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ETC Company Straighterline Mentioned in Testimony to US Senate Committee
Posted February 7, 2012
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Senator Tom Harkin (D-IA), chairman of the Senate Health, Education, Labor and Pensions Committee, convened a hearing on February 2, 2012, to explore innovative strategies to make college affordable for students and families. Education Sector Policy Director Kevin Carey testified before the committee.
In the testimony, Carey mentioned ETC company, Straighterline as an example of price innovation. Following is the quote from the testimony:
"There are three main ways public policy can create stronger incentives for colleges to keep prices down-three kinds of price innovation.
The first kind of price innovation is about who gets to be a college--or, more specifically, who gets to be a provider of higher education.
Consider the company Straighterline. It was created by an education entrepreneur and is located here in the Washington, D.C. area. Straighterline offers online courses to students for a flat subscription rate of $99 a month plus a one-time charge of $39 per course, for all the courses students can take. They can enroll in accounting, statistics, calculus, biology, and other introductory classes. The textbooks and course materials all come from the same major commercial publishers that regular colleges use. Individual tutors are available, online.
Straighterline's prices are so low because, as I noted earlier, once you make the initial investment in online course development, the cost of serving additional students is very small. And also because Straighterline isn't paying the sunk costs of maintaining football stadiums, research departments, vice-provosts, and so on.
Straighterline currently serves several thousand students and is growing. This education comes at no cost to the American taxpayer because students aren't allowed to use federal financial aid to take Straighterline courses.
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