McGraw-Hill Education Establishes First-Ever “Pay-For-Performance” Business Model In Partnership With Western Governors University

NEW YORK and SALT LAKE CITY, June 8, 2012 — McGraw-Hill Education and Western Governors University (WGU) today announced a landmark agreement to establish a "pay-for-performance" model in which McGraw-Hill will receive variable compensation for those WGU students who use MHE technology and services for a particular course and pass.

Through the partnership, McGraw-Hill Education will provide e-books and access to industry-leading adaptive learning tools including McGraw-Hill LearnSmart to Western Governors University's (WGU) online courses. Under this new pricing structure, the university will pay a significantly discounted flat fee for McGraw-Hill's course materials. In addition, WGU will pay McGraw-Hill a premium for each student who uses the materials and passes the course (a passing grade at WGU is equivalent to a letter grade of "B" or better). Through this new pay-for-performance model, universities and learning companies share in the accountability for student success and students gain access to premium educational materials while keeping costs low.

"With more student loan than credit card debt in the United States, McGraw-Hill Education has an opportunity to be a part of the solution. Through this first-of-its-kind pay-for-performance agreement with Western Governors University, McGraw-Hill Education will be compensated for our digital technologies, services, and content based upon the performance of the students," said Brian Kibby, president, McGraw-Hill Higher Education. "This landmark agreement works to achieve two of the most pressing objectives in higher education: improving student performance and lowering costs."

The new business model supports WGU's philosophy of providing a mentor-guided, competency-based education that allows students to advance when they demonstrate mastery of all course competencies rather than accumulating credit hours by spending time in class. For each degree program, required knowledge and skills, called competencies, are defined in collaboration with education and industry experts, and assessments are developed to measure these competencies. WGU has drawn national attention for this innovative, competency-based approach to learning, which offers affordable, high quality education. Tuition at the private, nonprofit university is about $6,000 per 12-month year and has only increased by $200 in the past 6 years.

"Western Governors University is known for its innovative approach to solving the problems that persist in our higher education system," said Tom Malek, senior vice president of Learning Solutions and Services at McGraw-Hill Higher Education. "We believe in making radical changes when they can benefit our nation – which is why we've partnered with WGU on this pay-for-performance program. We know that our curriculum and smart study tools like LearnSmart work when you have the commitment of the university and a willingness to try new business models that are designed to enhance performance."

"This partnership with McGraw-Hill Education is consistent with our goals at WGU—to find innovative ways to reduce the cost and improve the quality of higher education," said WGU President Dr. Robert Mendenhall.  "In addition, it helps support our objective of reinforcing accountability among our partners as well as our students."

About McGraw-Hill Education
McGraw-Hill Education is a content, software and services-based education company that draws on its more than 100 years of educational expertise to offer solutions, which improve learning outcomes around the world. McGraw-Hill is the adaptive education technology leader with the vision for creating a highly personalized learning experience that prepares students of all ages for the world that awaits. The company has offices across North America, India, China, Europe, the Middle East and South America, and makes its learning solutions available in more than 65 languages. For additional information, visit

About Western Governors University
WGU is the only university in the U.S. offering online, competency-based degree programs. WGU offers more than 50 degree programs in business, K-12 teacher education, information technology, and health professions, including nursing. Since its inception in 1997, WGU has grown into a national institution, serving more than 32,000 students. WGU is self-sustaining on tuition of approximately $6,000 per 12-month year for most of its programs.

WGU is regionally accredited by the Northwest Commission on Colleges and Universities and nationally accredited by the Distance Education and Training Council (DETC). WGU nursing programs have been accredited by the Commission for Collegiate Nursing Education (CCNE), and its B.S. in Health Informatics is accredited by CAHIIM (Commission on Accreditation for Health Informatics and Information Management Education).
On June 11, 2010, WGU Indiana was created by Governor Mitch Daniels as Indiana's eighth state university. WGU Washington was established by the Washington State Legislature on April 22, 2011. On August 3, 2011, the state of Texas created WGU Texas. WGU Indiana, WGU Washington, and WGU Texas are state-endorsed and offer degree programs that are accredited through Western Governors University. For more information, go to


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