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Study: Nonprofit Colleges Carving Out a Place in Online Ed

October 10th, 2012

By Jacqueline Foster, Editor

A recent study by the Parthenon Group found that nonprofit universities are gaining ground in providing online degree programs to working adults, a target group that was previously served primarily by for-profit colleges and universities, according to Inside Higher Ed. These nonprofits are competing for nontraditional students and providing more choices for adult learners looking for online education. The study, titled "Are the Sleeping Giants Awake? Non-Profit Universities Enter Online Education at Scale" shone a spotlight on 10 nonprofit institutions that have managed to enroll more than 10,000 online students each last year, the article explained.

Major players in nonprofit online higher education include Liberty University, UMass, Western Governors University, and Excelsior College, the study notes. Even though schools like these and others are making headway in getting the word out about their online programs, they still have a long way to go to catch up with their for-profit competitors, which utilize much more aggressive marketing strategies and have been working in online ed for much longer, the article noted. In fact, the study predicts that only a few nonprofit universities would become significant competitors of the for-profits.

Increased competition among online schools will lead to students being choosier with where they spend their hard-earned money, and if nonprofits can provide a high-quality education at a lower price, they may have an edge over their for-profit counterparts. However, some of the more selective, reputable nonprofit universities may even be able to charge more per credit for their online courses because of the degree to which students know and trust the brand, the article explained.

So what qualities will help online colleges lead the pack? Whether the institution is for-profit or nonprofit, the ability to market specific programs over the college’s brand name, the ability to highlight the program’s potential for helping a student land employment, and offering programs with positive student success outcomes, including high student retention and graduation rates, high job placement rates, etc., will allow online colleges to differentiate themselves, the study concluded.

One factor that could tip the odds in the nonprofits’ favor is the increased scrutiny by government and the news media on for-profit higher education in recent years, as politicians and pundits decried the high pressure sales tactics and high student loan default rates among graduates of for-profit colleges. Many for-profits were put under and uncomfortable public magnifying glass for over-promising job opportunities and under-delivering with job placements. However, this has led many for-profits to make positive improvements in student learning outcomes.

While it is unclear whether or not nonprofit colleges will truly give the for-profits a run for their money, one thing is becoming clear: students have more choices than ever when it comes to high-quality online education, from the big national for-profit chains to the public university right in their backyard.