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UniversityNow Rides a Low-Cost Wave

Max Whittaker for The New York Times, A day in the life of Travis DeCampos: on the job at the Sacramento Fire Department and working on his bachelor's degree from Patten University with his fellow firefighter Chad Chase, right. 

 

For Profit and People, IN his 2011 TED talk, Gene Wade thus shared his vision of an ultra low-cost college degree for working adults. As of today, he has raised $42 million in venture capital for his new company, UniversityNow, and its two for-profit universities, Patten and New Charter. The first students started in the spring. Around the same time, Forbes magazine named Mr. Wade the most disruptive figure in education.  By ANYA KAMENETZ Published: November 1, 2013, The Disrupters   http://www.nytimes.com/2013/11/03/education/universitynow-rides-a-low-cost-wave.html?hp&_r=0 

Imagine we could actually build a system of schools that … set up every single student who enrolled in it for success, unlike the schools we have today in higher education, where most students who enter it get no credential at all, most students that enter it are left with a mountain of student debt.  GENE WADE at TEDx San Francisco

PATTEN UNIVERSITY

Tuition: $1,316 per four-month term
Format: Online, self-paced
Degrees: A.A., B.A. in business; M.B.A. ($1,996 per term)
Started: March 2013

NEW CHARTER UNIVERSITY

Tuition: $796 per four-month term
Format: Online, self-paced
Degrees: A.A. in business, general studies; B.A. in business; M.B.A. ($1,316 per term)
Started: March 2013

  

Jim Wilson/The New York Times

 

Gene Wade, founder of UniversityNow, at the reconfigured Patten University in Oakland, Calif. 

IN his 2011 TED talk, Gene Wade thus shared his vision of an ultra low-cost college degree for working adults. As of today, he has raised $42 million in venture capital for his new company, UniversityNow, and its two for-profit universities, Patten and New Charter. The first students started in the spring. Around the same time, Forbes magazine named Mr. Wade the most disruptive figure in education. 

UniversityNow’s downtown San Francisco offices have the same vibe as any bustling tech company close to its start date, with whiteboards full of lists and walls decorated with the company’s values (“Responsive/Agile,” “Students First,” “Ownership/Empowerment”). The online programs are delivered on a custom-built software platform that guides students to the next, most relevant text, video or assignment, much like Amazon suggests what you should read based on past activity. Enrollment has surpassed 1,200 students and is growing, Mr. Wade says, at 20 to 30 percent a month. 

“We’re off to the races,” Mr. Wade says. “It’s been quite intense and good. We had a person call us the other day. They got that email from their employer about our program. They were about to sign up for $28K in debt at the University of Phoenix. Now they’ll be doing our M.B.A. for $1,000 a year” — $4,000 before employer subsidies. “That’s a game changer. She’d be paying that the rest of her life.” 

Patten (with online and on-campus programs) and New Charter (online only) are part of a low-cost wave that has emerged in the last year in response to the hue and cry over college affordability. The programs tap many of the trends bubbling up in online education, including adaptive learning, mentoring and self-paced learning that replaces class time with a professor. UniversityNow programs are based on student mastery of competencies, determined by a team of newly hired faculty members with input from employers on course objectives. 

Students begin with a pretest that pinpoints problem areas, then review suggested material until they are ready to submit assessments, which can be a written report or exam. 

For the past five years, Mr. Wade has worked on his plan to build a “socially responsible” for-profit university. He grew up in housing projects in the Roxbury section of Boston and struggled in school before a youth program turned around his life. Burly in a suit and soft-spoken, he has an unshakable confidence and a checkered résumé. And in one way or another, all of this has come to play in the building of this innovative new venture.

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MR. WADE, a Harvard law and Wharton business school graduate, is more education entrepreneur than educator. He opened a charter school that failed, then a venture-backed school management company that sold to Edison Schools Inc. for $38 million in 2001. He served as executive vice president at Edison, a money-losing for-profit charter school chain dogged by inconsistent test results. 

Finally, Mr. Wade founded Platform Learning, a company that offered tutoring to “schools in need of improvement” using federal funds newly available under No Child Left Behind. Platform went out of business under a cloud. New York City officials contended it overcharged and had engaged in “questionable business practices” when recruiting students, including promising incentives to schools. Mr. Wade says employees acted properly, and Platform billed only for the number of students it served. Platform, he says, was a victim of “politics” — zealous investigations by school districts jealous of the federal money his company was earning. “The underlying problem was that money that could have been controlled by the school districts was being given to private organizations as a sanction under N.C.L.B.”

Mr. Wade’s struggles with Platform directly contributed to a bold step he is taking in his new venture: opting entirely out of federal student aid programs. 

“It is the reason that Patten is structured the way it is,” he says. “If you want to innovate and be successful, your odds go up when you reduce the political friction in your business model.” 

Patten and New Charter are among very few accredited colleges that don’t accept federal student aid. Opting out, Mr. Wade says, significantly cuts payroll and lowers administrative overhead. It allows students to be truly self-paced — to take as little as one course at a time, and to hit pause for a few days or weeks rather than having to carry a minimum course load, as required if a school accepts Title IV student aid. Opting out also exempts the colleges from regulations intended to rein in some of the excesses of the for-profit sector, like the one that prevents schools from compensating recruiters based on the number of students they sign up — a practice that has been known to tempt recruiters into enrolling students unable to benefit from college work. 

http://www.nytimes.com/2013/11/03/education/universitynow-rides-a-low-cost-wave.html?hp&_r=0