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Udacity Completes the Switch to Term-based Scheduling for Its Nanodegrees

In the past year or so, Udacity’s Nanodegrees have changed a lot. Last year, we wrote about Udacity removing its job-guarantee as well as the “half your money back” programs. Then it shutdown, a freelancing platform for Nanodegree Alumni. We also noticed that the newer Nanodegrees launched by Udacity were term-based i.e it had a start date and end date instead of the monthly subscription model.

Finally, the switch is complete, and now all Nanodegrees are term based. A few legacy Nanodegrees which were still on the monthly subscription plan, have now been moved over. Here are the before and after prices:

Nanodegree Name Old Pricing and Duration New Pricing and Duration
Android Basics $199/month, 4 months $599. 3 months
Front-End Web Developer $199/month, 6 months $999, 4 months
Full Stack Web Developer $199/month, 6 months $999, 4 months
Android Developer $1199 or $199/month, 8 months $999 months
Become an iOS Developer $199/month, 6 months $999, 7 months
Business Analyst $199/month, 160 hours NA

This switch was announced by COO of Udacity, Clarissa Chen in a blog post titled Connecting Learning to Jobs, at Scale.  Course providers generally like to bury news like these in cryptic blog posts (see EdX’s  Furthering the edX Mission, Forging a Future Path or Coursera’s Verified Certificates ensure academic integrity).

According to Clarissa, Udacity has noticed a 16-point increase in graduation rates for a term-based Nanodegree over its old subscription model. In the old model, students used to pay a monthly fee to access the Nanodegree contents until they complete the Nanodegree. In the new model, each Nanodegree has fixed start date and end date.

The term based scheduling means that that students need to finish all projects before the end of the term. Those who fail to do so are offered a 4-week extension to complete any outstanding projects. If they don’t, they are kicked out of the program and lose access to the content. Students also don’t have an option to pause their Nanodegrees. They can rejoin the Nanodegree the next term, but will have to pay the full price again. Even those who successfully complete a Nanodegree will have their access removed a period of time after graduation.

Via these changes, Udacity has created a rigid structure that seems closer to a university’s semester pattern. Interestingly, Silicon Valley University is starting to look a lot like a traditional university.

This change combined with other changes over the last year or so (like ending the half your money-back program) have effectively increased the cost of Nanodegree for an average student. These changes seem to be working, last year Udacity made $70M in revenue.