The Rise of “Alt Credit” · • Students starting with StraighterLine are more likely to persist than those that don’t. Scholarship Program (Optional) • Willing colleges provide

The Rise of “Alt Credit”

Why, Who & What’s Next

Burck Smith

CEO and Founder, StraighterLine

[email protected]

Sections

SERIES C September 20142

I. Why? Economic Drivers of Alt Credit

II. Categories and Examples

III. An Example: StraighterLine

IV. Regulatory Landscape

Tuition

Student

Funding

Sources

Can I repay the debt?

Can I get a job?

• Exponentially more choices

• Many price points

• Focus on credit transferability

What am I learning?

Students are

Shoppers!

Ways to Increase Value of Credential


I. Lower total cost of degree

II. Reduce time needed to earn credential

III. Greater assurances of employability

IV. Greater expected value of post-credential employment

$$

$914

$646

20151999

$300

$150

Govt. Support

List Price

Cost of Delivery

Online Course Profit Margins at Accredited Colleges

Subsidy

• State allocation

• Federal student grants/subsidized loans

• Non-profit tax status

• Tax preferred plans

• Branding advantages

Accreditation

• Only institutions can be accredited, not courses

• Accreditation measures inputs, not outcomes

• Colleges set own, subjective articulation policies

• Accrediting agencies are staffed and financed by colleges

Competitive Barriers

• Colleges cannot easily be “disaggregated”

• Colleges must look similar to each other

• Standards set and enforced by those that would be undermined by changes

Subsidy + Accreditation Keeps Competition Out

7

Rise of Alternative Providers

ACCREDITED COLLEGES

Academic CreditNo Credit/Certificates

ACCREDITED COLLEGES

8

Types of Alternative Providers

Certificate

ACCREDITED

COLLEGESDegree

Face To FaceOnline

• Offers nearly 60 well-supported, self-paced, competency based online general education courses to about 20K adult students.

• Free trial. $99 /mo. membership + about $49 per course started.

• Psychometrically valid and reliable end-of-course assessments. Anti-plagiarism and on-line exam proctoring

• Continuous improvement methodology using A/B testing on completion rates and NPS scores.

• ACE Credit recommended, DEAC AQC approved, College Board approved, over 100 articulating partner colleges.

StraighterLine

Helps Students Reduce Risk of Starting College

Low Price ✓ Low Risk ✓ Not on Record ✓

• $99 per month +

about $49 per

course

• College can give

discount codes to

students

• Free Trial

• Subscription pricing.

Cancel anytime

• Incomplete or

failed courses not

on transcript

• Does not count

against Title IV

caps

SERIES C September 201411Confidential and Proprietary

Attract and Retain Students

Credit Equivalency Agreement (Free)

• Students taking SL courses know that credit is guaranteed to transfer.

• College is part of selection set from which students choose

• Nearly 100 partners including best known public, private and for-profit online programs.

• Students starting with StraighterLine are more likely to persist than those that don’t.

Scholarship Program (Optional)

• Willing colleges provide a tuition discount to SL

students that complete four or more courses.

• College is given “Scholarship” status on website.

Greater marketing power to attract the students most

likely to persist.

• Over 20 scholarship partners

Refer and Re-Enroll Students


Co-branded, Closed Loop MarketingReferral

College


“The university admits 94 percent of

students who have completed at

least two StraighterLine courses.

And year-to-year retention rates for

StraighterLine course completers at

WGU top 90 percent…”

“We can hand those

students off,” said

WGU’s VP for enrollment,

“to help them gain those

skills at a much lower

cost than we can

provide.”

Referral Impact


Reducing Student Risk = Greater Persistence


MOTIVATION

ABILITY

Low

Low

High

High

DROP-OUT/NO

DEBT

TRANSFER/SAVE MONEY

EITHER:TRANSFER & SAVE;

ORDROP-OUT & NO

DEBT

EITHER:TRANSFER & SAVE;

ORDROP-OUT & NO

DEBT

16

College Tuition & Fees

Medical Care

Customer Price Index

In FY2016, if SL students enrolled elsewhere, students and taxpayers would have spent an additional:

$-

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

Private 4-year Public 4-year Private For Profit Public 2-year

Taxpayers

Students

Certificates


Types Prices Notes

Coursera

Specializations

82 across wide

range of topics

4-6 courses at

$50 - $75 each

Raised $60

million in Fall

2015

Udacity

Nanodegrees

12 focused on

tech.

$200 per month.

Students spend

$700 on average.

Raised $105

million in

November

EdX X-Series19 across wide

range of topics

3-6 courses at

$50 - $75 each

* Lynda.com bought by LinkedIn for $1.5 billion; Udemy raises $61.5 million; Pluralsight filing to go pubilc

Bootcamps


*

• Estimate 16K grads in 2016

• 10-12 week sessions; average $1,000 per week as high as $1700 per week.

• Advertise 90%+ placement rates, but no standards for measurement

Internships/Corporate


EQUIP Ex Site (and Other Efforts)


• Tension Between Good Policy and Good Politics

• Title IV Access Through College & “QAE” + Accreditor Approval

• 50% - 100% of Program Must Be Outsourced

• About 10 Programs To Be Selected

• Participants Can Be Any “Non-College”

Burck Smith

[email protected]

Twitter: @burck

Questions?

Documents

The Rise of “Alt Credit” · • Students starting with StraighterLine are more likely to persist than those that don’t. Scholarship Program (Optional) • Willing colleges provide