Have Aspirations, Will Travel

Students are increasingly looking across state lines to find online degree or certificate programs -- especially if an institution can tempt them with improved job prospects, according to a new look at trends in distance education.

This spring, the researchers, consultants and senior officers at Learning House and Aslanian Market Research surveyed 1,500 recent, current and prospective online undergraduate and graduate students pursuing either degrees or certificates at institutions across the country. Now in its third year, the report released Tuesday morning is the most recent effort by market researchers to identify the millions of students who take all their courses online -- and what motivates them to do so.

Their work has gotten a little easier now that the U.S. Department of Education collects data in the Integrated Postsecondary Education Data System about the number of students who study online, but the data are still out of date. The most recent information is almost two years old. As the report suggests, a lot has changed during that time.

In the inaugural Online College Students report, released in 2012, 80 percent of surveyed students said they enrolled in fully online programs at institutions within 100 miles from where they live. This year, only 54 percent say the same. The growth is largely driven by graduate students, 48 percent of whom said they study at an institution more than 100 miles away from home, compared to 35 percent two years ago.

That development, the researchers said in an interview with Inside Higher Ed, is fueled by both supply and demand.

“Online education is no longer disruptive,” said Carol B. Aslanian, the senior vice president of market research at Education Dynamics who led the Aslanian Market Research Team. David L. Clinefelter, chief academic officer at the Learning House, led the other. “It’s now. It’s here. People want it.”

The online education growth rate may be slowing, Aslanian said, but that rate masks the fact that large nonprofit institutions have entered the online education market while for-profit institutions have shed hundreds of thousands of enrollments. “We’re getting far more high-brand, recognizable, reputable institutions into the online market,” she said. “I think the entrance of brand names is going to captivate the market appeal.”

On the student side, the researchers said they were carefully watching numbers that suggest two in every five fully online students are unemployed and therefore seeking higher education to improve their job prospects.

“We don’t know if it’s an anomaly yet,” Aslanian said. “But if we’re getting more unemployed people... it could be due to the fact that these unemployed people want a more convenient way while they pursue a career to study online.”

Questions about furthering their careers resonated with the students who participated in the survey. Asked to pick the strongest marketing message out of a lineup of 18, one-quarter of the students picked “90 percent job placement,” easily beating out “Earn your degree in one year” and “Study at your own pace,” which attracted 10 percent each.

Almost three-quarters of the surveyed undergraduates, or 72 percent, said their primary motivations for studying online were related to their careers -- reasons such as un- or underemployment, seeking a position in a new field, or keeping up to date with skills. Graduate students were most likely to return to school to make themselves more marketable for a promotion or a new position in their field, according to the survey.

The value of an online program that emphasizes employment has been reflected in similar studies of the online education market, including work from the research and consulting firm Eduventures. Brian Fleming, a senior analyst there, said in an email that “it makes sense that adult learners’ No. 1 reason for earning your degree is career enhancement.”

Fleming said he was less certain about the report’s conclusion that “Marketing professionals should consider or test expanding the geographic region for reaching prospective online graduate students,” however. “[T]he national reach of large established online brands (Phoenix, Ashford, Liberty, etc.) makes it very hard for most schools, especially those currently enrolling less than 1,000 online and with limited adult learner foci and technological infrastructures, to break into out-of-state markets in a way that would really drive a coherent strategy,” he wrote.

According to Aslanian, the market is nowhere near saturated with online education providers. “Only 15 percent of all college students are in a fully online program,” she said. “Do I think that number is going to go up in a year or two or three? Absolutely.”

The challenge for new entrants into the market, Aslanian suggested, will be to distinguish themselves from the competition. Instead of launching another standard M.B.A. program, for example, institutions could attract students with specific concentrations, she said.

The convenience factor also ranks high among online students. More than half of graduate students and 70 percent of undergrads surveyed said the period of time between searching for a program and enrolling at an institution should take no more than two months.

That program should also be lenient with transfer credits -- 82 percent of survey-takers said the amount of credit accepted was important to them. Finally, a plurality of students, 38 percent, said they preferred that the institution told them how much they would have to pay for the entire degree, and not for every course or credit hour.

“I have not seen much other work looking at this issue -- which seems pretty central to most higher ed business models,” said Jeff Seaman, co-director of the Babson Group (which has its own online education report), said in an email. “That students are confused about pricing should be a wake-up call for many higher education institutions.”