U.S. Open University to close!

That may be my first exclamation point in a thread. I was astonished to read this, this morning:
http://chronicle.com/free/2002/02/2002020501u.htm

The biggest distance university in the world (Open University, UK) spends $20 million to move into the biggest education market in the world, and manages to enroll only 660 students in two years.

My belief is that they knew very little about the importance of marketing. Heriot-Watt (far less known, and with less than 1% of that budget) enrolled more than 1,000 Americans in its first two years, largely through a combination of a terrific program and (if I do say so m'self) pretty darn good marketing.

 

I am totally surprised by this one as well. It is unfortunate when legitimate DL schools such as this one succumb to their own poor marketing efforts, while at the same time some mills flourish because of "good" marketing. Makes me a bit nervous about some other accredited DL schools with relatively low enrollment.

By the way, does anyone know what will become of the students?

 

Well, we all know how those "for profit" schools turn their backs and close up shop when the money's not right, unlike not-for-profit schools who keep on plugging away for the greater good....uh, er, except here.

All the previous nonsense about how not-for-profit schools are somehow less susceptible to market forces--that they would stay open and serve students even if they weren't covering costs, that they operated not for money, but for altruism--is a load of crap. USOU spent a lot of money, didn't see enough of a return, and will cut its losses. At least a for-profit school would have had a business plan and some idea how to market itself. Then the current students--not to mention any graduates of this open-and-shut school--wouldn't be left hanging. Niiiiiiice.

Market forces apply equally to schools competing in the DL market regardless of tax status. USOU couldn't make money so it closed. Lesson learned.

Rich Douglas

 

marketing and course offerings

It could be that the "North American" education consumer has different needs than the "European" consumer. The Open University website never seemed to offer very much.
I steered several potential students to the website, but they found Charter Oakes or Thomas Edison to have more things that they wanted.
Why couldn't they offer everything in the USA that they offered in England? U of London seems to be able to offer the same program in both North American and Europe? What were the start-up funds spent on?
All the best!

 

I think its because those in the U.S. are concerned about "superficial" issues such as a school's name. Even on this board, we see many discussions and complaints about "stupid names" and "stupid name changes". Nobody (except, apparently, 660 students) in the U.S. wants to attend and receive a degree from an "Open University." They might as well call it "Distance Learning University" or "Correspondence College". I think they would have had a chance at success if the school had a "prestigious sounding" name.

 

I think Mr. Barrington raises a very valid point. The name of the University positions its graduates to be victims of discrimination from those who don't think much of distance learning to begin with. I don't know, of course, if that is the reason for the school's failure. What I do know is that I would not choose to attend a school with such a name.

 

trigger

I agree with Irat.

For me as an European student, Open U. America´s lack of regional accreditation was the main reason for me to stay away from this school (as we discussed in many other threads, degrees from not-at-least-regionally-accredited schools can not legally be used e.g. in Germany) and switch over to Open U. UK´s website... (besides: far more possibilities).

If Open U. America would have started with regional accreditation at the beginning, I guess they would have made a lot more than 600 registered students...

 

While this doesn't explain everything, I think this point has merit. Many schools with nontraditional-sounding names have renamed themselves over the years. A few from memory:

The Graduate School of America -- Capella University
Campus-Free College -- Beacon College
Vermont Institute for Community Involvement -- Burlington College
Connecticut State Board for Academic Awards -- Charter Oak College
Union for Experimenting Colleges and Universities -- Union Institute
American Open University -- Clayton University
Koh-e-Nor U. -- U. of Santa Monica

There are many others.

Rich Douglas

 

trigger

hm,
towards Mr. Barrington´s point: that counts for Europe also.

I guess almost everyone would a hundred times more like to have a degree from the "University of so-and-so", even if it states "distance learning" somewhere on the transcripts than from the "Open University".

The German ´Open University´ ("Fernuniversität Hagen", being translated with Distance University of Hagen) also does have a worse reputation than the brick-and-mortar (state) universities, though (I know) that it´s curricula are very often A LOT HARDER...

 

Hmm. It seems like there is more to this story. Yes the name probably prevented many from signing up. They were however only slightly short of their projected goal (660 out of 880 students). Why invest 20 million on this and then because they were slightly short drop the whole project? Political reasons or were they about to get a rejection from Middle States? It just seems to not add up.

 

loosing is sometimes a plus for taxes

The withdrawl of Open University is perplexing. Sometimes for-profit businesses spend money, to loose money, to balance off profits in other parts of the business. Once the economy changes, the losses may no longer be necessary.
To me 20 million sounds like a great deal of money. But to the dot.coms, that was sometimes a drop in the old bucket.
Wouldn't Open University want to "shop-around" it's program for a possible sale? Perhaps not being RA would make any sale difficult?
What ongoing expenses would an on-line university/college have after the start-up? Once the initial losses were over for equipment, couldn't they operate quite well on a small number of students each year? The know they have 600 students so they hire staff appropriately?
Will Governors in the west be the next to go?

 

There are many reasons which, taken together, spelled the end of OUUS.

1) No identity and no accreditation. British... yet no royal charter... American... yet no RA.

2) Not-for-profit... I wonder (look at those tuition fees, OUUK is less by any measure).

3) British standards, yet a degree from an American virtual U... why bother?

4) There were evidently discussions regarding cutting standards for the US market (see other thread) but I doubt they would whore themselves enough to compete with the likes of TESC and UoP in the "quick and easy" market.

The fact is, other UK schools are doing quite fine in the US... HW is most notable but Leceister, UoL and others are definetly not failures.

However these schools maintained the formula of British standards, British degrees at a reasonable cost.

 

Needless to say, I've sent a copy of this to the genii in admin at AU. AU was very big about its "partnership" with OUUS. Interestingly enough, elsewhere in this thread, somebody questioned the stability of WGU, another alliance that AU admin is very proud of its affiliation with.
This all makes for very interesting reading, and proves the point that I've been making to AU admin that unbridaled expansion into the US market, without the proper capital and planning to back it up is pure folly.

Darren.

 

I agree. UK Open University has a new head (as of Jan 1). I wonder if there has been a reassessment of priorities in Milton Keynes. Gourley's world view is likely very different from Daniel's.

 

Check USOU's website. The news is there already.

I always think when you pick a DL program, you
have to go with one that can last longer.

It is bad to hear that even USOU will close.

Even though, people say Phoenix this or that, I think
it can last longer than many other DL schools. So you
have to take this into account.

 

McDonald's will be around for a long time also... but that does not make their food good or nourishing.

 

Re: loosing is sometimes a plus for taxes

20 million may not be so much money... given the valuation of the pound, British goods and services are costly to Joe Average. Case in point... If Open University is to compete successfully in the US DL marketplace, they surely need to demonstrate the worth of degree to offset the high cost. Apparently H-W has been successful in differentiating their wares in the market place. The name of the school could be funny if there is a Brand preception to go with it.

Regards,
Dick

 

What’s the mystery? OUUS was not RA and it was expensive. QED!
The mystery has always been why the British OU did not simply serve the North American market from England as U of London does.

 

You are right. Parading a degree from a closed DL school is like finding yourself in double jeopardy. You have to deal with DL prejudice as well as with the stigma that is associated with closed schools.

 

Hi,

As I Brit I can't say I've followed the progress of the OU in the USA all that closely, but I would have been glad had the project turned out successfully.

But you might say the odds were stacked against it.

In fact I met the previous Vice Chancellor, Sir John Daniel, in his office at Walton Hall on the big OU campus / DE organisation in Milton Keynes, England, in July 2000 when he was preparing to give the Global Learn Day IV Keynote Address (which he later did from a New York hotel room in October of that year).

He's now with the United Nations, and one Degreeinfo response here has suggested that the new VC has decided to draw a veil over OU-USA. Maybe that's true. However, the OU were not novices in the subject, and Sir John himself had previously been head of a Canadian university, so presumably had some knowledge of the North American situation, whoever was responsible for the initiative.

So, let's see. Here is a distance education organisation, with its operations represented in 15 European countries, six regional centres in the UK and scores of local Further Education (Community Colleges) integrated into their programs. Tens upon tens of thousands of students and oh, the BBC regularly carries their educational broadcasting.

What went wrong ? My take is that they decided that trying to set up in the USA, and at the same time trying to follow the US "recognised" accreditation route, just wasn't worth the candle. As mentioned, 660 isn't that far short of 880.

And of course, that will no doubt please those existing institutes with recognised accreditation, but who haven't anything like the capability of the OU to deliver worthwhile Distance Education. Do I hear anyone say "spoiling tactics" ?

Getting DETC accreditation obviously didn't do much for USA-OU, and getting the "real thing" was felt to be necessary - although incomplete at the time of closure announcement.

Marketing of USA-OU (and its list of plus-points) may have been lacking, but given the slow slope of getting started thanks to the accreditation baggage, it's hardly surprising that enrolments only trickled through.

Of course, H-W, Leicester etc etc may have done better in the USA, but then they are offering (and still do) British degrees to Americans (any anyone else around the world) - not trying to set up to offer American ones to Americans, and in a way that would attract federal financial support.

That will turn out to have been the fatal flaw of USA-OU - and perhaps others will try to learn from it. Notice however that the OU have been instrumental in helping to establish in-country DE operations in other places with their local accreditation requirements without difficulty (eg. Hong Kong). I think a project covering the whole of the Middle East is also well under way.

Maybe those concerned should try to learn that there's got to be a much better way in the USA to go about establishing DE quality assurance. I say that the present approach has arguably driven away what is probably the best Distance Education operation in the world from American shores.

And of course those who have lost out most are the American students who would have taken their programs in what would have been an American DE organisation. But now they'll probably be going somewhere else ..... to other US programs, many from latter day converts to DE from traditional education who are no doubt nicely cocooned in their present statuses.

Regards,

Neil Hynd