diff --git a/lms/envs/test.py b/lms/envs/test.py
index 941b855f5c..aed49d43de 100644
--- a/lms/envs/test.py
+++ b/lms/envs/test.py
@@ -20,7 +20,8 @@ INSTALLED_APPS = [
 
 # Nose Test Runner
 INSTALLED_APPS += ['django_nose']
-NOSE_ARGS = ['--cover-erase', '--with-xunit', '--with-xcoverage', '--cover-html', '--cover-inclusive', '--cover-html-dir', os.environ['NOSE_COVER_HTML_DIR']]
+NOSE_ARGS = ['--cover-erase', '--with-xunit', '--with-xcoverage', '--cover-html',
+             '--cover-inclusive', '--cover-html-dir', os.environ.get('NOSE_COVER_HTML_DIR', 'cover_html')]
 for app in os.listdir(PROJECT_ROOT / 'djangoapps'):
     NOSE_ARGS += ['--cover-package', app]
 TEST_RUNNER = 'django_nose.NoseTestSuiteRunner'