HBCU Distance Learning Report -- 2010

Introduction

A. Context
This report is the Digital Learning Lab’s fourth analysis of the distance learning initiatives launched by HBCUs.  (Note: see the DLL’s reports for 2005, 2006, and 2007.)  Once again the DLL frames its analysis of the 105 HBCUs within the context of the annual surveys of over 2500 colleges and universities conducted by the Sloan Consortium. What’s different about this report is its broader economic context.

B. The Great Recession
The Great Recession imposed substantial financial hardships on academia. Most non-profit private colleges and universities saw their endowment and other investment income reduced by 18 percent or more; and many states, e. g., California and Mississippi, sharply reduced their support for their public institutions of higher learning.  But what about the for-profit corporations? 

This question was succinctly answered by an Inside Higher Education article (“For-Profits Boom”, April 7, 2010), which provides a concise summary of some of the key findings in the extensive U.S. Department of Education report, “Enrollment in Postsecondary Institutions, Fall 2008; Graduation Rates, 2002 and 2005 Cohorts; and Financial Statistics, Fiscal Year 2008”.

Unlike public and private non-profit institutions, the for-profits thrived during the recession (at least until recent Senate hearings cast some of their business practices in an unflattering light … again).  Here are a few relevant statistics cited in “For-Profits Boom:”
  • “Six years ago, there were almost three times as many students enrolled in private nonprofit colleges as there were at for-profit institutions. By 2008-9, that ratio had slipped to about 2 to 1.”

  • “ … virtually every sector of higher education enjoyed enrollment growth in fall 2008.” … Between 2007 and 2008, enrollments increased by more than 900,000 and “more than a third of that increase came in the for-profit sector, which saw its share of the entire postsecondary market inch ever closer to 10 percent (it is likely to be well above that now, given how career college enrollments have swelled in recent months.)”
  • “At four-year private colleges, meanwhile, overall expenditures grew by about $8 billion (from $124 billion to $133 billion) from 2007 to 2008, but revenues shrank drastically, to $139 billion in 2008 from $182 billion in 2007. The main culprit: a nearly $50 billion drop in the category called ‘investment return’. “
In other words, enrollments during the recession went up in all sectors, but especially among the for-profits. On the other hand, endowment/investment income went down, and so did government support in many states. Now we just need to connect two more dots to complete this picture:

  • For-profit corporations make a profit on the tuition provided by each student; hence increased enrollments generated increased profits.

  • By contrast, tuition at non-profit public and private institutions only covers part of the total cost of educating each student. This gap between tuition revenue and total cost per student must be covered by other revenue, e. g., investment income, alumni donations, foundation grants, government support, and other sources. Therefore enrollment increases at non-profit institutions widened their tuition/total cost gaps and these wider gaps could not be covered by decreased revenue from investments and/or from decreased government support.
An immediate consequence of the diminished capacity of non-profit colleges and universities to pay their bills has been an upsurge in the number of institutions undergoing radical reorganization, i. e., drastic reductions in the number of courses and degree programs offered, faculty hiring freezes, staff reductions, increased outsourcing of administrative services, greater reliance on management consultants, etc. (Note:  Some prominent HBCUs undergoing this kind of intensive renewal process include Jackson State University, Spelman College, and Howard University. Numerous references to reorganization initiatives at non-HBCUs can be found on the Chronicle’s blog “Campus Cuts”.)

C. Online Programs as Cost-Effective Alternatives
However, the specific renewal effort that is most relevant for this report is the dramatic upsurge of interest in online programs among HBCUs and other non-profit institutions who now regard online programs as providing cost-effective options that can help them close their tuition/total cost gaps and, perhaps, provide a profitable source of additional revenue. This paradigm shift from accessibility to cost-effectiveness was stimulated by the widely publicized, recession-resistant earnings of the most successful for-profit operations whose enrollments range from one third to 100 percent online (e. g., Capella University). The online revenue aspirations of non-profit institutions were also encouraged by surging increases in online enrollments, e. g., a twenty-one percent increase in online enrollments between the fall 2008 and fall 2009 semesters according to the latest Sloan Consortium survey (“Class Difference$ -- Online Education in the United States, 2010”).

That the economic desperation of the Great Recession should trigger an upsurge of interest in the revenue generating potential of online programs for non-profit institutions is an ironic echo of a similar upsurge that was generated by the “irrational exuberance” of the final years of the 1990’s dot-com bubble ten years earlier.  Hopefully, the riders of the current wave have learned valuable lessons from the spectacular wipe-outs of the promising for-profit ventures launched by their distinguished predecessors:  Columbia University (“Fathom”), New York University (“NYUonline”), the Yale/Oxford/Stanford (“AllLearn”) partnership, Temple University (“Virtual Temple”), and the University of Maryland University College (“UMUC Online”).


D. HBCUs Going Online
The increased interest in online programs among HBCUs requires additional consideration beyond the fact that many were hard-pressed by the Great Recession. As recently as the late 1960’s, HBCUs enrolled over 80 percent of all African American undergraduate students. But the Civil Rights Revolution facilitated long-term increases in African American enrollments at non-HBCUs as well as long-term declines in HBCU enrollments. Consequently they accounted for only 12 percent of all African American undergraduate enrollments in the Fall 2009 semester; and this percentage is probably between 10 and 11 percent today.  More recently, the Great Recession’s impact on enrollments at public HBCUs was considerably less than on private HBCUs. To the contrary, a search of the DLL’s Announcements database for “enrollments” yields five announcements of increased enrollments, including all-time records, for five public HBCUs for the Fall 2010 semester (UMES, SUNO, AAMU, Morris College, and Fort Valley State), but none for private HBCUs.

At this point declining student enrollments pose an existential challenge.  In their search for ways to increase their enrollments, the private HBCUs that hitherto have shown little or no interest in meeting the continuing education needs of non-traditional African American students are now giving serious consideration to online programs, not only as a potential source of sorely needed additional revenue, but also as a source of additional enrollments that would help them justify their continued existence.

 
E. The Logic of Outsourcing
Perhaps the most distinctive feature of the new wave of revenue-motivated, online programs is their extensive use of outsourcing. The rise of outsourcing is a logical consequence of the recession-driven rise of interest in online programs within smaller college and universities. Just as movie producers must sell a substantial number of tickets in order to recoup each movie’s production costs, so too online courses must be “sold” to a substantial number of students in order for their institutional sponsors to recoup each course’s substantial development costs. The very largest institutions, such as state higher education systems and the most successful for-profit operations whose annual enrollments may exceed 10,000 students per course, can quickly recoup these high development costs by “selling” their online courses into their large internal markets. 

·       On the other hand, smaller institutions may find it difficult, if not impossible to recoup their development costs within their smaller enrollment markets, especially when they want to move from offering a few online courses to offering entire degrees online. Hence their increased interest in online operations has stimulated a corresponding rise of “market aggregators” – companies that provide similar online services to a large number of smaller institutions, thereby aggregating their smaller individual markets up to a size that’s large enough to be profitable. Aggregators begin with templates for their services, which they “customize” for their clients, where more customization entails larger fees. In other words, aggregators recoup the cost of developing their templates and their customizations from their clients’ fees -- fees that are more affordable than the substantially greater costs each client would have incurred had they not outsourced.

Just as Hollywood studios specialize in the costly conversion of scripts into movies and in their subsequent marketing and distribution, so too online aggregators specialize in the conversion of course notes into state-of-the-art online courses and assist in their subsequent marketing, distribution, and management.  Accordingly, online “studios” may offer their clients a wide-ranging menu of services, including: market analysis, course development, training for online instructors, online advertising, packaging online applications, advising potential students, providing online help for students currently enrolled in courses, hosting the client’s courses on the “studio’s” servers, and providing instructors for the courses.

A recent article in the Chronicle is highly informative in this regard. (See “Outsourced Ed: Colleges Hire Companies to Build Their Online Courses”, Chronicle 10/28/2010.) Although these online “studios” extract substantial fees for their services, the Chronicle reports that Northeastern University received more than $2,000,000 in revenue in the past year after paying the fees for the online services provided by Embanet-Compass. In other words, outsourcing can be highly profitable for both the aggregators and their clients.

 
F. Recent Game-Changing Developments That Facilitate Outsourcing
Significant developments have occurred within the online services industry within the last few months that should greatly facilitate outsourcing by more non-profit institutions of higher education: 
  • Partnership of Blackboard and K12, Inc will offer credit courses (Oct 2010)
    Blackboard and K12, Inc announced a partnership that will offer credit courses that are initially targeted at students in community colleges who need remedial instruction. The partners will provide the whole package for the community colleges, including course instructors. Given that most colleges need remedial courses, it’s likely that the partners will extend their market in the foreseeable future.
  • ·       Corporate support for open source LMS Sakai and Moodle (Sep 2010)SunGard and rSmart announced a partnership that will provide fee-based technical support for the Sakai open source learning management system that was created by some of the nation’s leading research universities. Just as IBM and Novell’s support for Linux enabled organizations that lacked large IT staffs to adopt this powerful, free alternative to Windows and Unix, SunGard and rSmart’s support for Sakai should enable more colleges, universities, and online service providers to adopt Sakai as a free alternative to Blackboard. This complements last year’s announcement of technical support for Moodle, the other leading open source LMS, by Datatel and Moodlerooms (Oct 2009)
G. Outsourcing By HBCUs
As a persistent advocate of outsourcing by HBCUs of their online programs – the reader is referred to the DLL’s 2005 report “Distance Learning, Build or Buy?” – the author of this report has felt pleased and vindicated by the emergence of well-organized, well-financed online aggregators within the HBCU community within the last two years, including:
  • Tom Joyner’s HBCUsOnline, which was formally announced in September 2010. Mr. Joyner is a highly successful radio personality, but he is especially appreciated by the HBCU community for his steadfast commitment as a philanthropist.   The Tom Joyner Foundation has provided substantial and timely financial assistance to HBCUs every month since 1998 totaling over $50 million.

  • Education Online Services Corporation (EOServ Corp) headed by Dr. Benjamin F.  Chavis, that launched its operations in 2009.  As noted in the “Findings” section of this report, most of the HBCUs that added online degree programs since Fall 2006 were clients of EOServ Corp.
HBCUsOnline and EOServ Corp intend to help HBCUs to expand their enrollments and to generate substantial revenue online.  Both companies will enable HBCUs to outsource much of the costly development of their online courses and programs, and both will help their clients market, distribute, and manage the resulting products.
Note:  Full disclosure also requires that the author of this report acknowledges that he is currently tasked by the Chief Operating Officer of Howard University to coordinate an effort to develop online degree and certificate programs for the University that will become substantial revenue generators. All approaches will be considered; but given the previous DLL reports he has written, no one should be surprised if Howard’s ultimate online strategy involves substantial doses of partnerships and outsourcing ... :-)
 
I.            Methodology

A. Definitions
This report examines the online degree programs offered by HBCUs:
·       An “HBCU” is defined to mean one of the 105 colleges and universities listed on the Website of the White House Initiative on HBCUs

·        “Online” courses and programs meet the Sloan Consortium’s requirement that at least 80 percent of the content of the courses be delivered over the Internet   (Note: Given the report’s focus on Internet courses, the terms "distance learning" and "online" are used interchangeably.)

B. Data Collection
Most of the data referenced in this report came from the DLL’s systematic reviews of the 105 HBCU Websites during the first few weeks in September 2010.  (Note: the author of this report takes full responsibility and apologizes for any errors in this report that resulted from misreading the pages on an HBCU’s Website.) Other data about each HBCU came from the U.S. Department of Education’s IPEDS database via its user-friendly College Navigator Website and from the Carnegie Foundation’s classifications pages. All of the data has been assembled into an extensive directory that is online. The raw data for the DLL’s previous report about HBCUs is also online:

C.  Context
Every year the Sloan Consortium conducts a survey of over 2500 colleges and universities. The fundamental question the Sloan reports are designed to answer is straight-forward: How many students are taking online courses? Respondents who complete the survey forms at the participating institutions provide enrollment figures plus additional data about the perceived effectiveness and acceptance of their institution’s online offerings. The DLL’s simpler data collection procedures support a correspondingly simpler fundamental question: How many of the 105 HBCUs are offering online degree programs? 
Sloan’s reports also identify trends and changes from one year to the next; similarly, the DLL’s reports also identify trends and changes, especially where these developments differ from the trends and changes identified by the Sloan studies.

II.         Findings
A. Focus of This Report
This report answers three questions:
  • ·       How many HBCUs offered online degree programs in fall 2010? How many in fall 2006?
  • ·       Which types of HBCUs offered online degree programs in fall 2010?
  • ·       What role did outsourcing play in the online degree programs offered in fall 2010?

B. Overview
A list of the online degree programs offered by HBCUs in the fall 2010 semester appears in Table 1 (next page). The online programs offered HBCUs in fall 2006 can be found online in an appendix to the DLL’s previous report HBCUs Distance Learning 2007. Comparisons of the online degrees offered in fall 2010 with the online degrees offered in fall 2006 yielded the following results:
  •  In the fall 2010 semester, 19 HBCUs offered online degrees – a 58% increase over the number offering online degrees in fall 2006. 
    As per Table 2 (subsequent page), 19 out of the 105 HBCUs (18%) offered online degree programs in the fall 2010 semester; whereas in the fall 2006 semester only 12 (11%) offered online degrees.
     
  • More public HBCUs offered online degrees than private HBCUs, but private HBCUs recorded the biggest gains.
    As per Table 3 (subsequent page), 13 public HBCUs offered online degrees in fall 2010 compared to 6 private HBCUs – a bit more than twice as many; but three times as many private HBCUs offered online degrees in 2010 as in 2006
     
  • Outsourcing accounted for over 70 percent of the increased number of HBCUs offering online degrees.As per Table 3 (subsequent page), one HBCU dropped out and eight were added. Five of the eight additions were clients of EOServ Corp, a provider of online support services -- Morris Brown College (GA), Tougaloo College (MS), Virginia University of Lynchburg (VA), Jackson State University (MS), Langston University (OK)
     
  •  Proprietary learning management systems (LMS) increased, but Blackboard remained dominant. 
    As per Table 4 (subsequent page), Blackboard maintained its position as the HBCU community’s favorite LMS, but five HBCUs used a proprietary LMS developed by EOServ Corp.

Table 1. List of Online Degrees Offered by HBCUs in Fall 2010
HBCUs (6)
Pub vs. Priv
Associates
Bachelors
Masters
Doctoral
Bethune-Cookman University (FL)
private


Transformative Leadership

Fayetteville State University (NC)
public

Business Administration, Criminal Justice, Fire Science, Psychology, Sociology
Criminal Justice, MBA

Fort Valley State University (GA)
public

Criminal Justice, Political Science, Psychology, Technical and Professional Writing


Hampton University (VA)
private
General Studies, Business mamagement
General Studies, Paralegal Studies, Religious Studies, Business Management, Systems Organization and Management


Howard University (DC)
private

Clinical Laboratory Science

Pharmacy
Jackson State University (MS)
public

Child Care and Family Education


Kentucky State University (KY)
Public


Special Education

Langston University (OK)
Public

Business Administration
Educational Leadership

Morgan State University (MD)
public



Community College Leadership
Morris Brown College (GA)
Private

Organizational Management and Leadership


Norfolk State University (VA)
public

Interdisciplinary Studies


North Carolina A&T State University (NC)
public

Agricultural Education, Occupational Safety & Health, Business Education, Electronics Technology, Technology Education
Agricultural Education, Information Technology, Instructional Technology, Technology Education
Technology Management
North Carolina Central University (NC)
public


Computer Science, Library Science, Information Science, Online Istructional Design

Prairie View A&M University (TX)
public


Juvenile Justice

Tennessee State University (TN)
public

Organizational Leadership, Information Technology
Nursing, Speech Pathology & Audiology, Professonal Studies, Education

Texas Southern University (TX)
Public


Executive MBA, Executive MPA, Curriculum & Instruction

Tougaloo College (MS)
private

Economics


Virginia University of Lynchburg (VA)
private
Organizational Management
Organizational Management


Winston-Salem State University (NC)
public

Clinical Laboratory Science, Interdisciplinary Studies
Rehabilitation Counseling




Table 2. Number of HBCUs Offering Online Degrees
Degrees
Fall  2006
Fall  2010
Change
% Change
Associates
1
2
1
100%
Bachelors
10
13
3
30%
Masters
6
11
5
83%
Doctoral
3
3
0
0%
Total Degrees
20
29
9
45%





HBCUs Offering Degrees
12
19
7
58%





Total HBCUs
105



% HBCUs
11%
18%




Table 3. Type of HBCUs Offering Online Degrees

Type of HBCU
Fall  2006
Fall  2010
Change
Comments
Special Notes
Public
10
13
3
2 additions are EOServ Clients
Dropped SC State; added Morgan, Jackson State, Langston, and Texas Southern
Private
2
6
4
3 additions are EOServ Clients

Total
12
19
7










Table 4. LMS Used By Online Degree Programs 
LMS
Fall  2006
Fall  2010
change
% Change
Comments
Blackboard/WebCT
12
13
1
8%
Tenn State switched to Desire2Learn; Dropped SC State; added Bethune Cookman, Morgan, Texas Southern
Desire2Learn
0
1
1

Tennessee State
Proprietary
0
5
5

EOServ  clients use proprietary system
Total
12
19
7




C. Sloan Consortium Surveys
The Sloan Consortium’s annual surveys have repeatedly found three patterns with regards to online courses:
  • ·       Public U.S. institutions of higher learning offered a substantially larger share of the nation’s online courses than private U.S. institutions;
  • ·       Larger institutions were more likely to offer online courses than smaller institutions
  • ·       Private non-profit institutions did not value online courses as highly as did public institutions.
The remainder of this report discusses the extent to which HBCUs adhered to these patterns. It focuses on online degree programs, rather than online courses. Furthermore, the analysis only considers four-year colleges and universities because the author’s final review of the Websites in early November 2010 did not disclose any two year HBCUs whose degree programs were online, i.e., delivered at least 80 percent of their content via the Internet. (Note: The author apologizes, again, to any and all HBCUs whose online degree programs he failed to identify completely and correctly.)

·       Excluding the 13 two year institutions, the two medical schools, and the divinity school leaves 89 HBCUs having four-year undergraduate programs. (Note: the U.S. Department of Education’s IPEDs database provided no six-year graduation rates are for five HBCUs in early November 2010.)

D. More public four-year HBCUs offered online degrees than private four-year HBCUs.
We have already seen that in the fall 2010 semester that 13 public HBCUs offered online degrees, whereas only 6 private HBCUs offered degrees, more than twice as many.  It is also worth noting that the percentage of online public HBCUs is almost three times as high as the percentage of online private HBCUs:
  •  Of the 40 public four-year HBCUs, 13 were online, i.e., 32.5 percent
     
  • Of the 49 private four-year HBCUs, only 6 were online, i.e., 12.4 percent

E. Most of the largest four-year HBCUs offered online degrees
Table 5 (next page) lists the 20 four-year HBCUs having the largest enrollments in fall 2009, the most recent semester for which IPEDS data was available.
  • ·       This “Top 20” list included 12 online HBCUs, i.e., 60 percent. The reader should note that only two of the largest twenty HBCUs are private. 
  • ·       Only seven of the remaining sixty-nine HBCUs offered online degrees. This includes 47 out of the 49 private HBCUs. Only four of these 47 private HBCUs offered online degrees.

Table 5. Which of the Twenty Largest Four-Year HBCUs Offer Online Degrees?
HBCUs
Offers Online Degrees?
6-Year Grad. Rates %
Enroll
Type
Florida A&M University

39
10244
Public
North Carolina A&T State University
YES
37
8955
Public
Tennessee State University
YES
40
6827
Public
Texas Southern University
YES
11
7258
Public
Howard University
YES
62
7176
Private
Jackson State University
YES
47
6805
Public
Prairie View A&M University
YES
32
6617
Public
Southern University A&M College

30
6484
Public
North Carolina Central University
YES
44
6441
Public
Morgan State University
YES
32
6199
Public
Norfolk State University
YES
32
6150
Public
Winston-Salem State University
YES
36
5960
Public
Fayetteville State University
YES
32
5586
Public
Virginia State University

44
4871
Public
University of the District of Columbia

12
4770
Public
Alabama State University

22
4638
Public
Hampton University
YES
52
4565
Private
Grambling State University

29
4538
Public
Alabama A&M University

29
4496
Public
Bowie State University

39
4400
Public

These results are clearly consistent with Sloan’s findings. However, readers familiar with HBCUs will probably be struck by the absence of some of the most prestigious HBCUs from this “Top 20” list.
Creating online degree programs entails substantial expenses that smaller HBCUs may not be able to afford. But three of the smallest HBCUs (Tougaloo College, University of Virginia at Lynchburg, and Morris Brown College) finessed this challenge by engaging the services of a cost-effective online services provider. On the other hand, some of the private HBCUs, e.g. Spelman College, may be smaller, but have access to larger financial resources than many of the larger public HBCUs. These considerations led the author to take a second look.

F. Most of the four-year HBCUs with the strongest academic records did not offer online degrees
Table 6 (next page) lists the 20 four-year HBCUs having the highest 6-year graduation rates:
  • ·       Fourteen are private; six are public; and only seven of the twenty offered online degrees, i.e., 35% -- compared to 60% of the largest twenty HBCUs in Table 5.
  • ·       Nine of the top ten HBCUs in this group are private, but only three offered online degrees, the two largest (Howard and Hampton) plus one of the smallest (University of Virginia at Lynchburg).
  • ·       Two of the smallest HBCUs in this elite group engaged an online services provider (University of Virginia at Lynchburg and Tougaloo College).
These results are consistent with the Sloan Consortium’s finding that private, non-profit colleges and universities did not place as high a value on online courses as did public institutions. However, taken together with the results presented in the previous section, they suggest a more nuanced interpretation that an HBCU’s online activity will not only reflect its size, but also its position with regards to selectivity vs. accessibility. 
  • ·       HBCUs that are committed to providing greater access to non-traditional students will either pay the costs of developing their online degree programs in-house or outsource some or all of this development to a cost-effective online services provider.
  • ·       On the other hand, HBCUs that are inclined to be more selective will not offer online degrees, regardless of their size or their access to financial resources.
G. And in conclusion … so what?
That was the reaction of a very savvy academic administrator when he finished reading a portion of an earlier draft of these findings … “So what?” …  Recognizing that my colleague was merely expressing his disappointment that the report did not address the most important questions that concern all senior administrators involved with their HBCU’s online operations, the author was not offended:
  •      What were the enrollments, retention rates, and graduation rates of the existing HBCU online degree programs?
  • ·       What kinds of salaries and other measures of professional success did their graduates enjoy?
  • ·       How much revenue did these online degree programs generate for their HBCU sponsors?
Unfortunately, the author did not have access to the kind of operational data that could answer these questions, questions whose answers will position us to address the really big issues: What kinds of online programs will satisfy the personal and professional goals of our students?  And what kinds of online programs will satisfy the financial and other institutional goals of our HBCUs?

No doubt, the data we need will become widely available in the next few years. Meanwhile, today’s blogosphere and other media are clogged with super-hype that boldly asserts that online programs will magically solve all of our problems. Unfortunately, this kind of “irrational exuberance” invariably leads to investment bubbles.  Given the pressing, un-magical reality of our problems, the last thing the HBCU community needs is an “online bubble.” So what? So we have to get beyond the hype. We have to find out who’s really doing what and how they are doing it, even if we don’t yet know how effectively they are doing it.  Hopefully, this report will make a contribution to this basic understanding … :-)


Table 6. The 20 Four-Year  HBCUs Having the Highest
6-Year Graduation Rates
HBCUs
Offers Online Degrees?
6-Year Grad. Rates %
Enroll
Type
Spelman College

83
2229
Private
Howard University
YES
62
7176
Private
Morehouse College

60
2689
Private
Fisk University

57
600
Private
Hampton University
YES
52
4565
Private
Virginia University of Lynchburg
YES
50
223
Private
Bennett College

48
766
Private
Saint Augustine's College

48
1529
Private
Claflin University

47
1779
Private
Jackson State University
YES
47
6805
Public
Elizabeth City State University

46
3208
Public
Xavier University of Louisiana

45
2666
Private
North Carolina Central University
YES
44
6441
Public
Virginia State University

44
4871
Public
Clark Atlanta University

43
3202
Private
Albany State University

42
4016
Public
Tougaloo College
YES
42
939
Private
Tuskegee University

41
2475
Private
Oakwood University

40
1859
Private
Tennessee State University
YES
40
6827
Public

Last updated: 6/25/2014 6:35:26 PM

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