This online community college wants to flip the script on higher education

Every school year, the value of a college degree seems to diminish, and the price tag continues to soar. But Tade Oyerinde, founder of Campus, an innovative online community college, intends to flip the script. Tade’s business model not only aims to disrupt higher education, but it also contains a crucial quality every founder should embrace.

This is an abridged transcript of an interview from Rapid Response, hosted by the former editor-in-chief of Fast Company Bob Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with today’s top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode.

So this time of year, students go back to school. In 2022, you started Campus, the U.S.’s first online community college. Tuition is only around $7,200 and it has taken off, attracting professors from places like Princeton and NYU. What’s the goal, the mission of Campus?

If you think about over the past 30 years, as four-year universities become so expensive today, almost half of all undergrads will start off at a community college. And community colleges, when they work, are awesome. You go there, you take two years, typically they’re a lot less expensive, and then you can still transfer into a four-year university, you still get the degree, and the prestige and the employment benefits that come from having, let’s say, a Penn State degree, for example. But with half the cost, typically community college is so inexpensive that you can actually cover it completely with federal grants, particularly the Pell Grant, which is about $7,500 a year. The problem is most kids who go to community college don’t complete, about two-thirds, 68% of students who go to community college will never graduate. And unfortunately they will leave an average of $5,700 in debt.

Like, the cost of higher education just keeps going up and up, and up, and it kind of seems like that’s accepted and sort of the community college model is sort of a way around that, right? Is that the way you think about it?

Yeah, why would you pay $60,000 a year to go to a four-year university for the first two years when you could pay nothing by starting off at a community college and then transfer? You still get the same credential, the same degree. And the answer is because four-year universities are awesome, right? It’s a dating app. It’s a social networking app. It’s a country club for the upper, middle class, and wealthy. And if you’re in those categories, that’s great, but it is not logical for most Americans to spend that kind of dough for those first two years, just for that freshman experience.

And the transferring from a two-year to a four-year school to get a degree. Like, is that easy? I mean, is that something that Campus is working on trying to make easier?

Well, it’s not. Students lose on average about a third of their credits when they transfer from an average community college to an average four-year university. And that’s really annoying. Because these kids are disproportionately likely to be the first in their family to go to college.They’re typically middle to lower income.

We haven’t actually announced these yet, but I guess I’ll give you the scoop here. We recently signed a deal with Arizona State University and Butler University. Any student who comes to Campus and gets a 2.5 GPA or a 3.0 GPA at Butler, they get automatically admitted into ASU and Butler, as juniors with full junior standing. That’s a game changer. That’s what this is about. Students need to be able to know when I’m coming to Campus, I’m not even really going to get a Campus degree. I am a pre-ASU student. I am a pre-Butler student. But the main difference is our tuition is so inexpensive that the Pell Grant completely covers it. And so 86% of our students pay nothing out of pocket. The federal government covers it completely.

The investments that you make in services for your students, while they can cost you something, if you have a lower dropout rate than other schools, a lower churn, then from a business standpoint, that can kind of help pay for itself. I mean, is that part of the business model also? Does that help you in that way?

Well, you just said the secret, or rather quiet part out loud. That is the business model that we discovered. If you actually have better graduation rates, better persistence and retention rates, your lifetime revenue per student actually goes up. So most community colleges will lose 50% of students every single year.

And that’s lost revenue. Like now they’re not oriented to really think this way because they don’t think of themselves as a business offering a service to customers. They kind of think of themselves, you know, it’s like, Oh, you have to apply to come to our school and we will decide whether or not we want to serve you.

Whether or not you graduate, sink or swim, it’s all up to you. That’s kind of the whole posture of our higher education framework.

Most schools should really flip the model like we have. And, and they say no, students are our customers. Helping them acquire skills, knowledge, and then giving them a credential that proves that they have those skills and that knowledge—that’s the service. And when you think about it that way, yes, if your customers are leaving out the door and they’re not coming back, well, what are you going to do? You’re going to try and do everything we can to stop them, and then when you do that—your revenue per student goes up, per customer goes up. And then you can actually spend more to try and keep more customers.

And by the way, one of the things I love about this model is that graduating students is good for students, it’s good for our country, it’s good for society, and it’s good for our bottom line.

Among your investors, you’ve got OpenAI, Sam Altman, Shaquille O’Neal just signed on as an investor. Do each of these characters give you advice? Do you rely on them for different things?

Sam Altman, I mean, this guy’s, he’s a crazy guy. He went to community college before Stanford. A lot of people don’t know that.

So when I met him, it was like a shotgun wedding. We met on Monday. And then we just texted all week, did a couple of Zooms, and like by Thursday he wrote the check. It was not like a typical investor process with meetings, and meetings, and meetings, and meetings, and meetings.

He said, “I’ve been looking for this exact concept. I think he’s very thoughtful about the disruption that AI is going to bring to a lot of entry-level knowledge work.”

And I don’t think anyone has any faith that traditional higher education is going to be sufficiently dynamic and responsive to the changing reality—shifting the skills, the curriculum, to make sure students are prepared for a new world.

But in general, with fundraising and with investors, I think the one piece of advice I always give the founders now is make your company so important, even if it’s high-risk, such that if it wins, the world has changed.

With Campus, everyone knows, like maybe we won’t succeed. I don’t know what the odds are, but if we win and every American gets skills and knowledge and makes their purpose their career with no debt, that’s a completely different country. That’s like a whole different society where anyone can raise their hand and say, “Hey, I want to learn something useful so I can contribute to society in an exchange, earn enough to create a great life.” That’s a completely different world. Crime is lower. Life expectancy is higher. Civic engagement is better.

Founders should always think about: If I win, is the world fundamentally different? And if not, then make your company more ambitious, make it more important, cause it’ll actually make fundraising easier.