Freemium U

Scott Hines is the president of World Education University (WEU). He’s also mayor of the city of Rancho Mirage, CA. While this may turn out to be University Mirage, you should pay attention to this business model.
The college is free. Even University of the People and Open University charge for courses. MOOCs may be free but they don’t add up to a degree.  As noted in December, Hines plans to offer free degrees.  WEU isn’t accredited yet, but the 5000 students enrolled (at least the subset paying attention to accreditation) are betting that they’ll figure it out by going through the traditional process or buying an accredited institution (after closing a big round of funding).
There are about 35 courses open. They are adding 10-20 weekly hoping for 220 courses in 30 degree programs  (mostly Associates or Masters level) by June.
They are looking at ACE process for granting credit for Coursera courses and looking for alternatives to expensive video or proctored test taker verification. WEU is considering acquisition of a company that offers cheaper keyboard authentication (ie, a unique typing pattern).
While WEU courses are free, they (unlike most MOOC providers) have four planned revenue streams:

  1. Advertisements will run between units (and the ad system will be running in April)
  2. Selling curriculum related books and materials
  3. Selling premium assessments, for example, the results of a comprehensive cognitive learning assessment will cost $2
  4. Student ID cards will be visa cards which will boost bankability of low income students and provide a little fractional income to WEU. (Improved bankability is of interest to big retail employers where there is also potential to serve as the in house training partner).

These guys are moving fast. WEU is launching the Klaus Nobel school of Peace Studies (Alfred Nobel, of prize fame, is Klaus’ great uncle). They acquired a high school curriculum from a small charter network in Arizona, Humanities and Sciences High School, and hired the school head (but I can’t tell much about either online). They are working on developing world solutions with Microsoft and Surface tablets and are hoping for big government contracts in developing counties.
I don’t know enough about WEU to recommend it to anyone, but this is a viable plan to offer free degrees. It may be drawing board stuff, but WEU seems to be a few steps ahead of the other free higher ed folks in terms of a plan with revenue streams.
Here’s the point: higher ed is in for radical cost pressure–particularly in the third tier. Brand names will be able to coast for a few more years but people putting together three-year budgets and business plans that assume current pricing and revenue streams are smoking some of that legalized stuff in Washington State.

Tom Vander Ark

Tom Vander Ark is the CEO of Getting Smart. He has written or co-authored more than 50 books and papers including Getting Smart, Smart Cities, Smart Parents, Better Together, The Power of Place and Difference Making. He served as a public school superintendent and the first Executive Director of Education for the Bill & Melinda Gates Foundation.

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