Online Tutoring and Musings on Education

Supportive Article from NCAT

2009-05-08T13:16:00.000-07:00

More articles about StraighterLine's impact on higher education. This one is from the National Center for Academic Transformation. For your reading convenience, the article is re-printed below:

Please Confuse Me with the Facts

A colleague of mine recently told me about her participation in a statewide gathering of K-12 and higher education faculty and administrators. At one point, the topic of “data-driven decision-making” arose.

For those of you who are not familiar with data-driven decision-making, here’s how a recent RAND Corporation occasional paper describes it: “In recent years, the education community has witnessed increased interest in data-driven decision making (DDDM)—making it a mantra of educators from the central office, to the school, to the classroom. DDDM in education refers to teachers, principals, and administrators systematically collecting and analyzing various types of data . . . to guide a range of decisions to help improve the success of students and schools. Achievement test data, in particular, play a prominent role in federal and state accountability policies. Implicit in these policies and others is a belief that data are important sources of information to guide improvement at all levels of the education system and to hold individuals and groups accountable.”

My colleague was puzzled by this topic as well as by all of the discussion surrounding it. At one point, she hesitantly raised her hand and asked, “Excuse me, but what other kind of decision-making is there?”

To say that higher education is most decidedly not data-driven might be the understatement of the century. This is never more apparent than when our community is confronted with something new.

I have recently been drawn into a debate--most notably on the Inside Higher Education (IHE) web site--about the virtues of a new higher education entity called StraighterLine. StraighterLine is a new, online option for earning college credit for general education courses. A division of SMARTHINKING, the experienced and highly successful online tutoring service, StraighterLine combines online, individualized tutoring services with commercially available course content to create a set of general education courses. Students purchase these courses directly from StraighterLine and may earn credit by transfer to one of StraighterLine’s partner academic institutions or to a college of the student’s choice.

Why is NCAT involved? It started when Burck Smith, SMARTHINKING’s CEO, posted the following to the IHE web site: “StraighterLine courses were designed using the principles of the National Center for Academic Transformation's course redesign model. These principles--that the student engage with the content rather than being lectured to, have 24/7 academic assistance, and use alternative staffing strategies to run the course--have demonstrated significant cost reductions and student outcome improvements.”

Burck’s point got re-stated by the editor of Inside Higher Education, Scott Jaschik. “Smith cites leading education thinkers to explain his approach to education at StraighterLine, and in particular notes the work of Carol Twigg at the National Center for Academic Transformation, which argues--just as Smith says his company does--that courses need to be redesigned and that higher education should not assume that the traditional professor model is the best way to promote learning.”

Burck then went on to say, “The NCAT model and the SMARTHINKING service have both shown proven improvements in student outcomes. I will also note that the NCAT model and the StraighterLine model only really works with high-enrollment, relatively standard, general education courses.”

While there are a number of inaccuracies in each of these statements, perhaps the most important one is that there is no such thing as an NCAT “model.” NCAT does not have a model nor do we advocate one. In fact, we have identified six models that have emerged from the course redesigns invented by pioneering faculty and staff across the United States. Even within those six models, there are many variations in the ways in which the model is applied, depending on the particular circumstances of particular institutions. We identify practices that show increases in student learning and reductions in instructional cost and share those practices with the educational community. We hope that the number of redesign models will continue to increase.

So, while we do not have a “model,” StraighterLine does. And the model is both simple and compelling.

What is StraighterLine’s Model?

StraighterLine’s model has three primary components:

Courses - McGraw Hill educational materials developed by educators who have spent years thinking about how to teach introductory courses to college students (you can read about their course development process at http://onlinelearning.uvcms.com/index.php?page=our_courses_and_programs), which are used by thousands of colleges and universities.

Tutoring - online tutoring and writing assistance provided by SMARTHINKING to students at colleges and universities. By providing tutoring online and to many institutions, SMARTHINKING improves service and provides 24/7 assistance that wouldn't otherwise be available. SMARTHINKING has hundreds of institutional clients.

Partnerships – a growing list of institutions who have agreed to award credit for successful completion of the courses. Current partners include three for-profit institutions; Charter Oaks State College, a nontraditional college for adult students; and, Fort Hays State University (FHSU), a traditional institution of 10,000 students in Kansas.

Currently, StraighterLine offers ten general education courses: Introductory Algebra, College Algebra, Precalculus, Developmental Writing, English Composition I and II, Economics I and II, and Accounting I and II. More courses are in the pipeline.

Students can start any time they like, set their own schedules and work at their own pace.

What do these courses cost? $399 each.

Affordable, accessible, flexible, high-quality courses with on-demand assistance. What’s not to like?

One would think that in a time of rising college costs, slashed budgets, laid-off faculty, furloughs, course enrollment caps, community colleges bulging at the seams, and so on, StraighterLine would be welcomed with open arms. You may be surprised to know that this is not the case. The higher education community, as illustrated by the discussion on the IHE web site, appears to be horrified by this new alternative to traditional higher education. One blogger on another site described the phenomenon as “a straighterline to higher education hell.”

Don’t Confuse Me with the Facts

Many of the objections to StraighterLine that have been raised are easy to dismiss and reflect a lack of knowledge (data-driven decision-making!) in higher education.

Courses offered via distance learning cannot be as good as those offered face-to-face.

Posting: “Can anyone actually tell me (with a straight face) that virtual general education classes offer the same quality as face-to-face instruction from passionate educators on the FHSU campus?”

Distance learning is now accepted practice in higher education since just about every institution in the country offers fully online courses. This debate is over.

Institutions should not transfer credit from non-accredited sources.

Posting: “Is this an ‘end-run’ around accreditation?”

Awarding credit for work done elsewhere is common and accepted in higher education since, again, just about every institution in the country allows students to bring credit to the college in a myriad of ways. This debate was resolved many years ago. Colleges routinely award credit for AP, CLEP, ACE, dual enrollment, life-skills assessment, or credit transfer from other colleges. There are also many third-party companies and programs, both for-profit and non-profit, that provide programs for which universities offer credit under their own names: Gatlin Education, Bisk Education's University Alliance, Ed2Go, Regis' New Ventures, the Institute for Professional Development, to name a few. Agreements with these entities are acknowledged by regional accreditors.

You get what you pay for.

Posting: “If the courses Burck Smith provides are not as good as courses taught by a qualified teacher in a classroom (as I and many of the other respondents to this article likely assume), then Mr. Smith provides a lesser product at a lesser price. You get, in other words, what you pay for, and caveat emptor applies.”

See my comments under distance learning.

Colleges should not out-source.

Posting: “The outsourcing of course content, grading and teaching of required gen ed courses calls into question serious issues of academic integrity and professional ethics.”

See my comments under transferring credit.

What does NCAT Think?

Even though I took exception to Burck’s characterization of NCAT’s planning methodology as a “model,” we do have a lot in common.

(I wasn’t too crazy about his implication that NCAT thinks full-time faculty members are not essential to ensuring high quality in higher education-–we believe they most certainly are. The issue is how their oversight is carried out in practice.)

There is no question that there is a need to reduce the cost of higher education-–that issue is unarguable-–and it is clear that StraighterLine is doing this. Because StraighterLine courses are relatively inexpensive, they provide a good option for many students. There is a clear benefit to both students and the taxpayer.

Some think that StraighterLine must do a better job in improving higher education’s dismal record with basic and remedial courses. Jaschik writes, “The theory behind StraighterLine is that many colleges have poor track records at teaching general education courses. If StraighterLine can do a better job, and selected colleges like Fort Hays grant credit, those colleges may be attractive places for the StraighterLine students to transfer to finish their degrees.”

It seems to me that alternate providers do not need to do a better job than traditional higher education; they just need to do an equivalent job. Many of our redesign projects at well-known universities have been motivated by increasing the cost-effectiveness of established high quality courses. The Virginia Tech (math), LSU (math) and Arizona State (graduate early childhood education) projects all wanted to maintain the quality of their traditional versions of the course while reducing the cost of offering them. If StraighterLine can offer courses at less cost and with more flexibility for students, they would seem to be a welcome addition to the higher education community.

So it seems to me that the only question that needs to be answered is, is the quality of StraighterLine courses as good as those offered at traditional campuses or perhaps even better?

The Need for Due Diligence (Please Confuse Me with the Facts)

Institutions considering awarding credit for StraighterLine courses need to know that the courses are equivalent in rigor to those offered at their particular college or university. They need to ascertain whether the course requires student work comparable to that at their institution--not to the university in the sky where all courses meet the Platonic ideal of the perfect course. They need to have enough information about the course to form an educated judgment about its quality and to accept the course as transfer credit. They need to do due diligence.

Posting: “I have personally seen and reviewed StraighterLine’s offerings and would stake my reputation on both their quality and rigor. I would have no hesitation to put them side-by-side in comparison with any course developed by any institution, anywhere. No, I did not "drink the Kool-Aid." I took the time to investigate both sides of the issue.”

Here are the facts

The course objectives are available on the StraighterLine website.
The learning materials are available on the StraighterLine web site.
The learning activities are available on the StraighterLine web site.
The course assessments, which match the course objectives, are available on the StraighterLine web site.
The grading criteria are available on the StraighterLine web site.
The point distributions that make up the final grade are available on the StraighterLine web site.

Look at them. If they meet your standards, you should consider accepting the courses as transfer credit. You should consider recommending them to your students who cannot get into the same courses on your campus. You should consider whether the quality offered by SL is better and more consistent than what you are currently offering and, if so, consider outsourcing these particular courses to StraighterLine. If they do not meet your standards, you should not do any of the above. The choice is yours. Larry Gould, provost at Fort Hays State University, took the time to look at the facts and concluded, “What is it about StraighterLine courses that provides me with a higher level of confidence about judging quality relative to, say, credentialed transfer credit from a community college or ACE? It’s simple. I know more about StraighterLine content, design, syllabi, instructors, etc. StraighterLine courses are more open and consistent than the credits that many colleges are already accepting under existing credit-transfer regimes.”

Conclusion

Students today want and demand flexibility in their educational pursuits. This flexibility includes the ability to participate anywhere at any time. Working students who cannot attend a class at 9:00 am, business people whose responsibilities take them on the road too often to consistently attend an on-campus course, servicemen and women who are never stationed at one location long enough to complete a degree, traditional-age students who need to make up a course for one reason or another—the list goes on and on.

StraighterLine courses are self-paced in that students can begin at any time and complete a course at their own pace. StraighterLine offers two payment options for students: one course at $399 or continuous enrollment at $99 per month. Thus, able students can complete a course for $99. Each course comes with up to ten hours of one-on-one live interaction with a qualified SMARTHINKING tutor (90% have a masters degree or Ph.D.) 24 hours a day, seven days a week. A student struggling in college algebra at 2:00 am can get live help within three minutes. In addition, each student is assigned a course advisor who works proactively to move them through the course.

Posting: "My Comp I course changed my life."

That’s great – I’m sure it did. But what about all of the students who failed Comp I? I can assure the reader that the latter outnumber the former. What about the students who failed to get timely feedback on their submissions? What about students who are not required to complete enough writing assignments to improve their skills due to large class size and/or instructor unwillingness to grade papers beyond a certain number? Students in StraighterLine’s English Composition I course submit eight essay drafts and six graded essays and receive personalized feedback typically within 24 hours.

And what do these courses cost? Somewhere between $99 and $399 each. Please confuse me with the facts.

--Carol A. Twigg

More Controversy...

2009-04-10T10:10:00.000-07:00

A follow-on article to the StraighterLine controversy was published by Inside Higher Ed today. Once you get past the sensationalism, the article is very complimentary toward the StraighterLine courses and model. I hope this leads regional accreditors and others to compare our courses and prices to existing online general education courses at institutions that they already accredit. On the other hand, the implication that this is somehow outside the lines of legitimate accreditation could diminish schools' willingness to work with us. We'll see. Lastly, I can't help noting that the first two comments (there are 3 as I write this) seem like they were written without having read the article. Our courses meet all the requirements listed and our faculty aren't questionable. These commenters clearly read the headline and then drew their own conclusions. Here's are two other thoughtful posts about StraighterLine's impact on college composition classes by Doug Robinson:

1) Response to the follow-on Article
2) Response to the original article.

The iPod of Higher Ed?

2009-04-03T15:08:00.000-07:00

National Controversy

As I expected, StraighterLine hit the national radar and has created quite a bit of controversy. Earlier this week, Inside Higher Ed ran an article about a controversy at Fort Hays State University, one of StraighterLine’s partner schools. The controversy was precipitated by a couple of students creating an anti-StraighterLine Facebook page and a critical article in the student newspaper. This article was followed by a rebuttal from FHSU’s provost. All of this was picked up by Inside Higher Ed and a lively debate ensued in the comments below the article. In turn, this spawned supporting blog posts like these:

Center for College Affordability and Productivity suggesting that colleges might look to outsourcing as a solid educational strategy.

Center for College Affordability and Productivity suggesting that a double standard is being applied to StraighterLine than to college’s own course quality.

Tony Seuss’ blog that extols the virtues of SL.

Michael Rizzo, a professor of economics at Rochester State University, identifies the hypocrisy of the claim that colleges always have control over their own credits.

A blog called Educated Quest has this to say.

Though it does not directly mention StraighterLine, Kevin Carey wrote a very relevant opinion piece in the Chronicle of Higher Ed comparing higher education to the newspaper business.

It spawned a critical post, like this:

A blog from Kairos in the writing community suggesting that this is a threat to higher education

For me, the opposition to StraighterLine boils down to the fact that StraighterLine is new, for-profit, and explicit about cost savings to the student. As I will discuss below, none of the elements that comprise StraighterLine are unprecedented in higher education.

Quality Courses?

Despite the fact that most, if not all, of the anti-StraighterLine contingent have not seen the courses, they suggest that these courses cannot be quality courses because they are not expensive enough, do not conform to an ideal educational model, are delivered at a distance, are not managed by people with appropriate credentials or are driven by a profit motive. It should also be noted that two days after this article, the Distance Education and Training Council (DETC), a nationally recognized accrediting agency, stated that StraighterLine courses meet or exceed all of their standards for online education. Further, StraighterLine’s partner colleges are regionally accredited, and the regional accreditors leave it to the institution to determine what they will award credit for.

First, courses need not be expensive to be high quality. This is the “fine wine” fallacy. To check, go the National Center for Academic Transformation and look at some of the Course Redesign projects. Usually, cost per student for general education courses at these well known universities are between $100 and $200 before Redesign. After Redesign, they are frequently even less.

Second, courses need not conform to the single professor and small group model to be better than what most students are getting today. This is the “Platonic Form” fallacy. Detractors compare StraighterLine to a terrific educational model that is also expensive, difficult to scale and is unavailable to most students. The appropriate comparison, and one which I welcome, is a comparison to other colleges’ online general education courses.

Third, some have said that these courses can’t be good because they are delivered at a distance. While I think that comparing the efficacy of face to face and distance education courses is a fair question – particularly if one were to include the prices charged for each – it is not an indictment of StraighterLine alone. It would be an indictment of the accepted practice of the thousands of colleges that provide online courses, StraighterLine among them.

Fourth, others have claimed that StraighterLine’s credentials aren’t sufficient. Despite my believe that the level of credentials and student success are only loosely correlated, SMARTHINKING’s tutoring services and StraighterLine’s courses are overseen by people with PhD’s and Master’s degrees in their appropriate subjects. All have significant teaching experience. Further, our team has authored numerous academic publications. Our credentials are as good, or better, than many colleges’ professors.

Fifth, others have claimed that StraighterLine is particularly susceptible to cutting corners, having relaxed academic standards, and letting students cheat because we are a for-profit company. StraighterLine has exactly the same propensity to do this as any other entity – not-for-profit, public or for-profit. If our standards are lax, we lose our partners and our business. Conversely, grade inflation, inconsistent courses, extremely low retention rates, and unchecked tuition inflation argues against the sanctity of the non-profit sector.

Lastly, all of the elements of the StraighterLine model, except for a couple of StraighterLine innovations, are already common across higher education. Colleges routinely accept credits from third party sources like the AP, CLEP, credit transfer, ACE credits, dual enrollment, and life-skills credit awards. Colleges routinely outsource whole courses and curricula to third parties like Bisk Education, Gatlin Education, Ed2Go, Higher Ed Holdings, Regis’ New Ventures and the Institute for Professional Development. The NCAT’s Course Redesign model explicitly states that colleges should redesign courses using 1) more interaction with content and less with a lecturer 2) on-demand academic assistance, and 3) alternative labor strategies where non-subject related course and student management duties are handled by lower-salaried people. The difference is that none of these pieces have been put together into a single model and offered directly to students.

Why is StraighterLine like the iPod?

While StraighterLine doesn’t have anything close to the ubiquity, the revenue or the “cool” factor of the iPod, its evolution is similar. The genius of the iPod business model is that it was revolutionary, but all of its elements were already available and established. The iPod created a complete system that allowed consumers to “rip” songs off of CD’s, organize them coherently using online song databases, transfer them easily to a portable memory unit, search and play them easily with a compelling user interface. Then Apple, in its only major innovation, added the $1 download model to further increase revenue. All of these elements were introduced at once by Apple in a coherent system.

Except for the $1 download, all of these elements were relatively well developed in isolation before Apple put them all together. Programs to rip songs off of CD’s and put them on the computer existed, but organizing songs was sometimes hard. Online song tracking databases existed for organizing a song library, but typically didn’t integrate with “ripping” programs. Portable MP3 players existed, but the user interface and transfer programs were difficult. Apple put it all together into a single, usable system.

StraighterLine, while not at Apple’s scale, does the same thing. Colleges already accept 3^rd party credits, though most of the 3^rd party credit providers aren’t explicitly consumer focused. Colleges already use Course Redesign models for general education courses, but the savings from these models are absorbed into the university rather than being passed on to the student. Therefore, there is little pressure on colleges from students to do more course redesign. Colleges routinely outsource curricula and staffing of academic programs to 3^rd parties, but usually not for general education courses and not to a company that also has a consumer model. StraighterLine adds a couple of additional innovations that colleges are not equipped to offer, namely the inclusion of on-demand, online tutoring as the primary instructional model and a subscription pricing model for courses. StraighterLine puts all of these pieces together to create a new general education course model where the quality of courses are as good or better than comparable courses, the dramatic savings are passed to the student, courses scheduling is extremely flexible for the student, and the cost of failure for students is extremely low.

Interestingly, the iPod music system was created by a computer maker which, at the time, was incongruous, but in retrospect makes perfect sense. StraighterLine is being offered by an online tutoring company which, because of the tendency to associate courses with content development, seems incongruous. However, digital content for general education courses and distance education software are essentially commodities. The SMARTHINKING labor model is what changes the equation. Also, the iPod’s success was enabled by limited buy-in of part of the industry that it eventually transformed. Select music companies needed to approve limited digital rights management and had to allow the $1 music downloads. The rest of the industry followed. Similarly, StraighterLine’s partner colleges see the possibility of driving additional enrollments by partnering with StraighterLine. Maybe the rest of the industry will follow.

StraighterLine’s Innovations

StraighterLine’s $99 per month subscription model is a true innovation in higher education (this model was first suggested by Ryan Busch, StraighterLine’s Director, during StraighterLine’s development phase). This is made possible by SMARTHINKING’s labor model. By having tremendous staffing volume in general education subjects, SMARTHINKING can provide very high service levels at any time of the day or night in any of the subjects that it supports. No single university or even most university systems have the demand to offer similar service levels. Note that the innovation in the labor model is not that it’s online, it’s that it is at scale. Though I do not think the implications of StraighterLine’s subscription model and SMARTHINKING’s labor model are fully recognized, I think they will be. The two largest implications are:

Reduce the Cost of Failure: So far, 82% of StraighterLine students have either successfully passed the courses or are in process. Of the 18% that did not pass, 80% (or 14% of the total) enrolled in the subscription model and dropped out after the first month. So, for those that succeed, they are provided an incentive to finish quickly and the cost of labor and infrastructure provision more closely matches the price of the course. Even more interesting, those that fail are only out $99! If a student enrolled in a typical college and then failed out in the first semester, he or she would have thousands of dollars of debt and no degree with which to earn more to pay back the debt. The likelihood of this student returning to the system is very low. Why can’t a traditional university do this? In a traditional model, a university projects X students to start on a given date and hires Y faculty to teach them. To secure Y in advance, the university has to make semester or annual commitments to faculty and therefore requires full payment from students even if they fail. Personally, I think the cost of failure is one of the greatest and most overlooked failings of higher education today.

Enable Unmatched Scheduling Flexibility for Students --Because SMARTHINKING’s online tutoring service has such a high volume of staffing, any new enrollments do not affect our staffing patterns at the margin. Therefore, any number of students (within reason) can start any StraighterLine course immediately. Further, they can take as long as they want to finish the course AND have a higher level of academic and course support than they would get in a traditional setting. There is nothing to prohibit a school or an individual to impose its own required schedule on the course, just that the schedule could be anything.

Establish Service Levels as a Course Quality Benchmark – It has always amazed me that we have customer service levels in every element of our lives, but not as a quality benchmark for courses. Service levels make a difference in all other aspects of our lives ranging from our buying decisions to perceptions of the companies that serve us (think about your frustration with the service levels of the local cable company!). I suspect that service levels have never been a benchmark because universities have never been able to actually monitor and enforce service levels. StraighterLine changes that. A student taking a math class can get live help from a Masters or PhD level instructor 24 hours a day, 7 days a week within 3 minutes. A student taking a composition course has roughly five graded assignments and seven optional submissions to our online writing, submissions will be returned in an average of 18 hours. Compare this to infrequent professor office hours, long-return times for e-mailed questions and week-long or more waits for essay feedback and returned grades.

Enable Unlimited Help for a Student – In a traditional course format, the amount of assistance that a student receives is not limited by the amount of help that the student needs, but by how much time the faculty member has to give. With commuter students, commuter faculty, adjunct faculty and high enrollment courses, the amount of time available is frequently very small. With StraighterLine, each course comes with up to 10 hours of 1-1 instruction. Students can buy more if they need it, effectively creating an unlimited amount of help. Opponents will argue that unlimited help isn’t free to the student. True, but unlimited help cannot be provided to anyone in any model unless the amount of help is somehow rationed and priced. When that happens, those that need more help can get it, even if they have to pay for it.

Hope

While it is far too early to compare the success of StraighterLine with the success of the iPod, the systems thinking behind their mutual development is similar. In the Kairos blog, it was said that some of the comments on this blog might simply be braggadocio similar to claims made 10 years ago during the first wave of online universities. It’s entirely possible. We do seem to hear the same themes at key-note speeches today that we heard a decade ago. However, innovation, cost-reduction, and quality improvement are not impossible in higher education. I hope that Kevin Carey’s insightful opinion piece in the Chronicle of Higher Education proves accurate.

Winning the Thought Leaders

2008-11-25T11:12:00.000-08:00

In SMARTHINKING's early days, I used to compare us to a well-respected art film -- we had won the art festivals, but we needed to show the box-office returns. Basically, the thought leaders and innovators of higher education agreed that SMARTHINKING was a great idea. However, we had to figure out a way to translate their approval into local sales. Fortunately, we did manage to show the returns for our online tutoring service.

Today, we are in the same situation for our new product, StraighterLine. We officially launched this about 2 months ago. Since then we have had rave reviews. Clayton Christensen, noted Harvard business school professor and expert on innovation called StraighterLine "disruptive." Richard Vedder, a former member of the Spellings Commission and noted expert on college cost and affordability, published an insightful blog post about our approach to academic labor. Tony Seuss a well-respected blogger and community college professor in Georgia published praise of the business model. For StraigtherLine, this is a terrific introduction to the national spotlight. Before you can win the popular press, you need to win the approval of the experts. We seem to have convinced the experts. Now, we need to convince individual students and schools.

While one would suspect that colleges might be very resistant to enrolling their students in someone else's developmental and general education courses, there seem to be a number of factors at work that could change that. First, state budgets are in woeful shape. This translates to budget cuts for colleges. These budget cuts are coming in a time of recession which usually causes enrollments to increase which means that colleges have to serve more students than ever before. With more students and less resources, StraighterLine is a powerful option to fulfill general and developmental education delivery. Second, the Gates Foundation just announced a signficant committment to community colleges. They are focusing on exactly the things that SMARTHINKING and StraighterLine have been built to support -- increasing student success, serving developmental students, and lowering costs. SMARTHINKING and StraighterLine are some of the few truly innovative approaches to these problems.

So, stay tuned as we try to take StraighterLine to a theater near you!

Is Higher Education for Students or for Professors?

2008-06-18T14:36:00.000-07:00

The Chronicle of Higher Ed just reported on StraighterLine’s launch. Titled “Who Needs a Professor?”, the article takes a mildly peeved attitude toward the new product. In this article and in the comments and blogs that it has spawned, it seems the benefits to the student are being roundly ignored. Perhaps this should be expected from a publication that serves professors, however StraigtherLine’s benefits to students, the ones actually paying for college, are profound. Here are the primary ones:

1) Affordability – The media is filled with laments about the rising cost of college. Well, StraighterLine is a way to dramatically reduce the price of the first year to year and a half of college. At $399 per course (just imagine if the government subsidies that support public colleges were applied to this price), this is dramatically lower than most 4 year colleges, private colleges and for-profit schools. It is even lower than many in-state community college tuitions. The next natural question is what do you get for $399?

2) Support – Students in StraighterLine courses get up to 10 hours of 1 on 1 instruction. This is more 1 on 1 instruction than is provided in most other online or face to face courses. Further, this is instruction on-demand. By using SMARTHINKING’s tutors, StraighterLine students get access to an instructor with a master’s degree or PhD within minutes. In a typical course, office hours are often provided limited, inconvenient or provided upon request, if there are office hours at all. Lastly, every SMARTHINKING tutor is screened, trained, and continually evaluated. Colleges typically do not offer their own professors and adjuncts this level of pedagogical development. So, students get more instructional support that is more convenient, more immediate, and more consistent.

3) Flexibility – Students in StraigtherLine courses can start a course within 24 hours of deciding to enroll and they can complete anytime within 6 months. In a traditional course, students are confined to the start and stop dates determined by the school and typically have to wait to start after deciding to enroll.

In addition, it would be helpful to compare the StraighterLine courses with the construction of many (maybe most?) freshman and sophomore general education courses in both online and face to face formats. Given that these courses are frequently taught by adjuncts or teaching assistants, with little or no training, with little or no availability to students beyond the lecture, and students are being charged 2 and 3 times what StraighterLine charges, it seems to me that StraighterLine courses are a welcome option for students seeking to reduce their cost of education.

StraighterLine

2008-06-10T13:17:00.000-07:00

On May 15th, SMARTHINKING launched a new product called StraighterLine. In many ways, this is the product that SMARTHINKING has been building toward for 9 years. While this may seem hyperbolic, I think this product has the potential to transform the cost structure of higher education. Here’s what it is, why SMARTHINKING is the one to bring it to market, and why it has so much potential.

StraighterLine provides general education courses – the ones that everyone takes in the first or second year of college – that are more affordable, better supported, and more flexible than most other online courses. Regionally accredited partner colleges agree to award credit to students that successfully pass these courses. Each course is $399 (without a government subsidy), comes with up to 10 hours of live one-on- one SMARTHINKING instruction, and can be started and stopped at the student’s convenience. McGraw-Hill (one of the world’s largest textbook publishers) provides the course content and Blackboard (the world’s largest Learning Management System provider) provides the course infrastructure. By inserting MH’s content into Bb’s LMS and integrating with SMARTHINKING’s online tutoring services, we have a course that is better than most of what is out there today. Partner colleges work with us because students taking StraighterLine courses will need to complete their degree somewhere. This becomes a lead generation engine for our partners colleges.

Offering online courses may seem a little far afield for an online tutoring provider like SMARTHINKING. However, when you take a closer look at the course ingredients, you realize that all of the course elements are, more-or-less, commodities except for the labor. For instance, college algebra course content is readily available. There are dozens of LMS providers. However, there are very few companies that can provide on-demand instruction. For the provision of online general education courses with on-demand instruction, SMARTHINKING is the only company that has the industry credibility to do this.

As I mentioned earlier, I think StraighterLine has the potential to transform higher education. I believe this because StraighterLine overcomes the three largest barriers to cost reduction in education. These barriers are
1) The deployment of an alternative academic labor model
2) The creation of a legitimate course provider outside of the traditional accreditation model
3) The delivery of cost reduction benefits to students (instead of to the institutions)

As I’ve noted in other posts, technology has the potential to dramatically reduce the cost and increase the quality of education. However, evidence to date points to the opposite. What technology should be able to do, in theory, is to reduce the price of content production and distribution to close to zero, the cost of software to close to zero, and the cost of communication to close to zero. In theory, the cost of course should only be the amount of academic labor consumed during the course. However, such a radical pricing model has never been tried because there has never been a labor model that could be implemented like this, and colleges are accredited at the degree level, rather than the course level. Enter StraighterLine

The StraighterLine model incorporates SMARTHINKING’s tutoring as instruction, thereby offering an instructional model that provides greater availability, better service levels, more consistency, and greater record keeping. Further, the amount of instruction is limited by how much the student wants or needs, rather than by how much the professor is willing to give.
The StraighterLine model only provides general education courses. By working with partner colleges, StraighterLine can carve out these high enrollment courses. The courses that are the best candidates for standardization and commoditization at volume. In this way, students that successfully pass StraighterLine courses can receive real college credit at a fraction of the cost of traditional college courses. If students buy these courses like we hope, then the cost savings will pass to them, thereby reducing the cost of higher education.

If all goes well, in 3 years or so, StraighterLine will be a primary provider of general education courses. Students will contemplate coming to StraighterLine first, and then continuing their coursework at a college of their choice.

Breaking Radio Silence

2008-04-22T13:31:00.001-07:00

It's been a loooong time since I last posted. Why? Well, I said most of what I wanted to say in my first posts. Now, however, SMARTHINKING is about to launch a new product that warrants another posting explosion. We plan to launch a new product called StraighterLine in May.

Online Tutoring and VOIP

2007-07-09T08:28:00.000-07:00

Voice Over Internet Protocol (VOIP) is the use of two-way, voice communication – like a telephone – over the Internet. This technology has been around for a decade or so. For online tutoring, though VOIP will be a common feature in the future, its past and present have been characterized by more hype than usefulness.

Why the hype around voice? People are accustomed to being tutored in-person, implying the use of voice. Therefore, voice is assumed to be a required element of tutoring. It is not. Tutoring requirements for math and other subjects are the efficient communication of symbols (it’s hard to describe the quadratic equation over the telephone), graphing and drawing ability, and text input. In fact, when students are being tutored effectively, there are lengthy pauses while students and tutors are working through problems. The presence or absence of voice has no bearing on the length of these pauses. So, for the most part, VOIP neither increases the quality or efficiency of communication. It is simply more familiar. Though SMARTHINKING will offer voice in a limited capacity in some subjects starting in January, we have provided hundreds of thousands of tutoring sessions without it. In fact, VOIP can cause more problems than it solves. Among the challenges of VOIP are:

Technical support – The number of students needing help with headsets, microphones, sound cards, bandwidth, processing capacity, voice installations, and simply turning the volume up, is significant.
Bandwidth – Using VOIP requires more bandwidth than a whiteboard or chatroom connection. With the increase in broadband penetration, this problem is diminishing, but it is still present in dial-up and shared bandwidth connections.
Archiving (Memory) – A whiteboard tutoring session can be archived by saving a single image or series of images. When a voice track is added, the memory needed for archiving increases exponentially.
Archiving (Quality Control) – A tutoring session saved as an image can be reviewed in a couple of minutes or less. A voice track requires the reviewer to listen to the entire tutoring session (an average of 25 minutes long).
Software installations – VOIP usually requires an installation of a program – rather than a flash or java download – onto the student’s computer.
Glitches and Voice Quality – For many users, VOIP can result in tutors and students talking over each other, waiting for the other to speak when the other doesn’t realize it, and other barriers to the tutoring interaction. With students already frustrated with their academic work, adding communication and technical frustration can be the last straw.

For the most part, online tutoring companies that do use VOIP require students to install software locally, sometimes give away headsets and microphones, and do not archive tutoring sessions. Installation of software requires a significant amount of forethought on the part of the student/buyer. Shipping of computer accessories dramatically inceases cost and also requires forethought. The lack of archiving impacts quality control and dispute resolution procedures. Students using services that provide on-demand support to struggling students, like SMARTHINKING’s services, typically do not have the time or the patience to go through a significant installation process at the same time that they are struggling with their homework. Requiring such installation serves to limit, rather than increase, the number of students using these services.

Having said all of this, voice may be a requirement for effective live tutoring in some subjects. Foreign languages, for instance, would seem to require voice. However, on the whole, lack of voice has had no adverse effects on student tutoring demand or satisfaction. Once VOIP becomes embedded into operating systems and browsers and voice input devices (headsets and microphones) are standard computer accessories, it will be interesting to see whether students choose to use, or not use, VOIP. This is getting closer and closer to reality as more computers come with Bluetooth connections that can integrate with mobile phone ear-pieces. However, for now, in SMARTHINKING’s experience, VOIP serves to limit the market for tutoring rather than expand it.

Why Technology Hasn't Lowered Costs or Improved Quality in Education

2007-05-10T11:57:00.000-07:00

Below is an article that was published in the Spring of '06 that I wrote for Threshold magazine, a publication of Cable in The Classroom. I am on their Advisory Board. In short, in every other industry, technological innovation is an effort to increase productivity. Productivity is greater output with the same input of labor or the same output with less input of labor. No matter the case, productivity is dependent upon integrating technology with labor -- something that education at every level has willfully ignored.

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OUTSIDE HELP: IMPROVING PRODUCTIVITY IN SCHOOLS

After capital expenditures, instructional labor is education’s biggest expense. Yet, despite the enormous potential of technology for improving the quality and quantity of instruction, and the enormous pressures on schools to reduce spending, little has been accomplished to enable greater teaching productivity. Put simply, to improve productivity, either more or better instruction must be provided to the same students or more students must be taught with the same resources.

Schools that expect technology investments to drive quality improvements and cost reductions would do better by focusing on products and services that answer questions such as:

* How do we free up more time for our most skilled teachers to perform the most complex instructional activities?

* What parts of the educational process are best done by computers instead of people?

* Are there parts of the educational process that could be performed more cheaply by others?

* What services does my school provide that cannot be done better or more cheaply by someone else?

The answers to these questions are neither simple nor easy, and they threaten traditional notions of appropriate student:teacher ratios, quality control, classroom design, funding formulas, salary structures, and job responsibilities. However, every successful technology innovation in the history of humankind has enabled people to do more with less. Education should be no exception.

PRODUCTIVE APPROACHES
Though these questions may be thorny and difficult, the traditional 20:1 student:lecturer model is giving way to more productive ways of offering instruction. While most examples are in higher education, they do offer models for K–12 education as well. Schools are combining their own instructors with other instructional services to create programs that are cheaper, more effective, and more scalable. For instance:

To free up professor time for course management, course design, and student intervention, the Kentucky Community and Technical College System (KCTCS) contracted with a commercial company to grade student essays within 24 hours and adopted a textbook that included an essay-review service. The benefits? For the students, they receive suggested grades within 24 hours, have a third-party review, and the graders have more consistent training and provide more consistent assessment than could be provided in a traditional structure. For KCTCS, one instructor can teach more students, the per-student cost is lower, and some of the cost of providing the service is borne by the textbook provider.

After deciding to offer a program focused on math and writing for underprepared students, Kaplan University partnered with an online tutoring company to provide the assessment, content delivery, and tutoring components. The students receive tutoring access up to 24 hours a day, seven days a week. The school is able to shorten the development time of a program, reduce its risk and development costs, and rely on the expertise of a partner company for specific instructional activities such as online tutoring.

The National Center for Academic Transformation (NCAT) has worked with more than 50 colleges to redesign high-enrollment courses. NCAT results demonstrate that, by rethinking instructional labor strategies, schools can increase student success and decrease per-student costs. When schools make greater use of digital content and courseware and rethink student: teacher ratios, staffing patterns, and faculty roles, students need less intervention from live instructors, and more of what they do need can be provided by tutors, teaching assistants, or course coordinators.

The Baltimore City School System is one of many public school systems nationwide to hire teachers overseas to affordably meet the “highly qualified teacher” requirement
of the No Child Left Behind Act (NCLB). The system hired as many as 50 Filipino teachers to teach in the city’s schools. Additionally, many online Supplemental Education Service (SES) providers under NCLB use tutors located overseas. Whether in person or online, tapping the global market for educational labor allows more flexible staffing, and either lower-cost or more-qualified staffing.

WHY NOT?
Opponents might argue that the intimate teacher/student relationship is lost if grading is outsourced. However, the reality is that the intimate teacher/student relationship is an ideal that is far less common than we would hope and is far more expensive than we would admit. Initial results from most of the NCAT’s projects and from the Kentucky grading project show that student performance actually improved, while per-student costs decreased. Another argument against such models is that outsourced instructors will have different teaching techniques and standards than those taught at a particular school. While there certainly are some teaching functions that are best not outsourced—particularly those that require
a high degree of socialization, such as most teaching of elementary students—there are many functions that can be easily outsourced. For instance, math, science, and writing fundamentals are essentially the same across schools, states, and countries. Most schools are already comfortable with outsourcing at least some elements of education—many schools that offer distance-learning courses do so through third-party providers, and textbooks and courseware are the result of outsourcing content development and delivery.

Every year, the cost of education outpaces inflation with no increase in overall student performance. In "The World Is Flat," the best-selling book that attempts to define trends and technologies in the global marketplace, Thomas Friedman describes how companies in almost every industry are “insourcing” their logistics—letting partner companies manage the tracking and delivery of their products and services—and outsourcing elements of their production process. These trends are increasingly part of education as well.

No matter how it’s defined, education, like other hidebound industries before it, is about to become part of a global market. In other industries, this has resulted in products and services that are cheaper and of higher quality. Viewed one way, this threatens the cost and service structure of American education. Viewed another, this is an opportunity to rethink the components and functions of a school and all of the political, economic, and accountability structures that surround it. If doing so can improve productivity in schools, more students will ultimately receive more opportunities to learn, achieve, and succeed.

Service Level Chicanery

2007-05-03T13:59:00.000-07:00

For online tutoring, students want on-demand help. Frankly, why else would they choose to be tutored online? As the online tutoring industry evolves into a larger market, it is interesting to note the lengths to which companies will go to to promise on-demand assistance. For instance, Tutor.com claims on-demand tutoring on its web site and in various corporate blogs. However, their service is only available from 11 AM - 10 PM (PT). Perhaps a more accurate claim would be "on-demand tutoring except for 13 hours per day." Worse, TutorVista (and many other small tutoring companies) claim 24/7 tutoring. In practice, this means that a student can schedule a tutor at any time for any time with sufficient notice. It does not mean that a student can get help exactly when they want it. At SMARTHINKING, we offer true on-demand math tutoring for the fall and spring semesters. During the summer, drop-in tutoring is available for 16 hours per day because there is not a sufficient volume of students to support full 24/7 access.

Why would companies spin these little white marketing lies? Because true on-demand tutoring -- 24/7, drop-in, live service -- is more expensive, requires greater scale, requires greater expertise, and requires greater data than pre-scheduled tutoring. These companies are trying to attract customers without investing in the tutoring force and management expertise necessary to offer on-demand service.

To understand why on-demand tutoring is more expensive and more complex, it helps to think of on-demand tutoring like a customer service center. When you call a company or utility, you expect to talk to someone on the other end. Running such a center is very similar to running an on-demand tutoring service. A critical operational variable in a call-center is "utilization capacity." This is the percentage of time that tutors spend tutoring students. It utilization capacity is too high then students have to wait a long time for tutors. If utilization capacity is too low, then the company is losing money. For instance, if a tutor is being paid $12 per hour and utilization capacity is 50%, the cost per hour tutored is $24. But, because one or more tutors are almost always available, there are no wait times. So, utilization capacity and wait times are inter-related variables. To do it right, a company needs to set a service level target and then determine the target utilization capacity to meet that target.

So, utilization capacity and service levels are mutually dependent variables. However, achieving a target service level also depends on the average length of a tutoring session. For instance, if a typical session in a call center is 2 minutes long, then a customer service center doesn't need to staff as many people to achieve a low wait time because customer service representatives are frequently available. However, for online tutoring, the average session length is around 30 minutes. This means that, with a small number of students per hour, an online tutoring company must have a very low utilization capacity to meet minimum desired service levels. As the number of students per hour rises, utilization capacity can rise while keeping service levels constant. Because utilization capacity can rise, it costs less to offer on-demand tutoring with a large number of students than with a small number of students.

Lastly, to manage all of this efficiently, an online tutoring company needs management sufficiently skilled to schedule tutors appropriately and sufficient data to know when the peaks and valleys of demand are likely to be.

So, to sum up, true on-demand tutoring generates higher labor costs because a portion of a tutor's time will not be used, requires scale to keep the unused portion of time as small as possible, requires management expertise, and good data systems. This is a significant investment that all small online tutoring companies are unwilling to make. The expense of true on-demand tutoring combined with its attraction to customers is the impetus behind the false advertising cropping up in the online tutoring industry.

Defining Online Tutoring Quality

2007-05-03T13:26:00.000-07:00

What is quality education? What is quality teaching? How can one measure it? These are some of the thorniest questions in education today. No single system or metric can determine it. For instance, standardized tests suffer from the fact that students may not test well, may have been trained on the wrong material, or may be having a bad day. Student survey data may reflect student opinions of the teacher rather than opinions of the learning. For instance, numerous studies in post-secondary education show a positive correlation between lenient grading and student satisfaction. Longitudinal data from schools, such as job placement rates or lifetime earnings of students, cannot be easily compared to each other because students at different schools enter and exit with different skill levels. Lastly, portfolio analysis -- the compilation and examination of a given student's work over a period of time -- suffers from the subjectivity of the teacher. Due to the flaws of any single metric, those that need to measure educational quality -- such as schools, accrediting agencies and parents -- are forced to rely on a meta-analysis of all of the metrics listed above, input analysis (credentials of instructors, training processes, and others), and reputation.

So what does this mean for online tutoring? A quick search of the Internet will demonstrate that every online tutoring company claims to have "high quality" tutors. Most will claim that their tutors are extensively trained. All list fabulous quotes from users. All show terrific survey results. All claim grade increases. So, how does a parent or a school determine who really is better? Using the above framework, they need to look at inputs, metrics, and reputation. Of these three, inputs are the least manipulable because inputs impact the cost structure of a business. They are also the least advertised, because they are a proxy for educational quality. However, they probably provide the best indication of the educational value of a service.

INPUTS
By looking at what goes into the tutoring process, one can get a sense of what should come out. The inputs that are relevant to online tutoring are tutor credentials, tutor training, tutor oversight, tutoring philosophy, service availability, service levels, breadth of service, and ease-of-use.

Tutor Credentials: Generally, tutors with advanced degrees in their discipline have a better understanding of the material than those that don't. This is particularly relevant in math and science. Companies that don't indicate the degree levels of their tutors are typically relying on current college students or graduates as opposed to masters level and PhD tutors.
Tutor Training: Just about everyone has been taught by someone who is brilliant in their discipline, but doesn't know how to teach. Tutor training on how to tutor is just as, if not more, important than subject level expertise. When students need help, they are typically frustrated and lack confidence. An effective tutor not only helps them with the subject matter, but encourages them as well. At SMARTHINKING, we call this the "affective" element of tutoring. Again, every company will claim to do this. However, if a company is serious about tutor training, its tutors will be part-time employees as opposed to independent contractors. Though hiring tutors as independent contractors is simpler and cheaper, IRS regulations require that any position that requires significant training as a job requirement must be filled by an employee.
Tutor Oversight: Tutoring is a one-to-one social experience that combines the delivery of subject knowledge with, hopefully, the social cues necessary to encourage the learner. However, as with any human interaction, there can be miscommunication between student and tutor, mistakes made in the provision of information, and differences in communication styles. Identifying and addressing these sorts of issues requires the subjective perspective of experienced educators. At SMARTHINKING, we have former college professors that oversee each of our disciplines. Further, they contribute to the scholarship surrounding online tutoring.
Tutoring Philosophy: An online tutoring service can be a learning service or an answer service. While not mutually exclusive, they are certainly not the same. Frequently, students want an answer, not a lesson. Tutoring companies that evaluate their tutors solely on student satisfaction ratings give tutors the incentive to do the work for the students. While this might make good business sense for a company trying to sell its services to consumers, it's not good education.
Service Availability, Breadth and Levels: All of these inputs are for naught if an online tutoring service doesn't provide service at the moment and in a subject that the student needs it and without an onerous wait time.
Ease-of-Use: Again, all of these inputs are for naught if the online tutoring technology is not user-friendly and capable of supporting educational interactions. For instance, Voice over the Internet (VOIP) is a feature that is frequently requested, but seldom used. This is because the set-up and performance for VOIP -- microphones, speakers, soundcards, volume settings, bandwidth, archiving, non-duplex service, voice lagtimes, and others -- make it more cumbersome than helpful. Also, math notation is notoriously difficult to do on the Internet. Technology that enables easy superscripts, subscripts, fractions, graphing, and other mathematical symbols enables effective online tutoring.

METRICS
Every tutoring company, SMARTHINKING included, touts its student survey results, quotes from satisfied customers, and sample tutoring interactions. Frankly, all of these are easily manipulated for marketing purposes. The only outcome metric that is more objective than the others are independent studies conducted by clients or others. While these will certainly have their share of methodological flaws, the bias of the company is removed.

REPUTATION
Because outcome data is so manipulable and input data is hard to discern, reputation and, by extension, brand, plays a role in determining educational quality. In large part, reputation is created by quality service over time. It is also reflected by a company's client base. For instance, to determine educational quality, one might look at the tutoring services chosen by other schools and educators. Presumably, other educators will vet a tutoring company on its educational features more fully than a parent, student or library might.

Despite the emphasis on testing in No Child Left Behind, the pressure being put on college accrediting agencies to measure school quality, and the growing demand for consumer educational services, the question of what is educational quality is not likely to be solved soon. In the meantime, those who need to look at quality are best served by evaluating an education provider holistically on inputs, metrics, and reputation, with an emphasis on inputs.

P = MC and the Implications for Textbook Publishing and Colleges

2007-04-24T07:48:00.000-07:00

Since the advent of the Internet, many prognosticators (myself included) have predicted dramatic transformation in the education industry and the textbook publishing industry. Unfortunately, when I go to a conference today, I hear rehases of the same keynotes as I heard a decade ago. Fortunately, there is some evidence that these transformations are finally happening in both education and textbook publishing.

The decade long belief in transformational change stems from a central tenet of microeconomics. It is that, in a perfect market, the price of a good is equal to the marginal cost of production and distribution of that good. The Internet renders the marginal cost of production and distribution of educational content to almost zero. For example, it costs almost nothing to produce and distribute one more copy of a digital algebra textbook. In theory, a competitive market would push the price down to almost zero. This has dramatic implications for the textbook industry and for educational institutions.

However, neither education nor the textbook publishing are perfect markets. As I noted in another post, the market for higher education is rife with trade barriers. The market for textbooks suffers from a mismatch of the person who makes the buying decision (the professor) and the person who pays for the book (the student). This means that the professor has no incentive to search for low-cost options. Further, the school also frequently receives a portion of a book-store's revenue, further reducing the incentive to reduce costly middlemen. Here is a comment that I wrote about an article about high textbook prices in a higher education trade magazine:

"Textbook prices would come down dramatically if:

1) Colleges made institution wide textbook decisions and bundled the cost of those books with the price of college, instead of letting each professor make their own textbook decisions.

2) Colleges didn’t look to their bookstores as revenue centers.
It is no wonder that textbook prices soar when the professor makes the buying decision, but the student buys the book. If the cost of a new textbook mattered to an instituiton, like it would if it had to be factored into tuition, the school would have an incentive to make better decisions and to shop based on price. Right now, there is no incentive for professors to do this. In fact, many of the largest for-profit schools have done this and they have driven textbook prices way down for their students.

Also, publishers would be thrilled to sell books directly from their websites and cut-out the middleman — the book stores. However, most colleges look to their bookstores as revenue centers. The college gets a piece of the profit. Therefore, the college frequently is the middle-man, again, with no incentive to cut prices."

So what's the good news? Publishers are aware that their existing textbook economic model is not sustainable. The growth of for-profit schools and the extension of the practice making institution buying decisions, the growth of free-content initiatives, and the growth of ad-supported textbooks are all portents of a different economic model. Increasingly, publishers are trying to figure out how to become service providers instead of content providers. Recently, SMARTHINKING announced partnerships with 3 of the 4 largest higher ed textbook publishers. Tutoring services, combined with an increased reliance on instructional administrative systems, are the sorts of products publishers will be selling in the future. These will be sold as subscriptions rather than as things (like books). In short, today students pay for content and get a lot of ancillary materials and services. Tomorrow, students or schools will pay for the ancillary materials and services and the content will be free. Educational institutions are confronted with the same challenge. Does it really matter where someone learns college algebra? What is the value that an individual school brings to education? A question for another posting…

Higher Education Free Trade Agreement (HEFTA)?

2007-04-12T08:08:00.000-07:00

Distance education removes the geographic barriers to educational choice. Once removed, those courses that are the same across schools --typically those taken in the last two years of high school and the first two years of college -- become commodities. As a commodity, standard economic theories can be applied to their pricing and consumption (or lack thereof). When you look at the higher education market through the lens of international trade theory, one can see ways in which the cost of high school and college can be dramatically reduced. One can also see why such changes are slow to happen.

Here's an excerpt from my master's thesis that I wrote in 1997, which, astoundingly and unfortunately, is still relevant today:

"The problems of integrating institutional course offerings is similar to the evolution of international trade and the creation of a global, integrated economy. In the international arena, each country could be said to produce roughly two classes of goods, those that they produce exclusively and those in which they compete. For instance, the climate of Mexico allows the growth and export of oranges and the cold waters of Finland provide cod fishing unavailable in Mexico. Clearly the orange and cod trade between both governments will help the other. However, both America and Japan compete to produce automobiles. Although Japan might produce better and cheaper automobiles, and the American consumer would prefer to purchase a better and cheaper automobile, political pressures conspire to prevent such purchases. Because “competitive” products are common to both countries, they are likely to affect more consumers, therefore, the benefits gained by sharing these products are likely to be larger than the benefits gained by sharing “exclusive” goods. As countries increase their trade, their economies become more integrated.

In distance learning, the colleges can be considered countries and their course offerings can be considered to be “exclusive” and “competitive” goods. Finally, as national economies or institutional curricula become even more integrated, industry specific government subsidies and regulatory barriers in international trade and state subsidies to specific institutions in distance education could affect the competitive balance."

To extend the analogy, two schools will be willing to import and export their low-enrollment, highly specialized courses (say, Mandarin Chinese and bio-mechanical engineering) because importing these does not threaten their existing courses. However, they are much less willing to import college algebra, english composition and chemistry 101, because these courses will threaten a school's existing math, writing, and chemistry faculty. To put it more bluntly, why won't a 4 year college which charge $1000 per course simply outsources its english 101 course to a community college which charge $250 per course? While consumers benefit from the first scenario, they REALLY benefit from the 2nd.

Though much of higher education has become a commodity in the last decade and the number of educational providers has grown substantially, the established educational players have little interest in "opening their borders" to credits granted at other colleges. Like taxation, subsidization and regulatory barriers in international trade, schools have a number of tools and policies at their disposal to keep their borders closed. For instance, individual schools set articulation policies and graduation requirements. Groups of like-minded schools set accreditation requirements which have important financial implications. State and federal governments provide price subsidies that affect the market for courses. Lastly, the byzantine labrynth of articulation policies, graduation requirements, accrediting agencies, and financial aid information limits the transparency of the process. Even if credits are officially transferrable, if it is difficult to find that out, students will be discouraged from trying in the first place.

* Articulation policies: Each school sets its own policies about the courses from other schools that it will count as credit. For instance, even when a public institution and a for-profit institution are accredited by the same body, public institutions (importer) are reluctant to accept credits from for-profit colleges (exporter), where for-profit colleges (importer) are very likely to accept credits from public colleges (exporter). A similar dynamic exists among 4 year and 2 year institutions. These are similar to regulatory policies that might be enacted at a national level. For instance, a government may decide that only products from countries with certain environmental or labor laws are allowed to be imported.

* Graduation Requirements: Even if a school does import another school's credits, other regulatory barriers are likely. For instance, an importing school might count a student's course as credit, but not credit toward graduation, or not credit in a specific discipline necessary for graduation. Though not monetary, this is, effectively, a tax. A student may import the course as credit, but may have to pay for this course again or pay for a different course when it's unnecessary to meet graduation or distribution requirements.

* Accreditation: The regional accrediting agencies are funded by their member institutions. The agencies' purpose is to help institutions improve. However, because this is a quality assurance body created by the members that it oversees, its ability to impose dramatic change, impose requirements contrary to its members vested interest, and to respond to external forces is dramatically limited. By linking regional accreditation to a student's ability to receive federal financial aid, regional accrediting agencies are the de-facto quality assurance bodies for higher education. This is similar to the multi-national groups that govern economic policy. For instance, an accrediting body could be compared to the OECD, European Union, or World Bank donor countries.

* Price Subsidies: Higher educatoin is one of the few industries where for-profits, non-profits, and publicly subsidized non-profits offer the same product at radically different prices. All states subsidize their public higher education systems to greater or less degrees. These subsidies, in turn, affect tuition. With tuition artifically lowered, it is difficult for cost-effective solutions to enter the marketplace. The United States continually complains about how EU countries subsidize AirBus in its competition with Boeing in the sale of aircraft.

* Information Asymmetry: This means that the school knows its articulation policies and graduation requirements, but it is extremely difficult for the student to find it out. It is even more difficult to find it out for many schools that the student might be considering. Without having the appropriate information, the student is discouraged from piecing together a lower-cost educational path.

In every other industry, new technologies increase productivity which drives costs down, improves quality, or both. Usually, it is the free market which forces these productivity improvements. Companies that use new technology effectively, frequently start-ups, force established companies to comply, thereby improving the productivity of the entire market. In education, though the technologies exist to dramatically reduce costs and improve quality, the market dynamics do not.

However, I believe that market realities are creating serious cracks in the regulatory structure that protects existing colleges. First, the cost of college continues to rise faster than the rate of inflation and students are seeking ways to piece together an affordable college education. Even the cost of publicly subsidized education has risen to the point that low-cost, high quality, unsubsidized course offerings can enter the market place. Second, students are increasingly turning to distance education for convenience, if not price. This creates a competitive market for distance education classes. As schools compete for students, they are increasingly willing to accept another school's credits in order to attract a new student. Third, as schools are increasingly willing to accept another school's credits, schools are being forced to examine and open up their articulation policies. Public institutions are increasingly enacting articulation agreements among themselves or are being forced to do so by the state government. Fourth, as a result of greater articulation agreements and the searching power of the Internet, credit transfer policies are becoming increasingly transparent. Fifth, the federal government is beginning to take a much harder look at the role of accreditors. Ultimately, the federal government needs to decide if an accrediting body is a self-improvement club or a quality assurance entity. If the former, the financial aid shouldn't be tied to it. If the latter, schools should have a more limited voice in the standards that it sets.

It is a shame that the Internet has not driven the cost of education down. However, today, in higher education, one can see the first cracks in a market that has been protected for a century. If I'm lucky, higher education will be cheaper for my kids than it was for me.

The Online Tutoring Landscape

2007-04-06T18:43:00.000-07:00

In a previous post I noted that there are 2 kinds of online tutoring: Prescriptive tutoring and Drop-In tutoring. SMARTHINKING focuses on the Drop-In model. Within the drop-in market, there are 2 established companies -- SMARTHINKING and Tutor.com -- and at least one well-funded new company who may offer drop-in tutoring (TutorVista). Tutor.com has built its business by selling to public libraries who target middle school students. SMARTHINKING has built its business by selling to colleges, some high schools, and bundling with textbook providers. SMARTHINKING has tried selling to public libraries with limited success. Tutor.com has tried selling to colleges with limited success. Each company has tailored its service and pricing to fit its market.

Though SMARTHINKING has little or no competition in the higher education market, I have always thought that some company would emerge to compete with us. However, 2 dynamics have emerged over the past six months that will make it very difficult for new entrants to compete successfully in the college market.

The first dynamic is the growth of our partnerships with publishers. Starting in June, 4 of the 6 largest college textbook publishers representing over 70% of the college textbook market will bundle SMARTHINKING's services with selected products. These publisher partnerships will allow the 300+ schools who contract directly with SMARTHINKING to offer more tutoring services without incurring extra costs. For publishers, the addition of SMARTHINKING helps sell more books because schools want to extend their existing SMARTHINKING services. Schools have an incentive to contract with SMARTHINKING because publisers offer ways to defray costs. SMARTHINKING can now offer a school a complete solution on a single platform that can integrate SMARTHINKING tutoring, a school's own tutors, and tutoring provided by publishers. In addition to all of this, the branding that results from the marketing efforts of these publishers cannot be underestimated.

The second dynamic is the dramatic service level improvements that come with scale. Running a drop-in tutoring service is like running a call center without the call and without the center. The biggest difference is that session lengths -- the time spent on a call -- in most call centers is short. For online tutoring, the session lengths are long. This means that, to achieve consistently low wait times without signficant overstaffing, a drop-in tutoring center must have a lot of users. Our models indicate that a center needs about 35 sessions per hour to achieve average wait times under 4 minutes with an efficient staffing model. In the past year, SMARTHINKING has grown such that we meet these service levels across almost all of our available hours. Competitively, this means that any new entrant will need to signficantly over-staff prior to achieving student volume if the new entrant plans to compete on service levels. For SMARTHINKING, we will begin to integrate service levels as a marketing message to our current and future clients.

These 2 dynamics -- the interdependence of our schools and publishers and the predictability of service levels -- makes me increasingly confident in SMARTHINKING's ability to grow within and defend the college market from new competitors. These dynamics, plus the college focused service elements that we already offer such as 24/7 drop-in math tutoring and the world's largest online writing lab, make us the only choice in the college market.

Colleges (and High Schools) Will Compete On Academic Service Levels

2007-04-02T08:11:00.000-07:00

Recently, I have given several presentations to higher education administrators about how call center theory can be applied to educational services. An online, drop-in tutoring service, like SMARTHINKING, is essentially a call center, but without the "call" and without the "center." To create this presentation, we developed a fairly complex model to analyze the interaction between the following variables:

The number of tutors staffed;
The average number of students expected;
The length of a tutoring session;
The desired average wait time for a student (the service level);
And the variance embedded within all of these variables.

With this model, we can predict the number of tutors that need to be staffed (ie. 15) to meet a desired service level (ie. average wait time less than 4 minutes) with a desired tutor efficiency (ie. 75% of the time a tutor is working with a student). The upshot of all of this was that, to run a cost-effective, drop-in tutoring service with reasonable service levels, you need to have A LOT of expected students. This is becaues the session length for tutoring is far longer than that of your typical call center. I found this model fascinating, and I was sure that others would as well.

Others didn't. Perhaps I need to polish my presentation skills, but when I was explaining the model and the results I saw a lot of vacant stares and more than a few nodding heads. However, rather than ascribe the lackluster response to my own performance, I'll use it as a pretext to draw some generalizations about education. At a minimum, this will rationalize away my disappointment. Perhaps it will even be insightful!

As I thought about my presentation, I think the real reason that listeners were unmoved is that the presentation correlated with almost nothing in their daily work lives. In fact, at the beginning of the presentation, I asked how many schools had defined service level goals for faculty members to meet. For instance, were faculty required to return a paper or an e-mail in X amount of time? Only 1 school out of 150 indicated they had such service levels. It occurred to me that these basic principles of service are simply not considered when schools deliver education. This, I think, will change dramatically in the next 10 years.

As more classes are taken online, higher education increasingly becomes a commodity. Online, geographic barriers to student choice are gone. The remaining differentiators -- price and quality -- remain. In my opinion, the traditional pricing structure of higher education will soon crumble as well. If students can take an english 101 course at a community college for 1/3 of the price of the 4 year college, and the credit is comparable AND the student can take it online, pricing will eventually become more rational. With these changes, the only element left that an institution controls is its academic quality. Within academic quality, the content of general education subjects rarely change. So, for those schools not competing on student selectivity or brand, all that's left is the level of service that they provide to the student.

This is a lesson that has already been learned by higher education administrators in admissions and technology. Colleges understand the impact of service levels when recruiting students and the impact of service levels as it relates to tech support. It is ironic that the real product of education, student learning from courses and services, hasn't incorporated any of these lessons. For most schools -- particularly public institutions -- this is a result of the traditional higher education governance structure. Traditionally, academic decisions and business decisions are made by the faculty and the administators respectively. For schools that want to compete successfully online, academic and administrators will need to work together to focus on the services that provide the greatest benefit to their customers -- the students.

The Direct To Consumer Conundrum

2007-03-30T06:24:00.000-07:00

I'm digging this blog idea. Prior to starting SMARTHINKING, I was a freelance writer for education and technology issues. I wrote for a variety of magazines and institutions -- Converge magazine (now defunct), Wired (a couple of very small pieces), CEO Forum on Education and Technology, National School Board Association, and others. This feels like those days again...

In the last six months, there has been resurgent interest in selling online tutoring services directly to consumers. One company plans to offer low-cost tutoring from tutors located in India and has raised over $10 million to try it. Another company is trying to raise a similar amount to aggressively expand into the direct-to-consumer market. This investor fervor hearkens back to the days of the late '90's when investors and companies showed similar irrational exuberance over the online tutoring market (from which my company benefited, to a degree).

The last decade is littered with companies that have tried to sell online tutoring services directly to consumers. In the late '90's one company raised close to $20 million on the theory that it could create a market for tutors offering their services and students needing tutors. Another well-known company invested close to $40 million to develop a direct-to-consumer online tutoring service. While both of these companies are still around, their business models have radically changed. After plowing through its $20 million, the first company bought a much smaller company that allowed them to sell services directly to public libraries -- effectively abandoning the direct-to-consumer model. It is now trying to resurrect the direct-to-consumer channel. The second company integrated its online tutoring offerings into it's place-based tutoring services -- effectively creating a hybrid tutoring option. Neither company has come close to justifying the original investment. From my own experience, SMARTHINKING ran several well-executed pilot programs targeting the direct-to-consumer market with very little success.

Tutoring seems like a market ripe for "disintermediation." According to Eduventures, the tutoring market is worth $4.5 billion and growing at 15% per year. It's also highly fragmented with price points ranging from $8 - $200 per hour, varying levels of quality, and imperfect mechanisms for quality assurance. In short, it seems like a perfect market for the aggregating ability of the Internet. In theory, some company should be able to offer a consistent level of service at a relatively low price to create a respected online tutoring brand that would aggregate both tutors and students. In practice, this has not been the case.

So, what happened? One answer might be that students don't really like online tutoring. Perhaps face-t0-face tutoring provides a level of personal interaction that is lacking on the Internet. While this is undoubtedly true, online tutoring offers other advantages like convenience of time and place, anonymity, archiving, and others. Further, usage of SMARTHINKING's online tutoring services is growing by more than 50% per year with most students using the service more than one time. Student surveys show that students really like the service. So, again from our experience, this isn't the case.

I believe that that the direct-to-consumer market hasn't worked because there is a mismatch between the market to whom online tutoring appeals and the consumer purchasing patterns for educational services. There are 2 types of tutoring. They are "prescriptive" and "drop-in." Prescriptive tutoring is where a student attends regularly scheduled tutoring sessions, frequently with the same tutor. Often, this tutoring will be tied to a pre-tutoring assessment to identify student weaknesses. The largest market for Prescriptive tutoring seems to be in the K-7 grades. Drop-in tutoring is where students get help from tutors when they need help. Essentially, this is a call center model for tutoring. Almost the entire consumer market for tutoring resides in the Prescriptive market. All of the well-know tutoring companies offer Prescriptive tutoring services. Prior to the advent of the Internet, Drop-in tutoring was restricted to places where students could be aggregated to create sufficient volume to offer a drop-in service. In practice, this was limited to learning assistance centers (ie. math labs) at colleges and universities. The Internet has allowed Drop-in tutoring to expand beyond the residential school. Because Drop-in tutoring requires students to initiate the interaction, this is most appropriate for high school and college students.

This is a rough and incomplete generalization, but I believe that education has 2 functions. These are socialization and knowledge transfer. When students are young, socialization is more important. As students age, knowledge transfer gains in importance. No matter how well constructed, online tutoring is simply a less powerful socialization experience than face-to-face tutoring. Therefore, online tutoring has not been as popular or successful with younger students. On the other hand, the convenience of the drop-in model of online tutoring is excellent at knowledge transfer. This model is used successfully by older students -- typically high school and college students. So, to sum up, online tutoring works well for older students, but not as well for younger students.

This is another rough and incomplete generalization, but consumer purchasing of educational products and services is restricted to three general categories. These are:

Educational objects and toys -- like reading software or Leapfrog's toys;
High stakes test prep -- SAT prep, etc...
"Get Ahead" services -- Tutoring for young students.

Numbers 1 and 3 appeal to parents of younger students. Number 2 appeals to parents and students in the high school and college levels. Parents of high school students are willing to pay for test prep because there is a very clear goal in mind. They have not been willing to purchase Drop-in tutoring because the value isn't as clear. College students will spend a ton of money on tuition and textbooks, but don't buy much of anything after that. Again, because the relationship between an external tutoring service and passing a class isn't extremely obvious. What this means is that, the element of online tutoring that works well -- Drop-in tutoring-- is not well matched to the buying power and habits of the students for whom it works well.

It is entirely possible that I have misjudged the market dynamics. Perhaps the consumer market for online tutoring in the late '90's and early '00's wasn't mature enough yet. Perhaps the new marketing power of search engines is enough to create this consumer market. Perhaps today's investment in the consumer online tutoring market will prove to be rational exuberance. However, I don't think student and parent buying patterns have changed very much. Here are the lessons that I draw:

Drop-in online tutoring works well.
Drop-in online tutoring is best sold as an "add-on" to a school or as part of a bundled solution with another educational product.
Students will come to expect Drop-in online tutoring as part of their educational experience, rather than purchase it independently.

The next year will tell if there really is a consumer market for online tutoring.

Introduction

2007-03-29T11:46:00.000-07:00

I've been debating whether to start a blog for about a year now. After reading an article about corporate blogging in Wired yesterday, I figured now was the time to try. Doing it because others are doing it is certainly not the best reason to do anything, but there seems to be little harm in sharing my thoughts about my company (SMARTHINKING) and about American education.

I am the CEO and co-founder of SMARTHINKING.com. We are the leading provider of live, on-demand, online tutoring services to schools and publishers. I founded the company in July of '99 to allow high schools and colleges offer tutoring services to their students such that their students would be more likely to pass the general education courses in which they often fail. Our tutoring services are also bundled with a number of college textbooks published by Houghton Mifflin, Bedford Freeman & Worth, and LWW. Starting in June, they will also be bundled with textbooks from Pearson Education and Thomson Higher Education.

The things that differentiate us from other online tutoring providers are:

We offer live, drop-in math tutoring 24 hours a day, 7 days a week (in the Fall and Spring).
We provide an online writing lab where students submit essays for critique and return within 24 hours.
Our services are vetted and selected by educators (like teachers and professors) who must be assured of the academic and pedagogical credentials of our team and our tutors.
Our services are also bundled with textbook publishers, allowing our clients to find flexible ways to pay for services.
Most of our tutors are part-time employees, as opposed to independent contractors. While it would be cheaper and easier to have independent contractors, IRS regulations forbid signficant training of independent contractors. To do online tutoring well, we find that significant pedagogical training is required.

So, this is my first post. I'll be back shortly...