Capella aims to accelerate education

It's hard to deny the appeal of any educational program that goes as quickly as possible to a meaningful degree and then to a better job.

So if getting there on the shortest path is the goal, what steps can easily be cut? How about a 12-week class that covers pretty much what the student already had to learn just to keep doing her day job?

Capella Education is eliminating the need to take that 12-week class. Or pay for it.

Capella calls its new approach FlexPath. And while still early, it certainly looks like the kind of innovation that could go a long way toward addressing the perennial complaints that higher ed takes far too long and costs far too much.

The Minneapolis-based company has been working on FlexPath for some years, but it's still not that well known. In part that's because Capella isn't as much in the news as it was in its early days. Capella got a lot of attention as one of the early innovators in for-profit education, putting coursework online two decades ago, back when many of us had no idea how to even use the AOL free-trial disk that showed up in the mail.

And then the industry exploded, attracting students and capital as for-profit schools sold themselves as a surefire cure for many of the ills of higher education. Degrees were now within reach for people who had long odds of ever getting one in a traditional setting.

But much of for-profit education turned out to be a cure worse than the disease. Stories abound of schools recruiting ill-prepared students just to get ahold of their federal student loan money, leaving them with a lot of monthly payments to make and not much else.

Some for-profit colleges have collapsed. Even an industry giant, the University of Phoenix, has seen its total enrollment get cut in half in just five years.

By offering graduate degrees, Capella serves a different end of the market from the schools most in trouble with regulators. When the industry flipped from boom to bust, though, Capella's revenue slipped, too. For 2014 the company reported revenue growth of about 1.5 percent, to $422 million, with total enrollment that was up all of 2.5 percent.

Capella CEO Kevin Gilligan said that might not sound so exciting, until you consider what is happening in the rest of the industry.

"Look, the industry is challenging right now," Gilligan said. "You basically have to create your own growth, by taking share or expanding the available market."

FlexPath isn't the company's only response to a challenging time in its business, but it's clearly a strategy designed to both take share and bring new customers into the market.

The idea is to get away from that basic unit of measure in academic life, the credit hour. That's really not much more than the measure of how much time a student spent listening to a professor.

What's more important is what the student learned. How long it took to learn it is irrelevant.

In Capella's industry, designing a course around specific things to be learned is called competency-based education. This, as it sounds, tries to break down the course into very small bits of skills or knowledge.

Capella has been competency-based from its early days, "long before anybody appreciated it," said Wells Fargo Securities analyst Trace Urdan. "What you're seeing with [FlexPath] is the payoff for that very painstaking course design process."

The second critical factor in making FlexPath work is being able to confidently prove to outsiders — such as employers — that a Capella grad is actually competent. And the company has been refining that capability.

So if the company offers coursework that leads to a student acquiring the right competencies, and the company can confirm they were mastered, then what's the purpose of making sure it takes 12 weeks?

If it does, that's fine. But if it could get done in six weeks, it should only take six weeks.

Capella sells its FlexPath service on a quarterly subscription, two courses at a time. If the student gets done with two courses, it's possible to keep going. It'll still be one quarterly subscription price.

Everyone can't move that fast, but imagine a credit analyst who did all the spreadsheets for his boss for two years and then decided an MBA might lead to a promotion at the bank. A finance course should go pretty quickly.

Capella has had students get an MBA in less than a year for $8,800. It's more than $80,000 for Minnesota residents in the traditional program at the Carlson School of Management at the University of Minnesota. And it takes two years.

In explaining the origins of the program, Gilligan said, "I keep going back to this simple quote I heard from one of our learners: 'I am highly motivated to practice at the top of my profession. I just don't have any time or money to waste.' "

Gilligan thinks FlexPath delivers the kind of value that's going to attract people who today can't see a way to attend school at all. He calls these people "non-consumers," one of the business terms he uses that clearly gives it away that he's not a traditional college dean.

Capella has been going slowly with its program, working closely with regulators and its accreditation body, but it's talking more and more about it. Gilligan will soon go to New York to talk to investors, and it's FlexPath that they will want to hear about.

Gilligan knows it's still early, but to him FlexPath looks a lot like the start of online education two decades ago.

When the first high-quality courses went online some students left the classroom for the computer. But others, Gilligan explained, signed up for courses only because they could take them online. Coming to class wasn't an option, as they were working or taking care of kids.

"Just like online, I could see FlexPath becoming a whole new category of higher education," Gilligan said. "It's flexible degrees. And the potential is huge."

lee.schafer@startribune.com • 612-673-4302