BOSTON, Oct. 2, 2012 /PRNewswire/ --The growing presence of nonprofit universities in online education has ignited unprecedented competition for students who once could choose predominantly among for-profit programs. For the first time a school's brand and its presumed influence in the job market is a competitive differentiator for applicants, according to new paper from The Parthenon Group's Education Practice.

The bread and butter of for-profit online universities such as American Public, Bridgepoint, Capella and the two giants Phoenix and DeVry is the working adult population. Not surprisingly, the top priority of this demographic is to improve career prospects, and The Parthenon Group found that for the first time students are willing to pay a premium of as much as $5,000 to get a degree from a high-profile, nonprofit institution that might abet this goal.

"Competition for students is escalating rapidly between the for-profit and nonprofit sectors," says Chris Ross, a partner in the firm's Education Practice and author of the paper. "You can say the nonprofits, including well-known public universities, have been the sleeping giants. As they scale up in online education, they are moving aggressively into what's been the sole domain of for-profit educators."

Currently, there are 11 nonprofit universities with online enrollments of over 10,000 students and several have surpassed 20,000. Additionally, brand-name schools such as Arizona State University, Boston University, Purdue and the University of Notre Dame are jumping into the market.

The financial stakes are high for the nonprofits and so are the market opportunities. Apollo, the largest for-profit educational corporation, enrolls more students than the 10 largest nonprofit institutions combined. The overall for-profit educational enrollment is approximately 2.5 million, which is double the share from back in 2001.

Moreover, nonprofits for the most part are broadening, as opposed to cannibalizing, their own enrollment market by pushing into online education. "Not only are most online students working, they are older than the typical college enrollee who is aged 18-to-24 and living as a dependent," says Ross.

To date, nearly all nonprofit players in the online market have been inclusive schools that accept most applicants. Selective universities, which make up the preponderance of the 18 million annual post-secondary college enrollment, represent less than 20 percent of online enrollments though the number is growing rapidly.

"They are able to scale up quickly by partnering with online education-services companies like Embanet, Bisk, Deltak and Pearson that offer a full value chain of services that goes well beyond course development," explains Ross. "These services can include innovative recruiting/marketing techniques, processes and student response times that are quite different from traditional nonprofit strategies and are definite competitive strengths."

Competing for Students Across Brand, Price and OutcomeIn the paper, Are the sleeping giants awake? Nonprofit universities enter online education at scale, Ross says all post-secondary institutions will soon compete across brand, price and outcome in new and different ways. For both for-profit and nonprofit sectors Ross sees top-line growth being fueled by three new market "drivers:"

Scale at the degree/program level. Today's applicants consider program first, but as online programs continue to scale, these students will gravitate toward the largest and best-known programs. Program-specific enrollments are the new metric of success.

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Nonprofit Universities Bring Brand Recognition to Online Education