UPDATE: April 8, 2019: Arizona State University and its private equity partner, TPG’s Rise Fund, last week launched InStride, a public-benefit corporation that intends to connect employers and higher education institutions in order to provide workforce education.
ASU is the first university partner and more are expected. Among InStride’s leadership team is Chief Learning Officer Jonathan Lau, who was previously senior vice president and general manager of the skills division at Cengage. On its website, the new entity says students can choose among "short-form credentials" and associate, bachelor’s and graduate degrees.
- Arizona State University is planning to roll out a for-profit "learning-services company" to forge ties with employers who want to offer employees access to its online programs, as well as with other research institutions, The Chronicle of Higher Education reported.
- The venture has not formally been announced, although Arizona State President Michael Crow shared details with The Chronicle. A private equity partner, the $2.1 billion Rise Fund, managed by TPG, will be the majority owner and has invested in the "low tens of millions" of dollars, according to Crow.
- The university is already well-known for employer partnerships and is one of several recruiting students for online programs using that approach — which tends to involve lower acquisition costs — including Purdue University Global, Southern New Hampshire University (SNHU) and Western Governors University.
The online education field is growing, and moves like Arizona State's suggest colleges playing in the increasingly crowded space will be doing more to lock down markets. It's not the only one going after employer partnerships, however. Last month Purdue Global announced a partnership with Papa John's, which is offering its 20,000 corporate employees free tuition through the online college.
Adult learners — whether they are accessing education through their employer or on their own — will continue to be a critical piece of these institutions' online strategy.
Earlier this month, the University of Massachusetts System announced plans for a national online college targeting adult learners. The decision, according to UMass System President Marty Meehan, is partly a hedge against widely projected enrollment declines in the traditional higher ed student population as well as reduced state funding and rising costs.
Other public colleges are underway with or are considering online expansion, including the State University of New York (SUNY), the University of Missouri System and the California Community Colleges system. This growth raises questions about the future of the online education space, including whether these colleges will build their systems from the ground up or acquire them, along the lines of the Purdue-Kaplan deal. It also puts public university systems up against online mega-universities such as Western Governors and SNHU, which have sizable marketing budgets.
Public institutions' brands may give them an advantage in recruiting over for-profit colleges or national online institutions so long as their pricing remains competitive and their offerings robust, Inside Higher Ed reported.
The desire for universities to offer a high-quality experience online — though not necessarily a replication of their on-campus offerings — is encouraging more institutions to work with third-party online program managers (OPMs) and other service providers. One example comes from legal education, which is expanding online programs to balance out a downward trend in Juris Doctor enrollees but requires a way to emulate the face-to-face conversations signature to that field's curriculum.
More broadly, colleges are expected to shift from all-inclusive OPM partnerships to a divide-and-conquer approach based on each parties' strengths. UMass may partner with an OPM, The Boston Globe reported. SUNY Provost Tod Laursen told Education Dive in February that the system doesn't expect to go "with a full-bore OPM type of solution." Instead, it may contract some services while "building a little bit of muscle" of its own.