About 125 years ago, students could earn the correspondence degree. Correspondence programs were initiated in higher education by the Universality of London in the mid of 19th century. In the next century, different universities played with other modalities including radio and television-based learning. Most notably in the UK—with the Open University. Correspondence degrees in the U.S. remained solidly ground on paper and the U.S. Postal Service.
There was little sense among traditional universities before the 1990s that students should generate a profit or be in any way central to the institution. These programs operate on cost-recover bases, and they were demoted to the outskirts. Lack of profit was sarcastic considering one of the pioneers of corresponding degrees.
International correspondence schools enrolled a total of 900,000 students by 1906, driven by a sales force of 1,200. It made sense given the view that correspondence degrees should serve educational outreach missions of the university. In the middle of the 20th century, the University of Maryland College and the University of Wisconsin Extension led the market.
The Internet has proved itself as a game changer for correspondence degrees by enabling three forms of interactivity.
- interaction with content,
- interaction with the instructor,
- the interaction with other learners.
People closest to the correspondence were the last to see it. Extension and ongoing education programs viewed the internet as yet other in a long line of non-revolutionary technologies like two-way video.
Market leaders like University of Maryland (UMUC), Wisconsin, Washington, and University of California Los Angeles were caught unaware as for-profit entrants nurtured the market for distance degrees.
For-profit entrants were not afraid of UMUC, and for-profit domination did not happen overnight. In 2000, Sloan Asynchronous Learning Network estimated that for-profits occupied less than 5% of the market for distance degrees. For-profits like the University of Phoenix grew rapidly over the prior decade by making higher education more accessible.
Duke University, an elite university which initiated its global executive MBA in the late 90s, and Cornell University which started e-Cornell as the university’s vehicle for online certificate programs seemed to grab the potential of online delivery better than other universities.
Development of for-profit universities for a decade was powered by online degrees. These degrees entered into the huge market of nearly 40 million Americans. By 2010, students enrolled in online programs were 3 million.
70% of those students attended for-profit institutions. From 2000 to 2010, most of the potential customers were targeted with the opportunity to go back to college.
The experience of the for-profits in the last 5 years has been, in part a calamity of the commons. Too many fishermen fishing in a diminishing pool. It has also been a failure of investment. For-profit organizations focused investment in the areas of marketing and enrollment.
Consequently, enrollment growth slowed and reversed over the last 5 years. The immediate reaction was to redouble the focus on marketing rather than thinking about the development of a product.
Programs in 2015 were easily recognized by online students from the year 2000. Many for-profits institutes use the same learning management system that was used a decade ago. None of them have attempted to reinvent online learning based on the current technology. It is a failure of investment that is coupled with the failure of imagination.
Online degree programs in popular subjects like Business, Technology, Psychology, Criminal Justice, Health, and Education are very popular commodity programs today.
We saw no growth in the market for online degrees last year. That’s because commodity programs are declining as the time is passing by. This decline is offset by growth in differentiated online programs.
What is a differentiated online program?
Institutions can differentiate their programs in three ways.
First way is through branding
Recognizing that there is a limited number of prestigious brands in higher education. Non-elite brands like Bridgepoint’s Ashford University has partnered with elite and recognizable brands like Forbes for Ashford’s business school.
Consequently, Ashford’s business programs continue to grow.
The second method is through specialized programs
There are many splendid examples of triumph specialized online programs although there is a ‘tail’ to online education curve. The tail for 100% online programs is not nearly long enough to make a real contribution to the growth of the overall market.
The real tail is blended programs—a subject for another day.
Third one is by connecting students to a job
How to do this thing effectively is still a puzzle. One company, ProSky has hit upon a fascinating model by providing on-ground universities the opportunity to enroll their students in a 10-week project-based online course in discrete skills areas such as digital marketing, SEO, and Sales.
Employers contribute projects to the course, monitor the work of students, and directly recruit students.
Ivy League Schools like Yale are now entering the market for online degrees via a partnership with online project management companies such as Pearson Embanet and Synergis Education. The growth of online project management companies and the brands that they have enabled have significantly contributed to for-profit enrollment decline.
Online project management companies now have the opportunity to lead the market for online degrees in the U.S. and internationally. They also have the luxury to work with stronger brands. Though they need to avoid making the same mistakes as their for-profit university predecessors.
Undifferentiated online degree programs will become commodities. Online project management companies should ensure that students enroll in online programs will get the job that they want. Also get a reasonable return on their investment in a pricey online degree.
Alina Olive is a senior content writer. She has experience of long-term in the marketing field as a content writer. She often creates articles on online education. Alina works in a Do My Homework company and writes an essay for students.
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