by Joshua Kim, Inside Higher Ed
The goal is to be a premium player in the higher ed space, but with a lower price structure made possible by stripping out the non-instructional and high fixed costs of a legacy university. With no need to build or maintain classrooms, student centers, or labs – and no labor costs for researchers – the backers of Minerva believe that they can provide a quality online learning education for significantly less tuition than the bundled competition. The branding is up-market, with the promise of exclusivity via high admission standards. Existing for-profits such as Kaplan or U of P or Capella could conceivably offer competition in the premium space (say through an honors college), but this would be difficult given each of these for-profits current enrollment selectivity profile. Similarly, it is difficult-to-impossible for existing high-status institutions to offer a lower sticker price (if not an actual cost of tuition), due to our high fixed costs and missions as knowledge creators. Going up-market for Minerva can make sense, as the demand for premium higher education will grow, and existing competitors have difficulty entering this space for brand or cost reasons. The challenge, as with all things, is in the execution.
Share on Facebook