UF Online’s New Corporate Partner: Discover Financial joins Walmart with Online Education benefit

Last week Walmart announced a new education benefit for its employers, subsidizing undergraduate college degrees at select online programs at the University of Florida (through UF Online), Brandman University, or Bellevue University.

The company said it estimates as many as 68,000 of its employees initially could sign up for the new college program. Walmart employs 1.5 million in the U.S. The company declined to comment on how much this initiative will cost it.

Employees will contribute $1 per day, for 365 days every year, toward their education, so long as they're enrolled. Walmart will cover the rest of the tab. Workers will be able to choose from the three nonprofit schools and have the option of taking classes online with the flexibility to study during the evenings or on weekends.

Today UF Online announced another partner: Discover Financial Services, issuers of the Discover Card and Diners Club International, with its 14,000 employees.

Discover announced a significant new education assistance benefit that provides all eligible U.S.-based employees the opportunity to earn a bachelor’s degree online from an accredited public or non-profit private university at no cost.

Known as The Discover College Commitment, the benefit covers tuition and required fees, books and supplies needed to complete select online degrees at one of three schools – the University of Florida (via UF Online), Wilmington University and Brandman University. The benefit has no tenure requirement so employees can start participating as soon as they want regardless of how long they have been with the company, including new employees on their first day.

The two partnerships are part of what UF Online calls their Employer Pathways, and in the process seem to be defining an alternate method of marketing and enrollment management, in contrast with most Online Program Management (OPM) assumptions.

Employees from Walmart and Discover Financial Services have expanded opportunities to earn a bachelor’s degree from the University of Florida (UF) thanks to a new and significant investment in their education from their employers. This remarkable step by these and other large employers demonstrates the value of a UF degree and the accessibility of UF Online, UF’s online undergraduate experience. Employers will provide a robust support package covering tuition, fees, plus access to life coaching and college readiness programs.

Discover is offering this new benefit to select programs at UF Online, Wilmington University, and Brandman University.

Discover is covering 100% of cost for select bachelor’s degrees. Discover is proud to offer “The Discover College Commitment” program – an innovative full-ride college education benefit, providing US-based employees the opportunity to participate in one of several select high-quality, fully paid, online bachelor’s degrees.

Both packages of education benefits is managed by Guild Education, "a tuition reimbursement and education platform that helps large employers extend education benefits, including tuition reimbursement, to workers".

I think these moves are more significant than just individual benefits. What we are seeing is UF Online, along with a handful of others, defining a different approach to marketing and finding potential online students, at least for undergraduate degrees. Historically, there is a common assumption that to enable a scalable online program there is a need for traditional digital marketing as the primary approach - Google AdWords, call centers, social media campaigns - with a partnership or two thrown in on the side. The origin of the OPM market is centered on providing these services in exchange for a percentage of tuition revenue, and for the majority of cases, the OPM's spending on this marketing and enrollment management category is the most expensive service in the package. The Employer Pathways approach by UF Online has the potential to flip the student acquisition assumptions - primarily driven by employer partnerships with traditional digital marketing channels as a secondary approach.

Walmart and Discover already have potential students identified, and the companies have the incentive to internally market these education benefits to employees. UF Online needs to support that internal marketing and feed applicants into the same application process, but they have a reduced need for general-purpose marketing. UF Online started out with Pearson Online Learning Services (formerly known as Embanet) to be their OPM partner, but in late 2015 they pushed Pearson out and decided to take over this management internally.

I talked to Evangeline (Evie) Cummings, Associate Provost and Director of UF Online, at WCET's Leadership Summit last week, and she described how UF Online is trying to reduce their marketing spend and instead invest more in faculty and course development. Part of that move is to spend less trying to get out-of-state students, which may pay higher tuition but still cost much more per student in acquisition costs. But the other move is to decrease the need to spend on traditional marketing channels.

We can think of Guild Education in this case as a derivative of the unbundling version of OPM, enabling the front-end services with an alternative approach and what appears to be a lower revenue share.

Rather than charge a transaction fee per student to the employer, Guild takes a cut of the tuition revenue from the universities it works with. This revenue-share model is an "elegant" solution for institutions that want to grow their enrollment online but don't want to spend more on marketing, said Carlson. It's also an attractive proposition for employers, who don't have to pay any additional charges on top of the contribution they make to their employees' tuition. The tuition fees are not discounted for the employers and will be charged at in-state or out-of-state rates depending on the location of the student. Neither Guild nor the three universities involved in the Walmart offer would disclose what percentage of tuition revenue Guild will take.

The bulk of the OPM market serves master's programs, and UF Online is centered on bachelor's degrees with a handful of master's, so this approach might not work across the board. But I'll bet that there will be plenty of undergraduate online initiatives that will be looking to UF Online and wondering if they should develop similar degree pathway partnerships as the centerpiece of their student acquisition plans. The online education space is maturing and becoming a lot more interesting.

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