SATISFACTION GUARANTEED or your money back? That's apparently the deal cut between McGraw-Hill and Western Governors University. The two have announced a "pay-for-performance" agreement in which the publisher's pay will be based on the performance of students using its course materials. Under the deal, McGraw-Hill will provide e-books and learning materials at a "significantly discounted" flat fee, and receive a "premium" for every student who passes the course (equivalent to a "B" grade). McGraw-Hill senior VP Tom Malek tells InsideHigherEd that the company anticipates making 10 or 20 percent less than it would if it simply charged based on enrollment. In return McGraw-Hill gets data about how students use its content with the names stripped out. (Clearly the company has calculated the value of this data.)
Student success, of course, typically depends more on the quality of the teacher than the text. But the nonprofit WGU offers only online bachelor's and master's degrees. Presumably there'll be no one else to blame other than the content and the student. And if the program works at WGU, McGraw-Hill is suggesting it can make a similar offer to more traditional community colleges and research universities.