PelotonU 2015 Q2 Update

We have spent the past year developing a more nuanced understanding of the students we can effectively serve, building and replicating high-quality support, and mapping the path to greater impact and financial sustainability. Here’s our first report from the field.

Want to help us continue providing hard-working adults in Central Texas a pathway t o a college degree? Contribute towards our work or suggest PelotonU to a local employer. Details on both options below.

As you can see, we are well on our way and picking up steam.

Key Performance Indicators

  • 18 students

This includes nine students enrolled in college and nine who began provisional enrollment in July.

  • 89% of students are on-pace to earn their degree in four years

This reflects on-time graduations; in Texas only 28% of Texas college studentsgraduate on-time. The longer students remain in college, the greater expense, and potential debt, associated with their degree.

  • 79% of students who began college with PelotonU are still enrolled

This reflects retention, or students who stay in the program from enrollment to completion. We focus on students who are working and likely to be enrolled part-time elsewhere. Of those who do so in Central Texas, only 16% graduate in six years.

  • No student with college debt

Between federal grants and our $3,000 scholarship, every PelotonU student has avoided loans to pay for school while in our program. This compares to an average of $25,00 for university graduates in Texas.

Q2 Highlights

  • Student research

We want to better understand why students decide to pursue college, who influences that decision, and what barriers stand in their way. We hired a top ethnographic researcher in Austin to study student choices around post-secondary education. The findings (have a look) confirmed our experience — a college decision is complex and strongly influenced by trusted peers.

  • College for America

College for America built a learning platform from the ground up that’s the best in the industry. They prioritize learning over assessments, and are cautious about who can enroll. After two years of talks, they agreed to let our students enroll in September. The cost is only $2,500 before Pell Grants, which means not only a top-notch education, but one that’s affordable.

Here’s why we’re excited about competency-based education

While their platform is outstanding, students still struggle to find timely tutoring and consistent accountability. That’s where PelotonU steps in.

  • Coaching like-minded organizations

Our team has had the opportunity to advise organizations who want to implement our model, including a charter network in Boston, Goodwill Sacramento, an NGO in Rwanda, and a faith-based group in San Antonio. UT-Austin has also asked our students to consult on their competency-based degree program. Our hope is leverage our expertise to incubate like-minded organizations across the country.

Q2 Challenges

  • Student recruitment

We know 4,000 students each year in Central Texas start college and don’t finish, but we don’t know where to find them or how to convince them to try a new way to go to college. We craft a recruitment hypothesis each week. We then execute, evaluate, and build a new experiment based on what we learn. We wrote 28 hypotheses this quarter, and most were unsuccessful. We’re moving away from cold calling potential referral partners, and will design tests focusing on events and direct student outreach in Q3.

This is a place the whole industry is stuck. For-profit colleges use traditional advertising and spend up to $2,500 to acquire each lead. We believe there’s a more effective way to convince people who have opted out of the college pathway to re-engage with that journey. It’s a big assumption, and one we will continue to test and refine for the remainder of the year.

  • Employer partnerships

This is the core of our earned revenue strategy. We want to parter with employers who have existing tuition reimbursement, entry-level staff, and opportunities for internal promotion. We’re learning these employers have multiple stakeholders, and large incentives not to change the status quo.

We’re experimenting with various industry verticals to learn where we best fit. Our team is learning the nuances of HR departments and how to make PelotonU easier to understand. This is our shortest path to long-term financial viability, and we’re bent on figuring it out.

What to Expect in Q3

  • A growing Board of Directors

Karen MarkhamMary Ellen Pietruszynski, and Van Davis recently joined our Board of Directors. We’re thrilled to add their support, strategic insights, and experience as we navigate the next chapter of our growth.

  • Partnership with St. David’s North

St. David’s Medical Center North agreed to pay us to provide education for their staff. We expect to enroll a cohort of students in Q3.

  • A new office

Co-working has worked better than we hoped over the past two years. As we grow, renting on a per-student basis has become more expensive. We will move into a permanent space in October, providing stability and a chance to further invest in student culture and community events.

Student Story:

After hearing about PelotonU, Connor’s manager at Dunkin’ thought it might be a good fit for him. Connor applied because “I didn’t get the good end of the stick very often in life… so anyway that I could get assistance to finish school and have a better life…I took the opportunity immediately, without a thought.”

“I graduated high school with honors and went to UTSA as part of the CAPS program under the notion that if I got a 3.2 GPA I could transfer. I got a 3.6 GPA my freshman year but when I got to UT Austin, my financial aid didn’t come through. Mostly, I had to quit school because I couldn’t pay for it.”

Connor was working on a BA in psychology at UTSA but shifted his focus toward accounting when he enrolled at PelotonU. “Initially, I didn’t know what I wanted to do. But, when I did decide on accounting, [Sarah] helped me figure out which school was best and what I would have to do to complete the degree.”

PelotonU encourages students to pursue degrees in their field of interest, an approach Connor embraces. As he maintains a full time job and pays back debt from his freshman year, Connor’s thankful for a place to focus on his studies. “I love that I can sit and work on my schoolwork on my own. There’s background noise and I don’t get bored. I also like that when I need help, Sam or Sarah or Hudson are right there to help me at any second.”

Connor is studying at Western Governor’s University.. His classes are self-paced, and with his credits from UT-SA, Connor will likely graduate in two years. Even though it seems like a long time now, he says “having a Bachelor’s degree at 20 with no debt…there’s no bad aspect.” (interview by Candice DePrang Boehm)

How You Can Help

  1. Introduce us to local employers

Know a local franchisee, corporate executive, or employer who has staff that wants to go to college? We can help. Email and we’ll give you information for an introduction.

  1. Donate to our work.

100% of our overhead is supported by our board. Your investment goes directly to student scholarships and support. Click the text below.

Bill Gates made the following observation just over a month ago, highlighting the 36 million Americans with some college and no degree. There’s many more adults who want to go to college than who successfully reach their goal — that’s who you help us support in Central Texas.

“It’s time for higher education and the ‘real world’ of employers to start working together to meet the demand for 11 million skilled workers…If we’re successful over the next decade, we’ll do more than close the skills gap. We’ll also make progress reducing the large and growing gap between America’s rich and poor.”

Thank you for your investment in our students. If you have any questions, always email

Sincerely, Hudson