New term enrollments released today by National Student Clearinghouse signal more sobering news for higher education, especially for online providers. Total enrollments across all of higher education decreased by 0.8%, with for-profits once more in precipitous decline at 4.9% and adults (24+) continuing to fall by 3.1%. We recommend taking stock of the details in this great update from Paul Fain.
Seeing as how online education, which consists primarily of adult learners, is so highly susceptible to ebbs and flows in the adult market, we see no reason why the following scenarios will not continue in the near-term:
Figure 1. The pace of headcount growth continues to slow from 16% in 2010 to 7% as of Fall 2013, dipping to as low as 2% by 2016 as the market continues to feel the effects of mainstream status.
Figure 2. Exhibiting little difference from years past, 48% of adults surveyed in 2013 were neutral on the perceived quality of online education.
- Continued slowdown for most: Keeping in mind that when we say online education, we are referring only to degree-granting programs whereby 80% or more of study is pursued online, across the market we see nothing but further slowdown leading to near flat-growth by 2016. For better or worse, online continues to feel severe effects of a strengthening economy and new disruptive models such as blended learning and MOOCs, which also are pulling adults away from conventional online programs.
- Maintreaming all around: By and large, with an estimated 3.2 million students learning online, roughly 15% of all higher education enrollments, the market is as mainstream as ever. All the effects of a mainstream market, consumer pragmatism, a slower pace of innovation, tech-digestion, and the ripple effects of regulation and scrutiny, make online education less appealing for its own sake and more of an option among many, if at all. To say adults still crave online education, if they ever did, would be false. To say adults don’t want online education would be misleading. Our data shows adults are fairly neutral on the perceived quality of online, and are far more willing to shop around for the right program.
- Growth for some: Yet, to say online education is in decline would be wholly inaccurate. Take the likes of Southern New Hampshire University, Grand Canyon University, and a slew of middle-market public universities, all of which are growing, some quite significantly, online. We attribute this innovative thinking on the part of some institutions, like SNHU or Grand Canyon, where online has been aligned either with that of a broader policy push to drive attainment (College for America) or with the value of an otherwise traditional campus-based experience. Grand Canyon is a perfect example. For years, they have brilliantly interwoven the value propositions of traditional and online education into that of a cohesive brand. State universities are continuing to pick up steam from a tighter state regulatory environment, which has further regionalized enrollments by making it harder or less strategic for out-of-state providers (large players like Grand Canyon excluded) from taking share in higher growth markets, such as Georgia, Texas, and North Carolina.
What does this mean?
Some thoughts. First, as Paul Fain suggests, better rates of retention are surely in view here, especially form semester-to-semester, as are issues surrounding Federal and state appropriations, remedial education, etc. To extend his argument, we would suggest that online also needs to think harder and more deeply about systemic challenges related to its perceived quality and impact, such as (presented in no particular order):
- Andragogy: It’s difficult to imagine that declining adult participation is solely due to a strengthening economy. Poor pedagogy, or andragogy to be precise, is also to blame. Andragogy refers to teaching and learning strategies geared to adults, which will be more and more critical for ensuring online student success moving forward. Andragogy is a distinct approach to teaching and learning that encourages highly experiential, problem- (not content-) centered learning, and is practically oriented and linked to professional competencies and outcomes. And beyond programming offered through weekend cohorts, contextual learning in the workplace, and satellite campuses, providers serious about andragogy will offer more collaborative components online through use of connecting technologies, social learning, and mobile tools that can offer comparable, if not more compelling, experiences and outcomes. Competency-based education, and all the benefits of adaptive learning, are also highly andragologiocal in nature.
- Operational strategy: Mature institutions with long-term aspirations for online learning are moving toward a more centralized model to improve quality and efficiency in the production of online content. The key characteristics of this approach are a team-based model that allows various parties—faculty members and instructional designers—to contribute where most able and eager. Best practice across the industry includes integrating online learning into the core of an institution rather than maintaining online as a discrete and distinct offering or program type and positioning a central online unit as a primary center for design and delivery, including even enrollment and retention management in some cases. The benefits of centralization, when done right, include lower costs of production, higher quality content, economics of scale, and a better framework for adaptation and continuous improvement.
- The risk of innovation: In a mainstream market, what constitutes an online strategy, especially for providers late to market, is complicated. On one hand, providers can continue to pursue a model that mirrors today’s market norm—asynchronous, driven by discussion boards, slides, and captured lectures—possibly with some uniqueness through experiential learning or differentiation through brand strength, but little innovation. This may lead to short-term success, but is shortsighted, as the intensity of regulation and scrutiny imposed on the market will make it more difficult and, ultimately, less profitable simply to sustain today’s model. Conversely, providers can leave the old model behind and push the envelope with new forms of online learning through highly experiential models, simulations, social learning, use of open education resources, unbundled offerings, adaptive learning, credit through badges, and competency-based learning. In this case, providers lower the liability in the long term surrounding investment in new technologies and pedagogic practices, but would need to be comfortable experimenting with approaches that are still somewhat unproven. As the up-front investment needed and brand risk is much greater for a more long-term approach, payoff is also no more guaranteed (but is likely).
Looking for more information on the online market? Contact us to learn more about our recent report, Seizing Opportunity, Navigating Risk: A Guide To The Evolving Online Market.