- 2U announced Monday that it is entering the undergraduate degree market with an online bachelor’s offered in partnership with the London School of Economics and Political Science (LSE). It is expected to launch in October 2020.
- The 36-month program in data science and business analytics is on a 10-year contract between 2U and LSE. About three-fourths of the content will be asynchronous and one-fourth will be synchronous, Andrew Hermalyn, 2U's president of university partnerships, told Education Dive. It is priced around $21,000 for United Kingdom-based students and $25,000 for international students.
- The news comes less than a week after the online program manager told analysts and investors it was shifting its strategy beyond high-priced graduate degrees to include a wider array of program types and price points as well as the use of fee-for-service contracts.
"There's a lot of change involved in this news," said Phil Hill, co-founder of education consulting firm MindWires. While the move into the undergraduate market was expected, the lower price-point and the shift in the pedagogical model to more asynchronous content "intensifies the diversification that's happening," he added.
LSE came into 2U's fold through the company's acquisition of short-course provider GetSmarter in 2017. The new online bachelor's degree reimagines one of LSE's existing programs, Hermalyn said.
He suggested it is just one model of online undergraduate programming 2U may pursue. "This is a very good first example of a full degree that someone could earn over a three-year period. Are there varying ways to enter a digital undergraduate space?" he asked. "Yes. We're excited about this one being our entrée into it."
Most of the 2U employees working on the LSE program will be based at its office in Cape Town, South Africa, which has been running 2U's other programs with LSE, which include short courses through GetSmarter.
Over the past several years, 2U has expanded its offerings mainly through acquisition, adding options such as boot camps, professional certificates, short courses and, now, undergraduate degrees.
It announced last week that it would put those pieces together to become the "exclusive pan-university digital education collaborator" with the University of North Carolina at Chapel Hill, a deal that could include smaller-size programs. UNC-Chapel Hill, which already works with 2U on graduate programs, said it is still negotiating the contract.
The LSE partnership has 2U bringing a lower-cost program to another existing customer. "In some ways, it's a very clever way for them to dip their toe into the low-cost undergraduate market and build the muscles that they need to be effective there," said Trace Urdan, managing director at education investment and consulting firm Tyton Partners, which studies OPMs.
Scale will be key to competing in the broader market for online education, something 2U CEO Chip Paucek brought up in a call with analysts last week. That's particularly true for undergraduate education, where students and their families are more price-sensitive.
The University of Pennsylvania's launch last fall of an interdisciplinary bachelor's degree was not necessarily priced to scale, which at around $2,380 per course unit costs about $71,000 for the entire program. Meanwhile, online master's programs such as those offered by institutions through edX have looked to gain interest in part by being priced lower than the competition.
2U is also breaking from its previous, failed attempt to offer online courses for undergraduates. In 2014, it shut down its Semester Online pilot due to challenges managing the elite universities that shared courses through a consortium.
"If they can get this right, if they can acquire the students inexpensively enough and actually make money on this program, then they might have something that could be really competitive at the undergraduate level," Urdan said.
Hill agreed, noting the significance of 2U's shift. "We need to understand how far out of their sweet spot they've gone,” he said. "They're taking big bets and they're diversifying and they're putting their money behind these bets."