College tuition, priced like a cellphone plan

AnnaMaria Andriotis:

While $199 might cover just a single credit (or much less) at a typical college, the same fee buys a month of unlimited classes at New Charter University, one of two online schools by startup firm UniversityNow. The pricing structure is similar to online college course provider StraighterLine's model, launched in 2008, which charges $99 per month of enrollment, plus $49 per class.

By creating the college version of unlimited data plans, experts say for-profit schools aim to get a leg up on the competition. In recent years, for-profit colleges have come under fire by students and Congress for their excessive tuition costs and the large number of students who drop out and default on their loans. After growing every year for the past decade, enrollment in private, for-profit colleges fell for the first time in 2011 by 3%, according to the National Center for Education Statistics. As demand drops, so does "their ability to charge high tuition," says Rob MacArthur, president of Alternative Research Services, which has tracked for-profit colleges. For their part, both the companies say their goals are to offer a quality higher education while lowering costs for families. "Our model isn't to spend a lot of money on marketing and charge you on the back end," says Gene Wade, co-founder and CEO of UniversityNow.

Posted by Jim Zellmer at December 13, 2012 2:43 AM
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