The Four E’s of Continuing Education: The Fourth E is for Economics
Facebook Twitter Linkedin Email Plusone Stumbleupon

Maintaining a healthy revenue stream is critical for many continuing education units to continue delivering services and programming to their largely non-traditional audiences.

Continuing Education units can be structured around four inter-connected areas of focus, all starting with the letter E. The fourth and final E, and the one often used by administrators as a measurement item, is Economics. For purposes of this framework, ‘economics’ is defined as ‘profit/loss, revenue and other related fiscal matters.’ In other words, does your program support itself or possibly even make money?

Part of what attracts me to continuing education has been the focus on education and professional development for students, rather than on profit and loss. One of the three mantras I had when founding my continuing education program was, “Don’t lose any money, but don’t worry about making money either; just provide a service to the community.” With this in mind, I focused instead on offering the right class, with the right experience, to the right audience, at the right time, and priced the classes to be competitive with industry and other university offerings. I didn’t focus on the economics and ten years later, I still don’t; I’ve found that focusing first on the student and service pays larger dividends than focusing on the dollar.

Each class section runs its own economics, with total tuition paid for the class tallied, and direct class costs removed (typically instructor, books/materials, testing fees, credit card fees, and catering), to find the net profit. All classes within a program, or month, are than totaled, the overhead charge applied (administrative staff, location rent, university fees, marketing, and related costs) for a final net gain or loss per month or program. Thankfully, out of 120 months of operation, the net after overhead has been negative only two months—one in only the second month of operation, and the other due to students dropping out to travel to New Orleans for Hurricane Katrina efforts. At the end of the year the total gain is tabulated, and then reinvested into new capital equipment, program development, student scholarships, or swept up by the university administration. In two cases, programs were found to be making large profit, and tuition was lowered for future offerings of the program.

Profit and loss are a key measurement item in business, but our programs in continuing education tend to have a different focus: student outcomes. Yet as continuing education leaders, we still need to be aware of the economic status of our programs, and make decisions that keep our offerings available for students for years to come.

- – - -

Join us every Wednesday and Friday in December as DeLalla discusses each of these elements in more detail. Don’t miss this Friday’s article, where DeLalla will wrap up the series.

The Four E’s of CE:

  1. Education: Academic topics and format (distance, in-person, etc) offered for students.
  2. Experience: Teaching faculty, classroom environment and campus life.
  3. Enrollment: Marketing, sign-up process, and alumni relations.
  4. Economics: Do the first three steps right, and the balance sheet should be in the black.
Facebook Twitter Linkedin Email Plusone Stumbleupon
New and Innovative Market Opportunities, Operations and Efficiency, Opinions

Tags:

Subscribe to The EvoLLLution, Get Premium Content And Stay Up To Date

2 Responses to The Four E’s of Continuing Education: The Fourth E is for Economics

  1. Quincy Adams Reply

    2012/12/19 at 8:53 am

    At universities all over North America, continuing ed units are emerging as the most (sometimes even only) profitable unit the institution’s got. As CE units become more and more important to a university’s revenue stream, amidst federal budget cuts and a sluggish economy, I fear they will be forced to pay more attention to their bottom line.

    I think in the current financial climate in higher ed, it is becoming increasingly difficult to talk about a program or a unit NOT in terms of profit and loss. I wonder if you have had any issues like this with your university administration– a pressure to make profit that interferes with your “mantra” of student-centredness.

  2. Patricia Bowman Reply

    2012/12/19 at 10:48 am

    It is interesting that Mr. DeLalla has found continuing ed to be more about professional development than about profit and loss; I am impressed and glad that this is the case at his university, but I think there are many institutions in the U.S. that exploit adult students who want to return to school, while solely thinking about their bottom line. Many for-profit universities have been criticized in this regard– they have very high tuition, and very low completion rate, and very high loan default rate; the focus is clearly not on the student, but on getting those tuition dollars. I think this is disgraceful, and Mr. DeLalla has shown that a responsible and student-centred approach can still turn a profit; policymakers and government, pay attention.

    We should be thinking about regulating against these exploitative higher ed institutions (the particular for-profit universities that operate in this way,I mean).

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Current ye@r *

© 2014 The EvoLLLution. All rights reserved.