Cal State Online: Public records shed light on what happened

Last month I shared the system announcement that the Cal State Online (CSO) initiative is finished. Despite the phrasing of “re-visioning” and the retention of the name, the concept of a standalone unit to deliver and market online programs for the system is gone. Based on documents obtained by e-Literate through a public records request:1

• The original concept of “a standardized, centralized, comprehensive business, marketing and outreach support structure for all aspects of online program delivery for the Cal State University System” was defined in summer 2011, formally launched in Spring 2013, and ultimately abandoned in Fall 2013;
• CSO was only able to enroll 130 full-time equivalent students (FTES) in CY2013 despite starting from pre-existing campus-based online programs and despite minimum thresholds of 16,700 FTES in the Pearson contract;
• CSO was able to sign up only five undergraduate degree-completion programs and two master’s programs offered at four of the 23 Cal State campuses;
• Faculty groups overtly supported investments in online education but did not feel included in the key decision processes;
• Pearson’s contract as a full-service Online Service Provider was in place for less than one year before contract renegotiations began, ultimately leading to LMS services only; and
• The ultimate trigger to abandon the original model was the $10 million state funding for online education to address bottleneck courses.

That last one might seem counter-intuitive without the understanding that CSO did not even attempt to support matriculated Cal State students in state-funded programs.

Terminology note: CSO measured course enrollments as “one student registered in one online course”, such that one student taking two courses would equal two course enrollments, etc. Internally CSO calculated 10 course enrollments = 1 FTES.

Below is a narrative of the key milestones and decisions as described by the public documents. I’ll share more of my thoughts in a future post.

2011

Based on foundational work done in 2010 by the Technology Steering Committee (TSC), a group of nine campus presidents along with six Chancellor’s Office staff, a contract is awarded to a consultant (Richard Katz and Associates) to produce five reports on online learning (link will download zip file) and Cal State Universities work to date. TSC then produced an overview document for what would become CSO in June 2011, including 10 guiding principles and the first schedule estimate. An October 2011 update document further clarified the plans. Some key decisions made in 2011 included forming a separate 501(c)3 organization owned by Cal State University and funding the creation of CSO by the contribution of $50,000 from each of the 23 CSU campuses.

Two key decisions from this period are worth highlighting, as they explain much of the trajectory of CSO in retrospect. The first one defined the need for an Online Service Provider (ultimately chosen as Pearson).

A business partner for CSU Online might be needed in order to provide the necessary student support services, including, for example, advising, financial aid, career services, and tutoring. In addition, a business partner could provide the 24/7/365 help desk support absolutely critical for CSU Online. Market research and marketing of programs are other potential areas for the contributions of a business partner. Instructional design support for faculty is another potential area, as is technological support for the effort.

The second decision defined a strategy in terms of which types of online programs to add in which order.

Following from the bedrock of our Principles, the TSC supported a tactical entrance into CSU Online by focusing on those areas in which CSU campuses are already strong and proficient. We believe that it is imperative to start from a position of program strength rather than to straggle into the market in areas as yet not fully defined or ready for implementation. Accordingly, the TSC recommends that CSU Online address six areas, with two ready for immediate roll out.

1. The 60 or so Masters level programs that exist throughout the CSU should comprise our initial effort with an eye toward serving the extensive mid-career professional and unemployed adults who are in need of this level of education to advance their careers.
2. Our second focus should entail the presentation of two or three degree completion programs in an effort to enhance workforce development.

An important note on both of these areas is that they are both self-support, offered through continued or extended education groups and not eligible for state funding. These self-support programs do not have the same constraints on setting tuition and tend to it significantly higher than state-support mainline programs.

The overview also estimated the timeline to include an RFP for commercial partner (OSP) to be released in Fall 2011.

By late 2011 there were already signs of faculty discontent with the inclusion of faculty in CSO decision-making and with the planned usage of a commercial partner. The Cal State Dominguez Hills faculty senate resolved in November:

Growing faculty concerns about the minimal faculty input in the development of the Online Initiative, as well as the direction the Initiative may be taking have led three Academic Senates (CSUSB, CSU Stanislaus, and Sonoma State) to pass resolutions calling for the suspension of the Initiative until basic issues are addressed and approved by campus senates. In addition a “CSU Online Faculty Task Force,” consisting of over 80 faculty across the CSU, has been actively questioning features of the Initiative and has written an open letter to Chancellor Reed expressing opposition to outsourcing to for‐profit online providers or attempts to circumvent collective bargaining.

The task force open letter can be found here.

2012

The RFP was actually released in April 2012. To my reading, the document was unorganized and lacked enough structure to let bidders know what to expect or what was needed. On schedule and enrollments, the RFP advised the following:

1.5 Cal State Online expects to officially launch in January 2013, with as many as ten degree programs. For the late fall 2012 term (beginning in late October 2012) Cal State Online anticipates offering two to three courses in several programs in a live beta test term.

1.6 ENROLLMENT PROJECTIONS Vendors should base proposals on 1,000 three unit course enrollments in year one and 3,000 three unit course enrollments in year two.

The RFP evaluation process was described in the first CSO Advisory Board meeting notes from June 2012, showing the final decision to select between Pearson and Academic Partnerships. Pearson was selected as the partner, and their contract2 has an unexplained change in enrollments.

The spending amounts detailed below (which may also be increased as appropriate, in Pearson’s discretion) are dependent on Cal State Online meeting the defined Enrollment thresholds for the prior calendar year. If Cal State Online does not meet such thresholds, the spending amounts for the then-current calendar year will be adjusted to reflect the actual number of enrollments achieved during the previous calendar year.

I do not know how the numbers went from an estimate of 1,000 course enrollments for 2013 in the RFP to a minimum of 16,701 course enrollments for 2013 in the contract. In retrospect, this huge increase can be described as wishful thinking, perhaps with the goals of making the financial case work for both CSO and Pearson.

The Advisory Board also decided in the June 2012 meeting to set standardized tuition for CSO at $500 per unit (compared with approximately $270 per unit for traditional campus student with 12 units per semester).

By October CSO had identified the specific campus programs interested in participating, document in the Launch Programs Report. The first page called out two of the first programs bringing in 200 students and 20 students – in other words, CSO migrated several hundred students to get started.

2013: Winter and Spring

In the Spring 2013 term, CSO kicked off with the Launch Programs described in the February 2013 Advisory Board meeting minutes.

Launch Programs: 6 Programs from 3 Campuses

• CSU Fullerton launched 3 courses in their online Business BA program January 14th 2013; marketing and recruiting of next group of students in progress. 35 + 18 Existing Students.
• CSU Dominguez Hills will launch their BA MBA and PA MPA online programs in spring 2013; marketing and recruiting students is in progress. BA Applied Studies will launch in summer 2013; first CSU reconnect program.
• CSU Monterey Bay will launch two new masters programs, Technology and MS in IT Management in spring 2013 and MS in Instructional Science and Technology will launch in summer 2013. Marketing to begin ASAP.

The notes also call out a financial model (document not shared with Advisory Board but notes taken) with three scenarios.

Three scenarios:

• Scenerio [sic] 1: Baseline Growth Modeling where projected enrollments grom [sic] from 188 to 7500; programs grom from 3 to 25; revenues from to over $11 million and additional investment required $2.2 million. Break even in FY 12/14.
• Scenario 2: Break Even in fiscal year 2012/14 Modeling where enrollments from from 188 to 15,750, programs grom from 3 to 30, revenues grom to over 23 million and additional investment required is $1 million.
• Scenario 3: Best/Strong Growth where enrollments grow from 254 to 36,250, programs grow from 3 to 50, revenues grow to over $54 million and additional investment required is $1 million.

The budget planning seems to fall on fiscal years (Jul 1 – Jun 30), whereas all other CSO planning was based on calendar years. Note that the best case scenario included an additional $1 million in CSU investment, and the baseline scenario estimated 7,500 course enrollments from Fall 13 thru Spring 14. Based on an email exchange with CSU Public Affairs, Fall 13 saw almost 1,200 course enrollments, which would have required a six-fold increase in Spring 14 just to make the baseline scenario.

Update: Also in February, CSO executive director Ruth Claire Black testified at the Little Hoover Commission (an independent state oversight board in California) describing the CSO initiative as part of discussion on state needs in higher education.

By the April Advisory Board meeting, CSO was seeing some positive interest from campuses, although the numbers were fairly modest compared to previous CSO estimations.

April Launch Report

• Fullerton business degree completion program is making good progress; 83 applications pending, 17 admitted for fall. Heavily oversubscribed for Fullerton. Good review from stundents on coaching. 50% of inquiries are for Fullerton program.
• Dominguez Hills BS Applied Studies program starts May 4. Large cohort of existing students. 13 students admitted for summer; fall 17 students admitted.
• The next undergraduate program will be the Northridge Reconnect program. In the next 30 days website will be updated to reflect Reconnect.
• Fresno MBA 60 inquiries; 1 applicant and 1 admission
• Other 4 grad programs slow build; redirect marketing resources towards masters programs
• Fresno Homeland Security Certificate website and Humboldt Golden Four are up on website. We are seeing equal demand across the courses (3 GE courses)
• Interest list has grown significantly; campuses who are not currently participating Cal State Online is full for fall. If existing Cal State Online campus may have capacity. Sociology at Fullerton. Dominguez Hills QA for fall start. Taking advantage of launch financial model.

The notes showed the group watching new activity from the California state legislature regarding online education, including the infamous SB 520.3 This raised the question of what Cal State Online’s role should be with this new emphasis. [emphasis added below]

Can Cal State Online fulfill the role of putting all online? Where should we focus? State side or Cal State Online. Chancellor wants this to happen. Ruth and Marge are working on a plan. Need to be cautious to not cause confusion to students and not diminish Cal State Online.

Requirement of bill is that courses must be articulated statewide. Makes sense for Cal State Online to take ownership.

In May the CSU faculty senate passed a resolution calling on Cal State Online to promote all online programs and not just the six run through CSO.

RESOLVED: That all online degree programs offered by CSU campuses be given the same degree of prominence on the Calstateonline.com and Calstateonline.net websites as the online degree programs offered through Cal State Online; and be it further

RESOLVED: That there should be no charge for listing state­support online degree programs on the Calstateonline.com and Calstateonline.net websites;

By the June Advisory Board meeting, there was some progress for Fall enrollments, and there was concern that the state legislature did not understand the bottleneck problem.

Legislature thinks that if students knew about online courses our bottleneck problem would be solved. State is not funding FTES. Enrolling students online will need state subsidy. There is a belief that we can educate students online cheaply. There is a disconnect in Sacramento. Enrollment caps are more the issue, not bottlenecks.

There was also an enrollment presentation for the June meeting:

Download (PDF, 221KB)

2013: Summer and Fall

Despite planned meetings every two months, the CSO Advisory Board did not meet again until October, and in this interim the decision was made to abandon the original concept and to change the Pearson contract. Advisory Board members were not pleased with the process.

In early summer Pearson requested changes in the CSU/Pearson contract; wanted to increase CSU costs for services. The quality of the marketing provided by Pearson was not adequate. There were multiple meetings between Pearson and Cal State Online to resolve concerns resulting in changes to the contract.

The new marketing firm for Cal State Online is DENT; replaces Pearson; started in July 2013. So far there is a high level of satisfaction

A communication was distributed to the Advisory Board and CSU system stakeholders on October 17th regarding the Pearson/Cal State Online contract changes. The communication can be found on the Cal State Online CSYOU site [ed. no longer available].

Discussion/Comments: 

• Members of the Advisory Board stated that there was little to no communication to them about the changes taking place. The last board meeting was a telelconference call in June and the August in-person meeting was cancelled.
  • There was a need to keep only a small number of people involved during the complicated negotiation process

The CSO entity was never formed as a 501(c)3 organization, and with the summer changes CSO would now report to Academic Affairs. The meeting notes further describe the changes.

The current Cal State Online business model will be in place until the end of 2013 and will then change. The Advisory Board will help identify opportunities and provide direction. It is anticipated that this will result in some changes in current program participation but hope that the current campuses will continue. Since campuses now have the option to use the LMS platform of their choice some campuses may elect to change to their own platform. [snip]

The Governor contributed $10 million to increase online education within the CSU. AB 386 Levine. Public postsecondary education: cross-enrollment: online education at the California State University was approved by the Governor on September 26, 2013 [emphasis added].

• With the changes in the Pearson relationship and the passing of AB 386 we are now taking a much broader view of Cal State Online; will be used as a store front for CSU online courses. All online courses and programs in system will have Cal State Online as the store front.

The CSU faculty senate unanimously passed another resolution related to CSO in November. The resolution applauded the movement of CSO to report to Academic Affairs and the allowance for campus selection of LMS, but the real focus was the lack of faculty input in the decision-making.

RESOLVED: That the Academic Senate of the California State University (ASCSU) express its dismay that recent changes to Cal State Online were announced to system constituencies without review or input from the Cal State Online Advisory Board; and be it further [snip]

RESOLVED: That the ASCSU contend that the dissolution of the Cal State Online Board should not occur until a plan for a new governance structure that includes faculty is established, and be it further

RESOLVED: That the ASCSU recommend the establishment of a newly configured Cal State Online system­ wide advisory committee to include at least 5 faculty members, and the creation of a charge, in a partnership between the ASCSU and the Academic Affairs division of the Chancellor’s Office;

This issue – involvement in decision-making – was continued at the final Advisory Board meeting just three days after the senate resolution.

Ephraim Smith (VP Academic Affairs): The Cal State Online Board was originally created for a 501c3 organization but there was a change in direction and did not pursue 501c3; board then acted as advisory. Now that Cal State Online hase moved to Academic Affairs the question is how should it interact with constituencies; work through existing committees? Need to discuss.

There are three full pages of notes on the resultant discussion, ended in a plan to form a Commission that looks broadly at online education across the CSU.

2014

Despite the decision being made in Fall 2013 on the major changes to Cal State Online, the systemwide communication listed in my July post was not made until June 2014. The above description is mostly based on CSO documentation, but I plan to add a few of my own thoughts of the lessons learned from this short-lived online initiative in a future post.