Emerging Technology

CHICAGO — While instructors and administrators weigh if and how to incorporate artificial intelligence into coursework, the emerging technologies pose broader existential questions about the role of higher education. 

Generative AI systems such as ChatGPT are poised to disrupt white collar and professional work, according to Daniel Susskind, an economics professor at King's College London, who has written a handful of books on tech’s impact on work. That, in turn, could have important ripple effects on colleges, which have long served as the training camps for those workers, he said.

Susskind spoke at a keynote event April 15 during the Higher Learning Commission’s annual conference in Chicago. He pointed to automation’s revolutionary impact on industries like agriculture and manufacturing — which has created huge gains in output with far fewer jobs — and to more recent advances in fields such as medical diagnostics. 

“We tend to think of the work that blue collar workers do as being relatively routine, relatively straightforward, relatively process-based, relatively easy,” Susskind said. “Conversely, we think of what white collar workers do as requiring subtler faculties — things like creativity, judgment, empathy.”

 AI has yet to replicate those functions of the human mind. But it doesn’t necessarily need to when trying to solve some of the problems in professions such as medicine, accounting, architecture and law.

Blindness to this state of things amounts to what Susskind called the AI “fallacy.” That, he said, is “the mistaken assumption that the only way to develop systems that perform tasks at the level of human beings is to somehow copy, replicate or imitate the way the human beings perform that task.” 

AI doctors, lawyers and accountants

With massive increases in computing power and data storage, AI can perform some of the same tasks through the blunt forces of processing and analysis that higher ed has traditionally helped to hone in humans.

“So a whole realm of activity that, until very recently, we thought was out of reach of these technologies turns out not to be,” Susskind said. “And it's often concentrated in the world of white collar work.”

The best response to this potential disruption is training and education, according to Susskind. 

This could mean focusing education on preparing students for tasks that can’t yet be automated or to outperform AI systems. 

“There are large areas of human activity that lie beyond the reach of even the most capable technologies,” Susskind said, pointing to interpersonal communication, judgment and empathy, among other areas. 

Colleges could also focus on training students to build the AI systems that might take over more human activity. 

Higher ed responds to AI advances

Many higher education officials are anticipating AI’s potential to change the sector. HLC devoted multiple panels to the topic at its conference, and the accreditor placed AI — and the “promises, opportunities, and threats” it poses — at the top of its annual higher ed trends list for 2024.

For institutions, AI could be incorporated into teaching, learning and personalized instruction and in all the areas of the enterprise that other organizations are looking at deploying it, HLC noted in its forecast.

At one of the conference panels, officials with Grand Canyon University described how they developed an institution-wide AI strategy tied to its mission. 

The Arizona for-profit started its process with a committee, as so many colleges do. Its early stages focused on brainstorming and surveying stakeholders to see what their needs were. 

That process churned out ideas such as using AI to develop curriculum content and monitor real-time student feedback. The committee went on to build a strategic model for how AI might be used at Grand Canyon, as well as to help develop resources for staff and faculty.

“No matter what decisions we make around AI — and those will change — and no matter if our perspective shifts around AI, the core of who we are as an institution is not going to shift,” Meredith Critchfield, dean of Grand Canyons's college of education, said at the panel April 15. 

The U.S. Department of Education is “concerned” about the impact a potential financial failure of 2U and other online program management companies would have on students, an agency spokesperson told Higher Ed Dive in a statement April 4.

The statement was in response to an open letter April 2 from advocacy groups — the Student Borrower Protection Center, Project on Predatory Lending, and Center for American Progress — calling on the department and Consumer Finance Protection Bureau to protect students from what they described as a “looming collapse” of 2U.

In a published statement on April 5, 2U said that the groups’ predictions about an imminent shutdown “are unequivocally false and represent a blatant attempt to confuse students and the public.”

The online program management sector has increasingly come under financial pressure, and 2U is no exception. After a meteoric rise over the last decade, the company now faces falling annual revenues, long-building losses and looming debt maturities. 

Documents filed with the U.S. Securities and Exchange Commission in February and early March included “going concern” warnings, indicating there is “substantial doubt” about 2U's ability to keep operating if it can’t refinance its debt or raise capital. The March filing noted specifically that 2U might have to file for bankruptcy or liquidate — among other, less dramatic outcomes — if it can't cover its debt obligations.

As of Dec. 31, the company’s total debt stood at $904.7 million. With a long history of operating losses, 2U has racked up an accumulated deficit of almost $1.5 billion. The company shrank its losses in 2023, but its loss from operations remained steep, at nearly $226 million. Meanwhile revenue declined by about 1.8% for the year to $946 million. 

While it struggles financially and aims for a turnaround, 2U disclosed Thursday plans for cash retention bonuses for its top executives in lieu of their typical bonuses and stock awards, including more than $2.3 million for its CEO and $1.2 million for its CFO.

The student borrower advocacy groups pointed to financial stresses, as well as litigation and negative media stories about 2U’s practices, in its letter to regulators. 

On Tuesday, the advocacy groups warned of a “sizable impact” on students if 2U fails financially. 

“It is critical that your agencies work together to create a plan to support students financially impacted by 2U’s looming collapse,” they wrote in their letter to regulators.

In its Friday statement, 2U acknowledged the “need to improve our financial position” and noted that it is working to address its capital structure. It said it is confident it can “negotiate more favorable terms with our financial stakeholders between now and the end of the year, resolving the going concern disclosure.”

The company added — in bold —  that it is not “considering any options that would cause 2U to cease operations or end programs for students currently enrolled in a program” that it supports.

The advocacy groups recommended regulators gather student enrollment and loan data from online programs run with the help of 2U and begin preparations for student relief, such as loan discharges. They also recommended reaching out to students about their options and eligibility for loan relief, among other actions.

The Education Department spokesperson said the agency “is concerned about the impact that a potential failure of any OPM, including 2U, would have on institutions’ continued program delivery for students.” 

The spokesperson added: “The Department encourages all institutions contracting with an OPM they use for program delivery that is facing financial challenges to take steps to ensure minimal disruption for students in the event that OPM is unable to provide the services it promised.  The Department views institutions as responsible for ensuring students are not harmed by any potential failure of an OPM.”

Despite the financial travails, 2U executives have expressed optimism. For the most recent quarter, revenue increased 8.3% year over year to $255.7 million, a figure that included $54.6 million from “the mutually negotiated exit of certain degree programs.”

“We need to adopt a shrink-to-grow mindset and take the necessary measures to date, to set ourselves up for success long term,” CEO Paul Lalljie told analysts in February. Lalljie took over as 2U's top executive after co-founder Chip Paucek stepped down from the position in November.

2U CFO Matt Norden, who is also the company’s chief legal officer, addressed the going concern language in February, telling analysts that the company had a “relatively strong liquidity position.” He also said the company had efforts in the works to free up working capital that would give the company a “strong foundation to operate the business going forward” and help it meet the service and quality expectations of the company’s university clients.

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Remote learning expands educational opportunities. But to fully harness these opportunities, colleges and professors need to consider how to achieve equity in remote learning so that online students receive the same education as their in-person counterparts.

According to the most recent data from the National Center for Education Statistics, the share of college students taking advantage of remote learning peaked in 2020, with 75% of undergraduates taking at least one online course and 44% studying exclusively online. Those numbers remained high in 2021 at 61% and 21% respectively.

This surge in remote learning provides underserved communities access to higher education. Older students, students with full-time jobs, and students who are raising families can now attend college without uprooting their lives. But with this access comes a new challenge: How can you keep online students engaged when they aren’t in the classroom?

AV technology, such as lecture capture solutions, PTZ cameras, and digital projectors, can be useful tools in unlocking the answer.

The challenge of creating equity in remote learning

When trying to create equity in the classroom, there’s a lot to consider. Students come from different social and cultural backgrounds, have different learning styles, and have wildly different home lives. And these are just the considerations for traditional, in-person classes. In hybrid learning scenarios where some students are remote while others are in-person, it’s easy to see how students may receive different classroom experiences.

The data backs this up. A recent report from the Center for Community College Student Engagement provides context. Some of the key takeaways include:

• Student Interaction: 50% of online students report never working with classmates on projects during class. Only 17% of their in-person counterparts report the same. A similar disparity is present when asked about collaboration outside of class hours.
• Instructor Interaction: While not as stark as student collaboration, there is also a gap when it comes to interacting with instructors. Only 45% of online students report that they often talk about grades or assignments with instructors. This figure jumps to 54% for in-person students.
• Perceived Difficulty: Perhaps unsurprisingly, this engagement gap leads online students to perceive courses as more challenging. Half of online students report classes being somewhat or extremely challenging compared to only 38% of in-person students feeling the same level of difficulty.

While this report highlights some of the challenges when it comes to achieving equity in remote learning, it also highlights an opportunity. Online-only students report significantly lower rates of skipping class and higher rates of completing coursework. This shows their desire to engage.

Strategies to promote equity in remote learning

Online students want to engage. Institutions and teachers want to ensure equity in remote learning. What strategies can help us reach these goals?

One methodology that has shown potential with K-12 students is the OLS approach. This strategy focuses on three stages:

• Own it: Students work with their teacher to specify learning goals.
• Learn it: Students work to meet their learning goals through a defined plan including activities and collaboration.
• Share it: Students express what they’ve learned to an audience.

OLS models have become more relevant as more students opt for remote learning. Simply put, when students aren’t physically present in the classroom, it’s important for them to be engaged from the very start of a lesson, as a higher level of independence will be required for them to succeed.

And while the OLS model focuses on K-12 students, the principles behind it align well with the idea of active learning in the college classroom. Active learning shifts the focus of class time away from traditional lectures and Q&As and encourages more collaboration and interaction. When implemented intentionally, this can help close the engagement gap and create equity in the classroom.

Enhanced lectures (and other video solutions)

Active learning encourages a shift away from traditional lectures, but that doesn’t mean they won’t remain an incredibly important tool in college education. The approach to lectures just needs to shift to make sure both in-person and online students can get the most out of the material being provided.

It’s analogous to watching a movie in the theater versus streaming it at home. Streaming may be convenient, but the distractions of home make it hard to focus and more likely you’ll miss an important detail.

Lectures pose the same problems for online students. One way to combat that is to take the same approach Hollywood does: make things cinematic.

Technology can help in many ways:

• Audio solutions such as wireless mics and high-quality podium mics will ensure professors can be heard clearly by every student.
• Point, tilt, and zoom (PTZ) cameras allow professors to move dynamically with no worry that remote students will suddenly lose sight of them.
• Digital projectors help integrate visual aids into lectures that can easily be seen and accessed by both in-person and remote students.

These are just some examples of lecture-capturing solutions that can enhance the lecture experience for all students. And lectures are just one example. Professors can also use this AV technology to record short videos that students can view at any time that introduce new topics or answer frequently asked questions. These quick videos can help build rapport with students and encourage engagement.

Stop lecturing, start collaborating

For some larger classroom settings, class time dedicated to lectures may be the best (and perhaps only feasible) way to reach every student. But, when possible, one way to encourage equity in remote learning is by posting lectures online and dedicating class time to student collaboration.

This style of hybrid learning is similar to what is being adopted in hybrid workplaces. Some of the same strategies can be applied:

• Team makeup: Assuring that groups are made up of both in-person and online students can help close the student interaction gap discussed earlier. This can also help students build trust in each other, leading to better results in the classroom and relationship building that can continue long after the class environment.
• Access to resources: Let’s say your classroom utilizes a digital display. It’s easy to see how remote students would feel that they’re unable to experience the benefits of such technology. However, in a group setting, online students and in-person students will work together as a team, allowing equitable access to all resources.
• Autonomy: The first step in OLS models is Own It. By providing students autonomy during class, they gain ownership over how they learn while still having the professor as a resource when needed.

Hybrid learning poses challenges. But by using some of the same technologies used to enhance hybrid work environments, classrooms can become more collaborative and engaging for all students.

Be available

Another challenge to equity in remote learning is ensuring all students have access to professors. Simple steps like personalized emails, zoom office hours, and timely feedback can go a long way to ensuring online students truly feel like a part of the class.

Equity in the classroom is possible with the right tech and intentions

New technology creates opportunities. It also creates challenges. AV tech can help professors meet those challenges. Tech solutions allow easier integration of strategies that encourage online student engagement and promote real equity in the classroom.

When the AI-powered ChatGPT made its big debut, higher education leaders naturally questioned how their students would use high-tech tools like it to write essays and research papers for class.

Just a short time later, we know that’s only a microscopic way that AI is impacting higher education. There’s a bigger question that universities should answer: How can we help students succeed and lead in a complex, AI-powered world after graduation?

I believe the answer is life skills — the kind that outlast and extend beyond inevitable technological changes. We should stop fearing AI and instead teach students to be resilient, self-reliant, compassionate and capable of sound judgment.

We won’t shortchange students on technical skills, but this won’t be enough in the face of AI. AI will eliminate more traditional technical jobs and drive major disruption — some positive, some much less so — in the way we live and work.

Universities must ensure they’re teaching the following skills to students.

Judgment and problem solving

A fast-moving technology with a reputation for making significant errors requires oversight by people with strong critical thinking skills.

I recently had the pleasure of interviewing famed theoretical physicist Michio Kaku. I asked him if it is possible for us to someday have artificial wisdom since we already have artificial intelligence. His answer was telling.

“Intelligence is more than just being smart. It’s being able to put the data together and come up with some conclusions,” Kaku said, “and then from the conclusions calculate the consequence of these conclusions. That gets us into wisdom, and artificial intelligence does not go that far. It simply allows you to compute.”

Experience is the best way to help students hone their judgment and problem-solving abilities. 

We need to deliver more experiences sooner for every major and every type of student pursuing a degree. When a student has opportunities to solve a real-world problem, implement a solution to a community issue or create something that betters the lives of others, they flex and build these abilities.

Campuses usually have laboratories and real-world studios where students conduct research, produce creative works, master new technologies, invent new ways of doing things and encounter scenarios that will occur time and time again in the workforce.

We need to give all students access to these resources as well as the freedom they need to be intellectually curious. AI lacks the human element we look for in leaders. Our priority is to develop the entire student, making them well-rounded, global citizens.

Empathy and emotional intelligence

A society going through the type of disruption that AI will bring requires strong leaders who have the ability to put themselves in other people’s shoes and lend a hand to those in need. 

In 2022, our university’s Survey Research Center questioned 500 executives at organizations with 2,500 employees or more to examine what leaders are looking for when they hire candidates, as well as what qualities employees need to get promoted and continue to grow in their careers. 

The survey confirmed what I have always believed: People skills are in high demand and harder to develop than technical skills. If you consider what Kaku said, that’s even more true in an AI-driven world. AI can guide the technical aspects of something, but only humans can frame it with empathy and emotional wisdom.

A majority of executive leaders, 64%, said they would be more hesitant to hire a new college graduate who lacked emotional intelligence than a person who lacked technical skills. That isn’t surprising when you consider that an even larger majority of executives said it is much easier to develop an employee’s technical skills than their personal initiative and coachability.

Another way to look at the importance of having life skills, such as emotional intelligence, is to consider how you feel in your doctor’s office. 

Even though doctors are highly trained, they know that bedside manners are still an important tool. When you visit a doctor, their ability to listen and communicate with you matters as much as their technical skills, if not more. You might not return to a doctor who ignores your concerns and fails to answer your questions when you seek clarity about a medical issue. 

We are failing our students if we teach them that life skills are no longer valued in the AI age.

Resilience and openness to change

We need to equip students with confidence to trust their own ability to embrace positive change and adapt to negative implications. Technology isn’t going to stand still, and neither can our students. 

Disruptive innovation expert Daniel Burrus recently gave a presentation to our faculty about the future. He gave the example of two physicians — one who uses a medical AI platform to help serve patients and another who does not. He noted that most of us would have a lot more confidence in a doctor who is willing to learn and adopt new healthcare tools and technologies in pursuit of better care, as opposed to one stuck in their ways and scoffing about change.

New technologies might mean new routines, new economic realities, the rise of new opportunities and the sunset of others. College graduates need the ability to embrace the positive and ride out the difficulties that come with disruption.

We’ve entered difficult times, and our institutions must be able to strategically adapt in a way that benefits our students for the rest of their lives. Prioritizing their critical life skills is actually our most important mission. 

A majority of college students, around 70%, are now enrolled in at least one online course, signaling a promising shift that could benefit learners who have historically been let down by traditional education models.

Most students are readily embracing this tech-enabled future, according to new research from WGU Labs, the research and innovation arm of Western Governors University. 

The organization surveyed more than 3,000 students across nine diverse institutions including community colleges, private and public four-year institutions, and primarily online, not-for-profit colleges. At least 80% of respondents agreed that online and hybrid are effective formats of learning. More than 70% agreed that ed tech not only makes their courses more engaging, but also helps them more effectively learn course material. 

First-generation learners were especially positive about the shift online. More than three-quarters of these students, 76%, indicated they would be interested in taking online courses in the future, nearly ten percentage points higher than their peers with college-educated parents.

But there’s a disconnect. Despite growing interest and potential for the medium to revolutionize learning and break down barriers, too many online courses offer a lackluster learning experience, resulting in poor outcomes that can leave vulnerable students worse off.

Not all online learning is created equally

Relative to their peers, first-generation students are less likely to reach graduation. This signals that institutions are failing to meet the needs of a more diverse student body. While far from a silver bullet, the ability to learn anytime, anywhere — and often for a fraction of the cost — can be particularly impactful for these individuals who are more likely to juggle full-time jobs, come from low-income families, and provide for dependents while pursuing their degrees. 

Their unique experiences may also render them more open to innovative, tech-enabled models. Whereas college-educated parents often project their own aspirations and preconceived notions of what college means onto their children, first-generation students are immune.

Despite the potential for online learning to enhance the student experience and drive equitable outcomes, many institutions have historically deployed tech primarily to mitigate revenue shortfalls and meet enrollment targets, often replicating face-to-face instruction via antiquated web-conferencing tools and demanding full price tags that leave students saddled in debt. 

Programs like these are a reminder that online learning is a tool — not a means to an end. And that end should ultimately be to deliver value to students.

The future of learning is online, but higher ed leaders won’t meet this moment without a deliberate online strategy. To that end, leaders should ensure online courses and programs include the following key components:

• Intentional design: Online learning should be purposefully designed for the virtual environment, removing artificial constraints that exist in traditional models of learning — for instance synchronous virtual lectures, and fixed-pace schedules — and leveraging digital tools that have been strategically selected for their ability to enhance learning.
• Excellent teaching: Whereas in-person learning requires that faculty live near campus, programs that deploy online learning have the benefit of sourcing the best teachers in the world. But it’s not enough to identify instructors with expertise in teaching; faculty must also be given sufficient time, resources, input, and training to effectively use ed tech. 
• Engaging experience: Innovations in ed tech can enable faculty to pull from diverse sources of media and content, leverage motivational techniques, and engage their students in ways that are difficult to replicate in-person at scale via virtual labs, peer-to-peer interaction and practice environments.
• Personalized learning: Thanks to advances in artificial intelligence, readily available data on how students are doing can empower faculty to adapt and personalize learning materials and experiences through timely interventions. At WGU, for instance, we use machine intelligence to better understand our students’ momentum at a given moment, drawing on indicators such as how they’re interacting with learning resources, the extent to which they’re engaging with faculty, and how they’re progressing. By identifying when students have less momentum and are in greater need of support, faculty can design personalized interventions at the moments when students need them most.
• Valuable credentials: Technology should be used to deliver an affordable learning experience. But affordability is only part of the equation. For students to derive real value, learning experiences must ultimately lead to economic mobility.

Every learner deserves the opportunity to earn a credential that can transform their lives, families and communities, and online learning can indeed be a powerful tool for expanding access to underserved student populations, including first-generation students. 

But access without attainment is an empty promise. Leaders from long-respected, brick-and-mortar colleges and innovative online universities need to think differently about educating and supporting a diverse student body, whether through investing in new supports and wraparound services, or by embracing technology.

Done right, online learning can be a powerful vehicle for connecting individuals to opportunity. But if leaders aren’t careful, tech-enabled instruction — just like its in-person counterpart — has the potential to leave underserved students behind.

In fall 2023, CEOs of major education companies  briefed analysts on their most recent financial quarters. And some of them dropped major news during earnings calls. 

That includes education company 2U, which announced it was parting ways with the University of Southern California — one of its oldest and largest clients — on most degree programs they worked on together. 

Meanwhile, the CEO of Grand Canyon Education accused the U.S. Department of Education of retaliating against the company by slapping a $37.7 million fine on its largest client, Grand Canyon University. Brian Mueller, who also serves as the university’s president, said the institution has endured government retaliation due to an ongoing lawsuit against the department. 

Company leaders also gave insight into how the ed tech and for-profit college sectors are faring. Below, we break down three trends playing out across some major public companies. 

Education companies double down on degree programs

Officials at Coursera, a high-profile MOOC platform, touted gains they made in 2023’s third quarter. That includes adding 6.5 million registered users to its platform, bringing the total to around 136 million. 

Coursera’s lesser-known business — which hosts online degree programs — also saw growth. Its degree segment rose to $11.7 million, up 13% from the year before due to rising enrollment. 

In total, more than 20,000 students are enrolled in degrees on Coursera’s platform. 

During an October call, Coursera CEO Jeff Maggioncalda said the company planned to focus on offerings called “pathway degrees.” 

These programs allow Coursera users to count open courses they complete on the platform toward credit for degree programs. Students can also be admitted to degree programs based on their performance in these courses, Maggioncalda said. 

Coursera recently announced it had built several of these pathways to master’s degrees offered by Illinois Tech. Coursera users can now complete professional certificates offered on the website — including from Google, IBM and Meta — as credit toward these programs. 

2U is also continuing to focus on its degree business, although revenue was flat for this segment in the third quarter, at $137.6 million. 

Company officials remain optimistic about the degree business. 2U announced this month that it struck deals with six colleges to help them launch and run 50 new degree programs, most of which will debut next year. 

Alternative credential offerings were a mixed bag

During the third quarter, Coursera’s overall revenue skyrocketed 21% year over year to $165.5 million. Officials attributed part of the increase to strong demand for professional certificates on its platform, including new offerings from Microsoft and Amazon. 

Coursera also expanded its work with the University of Texas System by giving its 240,000-plus students and affiliates access to the company’s Career Academy, a skills training platform for colleges and companies. The academy provides access to over 40 professional certificates. 

“These certificates are being integrated into the curriculum and often offered as career electives for credit for students pursuing traditional degrees,” Maggioncalda said last month. 

Udemy, another MOOC platform, also saw increases during the third quarter. Its total revenue increased to $184.7 million, up 17% compared to the year before. 

Most of the company’s gains were driven by its Udemy Business segment, which gives employers access to online courses to help train their workers. Revenue for this segment jumped 30% compared to the year before, rising to $109.1 million. 

However, 2U’s alternative credentials didn’t fare as well.

The company’s alternative credential revenue fell to $92.1 million in the third quarter, down 3% from a year prior. 

The company attributed the decline to lower enrollment in its coding boot camps, though 2U CEO Chip Paucek said other programs — such as those in data — saw growth. 

“Coding itself is where the problem was,” Paucek said. “We think that that is related to coding jobs in the market, and I'm sure influenced some by AI.”

Enrollment ticks up at for-profit colleges

Several public companies operate for-profit colleges, offering a glimpse of how these types of institutions are performing. During the most recent financial quarter, many of those colleges reported big enrollment gains.

That includes American Public Education, which runs the American Public University System, Rasmussen University, the Hondros College of Nursing and Graduate School USA. All but one of those institutions saw gains, helping boost the company’s revenue to $150.8 million for the quarter. 

American Public University System, which encompasses two for-profit colleges, accounts for most of the company’s enrollment, with roughly 90,000 students. Its net course registrations increased 8% compared to the year before, according to the company’s estimates. 

However, Rasmussen University — which has 13,500 students — saw a 10% decline. 

Adtalem Global Education also experienced enrollment growth. The company, which owns Walden and Chamberlain universities, saw a 1.9% year-over-year enrollment increase, bringing headcounts to over 80,000 students. 

Strategic Education, the owner of Strayer and Capella universities, is another for-profit college giant. Enrollment at those two institutions rose above 82,000 students during the third quarter, up 9.9% compared to the same period last year. 

Grand Canyon Education doesn’t own any for-profit colleges. 

However, the educational services company’s biggest client is Grand Canyon University, which the U.S. Department of Education treats as a for-profit college for Title IV financial aid purposes. The company takes 60% of the university’s tuition and fee revenue. 

The university’s enrollment rose to around 118,000 students by the end of September, up 6.6% compared to the year before. 

Perdoceo Education Corp. was an exception. 

Both of its institutions, American InterContinental University System and Colorado Technical University, had third-quarter enrollment declines. The drop was especially dramatic at the university system, whose enrollment plummeted 34.2% year over year to 10,000 students.

Academic Partnerships has agreed to buy Wiley’s online program management business for a base price of $110 million, according to documents filed Tuesday with the U.S. Securities and Exchange Commission. 

Earlier this year, publishing giant Wiley announced it planned to sell the unit, called Wiley University Services, and turn focus to its other businesses, such as research and publishing. The two companies plan to close the transaction by early 2024. 

Under the deal, Academic Partnerships may also pay Wiley up to $40 million from fiscal 2025 to fiscal 2026 depending on if the acquired business unit hits revenue targets. Wiley will also receive 10% of the common units of Academic Partnership’s parent company. 

Academic Partnerships is one of the biggest online program management companies, or OPMs, in the U.S. It has carved a niche by largely helping regional public universities launch and run online programs. 

Once Academic Partnerships completes the deal — which is subject to regulatory approval and review under federal antitrust law — the company will provide services to more than 125 colleges. 

Academic Partnerships CEO Fernando Bleichmar praised the deal in a statement Tuesday. 

"Across the globe, there is growing demand for high-quality, affordable online degree programs in workforce-relevant fields," Bleichmar said. "Bringing together AP and Wiley University Services will better enable the combined company to help universities meet students where they are with high-quality, timely online education in our rapidly changing world.”

The deal comes after Wiley announced plans in June to drop its OPM services. In the 2023 fiscal year, the unit brought in $208.7 million in revenue, down about 8% from the year before, according to SEC filings. 

The sale is yet another sign of huge changes underway in the OPM market, said Phil Hill, an ed tech market analyst and consultant, pointing to recent challenges other high-profile companies have faced. 

Pearson, another publishing company, similarly announced in March that it was selling its OPM segment to a private equity firm after losing one of its biggest clients, Arizona State University. 

And it’s not the only company to lose high-profile contracts. 

Education company 2U announced earlier this month that it was parting ways with the University of Southern California, one of its oldest and largest clients, on most of the online degree programs they worked on together. 

The company also reported flat revenue in its degree business for 2023’s third quarter. 2U’s stock price has since tumbled to around $1, far from its high of over $90 in 2018. 

“It’s just been a bloodbath financially,” Hill said.

OPMs have also been facing criticism over their business model and bracing for potential regulatory changes. 

As of April, Wiley University Services contracted with 64 higher education institutions, mostly through revenue-share agreements, according to SEC filings. Academic Partnerships also uses revenue-share agreements. 

Under these arrangements, OPMs typically front the capital needed to launch online programs and provide services like marketing, recruiting and course design. In exchange, colleges give OPMs a cut of their tuition revenue. 

These deals have drawn concern from some Democratic lawmakers and policy advocates, who argue that they drive up the cost of online education and incentive OPMs to use aggressive recruiting tactics. 

Criticism over these deals has mounted in recent years, with some groups taking issue with long-term deals that lock college programs into handing most of their revenue over to a third-party provider. 

Amid these concerns, the U.S. Department of Education announced earlier this year that it would review regulatory guidance that allows recruiting companies to sign revenue-share agreements with colleges. It also sought public feedback over the guidance. 

In a March comment submitted to the Education Department, Academic Partnerships argued that its revenue-share contracts push the company to only recruit students who will be successful in their online programs. It also argued that the existing guidance allows under-resourced colleges to compete in the online education space.

The leader of Grand Canyon University accused the U.S. Department of Education on Nov. 2 of retaliating against the college over an ongoing lawsuit. 

Brian Mueller, president of Grand Canyon University, took exception to the Education Department hitting it with a $37.7 million fine. Mueller is also the CEO of Grand Canyon Education, or GCE, an educational services company whose largest client is the university. 

During a call with analysts Nov. 2 to discuss GCE's third-quarter earnings, Mueller said he “had to file a complaint" over the Education Department’s 2019 decision to treat the university as a for-profit for the purposes of Title IV federal financial aid. “As a result of that, the retaliation started,” he said. 

The Education Department announced in early December that it would fine Grand Canyon University for allegedly misleading over 7,500 students about the cost of its doctoral programs. But Grand Canyon University officials have suggested the fine is related to an ongoing dispute about its for-profit status with the Education Department. 

That decision has heavy implications for the college, as it subjects the Christian institution to stricter regulation. It also meant the university was entitled to less COVID-19 federal relief funds, as for-profits received a lower share than nonprofits.

The dispute between Grand Canyon University and the Education Department hearkens to 2018, when the college split from GCE, which was previously its owner.

However, Grand Canyon University and GCE didn’t go separate ways. 

Instead, GCE entered into a 15-year contract with the university to provide services like marketing and recruitment. In exchange, Grand Canyon University hands over 60% of its tuition and fee revenue. 

As part of the changes, Grand Canyon University also sought to switch from a for-profit institution to a nonprofit. While the IRS approved the conversion, the Education Department denied the university’s request in 2019. 

“The department for some reason denied our nonprofit status,” Mueller said on the call Thursday. “We don’t know what the reason is. They don’t tell us.”

However, the Education Department shared an 18-page letter outlining its reasons for the decision in 2019. 

The agency explained it took issue with the contract between GCE and Grand Canyon University. Education Department officials concluded the primary reason for the transaction was to “drive shareholder value” for the company, with the university “as its captive client,” according to the letter.

The Education Department also cited problems with Mueller serving as both the president of the university and the CEO of the company it contracts with for services. It said those two roles create “obviously conflicting loyalties.” 

Grand Canyon University has maintained in court documents that it has measures to prevent such conflicts of interest. 

In late 2022, a federal judge rejected Grand Canyon University’s bid to overturn the Education Department’s decision, ruling the agency has the power to determine whether to consider the college a for-profit under Title IV. Grand Canyon University has since appealed the decision, and oral arguments in the case are scheduled for December. 

“We’ve been dealing with the department for five years,” Mueller said. “We’ll continue to deal with it.”

Grand Canyon University has accused multiple federal agencies of coordinating against it, even before the Education Department’s recent fine. This week, it said the Education Department’s fine was evidence of “coordinated and unjust actions the federal government is taking against the largest Christian university in the country.”

The Education Department refutes this.

“Any allegations that the Department is targeting GCU because of its religious affiliation are completely false and only serve to distract from the school’s own clear misconduct,” an Education Department spokesperson said in a statement Friday. “The Department’s decision on Grand Canyon’s attempted conversion from for-profit to non-profit — which we agree with, but which the school has raised as part of its evidence of religious targeting — was made under former Secretary Betsy DeVos.”

Last month, the university also criticized a Federal Trade Commission investigation against Grand Canyon Education. Company officials believe the inquiry is looking into the calls it makes on the university’s behalf, according to an October statement from the university. 

Mueller also on Thursday touted Grand Canyon Education’s third quarter performance in 2023. Revenue increased to $221.9 million, up 6.3% from last year. Costs and expenses also rose 4.1% to $180.4 million. 

The company saw $35.7 million in profit during the third quarter.

As technology has grown more sophisticated, algorithms have slowly crept into more and more operations on college campuses. 

Take admissions, where some colleges are using artificial intelligence to help them decide whether to admit a student. While that practice is still somewhat rare, four-year institutions are more commonly using algorithms to help with another admissions decision — how much aid to offer already admitted students. 

If an institution has limited resources, education experts say, an algorithm can help optimize how aid is distributed. Others say the practice could cause issues for students and even open institutions up to potential legal risk. 

But both skeptics and proponents agree that using an algorithm successfully — and fairly —  depends on institutions and vendors being thoughtful. 

What is an enrollment algorithm?

Enrollment management and aid algorithms are essentially tools that predict the likelihood that a student will enroll in an institution after being offered admission. But admissions teams can also move the needle on that likelihood — by doing things like offering scholarships and other aid packages. 

“The concept is to award financial aid in a way that results in the maximum total amount of net tuition revenue for the institution,” said Nathan Mueller, principal at EAB, an education consulting firm, and architect of the company’s financial aid optimization work. 

Enrollment goes up as institutions offer more scholarship aid, but revenue per student decreases. 

“What we’re helping them find is the place in between, where they’re giving the best mix of institutional financial aid to raise enrollment to the point where if they gave one more dollar, even though they would increase enrollment, they would start losing that institutional revenue,” Mueller said.  

At the individual college level, that process means determining an admitted student’s likelihood of attending and how sensitive they will be to changes in price. 

The inputs for each algorithm can differ, depending on an institution's goals. 

Algorithms can, for example, take into account applicant information, such as grades, test scores, location and financial data. Or they may also look at an applicant’s demonstrated interest in a college — whether they have visited campus, interacted with an admissions officer or answered optional essay prompts. 

EAB counsels its own clients to not use those interest markers in aid determinations.

"We do look at some of those things, as ways of understanding how engaged a student is and understanding their price sensitivity,” Mueller said. “It absolutely has predictive value, but from our vantage point it crosses into the area of something that's really not an appropriate mechanism to determine how much aid a student receives.”

In the past, Mueller said, many colleges committed to cover 100% of a student’s demonstrated need. But in the early ‘90s, Congress changed how need analyses were conducted — making many families appear needier — and reduced funding for Pell Grants. As a result, fewer colleges believed they could afford to make that pledge, he said.

While some institutions do not use algorithms to help determine aid, their goals are often similar to those that do, Mueller said. Today EAB works with about 200 clients — most of them private colleges — on financial aid optimization.

Careful consideration

Vendors emphasize that the algorithms they offer aren’t just mathematical models that run and spit out a result to be followed exactly. They allow an admissions team to try out different aid strategies and see how those might change things like the diversity, gender balance and academic profile of their incoming class. 

“The criticisms about algorithms or about artificial intelligence specifically have been around this idea that they are sort of running loose on their own and don’t have overriding guardrails that reference institutional philosophies or strategic goals,” Mueller said. “We would never want anyone to just follow a mathematical exercise without any consideration of the other key strategic aspects.”

But Alex Engler, a senior fellow at The Brookings Institution said he’s skeptical about whether institutions are appropriately contemplating how they're using these tools. 

Because algorithms are frequently trained on data resulting from human decision-making, they often show evidence of human bias and lead to different outcomes for different subgroups. 

In financial aid, that could be consequential. Engler said he’s unsure that the college officials working with algorithms day to day have the technology and data expertise to feel confident challenging the algorithms. 

“Sometimes universities aren’t or can’t sufficiently evaluate and adjust the algorithms and really be self-critical in their impacts,” he said. 

For instance, some students may choose to enroll in a college if given certain aid packages — even if it’s not the best financial choice for them. And students who are burdened with high costs are unlikely to persist and graduate, leading to poor outcomes for both them and their colleges. 

Wes Butterfield is senior vice president of enrollment at Ruffalo Noel Levitz, an educational consultancy firm that also offers aid products to colleges. He said algorithms and aid strategies can take persistence and graduation into account. 

“What the campus is trying to figure out is, how do I provide a fair amount of aid that will allow a student not only to enroll, but I think more and more campuses are also thinking about that retention piece, what is the proper amount of aid to allow a student to walk across a stage,” Butterfield said.

Ideally, he said, he would like to see similar aid packages offered across institutions. 

“Students should be enrolling because of mission fit, because of the major, because they like the extracurricular activities,” Butterfield said. “I’m trying to neutralize aid as a factor.”

Human touch

Legally speaking, these algorithms don’t require human touch. In the European Union, citizens have the right to have a human being review decisions of major consequence, like the terms of a loan. 

But that right doesn’t exist in the U.S., said Salil Mehra, a law professor at Temple University. Mehra said that misuse of aid algorithms could potentially open institutions up to antitrust liability. 

In August, the University of Chicago settled an antitrust suit alleging 17 universities of price-fixing by illegally colluding on their financial aid policies. 

But Mehra said it's also theoretically possible for institutions to collude without express intent, such as by using the same consultants who are then using very similar formulas with each client. 

“It might, as a result, have a similar effect as an explicit agreement in reducing the amount of financial aid that students with need would receive,” Mehra said. “That’s actually potentially scary or concerning because it would be difficult to discover if that was happening.” 

In general, higher education is facing legal scrutiny that didn’t exist before the 2019 Varsity Blues scandal, in which wealthy parents paid to have their children gain entry to top-ranked colleges. Colleges would be wise to stay abreast of ways they might be exposing themselves to antitrust liability, Mehra said. 

Mueller, from EAB, said the company’s algorithms are unique to every institution. 

“Ultimately there are substantial differences in the model used for each college, and where the factors are similar, they’re driven by the competitive environment, not an inherent sameness in the models,” he said via email.

A complex tool

In practical use, colleges and admissions offices may not see aid algorithms as a standalone piece of technology but rather as a more comprehensive tool for understanding their probable yield. 

The company Othot, which offers analytics and AI products to colleges, published the results New Jersey Institute of Technology realized from its algorithmic tools. In fall 2018, when NJIT began using the technology, the college enrolled 173 more first-year students and saw net revenue increase. 

But officials at NJIT say they don’t think of the technology as specifically an aid tool but as one that predicts yield, helping them ration limited resources. That includes aid, but also time and effort from admissions staff. The technology doesn't make decisions on its own, they note.

“It’s not telling us what to do,” said Susan Gross, vice provost for enrollment management. 

Engler, at Brookings, recommends that colleges and admissions offices hire people with data expertise to work with any algorithms, while also paying close attention to how their admissions strategy is performing over time and how students are faring after they are admitted. 

“There’s a lot that can be done to improve practices,” he said, “and make sure that you’re going to have such an algorithm system where there are at least some checks for, ‘Well hey, are we systematically disadvantaging or undermining our own students?’”

Two-thirds of colleges are adding online programs —  based on student demand — to sustain overall enrollment, according to an annual report tracking trends in virtual education. 

The CHLOE 8 survey found a similar share of colleges, 63%, are conducting market research to determine which online degrees would be popular among current and prospective students. And 42% of colleges are creating online versions of in-demand on-campus programs. 

However, the survey suggests faculty and students may not be fully ready for online learning. Only 22% of survey respondents said many of their full-time faculty have experience building online courses, and few institutions require orientation for virtual learners — even those who are mostly or exclusively in online programs. 

The eighth Changing Landscape of Online Education report — from market research firm Eduventures and quality assurance organization Quality Matters— reveals how colleges are adapting to growing student interest in online learning. 

Released in August 2023, the findings are based on over 300 responses from chief online officers working at two- and four-year colleges across the public and private sectors. They were surveyed in January and February 2023. 

Chief online officers reported that 36% of their fully online programs saw enrollment growth of 4% or greater among traditional-age undergraduates from 2021 to 2022. That’s compared to 22% of on-campus programs that enjoyed such increases. 

Similar trends played out for adult undergraduates, who the report defines as ages 25 and older. Nearly 51% of fully online programs saw enrollment of these students grow by at least 4% from 2021 to 2022, compared to almost 19% of in-person programs. 

Colleges are taking notice of these trends. Over two-thirds of colleges, 36%, report reexamining their strategies to adapt to growing demand for online learning, while 39% said their priorities are already consistent with this shift. 

A smaller share of institutions, 10%, suggested they are struggling to keep up with shifting student interests. 

“For many institutions struggling with enrollment and revenue levels, success in building online capacity may spell the difference between viability and crisis in the next decade,” Ron Legon, executive director emeritus of Quality Matters, said in a statement. 

Greater shares of colleges are requiring faculty members to train in online teaching than have in the past. Nearly three-quarters of community colleges, 73%, mandate this type of formal institutional training, compared to 43% of four-year public institutions and 50% of private four-year institutions. 

Similarly, community colleges tended to report the highest levels of faculty with online teaching and course design experience. 

Monetary incentives, used by 68% of surveyed chief online officers, were the most common method to encourage faculty to develop online courses. Meanwhile, 55% of respondents said they offered remote work as an institutional incentive for instructors to teach online, making that the most common method used for encouraging teachers to use virtual instruction.