Report: New Mexico colleges being outcompeted in online education market

Apr. 19—New Mexico's colleges and universities are missing opportunities for increased enrollment through online education as thousands of residents turn to out-of-state schools for online learning, according to a new report.

Higher education institutions across the nation significantly ramped up online education in response to the coronavirus pandemic as part of a push for remote learning.

Four years later, online courses remain a substantial part of higher education, Clayton Lobaugh, a program evaluator with the Legislative Finance Committee, told lawmakers Thursday.

"With this expansion of online higher education, state colleges are well-positioned to reach New Mexico's roughly 120,000 adults who have some college but no credential," he said. "However, New Mexico colleges are missing the opportunity to use online education to fully reach this population of potential students."

Higher Education Secretary Stephanie Rodriguez said the agency is "very much in alignment with targeted recruitment campaigns of former students" who didn't complete their studies.

"This was a talking point for the passage of the Opportunity Scholarship in 2022," she said, referring to a scholarship program that pays for up to 100% of tuition for state residents at two- and four-year public colleges pursuing higher education later in life.

After the scholarship was created, the department created the website to assist schools in their recruitment efforts, she said.

"The website is a one-stop shop for New Mexicans to see if they're eligible for the Opportunity and Lottery scholarships and see what school would fit them the most," she said. "Additionally, some colleges and universities did go through the Rolodex of former students who did not complete their degree."

Lobaugh said more than 11,000 New Mexico residents are enrolled in out-of-state online colleges, suggesting the state is being outcompeted in the online education market.

Sen. George Muñoz, a Gallup Democrat and chairman of the committee, suggested New Mexicans are finding cheaper, shorter courses outside the state. He recalled how one of his sons found a course that would cost $1,800 at the University of New Mexico that Northern Arizona University offered for $700.

"I don't know if you guys realize we're in a free market society," he said. "These students are very intelligent and very electronically literate. They're going to shop their costs."

Sherry Kollmann, chancellor of New Mexico State University's Global Campus, told lawmakers there are at least two reasons New Mexicans are taking out-of-state courses.

"Having worked in an out-of-state and having built an online university out-of-state, part of it is the speed in which students can graduate," she said, referring to her tenure at Southern New Hampshire University.

"The other part of it is the care and the weekly calls that advisers make to those students," Kollmann said. "There is a tremendous amount of care that those universities do with their students. ... What we need to be able to do is provide that care and attention to those students because if they're not going to get it from us, they will actually pay more to get it somewhere else."

Stephanie Montoya, a spokeswoman for the Higher Education Department, wrote in an email the agency is encouraging in-state public colleges and universities to continue and improve outreach to potential students who opt to take online courses out of state.

"With tuition-free college for undergraduate residents via the Opportunity and Lottery Scholarships and flexible online options for degree and certificate programs, we are continuing to collaborate with higher education institutions to raise awareness about the benefits New Mexico students can take advantage of," she wrote.

The report also found the New Mexico higher education system is "not realizing" millions of dollars in efficiencies with online education.

The state's colleges and universities could save up to $5.7 million annually "by sharing online courses across college systems and increasing lower-level online class sizes to 30 students," the report states.

"Many New Mexico higher education institutions are separately purchasing the same learning management systems to deliver online courses, which unnecessarily leads to additional costs by not using a shared price agreement," Lobaugh said. "State colleges could reinvest the cost savings from these and other efficiencies into raising New Mexico's comparatively low faculty and instructor salaries."

Higher education institutions in the state "collectively pay at least $356,000 annually in unnecessary costs by negotiating price agreements for the same software system to deliver online courses separately," the report states.

Kollmann said New Mexico should consider the "marketing aspect" when looking at efficiencies.

"I used to have a $56 million marketing budget just on my own programs," she said. "We have to also start thinking about those efficiencies."

Lobaugh also said the expansion of online education in New Mexico has "profound implications" for higher education facilities, which span 18.6 million square feet and cost at least $178 million per year.

"The number of New Mexico college students taking all of their classes on campus has decreased by 63% over the past decade, while building space has decreased by 2%," he said.

"The result is that New Mexico higher education institutions are most likely underutilizing building space, so in the future, higher education institutions, the state Higher Education Department and the Legislature will all need to consider the impacts of online higher education on capital outlay requests and decisions."

The report recommends the department amend its capital outlay manual and administrative rules to include benchmarks for space-utilization metrics for higher education institutions, among other recommendations.

Rodriguez said the department started a review of its processes years ago.

"We're going above and beyond that recommendation," she said, adding the department has one of the strongest capital outlay processes in state government.

"The department has done its due diligence in conducting a capital outlay process review in 2019 of all of our colleges, universities and special schools," she said. "From that review, we updated our manual and implemented project prioritization standards to score and rank capital project funding requests."

Follow Daniel J. Chacón on Twitter @danieljchacon.