To Survive, Does Higher Education Need to Embrace Change?


Freshman Survey Shows More Liberalism, Changing Motivations

January 1, 2017 Comments (0) Academic Discussion

Can a 'Pay as You Go' Model Work for Higher Education?


We think of the price of higher education like a series of massive bills — typically twice a year — for a semester’s price of classes. But tend to that model be replaced by pay-as-you-go pricing that fits personal budgets much better than going into massive debt and finding a way to haul yourself too much of it?

New Charter University is tinkering with a subscription plan that mimics what is already familiar to consumers — it’s not unlike a cellphone plan. For $199, students has access to a month of New Charter’s offerings.

They’re not the only ones changing pricing models. StraighterLine, another ed provider, sells access for $99 monthly and an additional $49 per class.

For their part, both the companies say their set goals are to offer a quality higher education while lowering costs for families. \”Our model isn\’t to spend a lot of money on marketing and charge you on the tailgate end,\” says Gene Wade, co-founder and CEO of UniversityNow.

The for-profit education sector is forced to think about price in a manner that non-profit competitors don’t. Not only is it an integral part of a sustainable, successful business design, but it’s a rapidly-changing landscape as non-profit providers go into the market already having a solid reputation and marketing for traditional, brick-and-mortar education.

77% of public colleges and 54.2% of private nonprofit colleges said so within the fall of 2011, up from 73.6% and 49.5%, respectively, two years prior, according to the Babson Survey Research Group and the College Board. Weight loss nonprofits enter the sector offering lower-cost alternatives, the chances are for-profit schools will slash tuition, says MacArthur.

Bottom-line pricing has raised concerns, though, as some ponder whether the quality of education is sacrificed as companies try their hardest to generate the most affordable — but still profitable — solutions.

Many of those providers are reporting rapid growth, as students seem to be signing up in droves to consider advantage of more fiscally-sensible options than they face even at vocational schools. Tuition at public universities, that has historically been a bargain compared to private institutions, continues to be so steadily rising that students are forced to question whether there might be an even better value.

The payoff, though, is way from certain, as there hasn’t been much time to see how online pay-as-you-go students have fared in the job market. Only one thing is certain — these students are unlikely to incur the levels of debt that continue to plague college students.

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