State universities were built to educate resident students. But they often have a tough time getting them into online programs. Just ask the University of California, which spent over $4.3 million to create UC Online. The result? SFGate reported in early 2013 that only “one person took a class.”
California is not alone. Public universities in every state struggle to compete with private companies when it comes to enrolling students.
Ranku, a graduate from the Kaplan EdTech Accelerator, aims to help state universities offering online degrees compete with for-profit providers, some of whom spend over half a billion dollars a year (and $400K on Google ads every day) to market to and recruit students.
The Seattle-based startup has just secured a multi-year, statewide contract to build a new search portal for online programs degrees offered by North Carolina’s 16 public universities. Unveiled on September 2, UNC Online allows users to search for more than 300 fully online programs and find details including GPA requirements, acceptance rates, and average tuition costs for in-state and out-of-state students.
Kim Taylor, CEO and co-founder of Ranku, argues students can get just as much (if not more) bang for their buck from public universities. An online Bachelor’s in business administration from UNC Greensboro costs around $8,200 for in-state students (for the entire program), while a similar degree from University of Phoenix runs approximately $60,000.
“Even though North Carolina’s college degrees are less than half the price of many for-profit providers, they couldn’t recruit to save their lives,” says Taylor, who previously worked in online education marketing as Director at Ampush Media (where she managed a $25 million portfolio of major online universities, including the University of Phoenix.) From her experience, traditional universities generally know how to attract wide-eyed 17-year-olds for on-campus programs. But when it comes to online degrees, which generally cater to older students, most schools are in the dark.
The ‘Perfect Storm’
North Carolina presented what Taylor calls “a perfect storm” of incentives working against public universities.
For-profit higher education providers typically make money from students who take out federal financial aid loans to pay for tuition. These companies must abide by the 90/10 rule, which stipulates that they cannot rely on federal aid for more than 90% of their revenue.
This rule, however, does not apply when it comes to military veterans and their families who receive tuition assistance from the Post-9/11 GI Bill. And North Carolina, as it turns out, is home to Fort Bragg, the largest U.S. military base with over 52,000 active soldiers.
In past years, for-profit colleges have come under fire for targeting veterans’ federal dollars while providing less-than-stellar outcomes. A July 2014 report from Senator Tom Harkin (D-IA), who chairs the Health, Education, Labor, and Pensions Committee, found that “enrollment of veterans in for-profit colleges increased sharply, in tandem with a steep decline in veterans' enrollment in public institutions.”
As GI Bill funds are supported by taxpayers, it may be disconcerting to see the report find that “as many as 60 percent of students who enrolled in some of the companies receiving the largest amounts of GI Bill benefits left the school within a year of enrolling and without a degree or diploma.”
Waking a ‘Sleeping Giant’
There’s no guarantee that the online programs offered by North Carolina’s 16 public universities will deliver better student outcomes. Piecemeal statistics from U.S. News and World Report’s annual college rankings, however, show that online graduate business and nursing programs at East Carolina University have one-year retention rates north of 80%.
Part of the problem in trying to collect aggregate statistics from other schools, Taylor argues, is that the data systems used by many North Carolina universities don’t distinguish between on-campus and online students. Because of this, enrollment and graduation data are often fragmented. Now that all 16 schools are using UNC Online, she says, Ranku will be able to "centralize all of this information across the state," allowing school officials to be better able to track student enrollment.
Complementing this effort to create more transparency around outcomes is NC Tower, an online resource created by state officials that lets users see how many community and four-year college students graduated in different majors, the percentage who found employment immediately after graduation, and their mean and median salaries.
Based on cost alone, Taylor is confident that state colleges can compete with for-profit providers. “Schools just really need help with recruitment,” she says. “They have an amazing brand; they just have broken websites and broken software.” She claims that Ranku has cut the cost of finding students for its other 46 university clients--“in many cases we’ve seen the cost per student acquisition cut in half.”
Veterans will also have another incentive to choose public colleges: An update to the GI Bill, announced on August 1, 2014, allows them to qualify for in-state tuition at public colleges, regardless of where they live.
Taylor believes other state universities will follow North Carolina’s lead. “I see North Carolina as a sleeping giant that is waking up,” she predicts. “Many others will soon follow.”
