On April 30, we released our 2019 Annual Report, a comprehensive overview of our business model, financial performance, and strategic direction. Included is a letter to our shareholders that provides our vision: to meet society's critical needs, higher education must be high quality, blended and connected, relevant, affordable and accessible, and sustainable. You can read the letter in its entirety below.
As I write this letter, we are experiencing an extraordinary moment in human history. The global COVID-19 pandemic has disrupted our lives, society, and the economy in profound and unprecedented ways. Although it is too early to know the full extent of the short- and long-term impacts of the pandemic, I sit here today steadfast and confident in our collective resilience and strength. Moments like this test humanity and force us to unite around a common purpose. They also push us to innovate and evolve. In my roles as husband, father, son, and CEO, I wholeheartedly believe in our ability to overcome the challenges we are facing today and those we will inevitably confront tomorrow.
For centuries, civilization has relied upon great colleges and universities not only to educate minds, but to meet society’s needs through research and innovation . Today is no different. Universities are on the front lines of caring for individuals infected with COVID-19 and are also at the forefront of researching treatments and a vaccine. These great institutions have stood the test of time, including past wars and pandemics, and through it all helped society recover and progress. That legacy will be drawn upon once again as millions of people, whose livelihoods and careers have been negatively affected by COVID-19, turn to higher education on their path to recovery and greater economic stability.
Our Vision: Meeting Society’s Critical Needs
Today, we have 73 of the world’s best colleges and universities in our portfolio. We are proud to call each one of them a partner. And now more than ever, we believe they can and must redefine higher education to address the critical needs of society. Twelve years into our journey, 2U’s story is no longer simply about bringing high-quality degree programs online. Our vision—and the opportunity for our partners—is more ambitious and profound. To meet society’s critical needs, higher education must be more than just high quality. It must be blended and connected, relevant, affordable and accessible, and sustainable. And 2U is purpose built and singularly positioned to turn this vision into a reality.
Higher education must be high quality. This isn't new for 2U—it’s been a constant since our founding in 2008. Since then, over 215,000 adult learners have enrolled in a 2U-powered offering. Our alternative credentials have a 90% average completion rate and our degree portfolio has an 82% average retention rate. And according to the findings of our recently released “Gallup-2U Graduate Outcomes Benchmark Report,” comparing experiences and outcomes of alumni from 2U-powered degrees with Gallup’s existing graduate degree alumni benchmarks, 92% of alums from our partners’ programs would still obtain a degree if they had the chance to do it all over again. Quality matters.
Higher education must be blended and connected. It's not just about moving online anymore. It's about connections across your lifetime, digital and physical, that are deeply personal. It’s about the fact that I truly became a Tar-Heel when I completed the MBA@UNC program—as did my classmates. It’s about an experience so personal that two students living in different cities from my cohort end up married after graduating. And it’s about the 14,500,000 hours students studying to become nurses, physician assistants, and social workers have spent in field placements helping real people who are welcoming their first child into the world or are battling an undiagnosed illness, PTSD or depression. Truly great educational experiences are about being part of something bigger than just yourself.
Higher education must be relevant. Whether it’s training the next generation of healthcare workers to fill an expected 3.4 million job openings by 2028, including 500,000 nurses by 2030, or reskilling and upskilling workers to fill the tech-driven jobs of today and tomorrow, higher education is more necessary than ever. And 2U’s unparalleled and growing nationwide portfolio of degree offerings in licensure-based disciplines that require clinical placements, tech skills-based boot camps, and in-demand short courses, offer the reach and relevance needed to meet the critical workforce demands of society.
Higher education must be affordable and accessible. For too long, the cost of higher education has continued to climb. We believe 2U can play a constructive part in bending back that cost curve. Today, we have a broad portfolio of products at different price points and we estimate that in 2019 approximately only 38% of our current revenue came from Title IV funding. We’ve announced a student friendly, interest-free deferred tuition plan under which students can defer a portion of their tuition upfront and only begin paying it back upon graduation if they are employed with no additional principal or accrued interest. And beginning in September 2020, Simmons University announced a 14% tuition reduction for their online and on-campus students making it easier and more affordable for people to pursue their dreams of becoming a nurse at Simmons. But accessibility isn't just about cost. We need to ensure that high-quality education is available to everyone. We’re proud that 46% of students in the boot camps we power are people of color and 30% of participants do not hold a bachelor’s degree. We are driving access to education, but more specifically, high quality education.
Finally, higher education must be sustainable—for all stakeholders. Sustainability is not optional—it is critical. Arguably now more than ever. And 2U’s revenue-share partnerships are a proven model for shared success and sustainability. Our model allows universities to realize a surplus from going online, while avoiding risk and focusing scarce resources on other core academic or institutional priorities. At the same time, universities benefit from the scale efficiencies and investment-driven improvements to our comprehensive 2UOS bundle of technology and services, all while providing world-class educational offerings that deliver great student outcomes. When students win, universities win, and then 2U wins.
2U has evolved. And we did it intentionally. We expanded our capabilities, our product offerings, and our geographic reach, all while keeping great universities at the center of our strategy. Together with our 73 university partners, we will continue to lead the way in reimagining higher education to meet the critical needs of society—for today and tomorrow.
Thank you for joining us in our mission of eliminating the back row in higher education.
For more details on the Annual Report, visit our Investor Relations website.
Learn more about us.
At 2U, we’re on a mission—to eliminate the back row in higher education and help universities thrive in the digital age. To learn more about who we are and what we do, follow the links below.