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The Business of Higher Education:. The Distance Learning. Revolution. Michael P. Lambert Executive Director Distance Education Training Council. Mike@detc.org. National Press Foundation Seminar Nov 1, 2006 New York. The Distance Learning. Revolution.

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The Business of Higher Education:

The Distance Learning

Revolution

Michael P. Lambert

Executive Director

Distance Education Training Council

Mike@detc.org

National Press Foundation Seminar

Nov 1, 2006 New York


The Distance Learning

Revolution

  • Student enrollments grew from 483,000 in 2002 to 1.5 million in 2006

  • In 2004 alone, student growth was 34%

  • Average annual growth will be over 20% for each year of this decade

(the above data does not include DETC data)


Revolution

cont.

  • Total online school revenues grew 36% in 2005, to over $7 Billion U.S.

  • By contrast, the online music market was only $1 billion in 2005

  • In 2001, online students were just 2% of the total U.S. college students. Today, they are over 7%


Revolution

cont.

  • Due to aggressive internet marketing, and the availability of Title IV student aid since July 1, 2006, for-profit online schools will exceed over 50% growth rate in 2006.

  • Availability of Federal Student Loans and Grants to online schools will likely result in millions of new student enrollments in the coming years


Revolution

cont

  • Growth at non-profit online colleges is strong as well: 25% growth in 2004 and 23% in 2005

  • 2 out of 3 Universities now offer online programs

  • As growth in classroom colleges flattens, growth in online learning will soar


Snapshot

of DETC

Today

Total Institutions100 in 7 countries

Total New Enrollments, 2005850,000

Total Active Students, 20052,250,000

Avg. No. of Programs Offered20 for Career; 12 for Degree

Avg. No. of Employees37 Career; 70 Degree


Profile of Students in DETC

Career CoursesDegree Programs

Av. Age3437

Employed:81%94%

High School Diploma85%99%

Male47%55%

Fees Paid by Employer40%38%


Top Academic Degree Programs in DETC

1. Bachelors in Business

2. Masters in Business

3. Bachelors in Criminal Justice

4. Masters in Information Systems

5. Health Care Administration


Top Career (non-degree)

Programs in DETC

1. Medical Transcription

2. High School Diploma

3. Child Care

4. Paralegal

5. Medical Billing and Coding

6. Bookkeeping

7. Personal Computer

8. Nutrition


Technological Features Used in DETC Schools

Offer Online Programs70%

“Free” Phone for Students96%

Enroll Online95%

Uses Email for Services98%

Use Phone to Contact Students96%


Customer Satisfaction in DETC

Responses from random surveys of students from EVERY DETC institution

  • RESPONDED “YES”

  • Did you achieve the goals you had?95%

  • Would you recommend the school to a friend?96%

  • Were you satisfied with your studies96%


Course and Program Completion Rates

Av. Degree Graduation Rate56%

Av. Career Course Completion 60%


In Curricula Area, DETC Institutions Plan On--

  • Moving content and courses online

  • Moving tests/exams online

  • Making content more interactive and engaging

    • Streaming video and audio, simulations, interactive assessments

  • Implementing communication tools

    • Messaging and online meetings

  • “Staying the course” with print/correspondence models


DETC School Survey

Do you currently use or plan to purchase a commercial course/learning management system to deliver online courses to students?


Marketing Shifts

  • Positioning and differentiation

    • From a niche market to a mass-market

  • Marketing expenditures escalating

    • 20-30% annual increases among for-profit institutions

    • +1-2 percentage points over revenue

  • Supply and demand and competition from “traditional” institutions is driving up costs

  • Media mix is shifting toward the Internet

  • New channels and strategies are emerging


DETC School Survey

Of the following marketing channels, which do you expect to focus more (i.e., budget, time) on in the next 2 years?


DETC School Survey

Select 3 of the following elements of your institution's offering that you most emphasize in marketing to potential students


Marketing Taglines

  • “Real school. Real degree.”

    • Penn State Online (PSU World Campus)

  • “E-learning with a tradition of excellence”

    • Virginia Tech

  • “Get your degree at warp speed – from a name you trust.”

    • Kaplan University

  • “Looking for a top-ranked degree that is also convenient? Earn your master’s online from one of America’s Best Colleges.”

    • Drexel University

  • “The nation’s leading online university”

    • University of Phoenix Online

  • “Accredited degrees – online, with the flexibility to fit your busy lifestyle”

    • The University Alliance (Regis, St. Leo, Tulane, etc.)


Potential, Future Marketing Taglines

  • Online or on campus, nationwide and around the world”

    • Blended models and national/international network

  • “The country’s only AAPT-accredited online program”

    • Programmatic accreditation and niche uniqueness

  • “Online education from your local university”

    • Brand/locality

  • “A quality online degree at a fraction of the cost”

    • Price competition

  • “The online degree rated #1 by manufacturing employers”

    • Prospect of quality ratings and labor market outcomes


DETC School Survey

Percentage of Students Supported/Reimbursed by Employers (in whole or in part)

Extrapolated Mean = 20-25%


Future Programs in DETC (3-5 Years)

  • Advanced degrees and continuing education

  • Health sciences

  • Professional Doctorates, e.g., Doctor of Business Administration

  • Homeland security

  • Graduate degrees in education administration

  • Para-professional degrees, e.g., Physicians Assistant


Trends in the U.S. Market

  • More discriminating and selective consumers

  • Continued private investment

  • Blurring of traditional “boundaries” and segments:

    • For-profit/non-profit

    • Online/on-campus

  • Growing importance of employer relationships

  • Evolving and increasingly favorable regulatory environment

  • Productivity and service enhancements through technology

  • Content is becoming more flexible, dynamic, and interactive

  • Beginnings of stronger international push among U.S. institutions


Future

Challenges

  • Competition and differentiation

    • Escalating competition in a growing market

    • Traditional institutions waking up to the opportunity

    • Increasing marketing costs, positioning in a noisy market

  • Staying technologically current

  • Finding and retaining quality faculty

  • Transfer of academic credits

  • Regulatory compliance and quality assurance

  • Diploma mills


DETC Internet Use

In which ways do students use the Internet to interact with your institution?

Note: “Check all that apply” – totals do not add to 100%


MEGA Trends for USA Distance Providers

  • More Competitors for the Same Student

  • Everything will be Online and Instant

  • Homogenous Learning Products and Services

  • More International Partnerships

  • Price is the Key Marketing Edge for DETC

  • Productivity and service enhancements through technology

  • Content is becoming more flexible, dynamic, and interactive

  • Beginnings of stronger international push among U.S. institutions


What Works In……

MANAGEMENT

and ADMINISTRATION

  • Annual Strategic Planning

  • Performance-Based Staff Accountability

  • Competitive Environment Awareness

  • Virtual Staff and Faculty Meetings

  • Comprehensive Outcomes Assessment System


What Works In……

PROGRAM

DEVELOPMENT

  • Custom (Docutech) Publishing

  • Ad Hoc Program Development Teams

  • Third Party Text Storage and Shipping

  • Partnerships With Reputable Online Institutions

  • Customizing LMS Templates


What Works In……

Curriculum Strategies

  • Spin-Off Programs/Multiple Options for Majors

  • Combination Degree Programs: Health Care and Law

  • Degree Completion Programs (2+2 BS programs)

  • Pre-Matriculation Assessment for Aptitude for Distance Learning

  • Small (Virtual) Group Projects


What Works In……

MARKETING

  • Bidding for Top Position on Internet Search Engines

  • Branding to “Stand Apart” from the crowd

  • Telephone Call after Literature is Received

  • Referrals from Current Students

  • Easy to Navigate Websites with Easy to Enroll Feature


What Works In……

TURNING PROSPECTS INTO STUDENTS

  • Convenience of the Method

  • Accreditation and Acceptance by Institutions

  • Acceptance of the Degree by Employers

  • Price versus PERCEIVED Value of the Degree

  • Program Matches Career and Life Aspirations


What DOES NOTWork Today

  • Print-based Advertising

  • Mailed-In Enrollments

  • Voluminous, Printed Catalogs

  • Scripted, Motivational Email Messages

  • Slow Evaluation of Student Assignments

  • Lack of 24x7 Student Services Via Email


DETC RESOURCES

AND MEETINGS

  • 81st DETC Annual Conference, April 15-17 2007, Tucson, AZ

  • DETC Course Development Handbook, 2004 edition

  • DETC Accreditation Handbook, 2006 edition (online)

  • Website: www.detc.org


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