February 24 2016

The Current Landscape of Online Learning in Higher Education

Written by Nimritta P.

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bigstock-Top-view-of-male-and-female-un-49735007As online learning rapidly expands its reach, there is a growing investement in research on different models of online learning, along with their success rates. ExtensionEngine recently released a report on the different online learning models for generating revenue in higher education, based on the activities of 136 higher-ed institutes across the U.S. They deduced 4 online learning revenue models that are most used by colleges and universities across the U.S. They are: for-credit online video based classes, research, pre-matriculation, and post-graduation.

1. For-credit online video based classes (Tuition Model)

This revenue model is one of the most well-established in the industry. These are online courses that can either follow traditional methods of paying tuition for credit hours, or follow a competency-based education model that delivers learning for targeted skill development. Courses are typically delivered in the form of MOOC's (Massive Open Online Courses), one of the most popular methods of online course delivery. MOOC's are used at 400 higher-education institutes worldwide. The success of MOOC's is proven by the fact that there are hundreds of people who are employed full-time to create MOOC's, or to provide support for the admin of these courses.  


  • A business model that has proven success

  • This model offers the best chance to make an impact on an institution’s learning

  • Lower’s institutional costs and increases enrollment


  • A time consuming implementation

  • Requires high volume of human resources

  • Political implementation of this model can be challenging

2. Research model (Grant & Endowment Model)

In this model, research is conducted on the best-practices, pedagogy, technology, methodology, efficacy, and cost effectiveness of various online learning models.


  • Allows institutions to hone in on an innovative focus

  • Provides an opportunity for the institution to differentiate themselves from other higher-ed institutes

  • Increases access to education by providing inexpensive, or free education to a global audience 

  • This model accelerates innovation in higher education


  • Of all the models, this is the most costly

  • Institutions are required to compete with one another for funding

3. Pre-matriculation (Recruitment & Fees Model)

Universities and colleges use online learning in a pre-matriculation model for student recruitment and assessment, as well as for introductory and remedial learning.  These courses are conducted in the form of MOOC’s, which can be used either to reach out to prospective students (recruitment), or to provide new students with some brush-up classes to ensure they’re ready for higher-ed level coursework (remedial learning). Revenue is generated through the increase of new students (i.e. customers), or from the fees paid for participating in the various programs.


  • Allows students to learn, be creative and innovative outside of the sphere of influence of the school

  • Opens up a new avenue of revenue

  • Opens the door to a new audience, increasing the size, encouraging diversity, and enhancing the quality of students.


  • Few metrics that prove the success of this model

  • Requires great investment

4. Post-graduate (Gifts & Fees Model)

Higher-ed institutes use this model for alumni enrichment (through newsletters, online programs, and sponsored events), as well as for both optional and required continued education programs. Revenue is generated through alumni donations, and/or from participation fees


  • Allows students to learn, be creative and innovative outside of the sphere of influence of their institute

  • Provides a new avenue of revenue

  • Opens the door to a new audience, increasing the size of student population, encouraging diversity, and enhancing the quality of students.

  • While this is a fairly new model, success has been proven, and the metrics are only growing

  • A highly profitable model


  • A high-level of competition against other cheaper, lower-quality post-grad programs


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