New stackable offerings give universities greater choice and customization, with core bundle of industry-leading technology and services beginning at 35% revenue share
2U and edX announce new incentives to encourage universities to lower tuition in drive for greater affordability
LANHAM, Md., July, 29, 2022 - 2U, Inc. (Nasdaq: TWOU), the parent company of leading global online learning platform edX, today announced a significant update to its partnership model as part of its transition to a platform company, unveiling new revenue share options that give universities greater flexibility, as well as new tools to assist partners in lowering the tuition of their online degree programs at their discretion.
“As we embrace our future as a platform company under the edX brand, we’re taking bold and important steps to support our university partners in transforming their institutions, expanding access, and helping bring down the cost of higher education,” said 2U Co-Founder and CEO Christopher “Chip” Paucek. “Higher education is at an inflection point, with learners demanding more flexibility and better ROI. 2U and edX strongly believe that greater affordability is better for students, better for universities, better for the company, and critical to the future of higher education.”
Over the past two years, digital transformation has moved from the periphery to the forefront of higher education, with institutions at various stages of building greater internal capacity for online learning. To meet universities where they are, 2U is shifting its one-size-fits-all model to a more customizable, platform-based approach that enables universities to design partnership packages that best fit their institution’s needs.
The new model combines 2U’s industry-leading technology and services with edX’s flexible approach to degree support, including access to the edX marketplace and the opportunity to reach edX’s global community of 45 million learners. Revenue share options begin at 35% for a core set of tech-enabled services and increase from there. Higher revenue share options give partners access to the company’s full range of services and investment capital, similar to 2U’s legacy model.
“Rice has been a long-term collaborative partner of both edX and 2U. We have found both organizations willing to flexibly engage with us on a range of issues as the world of online education evolves,” said Former President of Rice University David Leebron. “I believe 2U’s adoption of increasingly flexible arrangements in its partnerships will ultimately serve both students and universities well, and will foster an increased variety of student options that will open more opportunities to students from diverse backgrounds and at different points in their life and educational trajectories.”
The foundation of the new partnership structure is a Core Degree Bundle that supports the end-to-end student journey, from a student’s first moment of interest through graduation. At 35% revenue share, it includes program design and management, edX marketplace & organic marketing, prospect nurturing, ongoing student support, and 2U’s Digital Campus & data analytics ecosystem. These services have been proven to deliver strong student persistence and high rates of degree completion.
Universities have the option to enhance the Core Degree Bundle with additional tech-enabled services including paid digital marketing, course development, and specialized support services, such as clinical placement and faculty training and development.
The Wisconsin School of Business at the University of Wisconsin-Madison is one of the first partners to leverage the combination of 2U and edX support, entering into a new partnership with the company intending to launch an online master's business program as well as a Fundamentals of Business MicroMasters program.
In addition to its new stackable offerings, 2U and edX announced today that they are exchanging revenue share points for tuition reduction in an effort to encourage new and existing partners to lower the cost of their online degree programs. For any degree partner that agrees to significantly reduce online tuition, 2U will reduce its share of program revenue.
While 2U and edX’s university partners have sole responsibility for setting tuition rates for the 180+ online graduate degree programs the company supports, there is a common misperception that the company benefits financially from more expensive tuition. But in reality, the higher the tuition, the more expensive it is for 2U to market a program and attract students. As tuition goes up, student demand goes down, which leads to even higher marketing costs that are shouldered by 2U under its partnership model, not the university. Data clearly shows that tuition reductions remove one of the largest barriers to educational attainment, enabling more qualified learners to enroll and achieve their goals.
About 2U, Inc. (Nasdaq: TWOU)
For more than a decade, 2U, Inc. has been the digital transformation partner of choice to great non-profit colleges and universities delivering high-quality online education at scale. As the parent company of edX, a leading global online learning platform, 2U provides over 45 million learners with access to world-class education in partnership with more than 230 colleges, universities, and corporations. Our people and technology are powering more than 4,000 digital education offerings — from free courses to full degrees — and helping unlock human potential. To learn more: visit 2U.com.
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