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SHEEO Summer 2004

SHEEO Summer 2004. Financing Online Education: Building Sustainable Enterprises Laura M. King Vice Chancellor of Finance Minnesota State Colleges and Universities. Minnesota State Colleges and Universities. 15 member Board of Trustees appointed by the Governor 7 universities and 25 colleges

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SHEEO Summer 2004

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  1. SHEEOSummer 2004 Financing Online Education: Building Sustainable Enterprises Laura M. King Vice Chancellor of Finance Minnesota State Colleges and Universities

  2. Minnesota State Colleges and Universities • 15 member Board of Trustees appointed by the Governor • 7 universities and 25 colleges • 137,000 FYE, 250,000 annual students, 150,000 non credit students, 16,000 employees • 27% enrollment increase 1999-2003 • 53 physical locations across the state

  3. Expectations of Higher Education in Mn • Contain costs • Absorb inflationary pressures • Increase output • Be innovative • Internally fund escalating demand for online

  4. MnSCU Online Activity • Term includes full and partial on line delivery • 900%+ growth in past three years • 27,800 registrations sold in FY2003 • 1000 + credit based e learning courses • 500 non credit courses

  5. Integrated Governance • Created Mn Online Council in 2001 – chancellor’s office and institutional leaders • Council advises Sr Vice Chancellor/Cabinet/Chancellor • Coordinates with presidential leadership council of 32 presidents • No separate legal authority

  6. Integrated Governance • 3 year finance plan established • Sr. Vice Chancellor, on behalf of the Council granted accreditation powers in 2003 • In –house review teams trained and at work • Uniform pricing, quality assurance and program coordination system wide

  7. MN Online Central and Core Services • Virtual library and faculty training centers • Degree and Course alignment tools • E-folio and electronic career assistance • Electronic transfer index

  8. Cost Management for Online Enterprises • Who should be the benchmark? • Private online providers? • Public online providers? • What to measure? • Real costs (fixed and variable) • Innovation • Resources for reinvestment • How to measure it? • Number of new programs? • Number of new student segments?

  9. Policy Implications • Robustness of reinvestment choice • Scalability • Repurpose ability • Centralized vs. decentralized services • System approach • Non-redundancy of services • Management of scarce resources • Private-sector partnerships • Joint risk-sharing • Investment capital

  10. MN Online Cost Categories Design & Development • Delivery • Assessment • Reinvestment

  11. MN Online Cost Categories Reinvestment Costs • Course/Program Redesign • Repurposing curriculum into similar market segments • Curriculum Management Process • Engaging Partners

  12. MN Online Fiscal Model • Blended Approach - % of operations is funded through a central source - % of operations is funded through assessing user fees

  13. MN Online Funding Model FY05 - FY09 • Year 1: Revenues derived from students, campus allocations, grants, internal partnerships, and external contracts for services • Year 2: Revenues from students and campuses fixed to Year 1, increased internal support, and expanding external contract dollars • Year 3: Revenues = Expenses • Year 4: Residual cash targeted to reinvestment strategies • Year 5: Sustainable growth from revenues, cost management, and reinvestment strategies

  14. MN Online in 2004 • All 32 Minnesota State Colleges and Universities offer courses online • Approximately 18,065 students took at least 1 internet course • Minnesota State Colleges and Universities had served 45,074 online students • A 62% increase of credits for online courses over FY03 • FYEs at 4,215 for an increase of 1,620 over 2003 (June 2004) • The largest age group for enrolling in online courses was 21-25

  15. 2004-2006 Outlook • Maximize power of the system through designing & implementing an integrated student academic and administration service and usability • Develop a Marketing Plan for internal & external customers • Develop a comprehensive approach to assessment based on a continuous improvement model • Ensure financial viability of Minnesota Online & supporting projects/efforts

  16. Challenges in Sight • Widely divergent course development investment rates • Variable tuition rates • Program/course quality assurance • Course management support • Program development alignment/sharing across institutions

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