The hidden costs of college
Earlier this month we launched our new sponsored tuition program and it's generating a lot of buzz.
The biggest buzz we get is the question: “How can you do that?” Well, it’s a really simple answer.
We can offer a high-quality, low-cost education because we have identified and eliminated most of the hidden costs of running a University.
If you've watched my video presentation http://www.viddler.com/explore/AndrewJacksonU/videos/60/ , you've heard my indictment of the cost of marketing; it's one of the largest costs in the business of higher education. Universities are tripping over each other to generate leads on the internet. This competition drives the cost of lead generation through the roof, to the point where it costs a typical institution around $6,000 in upfront costs to attract each student who will end up graduating.
Our sponsored tuition program drives our cost of acquisition to less than $100 per student; that's less than $300 for a student who will ultimately graduate from our program. This savings is passed on to you.
Another huge cost to universities is the administration of federal student aid. There are at least 32 specific and lengthy regulations to which institutions must adhere in order to participate in federal 'Title IV' aid programs, including elaborate costly tracking and record-keeping requirements. And even if we did offer Title IV - as a DETC-accredited school, AJU would be allowed to generate no more than 50% of total revenue through Title IV funding. (Non-DETC schools can generate 90% of their revenue through Title IV.) In order to maintain a 50/50 ratio, we would have to spend even more on marketing to keep our student body 'balanced,' considering the demand for aid. By opting out of 'Title IV' funding (with the exception of helping you defer student loans you may already have incurred), AJU avoids infrastructure to administer the programs and saves thousands of dollars per student.
By keeping your educational cost low now, you can avoid the 'hangover' of a decade of student loan payback after you graduate.
A third area of cost is infrastructure. AJU supports no athletic programs or other expensive frills; we don't even maintain a campus, with the high costs of building maintenance/utilities/insurance/security...well, I could go on. In addition, AJU has based our technology infrastructure on open-source technology (myClassroom, configured in Moodle) so we avoid those massive annual technology licensing fees.
All of these cost savings are built into our pricing model – and the winner is the student.
We only spend money on the things that add value to education: The curriculum, the faculty, and the support staff who are here to serve the students.
We do it differently – we do it better – we do it for less. We will be the best at the lowest! Take Education Anywhere...because you can afford to go!
Happy Studying,
Don Kassner
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