Online Education Marches On

Purdue University rocked the world of higher education last month when it acquired the online, for-profit Kaplan University.

“We cannot honor our land-grant mission in the 21st century without reaching out to the 36 million working adults, 750,000 of them in our state, who started but did not complete a college degree, and to the 56 million Americans with no college credit at all,” said President Mitch Daniels, president of the public Indiana university, in announcing the deal. “None of us knows how fast or in what direction online higher education will evolve, but we know its role will grow, and we intend that Purdue be positioned to be a leader as that happens.”

The move prompted a renewal of media interest in online learning, which, here in Virginia at least, has attracted little notice since fascination with MOOCs (massively open online courses) erupted around the same time as the firing of University of Virginia President Teresa Sullivan five years ago. During that controversy, then-Rector Helen Dragas (who serves on the board of Partners 4 Educational Excellence, which sponsors this blog) had argued that UVa needed to pursue online learning more aggressively.

While UVa and other elite universities continue to dabble with online learning, lesser-known institutions have turned to it in a big way. According to the Wall Street Journal, the University of Maryland has more than 85,000 Internet students, while Colorado State has 18,000. Among private institutions, Liberty University here in Virginia has 90,000 online students, while Southern New Hampshire has 80,000.

Online enrollment holds out the potential to generate enormous revenue and positive cash flow. Liberty generated nearly $800 million in revenue from its online programs last year, up from $53 million in 2000, the WSJ quotes Jim Koch, former Old Dominion University president, as saying. As Koch wrote in an in-depth analysis in December (highlighted in Bacon’s Rebellion) Liberty has plowed hundreds of millions of dollars of surplus from its online programs into its endowment. That profitability may not last, however, as Liberty faces growing competition from other institutions.

While the rush of established public and private universities into online learning legitimizes the learning model, entrepreneurs continue to push the envelope in ways that could roil the higher-ed marketplace even more profoundly. Education startups are touting online programs as a vehicle to learn certificates of marketable skills that allow students to get good jobs without the necessity of a full two-year or four-year program. Writes the Associated Press:

Some innovators say a college degree may be obsolete.

MissionU, which began accepting its first applications last month, offers a one-year nondegree program in data analytics and business intelligence without an upfront tuition. As part of an income-sharing agreement, MissionU students will give back 15 percent of their salary for three years after graduation if they earn at least $50,000 per year.

Think about that. While traditional universities put the full risk of degree completion and job search on students, MissionU doesn’t collect a dime unless its graduates earn at least $50,000 a year.

The most valuable product many universities provide is not the education itself, but the degree, which signals to the labor marketplace that the degree-holder displays enough intelligence and diligence to graduate. The college sheepskin has long been a hiring filter for lazy human resource managers. But companies from Google to Ernst & Young have stopped insisting upon a diploma. Given the outrageous cost of higher education today, with students paying for tenured professors who don’t teach, football teams whose games they don’t watch, cadres of administrators who police their sexual behavior, politically correct faculty who stifle unpopular views, and the “Club Ed” complex of dormitories and dining halls, it should surprise no one that more and more students are seeking an education online.

The online trend will grow as broadband access reaches an increasing percentage of the population and as the technology and pedagogy of online teaching continues to improve. Elite universities have little to worry about, at least not now. Some people won’t mind paying $100,000+ to give their child the four-year experience of a residential college. But most Americans don’t have that kind of scratch. Second- and third-tier institutions need to be very, very afraid of alternatives that cut the cost of higher education in half.

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11 responses to “Online Education Marches On”

  1. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Bacon says: “Elite universities have little to worry about, at least not now. Some people won’t mind paying $100,000+ to give their child the four-year experience of a residential college.”

    No. Elite universities have plenty to worry about, just don’t know it. As functional and legitimate teaching institutions, they are quickly reaching their points of no return, are in full collapse now like houses made of cards. Totally corrupt, save for a few.

  2. CrazyJD Avatar

    Mitch Daniels continues to be the smartest guy in the room (No, not like Obama, who only thought he was the smartest guy in the room). Daniels neatly dodged running for president, but will always have huge impact on whatever he does.

    He does so, in part, by paying attention to the details, something the Richmond city administration could pay attention to in its finance office instead of engaging in grand development schemes. When he first took office as Indiana governor, Daniels looked out his office window overlooking the state parking lot roof. Noticing all the state owned cars, he told a young aide to put a penny on top of every left front tire. A month or so later he sold all the cars that still had pennies… which was most of them. They were never missed.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      I agree re: Mitch Daniels. That’s why I added the words “save for a few.” The few Mitch Daniels in our world of higher education, and others like him, such as Larry Arnn, along with a small resilient corp of tough and committed faculty will end up saving serious higher education in this country. After all the rest of our so called “educators” have done their best to destroy student education.

  3. LarrytheG Avatar

    Here’s the question.

    If someone can learn something online – and demonstrate their acquisition of the content with an appropriate certification test…

    then tell me what the purpose of a physical classroom with a in-person instructor is? What does it provide that online does not?

    Whether we’re talking about inner-city kids or rural adults who need to retrain.. give me the argument that says online can’t meet their needs.

    Not only should high-priced colleges be worried – but so should county-city K-12 public schools … who now spend twice as much for education that the State SOLs require – but to no measurable increase in performance…

    the only real question is will education be transformed before Dominion and solar will?


    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      You and I agree.

      I would add that on line education properly harnessed and deployed by people like Mitch Daniels and Larry Arnn will show that way that turns the tables on the Elites.

      We are seeing this happen right now as the reality of what is happening to our students at the elites is becoming ever more clear to ever more people. And as effective, lower priced, and accessable options and alternatives grow exponentially.

    2. LocalGovGuy Avatar

      Because online learning continues to fail.

      See University of Phoenix, the UC experiment, etc. U of Phoenix saw its enrollment decline by 3/4 in a 6 year period.

      Oh, and see this local story:

      Contrary to the author’s proposition, I see more and more employers (large, medium, and small) hiring more and more graduate degree holders for positions that used to require a bachelor’s degree.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Yes, true to a point, there a many bad for profit educations but now also a growing majority of very bad non-profit private and public educations.

        Indeed, given that a BA degree from most universities, including now likely a growing majority of those handed out by the elite institutions, are next to worthless insofar as concerns substantive learning, people are wising up finally. This dawn of truth has taken too long but its now arrived.

        And, of course, the universities been happily going along for years lowering the quality of their undergraduate educations. Why? Because it keeps kids fat, happy and uneducated for reasons deemed in the schools self interest.

        For instance, most professors do not want to teach students courses of substance and grade them for learning anything of substance anyway. All this teaching and testing of students would take too much work on the professors’ part and on the students part too. And it would take too much time away from the research and hobbies of professors, while it makes too many students and their parents unhappy because it requires hard work, grading, and failure on students part. This sparks complains against the professors, risking their job, tenure and entire future.

        So, to avoid all this hard work and risk, a system has been built that gives most all of those in control what they each really want, a scam education of students. One for example that gives away all ‘As’ for showing up, while entertaining students with Country Club facilities and bad attitudes.

        This is poison. It destroys the value of most students degrees in terms of learning, while it also operates like a Ponzi scheme. It ruins their education while it keeps students in their seats learning next to nothing but bad habits and attitudes for ever long periods of time while they pay through their nose for what tends to ruin their life, instead of enhancing and enabling their young lives.

        But now these Scam education regimes are being exposed nighty on the news, and in the newspapers. Universities are being exposed as dysfunctional institutions creating generations of dysfunctional students. Kid who have not only learned nothing of value but have also lost their ability to cope with the real world, much less act as a responsible well educated adult.

        Employers are figuring this out now! Namely that now even degrees from highly select universities and colleges are increasing losing their value to employers in the marketplace for today’s hiring. Today a student who just got a BA from an elite or highly select college proves only that 4 years ago he or she got good SAT scores. But does not prove proof that student got anything out of your undergraduate degree that holds any value to the employer, and any assurances of the graduates future success.

        So hiring practices are beginning to change. Employers have seen too many uneducated and ill prepared kids coming out of the “best schools’ along with everyone else coming out of the less select schools.

        There are exceptions and caveats here, but these are the growing trends.

        1. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          The Wall Street Journal’s “Notable and Quotable: Stressed at Harvard” article today highlights the point made in my above comment. That article reads:

          “Shar Omer … in the Harvard Crimson, May 1, (reports that):

          Harvard libraries will no longer charge 50 cents per day fees on overdue books. The change, one of several detailed in a post on the Harvard library system’s website, went into effect on April 1 … (stating that) …

          “The goals of these changes are to improve the student experience and embrace the ‘One Harvard” approach for borrowing material across Harvard Library,” wrote Steven Beardsley, Harvard’s associate director for access services administrative operations and special projects, in an email (that continued:)

          “We have witnessed firsthand the stress that overdue fines can cause students,” Beardsley continued.”

          This report raises several questions, namely:

          Does this new policy legalize student theft of Harvard’s property within it libraries, and thus waste Harvard’s educational resources, and impair the ability of other students at Harvard to study the stolen library books?

          Why are Harvard students stressed by paying fines for their refusal to return borrowed library Books, and not stressed by stealing them from Harvard instead?

          Is Harvard’s latest venture into coddling students’ bad behavior tantamount to theft a metaphor for all of America’s elite higher education system today?

        2. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          The comments above speak to how today’s policies at many American colleges and universities work hard everyday to undermine the character and educational achievement of their students on campus.

          IN THAT REGARD:

          Dennis J. Frailey, a long time expert on measuring performance in the US high tech industry and former university professor commented in a letter to the editor in yesterdays Wall Street Journal that:

          “The problem with many measurements (used to evaluate student and institutional performance in higher education) is that they induce behavior modification that achieve the metrics but often don’t achieve the goals. I’m particularly uncomfortable with the use of ‘graduation rates’ as a measure of academic performance … the effect of such a measure is to put pressure on faculty to give higher grades and, in particular, to pass students who don’t deserve to pass. We end up with higher graduation rates, resulting in a large number of individuals who have the degree but not the knowledge and skills the degree is supposed to imply.”

          Mr. Frailey went on to observe that:

          “There are better ways to measure academic performance … (And) the more important issue we should be discussing is how our education system is supposed to make up for poor attitude, behavior and motivation, usually resulting from cultural influences and, at times, poor parenting ..”

          I agree with Mr. Failey. But I would go a big step further. Today’s cultural decline in America is surely part of the problem that universities face, but I suggest that actions by universities over the past several decades have fueled much of the nation’s cultural decline. That indeed our entire system of higher education is geared to undermine student “attitudes, behaviors and motivation.”

          Thus, for only one of many examples, government and private ranking systems that grade student retention and graduation rates generate the reverse consequences that they are intended to achieve. Particularly so as they in practical effect demand that schools never give a student a low or failing grade, and so never seriously test or otherwise challenge students’ academic performance on campus. But instead our schools strongly encourage the disinterested and failing student to stick around, wasting his or her and everyone’s time and money paying for an education that he or she the student never gets.

          So today, no matter what, all students if they bother to show up at all graduate with straight As in four years.

          This keeps the schools ratings as high as possible. And just as surely this system turns far too many students into wastrels while it falsely inflates the university’s national ratings, ofttimes into a ‘preeminent educational institutions”.

          This is corruption of the highest order. It is an national scandal. It is deeply unfair to everyone but most particularly to the student, and those who pay the students bills for the promise of an education, but get in return an uneducated wastrel instead.

          And its happening to all our students, including the most talented, and those who otherwise would likely be the most motivated, irrespective of SAT scores or personal background growing up.

  4. LarrytheG Avatar

    I don’t see it as elites.. I see it as the middle class – who actually drive the priorities of K-12 schools to their own collegiate aspirations to the harm of lower income folks needs… and vocational education.

    That’s how we get to most public schools prioritizing spending oon things that are “needs” for kids headed to college – and not on lower-income neighborhood schools needs. Courses that are “electives”.. and collegiate resume “enhancers”. Newbie teachers to low income schools..better teachers to better neighborhood schools, etc.

    then at the college level – not courses for folks of lower economic means to get them a cost-effective degree that takes them to a real job but rather residential campus “experience” like their parents got.

    It’s not “elites” that are driving the UVA issue – it’s actually middle-income people who don’t want UVA to go to a true Ivy League status but rather remain the “common man” ivy option… for the masses.

    at the end of the day- folks of lesser means are going to find online – the way to go. The major problem is that online is currently infested by more than it’s share of fly-by-night for-profits selling worthless degrees.. e.g. Trump University, University of Phoenix, Kaplan University, and Strayer University…

    see: Screw U: How For-Profit Colleges Rip You Off

    that’s why it is imperative that legitimate bricks & mortar schools get involved in this game.

    I think the jury is still out on Liberty U – by the way. They’ve obviously mastered Online – AND they’re getting into K-12 which will become a
    major force in Christian, Charter and Voucher schools.

  5. LarrytheG Avatar

    re: online fail..

    I see online the way I see the so-called “failures”.

    they got ahead of themselves .. and did not understand how “online” would work but now. it’s hard to look back and find any “failures” that do not exist today and are, in fact, wildly successful.

    Online is going to get it right – and explode…

    take a look at Va Tech…

    Va Tech’s budget is about 1.5 billion.. impressive but Liberty made 900 million on online alone!

    residential on campus is a mainly American thing and it’s going to go away except for only the well off who can also afford to send their kids to boarding school.

    The thing about education beyond K-6 – is .. it’s on you… taxpayers should not be paying folks to hold your hand and “help” you get educated.

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