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eLearning: Are We Making Money?
7/21/2005
Start-up Funding
The institutions profiled here require that their online learning divisions be self-supporting and self-sustaining, yet start-up money (venture capital) has been essential for launching the programs. Boston University, for one, initially partnered with an external for-profit company for design and development of a financial planning course, in return for a percentage of tuition fees. That partnership enabled a shared-risk scenario: BU could invest in the content development and repackaging of the program for online delivery as well as the infrastructure to provide the necessary student services. Penn State and the University of Illinois Online both received grant support from the Alfred P. Sloan Foundation. And UMassOnline received internal capital from a university fund.
To ensure that an online program can be successfully launched and is self-sustainingover time, Bill Riffee, head of the University of Florida Distance, Continuing and Executive Education program, uses scaling criteria to help determine whether or not to offer a program: Can the program grow large enough (200 to 250 students) to support revenue-sharing with the colleges? Can it be self-sustaining in two to three years? This often means ensuring that a cash reserve is available to support a program as it is getting launched. One of the earliest programs launched at the University of Florida is the professional Doctor of Pharmacy program that consistently has over 500 students.
External and Internal Partners
Another shared characteristic of these online programs is that they do not try to do everything themselves. Each institution partners with other internal and external groups, as needed. For the production of courses, some institutions partner with groups such as instructional designers and developers. Others contract out market research and marketing, an expertise not easily found within higher ed. Still others work with partners to develop a substantive “branding” of their online entity. Most institutions use a course management system such as WebCT (www.webct.com) for their delivery infrastructure and to support student services.
In the early years of the online program at Boston University, John Ebersole, associate provost and dean of Extended Education, says that his team partnered on the development of both degree and professional development programs. On the academic side, BU’s online program has partnered with Embanet (www.embanet.com) on master degrees in Criminal Justice, Occupational Therapy and Management, and for a doctoral degree in Physical Therapy. In professional development, BU partnered with Acadient (www.acadient.com) for its popular financial planning course. Extended universities are now developing courses themselves and working with third parties for marketing help. In the academic degree area at BU, the largest and oldest online program is a master’s degree in Criminal Justice, with about 500 students.
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