RD355 - Report of Progress Toward Development of the Plan Required in § 23.1-909 for a Cooperative Online Degree Program – September 30, 2016

Executive Summary:
§ 23.1-909 requires the Secretary of Education and the Director of the State Council of Higher Education for Virginia (SCHEV) to report, by October 1, 2016, their progress toward development of a plan for a “combined cooperative degree program” whereby any enrolled undergraduate student at any public or private nonprofit institution of higher education may complete a degree program online “at a tuition cost not to exceed $4,000, or such cost that is achievable, per academic year.” Enacted in 2015, this statute codified House Bill 2320, which was introduced by Delegate Ben Cline, passed unanimously by both chambers and signed by Governor Terry McAuliffe.

Education Secretary Dietra Trent and SCHEV Director Peter Blake applaud Del. Cline and the 2015 Virginia General Assembly for their commitment to affordability, and to students generally, and for positing this innovative, ambitious idea for the Commonwealth to consider. The administration, the secretariat and SCHEV share your commitment to access, affordability and innovation, and view the concept of a collaborative, low-cost, online degree program as a unique opportunity to pursue those commitments simultaneously.

Following consultation with the Commonwealth’s two-year and four-year public and private nonprofit colleges and universities, and following extensive review of the capacities of our institutions, of potential models (and lessons learned) in other states and of the results of national surveys and expert analyses published by practitioners and think tanks, Dr. Trent and Mr. Blake offer the plan summarized below as their conclusion regarding the most feasible course of action for creation of a “cooperative combined degree program” that can be made available online to undergraduates at lower cost than traditional on-campus matriculation.

The Education Secretary and the SCHEV Director recommend that, to achieve the goals of § 23.1-909, the Commonwealth support the in-development Online Virginia Network (formerly the Virginia Degree Completion Network), with the expectation that the effort will be scaled up over time to encompass many of the key features contemplated in the statute. Dr. Trent and Mr. Blake believe this strategy is the most prudent and most likely means to accomplish the legislation’s dual ends: (i) a coordinated, statewide, online degree-completion system; and (ii) a reduced cost to students and families.

The Online Virginia Network (OVN), as outlined in the Fall 2016 document, Online Virginia Network: State Report and Proposal (LIS No. 275), from George Mason University (GMU) and Old Dominion University (ODU), represents a natural and efficient starting point on which to build the lower-cost online degree-delivery platform envisioned in § 23.1-909. In fact, its initial focus solely on degree completion for adults with prior credits has been broadened – in direct response to the statute – to ultimately provide wider availability of online courses and degree programs for all students. The first sentence of the OVN business plan begins with the statement, “The network is open to all Virginia students,” which captures fully the intentions of § 23.1-909. Dr. Trent and Mr. Blake believe they would be remiss to recommend a separate plan that would be neither necessary nor cost beneficial for the Commonwealth.

Among Virginia’s public four-year institutions, ODU is the major provider of online courses and degree programs. As such, the university has deep investments in relevant personnel and infrastructure that the Commonwealth need not duplicate in pursuit of a cooperative online degree program. GMU also has a strong presence in the online space, offering five degree programs in high-demand, high-wage STEM fields. Equally important, its administration is committed to enhanced participation in online education, “next generation” seamless transfer of academic credits and targeted student services.

Moreover, Gov. McAuliffe and the 2016 Virginia General Assembly have already allocated substantial sums – $1 million in FY2017 and $2 million in FY2018 – for SCHEV to work with GMU and ODU on a project that Chapter 780, Item 146 O.2., describes as “a plan for the Network to serve … students seeking access to an on-line degree program that is more cost-effective than a traditional degree.” Again, Dr. Trent and Mr. Blake believe that the Commonwealth’s best interests are served by seeking to fulfill § 23.1-909 via the proposed Online Virginia Network rather than by duplicating that very similar effort and expending additional, redundant resources to do so.

Review of the current landscape of online education in Virginia and relevant research published on the subject convinced Dr. Trent and Mr. Blake that a scale-up approach is more likely to be successful than an attempt to implement online statewide delivery of every degree program all at once. For one, the majority of the Commonwealth’s nonprofit colleges and universities currently do not offer any degree programs online. To increase significantly the availability of online courses and degree programs will require tremendous resources, infrastructure, expertise and time.

Second, within a “combined cooperative degree program”, the “cooperative” component should be developed prior to and during institutions’ internal efforts rather than after. As illustrated in recent research from New America and Education Sector, states should follow and achieve sequentially a set of five steps in their creation of major, inter-institutional degree-completion platforms. The statute’s desired online program constitutes the fourth requisite step; and, the business plan for the Online Virginia Network outlines the proposed pursuit of the activities called for in the first three steps and offers timelines and cost estimates.

Thus, Dr. Trent and Mr. Blake concur with New America analyst Rachel Fishman who, in her 2013 report State U Online, asserts that this model “works only if states combine and streamline existing efforts in order to achieve a fully articulated system where students can move … among institutions … . This way, states can ensure that their online systems are on a strong footing that will help them climb the steps toward effective, sustainable online efforts.”

Therefore, to initiate a “combined cooperative degree program” that will be offered online and at lower overall cost to students, the Secretary of Education and the SCHEV Director propose a three-part plan to be implemented over the next five years whereby:

1) The Online Virginia Network (formerly, and in Chapter 780, known as the Virginia Degree Completion Network) is designated formally during the 2017 legislative session as the vehicle through which the online program sought in § 23.1-909 is to be implemented.

2) SCHEV, GMU, ODU and all subsequent partners in the OVN are directed to develop the network so as to facilitate its growth and expansion over the next five years into the “combined cooperative degree program” envisioned in the statute. OVN partners will work together to:

a. create a clearinghouse of currently-offered online courses and degree programs that prospective and continuing students can easily search;

b. pursue shared-service contracts for learning management systems and faculty development resources that are proven effective in online education; and

c. standardize, and perhaps centralize, support services (e.g., academic advising; financial-aid advising; e-tutoring) targeted at online learners.

3) Simultaneous with institutions’ development of the OVN, the executive and legislative branches and SCHEV will work together over the next five years to:

a. create a sustainable, efficient cost structure for the network that supports online delivery of degree programs that are in demand by in-state students and employers;

b. provide incentives and support for faculty to develop online courses, to deliver courses electronically and to undertake professional development and training to meet the different, various and unique needs of online students;

c. collect robust data on online students to better understand their enrollment decisions, patterns and outcomes and to inform assessment and improvement of the network’s outcomes;

d. continue to implement and refine Virginia’s already-robust articulation agreements to ensure that credits earned by students follow them between and among institutions and count toward their timely completion;

e. ensure that students’ needs are met before, during and after enrollment in the network through tailored, online-specific student support systems and learning management systems; and

f. encourage expanded availability of and participation in dual enrollment, prior-learning assessments (e.g., Advanced Placement and International Baccalaureate) and the Two-year College Transfer Grant (CTG) program, as well as institutional adoption of innovative course and credit delivery (e.g., competency-based modules; massive open online courses/MOOCs offered for free or little cost; and/or experiments with awarding credits and/or financial aid differently).

Taken together, these steps will allow all stakeholders to work simultaneously and collaboratively to bring the program envisioned in § 23.1-909 to fruition, while addressing the issues of costs, faculty buy-in and student needs. Institutional leaders support this scale-up approach targeted at in-state students and high-demand degree programs that will allow them to participate voluntarily and in the form and to the extent feasible in accordance with their missions, capabilities and resources.

Dr. Trent and Mr. Blake acknowledge that the tenets of their plan do not guarantee the specifics prescribed in the statute for the “combined cooperative degree program;” nevertheless, they are convinced that their proposal will allow the Commonwealth to address readily or avoid completely the legal, regulatory, administrative and financial challenges and impediments entailed by a literal interpretation of § 23.1-909. For example, in allowing for voluntary institutional participation in whatever form and scale is most suitable for each institution, this plan avoids forcing every nonprofit institution in the Commonwealth to expend significant resources with no guarantee of either state financial support or student demand, and thereby, of an expectation or ability to recoup their investments, regardless of the tuition rate – but especially at a rate of only $4,000 per year.

Similarly, a scale-up approach in which assessments and adjustments are possible at each stage will avoid the Commonwealth becoming locked in – financially and in terms to commitments to students – to a specific, long-term end should different strategies emerge or new technologies become available in the meantime.

Moreover, Dr. Trent, Mr. Blake and counsel in the Office of the Attorney General do not believe that the Commonwealth can compel private nonprofit institutions to participate in this program; and the state certainly possesses no constitutional or statutory authority to dictate these institutions’ tuitions.

Also, this plan would reduce potential issues with accreditation standards, such as the requirement that at least 25 percent of a student’s degree credits be earned via coursework at the institution awarding the degree and from faculty holding a terminal degree in their field. It would also better ensure that students’ eligibility for federal and state need-based financial aid is not encumbered or reduced, and that the focus will be on in-state students rather than “any undergraduate student enrolled” as worded in the statute, which would imply that out-of-state and international students would be eligible for the legislation’s suggested $4,000/year tuition rate.

And here – on the issue of student cost – is where this plan perhaps diverges most from the statute’s intention of a significantly-lower tuition rate. Delivery of online instruction is expensive to undertake and to continue. Most institutions that initiate online programs do so to expand enrollments and/or to generate additional revenues. As a result, most providers charge tuition rates for their online offerings that are equal to or above the rates for their on-campus offerings.

Given the operational costs involved, the OVN proposal’s model seeks alternatives beyond tuition for reducing overall student costs, such as low- or no-cost textbooks and course materials, fewer and lower student fees, and reduced time-to-degree through credit for prior learning, life experience and competency demonstration.

Dr. Trent and Mr. Blake have concerns about the statute’s expectation regarding tuition at public institutions of higher education. On the practical side, they are concerned that a cut-rate tuition will imply that the online education being provided is low quality, or that the on-campus education being provided at a higher cost is vastly overpriced, or worse yet, that both implications are true. They believe that a college education – regardless of its delivery method – is a college education. An online degree program must be – in fact and in perception – just as rigorous and high quality as an on-campus program; otherwise, it should not be offered.

On the more philosophical side, Dr. Trent and Mr. Blake are concerned by the potential policy implications of – and the precedent that would be set by – requiring every public college and university to offer two tuition rates, which potentially could be dramatically different, for the same education. How would the institutions – and the Commonwealth – justify or even explain such discrepancies? Dr. Trent and Mr. Blake urge the legislature to consider carefully the ramifications of dual-tuition strategies, both in this matter and in Virginia higher education policy generally.

If the primary intent behind the statutory language is to reduce student costs appreciably, and the online program is but a potential strategy, then many opportunities are already in place that can be promoted to students at costs to the state well below those necessary to implement the “combined cooperative degree program” as described in statute. For example, based on 2016-17 tuition rates, a student can attend a community college, transfer to one of the six lowest-tuition public four-year institutions, and complete a baccalaureate degree for between $27,152 and $31,283 (an annual average cost of $6,788 - $7,821), excluding non-mandatory fees. These costs would be lower if a student has completed dual-enrollment courses and/or standardized tests (AP; IB) and participates in the Transfer Grant program. Moreover, this same path is already possible via online delivery from many community colleges and some four-year institutions.

If the intent is to reduce significantly the costs borne by students, and an online program is seen as the sole or best potential strategy, then Dr. Trent and Mr. Blake conclude the Commonwealth’s choices are either to create a separate online institution, to partner or affiliate with an existing online institution or to simply promote to Virginians one or more existing online institutions without a formal affiliation. The first choice would be very expensive – standing up a state-supported, comprehensive online institution would take several years and could easily cost $100 million; the second choice, while more expeditious, would still represent a significant one-time cost ($8-10 million); and choices two and three both would put the Commonwealth in the position of advocating for, if not supporting financially, an external provider in lieu of its own institutions and options.

For these and additional reasons laid out in the following pages, Dr. Trent and Mr. Blake recommend their plan over competing strategies and options. By supporting the establishment of the Online Virginia Network – scaling it up (from a focus on adults, veterans, military personnel and others with some college credits but no degrees) in response to § 23.1-909 to provide broad availability of in-demand degree programs for all enrolled Virginians, and pursuing state policies and funding that ensure the OVN offers high quality in its degree programs, student services and learning and employment/wage outcomes, they believe the Commonwealth will find the best means to achieving the laudable ends sought via § 23.1-909.