Financial Model
Steps:
- The assigned program coordinator from Purdue Online will create a budget including:
- Enrollment estimates
- Expenses
- Revenue
- The department usually has an estimated price to charge students.
- The program coordinator will also complete a letter of agreement.
- Upon completion of the budget, it is submitted to Purdue Online for review and approval from Purdue Online leadership and the Purdue Online business office.
Questions to Consider:
Pre-determined Fees
- PREMIS: To set up a shell in PREMIS for course registration, a fee of $250 or 10% of gross revenue, whichever is greater, is paid to Purdue Online.
- CERTIFICATES: Purdue Online will charge students $15 for each printed certificate.
- CEUs: Purdue Online charges students $3/CEU credit for processing CEUs and a $6 transcript fee.
- CREDIT CARD FEES: to enable learners to register and pay for the course using credit cards, about 2.5% of revenue should be budgeted to cover fees for managing and accepting credit card payments.
Student Price
- What is the price for the student?
- Inform student of non-credit refund policy.
Program Costs, Margin, Profitability
- What costs will be incurred to develop and deliver the program?
- What is the cost to deliver instruction?
- What are the non-instructional costs?
- What are the expected costs of new support staff?
- What is your expected revenue?
- What type of support does the department need from the college or university?
- What is the estimated margin?
- Who will provide ongoing financial management for your program?
- How will you market this course/program to get enrollments?
- What enrollment goals do you have?
Faculty Incentives
- What incentives will be available for faculty to develop an online non-credit program?
- What incentives will be available for faculty who teach an online non-credit program?
Revenue Share
- What is the expected revenue distribution model for the program? (Include university, 3rd parties, college, department)
- If your program is an interdisciplinary program, how will the net revenue be divided among the departments?
- Are you working with faculty from other departments? If so, have you considered sharing a percentage of the net profit with that department?
Program Feasibility
- Assess proposed program’s operational feasibility, student’s return on educational investment (ROEI) and cost to deliver instruction and service.
- Do you have enough faculty members interested in teaching online? Will you need additional faculty or staff?
- Will your program be financially sustainable?
- Who will provide the feasibility study?
- What is your program growth plan?
- What is your planned enrollment at launch?
- What is your planned enrollment in 5 years?
- Do you have capacity constraints?
Consider:
Who is Involved:
Purdue Online (Initiator)
Department (Collaborator)
Business Office (Collaborator)
Process Map:
