

Institutions developing an online strategy

Technology and economics driving new educational

models

Adaptive learning models maturing

MOOCs driving innovation in instructional

materials

Publishers partnering with institutions for

services beyond textbooks

Content and business models

reforming as services

Learning as we know it is

undergoing immense change

Thank you

Pat Sabosik

[email protected]

23 April 2013 © Elm City Consulting, LLC 2013 25

Learning Outcomes in Online Courses

22 April 2013 © Elm City Consulting, LLC 2013 26

Source: Going the Distance: Online Education in the US 2011 http://www.babson.edu/Academics/centers/blank-center/global-research/Documents/going-the-distance.pdf