Course Materials on a 'Pay-for-Performance' Basis

Western Governors University (WGU), an accredited nonprofit online university, is partnering with McGraw-Hill Education on a new way to provide learning tools to its students on a “pay-for-performance” basis. The program makes both printed and digital course materials available to WGU students, while McGraw-Hill earns fees based on student performance in classes using its resources.

WGU students will be able to access e-books and learning tools for online courses using McGraw-Hill’s LearnSmart software. The university will pay a discounted flat fee for the materials used, along with a premium for each student using the material who earns a grade of “B” or better on WGU competency exams for the class. This program is different because it is not based on the number of students enrolled in a course.

“This partnership with McGraw-Hill Education is consistent with our goals—to find innovative ways to reduce the cost and improve the quality of higher education,” University President Robert Mendenhall said in a press release. “In addition, it helps support our objective of reinforcing accountability among our partners as well as our students.”

The company expects to make “10 or 20 percent less” than it would if it charged for course materials based on enrollment, according to Tom Malek, senior vice president of learning solutions and services in an interview with Inside Higher Education. For taking on some responsibility for student performance, McGraw-Hill will receive intelligence from WGU on how students are using the content.

WGU currently charges a flat tuition rate for a study program, covering all coursework used by a student and learning resources except printed textbooks. Some programs also have a special fee in addition to program costs, such as the one-time program fee of $350 that is added to the $3,250 per-term charge for its nursing programs.

“We desired this model for quite some time,” Steve Klingler, vice president of student experience at WGU, told Inside Higher Education. “It aligns (McGraw-Hill’s) interests perfectly with ours and the students. We’re not content to buy the book—we want the students to actually learn from the book and pass the assessment.”