In October 2020, Simmons University announced an unusual deal. It would offer undergraduate degrees online with the help of the prominent online-program manager 2U.
The attention on online undergraduate education wasn’t novel — as of fall 2019, about 15 percent of undergraduate students took their classes fully online. But the partnership was: Simmons, in Boston, would be the OPM’s first U.S. college partner to serve undergraduates.
“It’s not that typical to see a whole lot of undergrad OPM programming,” said Phil Hill, an ed-tech consultant who has blogged extensively on online ed and OPMs. With Simmons, “They’re not the only ones, but … they’re leading the pack.”
This isn’t Simmons’ first deal with 2U. After stabilizing its finances following the 2008 recession, it rolled out online graduate programs with the OPM nearly a decade ago, and saw healthy enrollment. Now, amid enrollment and revenue declines and intensifying competition for prospective students, it’s gripped tighter to online education.
The university launched four online undergraduate degrees in spring 2021, and had added four more as of March, with an additional degree slated to go live later this spring. As with its in-person undergraduate programming, these online degrees are only available to learners who self-identify as women.
“For a small university, we’re making bets on innovation,” Simmons’s president, Lynn Perry Wooten, told The Chronicle. “The market has demanded that we’re able to do excellence on the ground and online, and constantly think about what innovation and opportunities look like.”
The return on this latest bet, though, remains unclear — a case study on the challenges small, private colleges face as they compete against mega-universities and other peers that, especially in wake of the Covid-19 pandemic, are rushing to attract learners seeking quality, flexible learning in a virtual format.
Simmons’s online undergraduate program, for one, has had a slow start. In each of its first three semesters, fewer than 100 students enrolled. This matters for two reasons: First, Simmons has an outsized reliance on tuition — and, in the last decade, online tuition — for revenue. Second, its revenue-sharing agreement with 2U means it only pockets a slice of the revenue its online programs generate, with about two-thirds going to the OPM for managing its online-learning platform, among other things.
A February report from Moody’s Investors Service also cautioned that the university “is highly reliant on this revenue stream [tuition] to support debt repayment.” Simmons’s debt has nearly doubled to $257 million in the last three years as it’s simultaneously pushed forward on a projected $450-million construction project to unite its academic and residential campuses, hoping to still attract students who prefer a more traditional, in-person college experience.
While this doesn’t mean the college is in any dire financial straits, it did contribute to both Moody’s and S&P Global Ratings downgrading the university’s bond rating last month. That development could leave the institution susceptible to higher interest rates as it sells future bonds.
“We’re constantly innovating,” Wooten said when asked about the university’s investments. And “it costs money to innovate.”
Expanding Online to Undergrads
In 2013, Simmons rolled out its first online graduate program with 2U, marking the university’s official foray into distance education. The initial results were impressive: Graduate enrollment at the university, which is co-ed, surged 67 percent between 2013-14 and 2017-18, according to Ipeds data. News outlets like Inside Higher Ed asked whether Simmons had whipped up the “recipe for success.”
In recent years, though, Simmons’s numbers have begun to slip. Between the 2017-18 and 2020-21 academic years, overall enrollment fell by about 10 percent. The majority of that decline was its graduate-student population, which dropped 12.4 percent. The college as of 2020-21 served about 1,800 undergraduates and more than 7,300 students total. (Since the pandemic began, enrollment at American colleges has declined by 5.1 percent across the board.)
Wooten has a few ideas about why. Nursing and social work, two of Simmons’s most popular graduate-degree programs, “have high burnout” that’s likely been exacerbated by the Covid-19 pandemic, she said. A healthy economy could also be a factor. People already employed will “tend to work longer and postpone graduate school,” she said, ”because the money is so good when you’re in a boom.”
Simmons’s undergraduate population, meanwhile, has been a bit more reliable, dipping 3.4 percent, or 62 students, over that same time period. So as Simmons studied the market and gathered feedback from its students, it homed in on a new undergraduate group to recruit: adult learners and transfer students. These are students who have credits toward a degree but — for an array of reasons, financial or otherwise — stepped away from higher ed and now want to return.
Simmons launched its online undergraduate endeavor, coined [email protected], in spring 2021, starting with four degrees. These programs, its news release read, would offer a blend of live and asynchronous coursework, small class sizes (in most cases, no more than 20 students), and alignment with Simmons’s mission to make “high-quality education that focuses on leadership and professional preparation more accessible to adult learners who identify as women.”
Tapping an external OPM for this undergraduate work departs from the norm, Hill said. In the past, colleges have often developed programming in house, with “more of a slow growth, take our time, figure it out, invest over time type of mentality,” he said. The Colorado Community College system, for example, has offered online courses to its students since 1998. Others are exploring internal, state-funded OPMs instead, such as the University of North Carolina system with its Project Kitty Hawk.
The Covid-19 pandemic, however, has brought a sense of increased urgency to adopt online education platforms. Colleges like Simmons are saying, “‘Hey, we’ve got to get this wrapped up and financially stable within four or five years,’” Hill said. “It’s a different model that is much more aggressive on enrollment growth.”
‘Normal’ but ‘Problematic’
This makes sense when considering Simmons’s revenue streams. In the Moody’s report about Simmons’s ratings downgrade, the agency noted that 86 percent of the university’s revenue in fiscal-year 2021 was based on “student charges” like tuition.
Among private colleges, reliance on tuition is a trend that’s “both normal and problematic at the same time,” said Robert Kelchen, a college-finance expert who serves as head of the department of educational leadership and policy studies at the University of Tennessee at Knoxville.
Getting more online students in particular also matters for the university’s bottom line. Simmons gave 65.5 percent of its online revenue to 2U in the 2019-20 year — a gradual decline from a high of 69.7 percent at the start of the partnership, according to the university’s financial statements. OPMs typically take about 50 percent or more of online revenue in the programs they manage.
2U, which partners with more than 130 U.S. institutions, told The Chronicle that colleges are paying for the wraparound operational supports it provides, including managing all marketing, engaging students, operating the online-learning platform, producing course videos, running trainings for the faculty, and offering 24/7 tech support.
A Slow Start
So far, the online undergraduate program has seen piecemeal growth. Data provided by Simmons showed 58 students enrolled in fully distance undergraduate education in fall of 2021, or 3.3 percent of all undergraduates that semester. There were 91 active students as of March 9, a Simmons official confirmed.
While Hill thinks it’s premature to say that’s “problematic,” that number across eight degree programs is “definitely slow, or very modest,” he said.
Since launching the program, Simmons has already made adjustments to expand the prospective applicant pool. It lowered its online tuition by 24 percent in January, with spring courses set at $500 per credit hour. It also plans to lower the minimum credits needed to enroll from 30 to 17 starting this fall.
“We are learning the market and where the students are,” Wooten said. A 2U spokesperson added in an email that, speaking generally, “There are many variables that can contribute to the relative growth rates of an individual program, including how many other programs in that discipline are available in a given geography and price point, the relative strength of an institution’s brand, [and] how new an offering is within an institution.”
Identifying prospective adult learners in particular can be tricky, said Russ Poulin, executive director for WCET, a national nonprofit focused on technology-enhanced learning in higher education. The pipelines don’t exist as they do when dealing with traditional high-school graduates, or with recent college graduates looking to specialize.
“These students could be all over the map,” he said. Poulin added that Simmons is also located in a higher-education mecca, near institutions like the University of Massachusetts, with its UMass Online programs. “You can’t throw a rock and not have it hit a college there,” he said.
There are notable players in this space nationally, too. Southern New Hampshire University, for example, serves more than 100,000 undergraduate students online and enjoys greater name recognition in the online postsecondary marketplace. At its scale, it’s able to offer a more competitive price: $320 per credit for undergraduate degrees.
Kim Cliett Long, an Online Learning Consortium board member and expert in quality distance learning and adult degree programs, appreciates the chutzpah and willingness to adapt. Being “nimble and quick,” she says, is vital for colleges, with incoming students now expecting increased flexibility and 24/7 responsiveness.
But if colleges are entering online undergraduate education now, she said, they have to set themselves apart by offering something niche. “Let’s say the newest area of social work is pandemic trauma,” she theorized as an example. “Tweak your degree program for that. Then you’re standing out against the other schools that have general social-work programs.”
Wooten believes Simmons, especially as a declared “women’s centered university,” does offer a unique experience. It’s “a women-centric education, small classes, and lots of engaged learning,” she said. ”We’re preparing you for your career, your life work.”
The focus on supporting the working woman is part of what convinced 26-year-old Tabytha Smith to enroll at Simmons last fall for her online undergraduate degree in computer science.
Smith grew up tinkering with the home PC and has always had a knack for analytical thinking. But she didn’t have any mentors growing up to drive her toward STEM, so she got her bachelor’s degree in business management. When she decided to go back to school, Simmons was appealing for a few reasons: All of her live classes would be at night, allowing her to still work full time. Plus, it would be her and a handful of other students in each class, allowing for more individualized attention from her instructors.
So far, Smith said she’s felt empowered as a budding software engineer to learn alongside other women in a space historically dominated by men.
“I knew the pool of females in STEM was already so small, and it can be intimidating when you only interact with male engineers,” she said. “With Simmons being more catered toward women … it takes away any weird pressure you might put on yourself, or self-doubt. It’s way easier to speak up.”
Simmons’s partnership with 2U runs through 2039, at least. Wooten is optimistic that momentum in the online undergraduate program will build.
Simmons officials project having around 275 students in the program by the end of the 2022-23 school year. Some early data informing these projections include an overall retention rate of 83 percent, Wooten said, and an 89-percent growth in the number of applications submitted between May 2021 and January 2022.
“At the end of the day, what matters to me is that Simmons is … offering extraordinary learning; that students are learning from a variety of ways and then they’re taking that learning to achieve their life goals and to do their life work,” she said. Still, she and other officials recognize that enrollment matters.
To help meet its goals, the university’s recruitment strategy — which includes search-engine optimization, paid search, social media, and virtual events — is expanding, and Simmons is “exploring partnerships with community colleges and organizations that work with (or have access to) large populations of women who have yet not obtained their bachelor’s degree” as potential pipelines, Kerri Brophy, Simmons’s vice president for enrollment management, wrote in an email.
Tripling enrollment in 15 months is “aggressive,” Hill said, but not unreasonable, given the university is starting off with “a pretty small base.”
“It’s something new. They’re trying it,” he said. “It’s just not proven yet to be sustainable.”