Altius Education Changes Course After Accreditation Battles

9/10/13Follow @wroush

Altius Education founder and CEO Paul Freedman says he knew he was taking a risk when he put all of the company’s eggs, save one, into a single basket: an online junior college called Ivy Bridge, owned jointly by Altius and Tiffin University in Ohio. The for-profit college, whose mission was to go traditional junior colleges one better by getting far more of its students into four-year schools, rested on course content created by Tiffin faculty and software designed by Altius.

Now that basket has been crushed.

Tiffin, after coming under pressure from the Higher Learning Commission, the powerful private organization that accredits colleges and universities in Ohio and 18 other states, said last month that it will shut down Ivy Bridge as of October 20. The college’s 3,000 students are now scrambling to transfer to other institutions in mid-semester. And San Francisco-based Altius, which has raised $27 million in venture funding, is scrambling to salvage its business.

In an extensive interview this week, Freedman shared his thoughts about what went wrong with the Tiffin partnership, what its collapse could mean for the larger edtech movement, and how Altius hopes to turn its one remaining egg—a set of online learning-support tools called Helix, originally developed for Ivy Bridge students—into a standalone product.

He’s angry about the commission’s ruling—which has forced Altius to lay off 60 percent of its employees—and says it sends a discouraging message to both students and entrepreneurs. “At Ivy Bridge, we were trying to solve a core problem, which is how you provide more access to education,” Freedman says. “Colleges are failing at it badly, and in my mind, unless you allow for innovation to play a role in that, you are destined for failure.”

Paul Freedman, CEO of Altius Education, in an interview at the 2012 launch of Altius's Helix online learning environment at Arizona State University.

Paul Freedman, CEO of Altius Education, in an interview at the 2012 launch of Altius’s Helix online learning environment at Arizona State University.

Indeed, the tale of Ivy Bridge is a sobering one for anyone who believes that Silicon Valley-style software innovation can help to “disrupt” the higher-education establishment. The difficulty, for organizations like Altius that are trying to invent new kinds of educational institutions, is that accreditation bodies like the Higher Learning Commission have a chokehold on the system of transfer credits. Most colleges won’t accept credits from non-accredited schools, which means entrepreneurs who want to create new online programs must partner with existing, accredited institutions.

That’s exactly why Altius turned to Tiffin for help creating Ivy Bridge in 2008. And the Higher Learning Commission raised no objections to the program when it reviewed Tiffin’s accreditation three years ago and renewed it through 2020. But everything had changed by this summer, when Tiffin officials were told that they could no longer run Ivy Bridge under the umbrella of Tiffin’s accreditation.

Overnight, five years of work at Altius went out the window. Plans to form an independent spinout called Altius University are now dead as well, since they depended on Ivy Bridge’s accreditation through Tiffin as a bridge.

Freedman doesn’t try to hide his bitterness about that outcome, saying it’s an example of the higher education sector’s resistance to change. “It is very clear that the establishment’s view is that the role of technology and innovation is to enable existing institutions, and ensure that key decisions about what you teach and how you price tuition are kept to the existing institutions,” he says. “Technology can be used in support of those institutions, but it can’t displace them.”

The Higher Learning Commission, for its part, says its concerns were more mundane. In statements to the press and in documents and correspondence released by Altius, commission officials have charged that Tiffin, in effect, tried to sell its accreditation to Altius for the joint venture. The commission feared that the university wasn’t clearly in control of the Ivy Bridge curriculum, and that the university hadn’t properly described the whole arrangement in reports to the commission. “People use the innovation cloak to wrap anything in,” the commission’s president, Sylvia Manning, told the publication Inside Higher Ed. “We have an obligation to look at the quality.”

The shutdown is the kind of bad news that’s all too familiar in risky industries like biotech, where an expensive drug R&D program can crash and burn overnight after a poor showing in clinical trials or unfavorable word from the FDA. (See, for example, our story this week about an unlucky South San Francisco biotech called Rigel Pharmaceuticals.) But while the FDA bases its decisions on scientific measures, and usually gives companies an opportunity to marshal evidence in their own support, Freedman says Altius wasn’t given a chance to correct the issues that concerned the commission.

“The accreditation system is always vague, but usually you are afforded opportunity for collaboration or compromise,” Freedman says. “But for whatever reason, what we were trying to do was seen with such deep skepticism that we weren’t afforded the same opportunity. From my perspective, that’s where things went sideways. If the Higher Learning Commission had said, ‘Your graduation rate is at x, and it needs to be y,’ there would be an entirely different narrative.”

How the Ivy Bridge narrative climaxed in disaster is a question that begins, and ends, with the nature of the accreditation system in U.S. higher education.

Nobody wants to go to a school whose credits won’t be transferable to other colleges or universities. The way Freedman describes it, entrepreneurs building new for-profit online degree or certificate program have three choices. First, they can … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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