Financial Model
Steps:
- The business office from Purdue Online and the business office of the academic department will create a financial model to understand if the program is financially viable. The financial model will include:
- Enrollment estimates for a minimum of 4 years
- Expenses
- Revenue
- The online program launch director will work with the faculty lead, the department head, and the respective business offices to analyze the expenses and revenue of the program and create a financial model.
Questions to Consider:
Tuition and Fees
- What is the price per credit hour to the student?
- What is the total price (to the student) to complete the program?
- Assist with program deposit forfeiture communication.
- Ensure tuition and fees are assessed accordingly.
- Send student communications regarding tuition due dates and cancellation dates.
- Customize invoices for students who require additional/more specific information than is on the myPurdue invoice.
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?
- Provide your financial model for this program.
- Who will provide ongoing financial management for your program?
Faculty Incentives
- What incentives will be available for faculty to develop an online course?
- What incentives will be available for faculty who teach an online course?
Revenue Share
- What is the expected revenue distribution model for the program? (Include university, OPM, 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.
- Propose data-based changes to product design to improve feasibility.
- 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 the estimated margin?
- 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:
