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Fiscal ModelsOverview for the Minnesota Online Council

Qualifiers• Funding Models must support the business plan

– Consolidated services and goal completion• Funds necessary for basic operations are not

dependent on 1-time funding• Extramural funding supports special elements,

innovations, features, research projects• Resources for model and examples

• Literature Review including WCET survey results and MnSCU Survey

– Invited 48 collaborates/systems to respond– Received 20 responses (41.6%)

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Fiscal Models

• Allocation Model– Consolidated services are funded from a central

source

• User Fee Model– Assessment of fees per course or per credit

• Blended Approach– % of operations is funded through a central source– % of operations is funded through assessing user

fees

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Fiscal ModelsAllocation Model

PositivesCollection of dollars not coming directly from studentsDemonstration of strategic commitmentReduces record keeping ( no new business practices needed)May allow another year to research and/or document baseline needs

Challenges Reduces AccountabilityChallenge in today’s economic environmentCauses reallocation decisionsReduces pressure to find efficiencies and collaborative solutions

ExamplesIdaho State UniversityRochester Institute of TechnologyBOREC-Louisiana’s Board of Regents Electronic Campus

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Fiscal ModelsUser Fee Model

Positives– Greater flexibility– Applies the costs to those benefiting– Easily adjusted– Promotes tie between student demand and opportunities for development– Market Responsive

Challenges – May be more costly to student– CAVEAT-May actually reduce out of pocket expenses for the student– Requires policy change regarding tuition and fees– Adds accounting responsibilities

Examples WI- $60.00/course for administration and 20% of tuition for each course is collectedPenn State-per semester tech fee of approx. $100.00 (some program variations)Indiana State University –Does not charge fee but tuition differential (employer

reimbursement for tuition NOT fees)Utah -online $25.00 per course State of Oklahoma- Electronic Media fee $110/per credit hourNDU System-access fee $30-$50 per credit depending on programMaine-Course Support fee-program dependent ($35/course)University of Alaska $40/course for lower division and $75/course for upper or grad

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Blended or Hybrid Approach

• 60% of respondents indicated that their online system continue to receive legislative or state funding for at least part of its operation. – Essay responses indicate that this reflects the cost of

development of online programs, educational costs for development of faculty as well as other, more traditional educational expenses

– Several of the respondents noted that their programs were not intended to be self supporting, or earn revenue

– Drivers included access and service to the students

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Goal to Work TowardsFrom the Students’ Perspective, MnOnline will promote

a comprehensive course price – Program Specific– Market Driven– Inclusive of all tuition and fees to be collected.

From the process perspective, Distribution of the fees will occur transparent to the students (to MnOnline, the home campus and any host campus)

Still to be determined– Setting the price– Process for distribution

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Minnesota Online

What’s the value?

• The value of Minnesota Online is to the student.– Our goal

• To do whatever is best for students. That means not only offering services, but also empowering students with the information they need to control their destinies.

• To do that we need to provide the most efficient technologies and systems we can.

• To do that we need to leverage the resources we

bring as a system.

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Minnesota Online

What’s the value?

• To leverage scarce resources across the system to meet the students need for: – Convenience– Cost– Communication– Content– Access

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Minnesota Online

What’s the cost of online delivery?

• The Cost of Learning

– Cost of content• Textbooks, online course materials, CD ROM

– Cost of the instruction• Instructor, online tutor

– Cost of infrastructure• Servers, bandwidth, software

– Cost of supporting services• Technical Help Desk, Virtual Faculty/support centers, Library

Services, etc

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Minnesota Online

What’s the challenge of online delivery?

• The biggest challenge in implementing e-learning lies in overcoming people's natural resistance to change.

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Needs

• Expand the reach of applications to more users, enhance services, and increase efficiency. However, adding stand-alone applications and systems will not address these goals. Instead, institutions must strive to unify all of their disparate technology applications and systems into a single digital campus.

• Assure access is a core value

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Opportunity for the System to be a System

• Problems that stem from lack of integration of services and products have been compounded by the expanded expectations of the students from this digital age.

• Minnesota Online provides the opportunity for the system to move forward.