Checking In on Project Kitty Hawk

Will the ed-tech startup partner successfully with UNC-System schools?

In 2021, the North Carolina General Assembly appropriated $97 million for the launching of an ed-tech startup known as Project Kitty Hawk (PKH). This non-profit is designed to partner with UNC-System universities to develop online programs for working adults. An estimated one million adult workers in North Carolina have some college but no degree, and PKH hopes to move many of those learners toward graduation. Since PKH’s budget is made up of Covid relief funds, the project is up against a deadline: The funds must be dispersed by 2024 and spent by 2026.

The Board of Governors’ Strategic Initiatives Committee received an update on PKH at their February 22 meeting. The presentation was conducted by a team of PKH employees: Wil Zemp, CEO of PKH; Brian Fleming, who leads business development for the organization; Jerraé “Raé” Williams, director of finance; and David Eby, chief operating officer.

An estimated one million adult workers in North Carolina have some college but no degree.Zemp opened the presentation by announcing that PKH is on track to begin teaching students this October. Two partnered schools will be launching PKH programs at that time.

While the two schools in question were not named, it appears that UNC Greensboro is likely one of them, as may be UNC Charlotte, NC Central University, North Carolina A&T, and ECU. These five schools appear to be the furthest along in the planning process.

Zemp also shared that five schools are lined up to launch in 2024, and PKH intends to add two or three new partnerships each year. At its current level of funding, PKH feels that it can responsibly bring on 12 university partnerships between 2024 and 2027. If additional institutions show interest from there, the organization will seek increased funding as needed.

Currently, PKH is working through what it is calling the “build” phase of developing new online programs. Zemp shared with the Board of Governors that the organization is juggling the more technical aspects of its work, such as creating the online platform for its programs, as well as undertaking general business functions like hiring employees and ensuring compliance with existing policies. Since PKH is the first program of its kind for the UNC System, it has more work to do on the front end than it would if it were simply redesigning an existing program. However, things seem to be moving at a swift pace, and the organization hopes to move into its second phase earlier than the August 2023 estimate shown in the presentation.

Fleming, responsible for institutional partnerships and market development, shared the “problem” that PKH is hoping to solve. North Carolina is currently experiencing major interest in adult online education, and enrollment in such programs in the Tar Heel State is higher than the national average. However, as PKH’s presentation states, over 63,000 North Carolinians have chosen out-of-state online programs. PKH is looking to reverse that trend, thus providing participating institutions with “flexible revenue streams.”

As part of their presentation, PKH’s executives looked at five out-of-state providers that have proven popular with North Carolina’s adult learners: Southern New Hampshire University (SNHU), Strayer University, Liberty University Online, Western Governors University (WGU), and University of Phoenix. According to the presentation, each of these institutions possesses some core competency that PKH hopes to mirror. (For example, Strayer University has an admirable “corporate and workforce focus.”) Additionally, PKH has been sure to align its goals with the goals of the UNC System, in an effort to ensure that students are the main priority.

North Carolina is currently experiencing major interest in adult online education.The PKH team argued that universities partnering with them could expect to see new enrollment growth and workforce-aligned programs. This is in addition to the enhanced revenue mentioned above.

Where program development and design are concerned, the team outlined their plan for building a unique online platform. While PKH will host all programs on its own digital platform, the idea is that each institution will tailor its programs to fit its individual needs. PKH is also making use of existing functionalities within the UNC System in an effort to keep things transparent and functional. For example, Zemp mentioned that the UNC System already has a “student information system,” so PKH will utilize that rather than creating a new system.

Zemp stated that “there will never be a Project Kitty Hawk student.” Rather, students and faculty remain part of their own institution; for example, an East Carolina University student will remain an ECU student but will simply be supported by the PKH platform.

As previously mentioned, five UNC-System institutions have signed letters of intent with PKH and are far along in the process of developing programs. PKH indicated that it feels UNC-Chapel Hill is close to signing a letter of intent, as well, so perhaps the flagship will be joining the development process in the near future.

Director of Finance Jerraé “Raé” Williams shared some budget items with the board. PKH has two main budget sections for fiscal year 2023. The first is its “build” process, which consists of launching the program platform so that PKH can begin accepting students. This will be a three-year process, with budgets already allocated through 2025. Currently PKH is 19 percent of the way through the “build” plan and has spent 25 percent of that budget. It has allocated $15.8 million for FY 2023 and, as of January 2023, has spent $6.4 million.

The second piece of the budget is made up of operating expenses (not including those associated with the “build” plan). For FY 2023, this comes to a total of $8 million. PKH has divided its operating expenses into four categories: enrollment, administration, operations, and governance. Through January 2023, the organization had spent $2.9 million. It predicts a positive net income by FY 2027.

What kind of future reporting can the public expect concerning the project’s cash flow, expenditures, and income?When it came time for questions, Board of Governors member John A. Fraley asked how PKH plans to acquire new students. Zemp answered that the organization will accomplish this largely by providing an alternative to out-of-state options. According to Zemp, if prospective students see online offerings at in-state schools, they will be likely to choose that path instead. Fraley followed up by asking how many of the 60,000 N.C. adult residents seeking online education continue to work in North Carolina. The PKH team did not have an answer at the time but said they could find out.

While the presentation was fairly thorough, it did leave some lingering questions. How and to what extent will PKH’s academic outcomes be reported (for example, attrition and graduation rates)? What kind of future reporting can the public expect concerning the project’s cash flow, expenditures, and income? What percentage of revenues will PKH take? And will PKH replace 2U and other current providers of online education?

The Martin Center looks forward to the next update in hopes of gaining more clarity about Project Kitty Hawk’s future.

Ashlynn Warta is the state reporter for the James G. Martin Center for Academic Renewal.