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Dan Davidson '11.5: Will online colleges transform higher education?

The University of Phoenix's prominent sponsorship was among the many comical elements of LeBron James's summer prime-time special, "The Decision." It was bizarre that King James associated his brand with an institution more often the butt of jokes than the recipient of celebrity donations, and the irony became even thicker when, just weeks later, the university was implicated in fraudulent and unethical behavior by a government investigation.

Online colleges remain saddled with poor reputations but have become economic juggernauts. Apollo Group, Inc., which owns the University of Phoenix and other for-profit education ventures, posted revenue of nearly $4 billion in 2009.

The success of for-profit higher education is clearly benefiting executives and shareholders. But online college holds even greater promise as a means of revolutionizing education in America. To date, however, this promise has yet to be realized.

The staggering cost of traditional college education is certainly leaving an opening in the market for online alternatives. According to the U.S. Department of Education, in 1980–81 the cost of tuition, room and board at a four-year, private institution was under $14,000 (in 2007–08 dollars), with the cost of a public institution less than half of that. By 2007, the cost of a private university was over $30,000, with public schools costing almost $13,500.  Many Americans simply cannot afford to attend college. Beyond monetary concerns, those who wish to get a degree may have familial obligations or a work situation that prevents them from doing so.

For those who cannot complete a degree in a traditional college setting, online colleges can be a powerful solution. In an article that appeared in the Washington Monthly last year, Kevin Carey, an education policy think-tanker, described an online college experience at odds with the image in many of our minds. Carey profiles a woman who, after earning lower wages than her college-educated counterparts, was laid off and finally decided to finish the degree she started years before. Faced with time constraints as a mother and economic concerns about spending a long time in school without work, she turned to StraighterLine, an online degree-granting program.

From her computer, Carey's subject could "access course materials, read text, watch videos, listen to podcasts, work through problem sets, […] take exams" and "collaborate with other students via listserv and instant messaging." She communicated with a course adviser through e-mail and could also talk to tutors online.

As for her two greatest concerns — cost and time — StraighterLine allowed her to complete courses as fast as she could work through the material and then begin new ones right away, all at a fraction of the price the same courses would cost on a traditional campus.

Why do we hear so few of these success stories? Some fault lies with the online college industry and some with the policymakers who govern it.

Online colleges are for-profit ventures, which creates perverse incentives for administrators balancing concerns about students and revenue. While Carey speculates that universities could eventually collapse under pressure from online alternatives in a fashion reminiscent of newspapers, it may actually be for-profit colleges that best resemble the newspaper industry. Like newspapers, online colleges face tradeoffs between efficiency and the quality of their product. How many executives and investors would eschew the former in favor of the latter? Thus, many papers are cutting staff and shrinking their coverage, and there is plenty of evidence showing that online colleges are driven by a desire to maximize profit without regard for students.

A report released in early August by the Government Accountability Office highlighted illegal or unethical practices at every one of the 15 for-profit colleges investigated. Four attempted to defraud the government by suggesting ways applicants could lie on their financial aid forms, "and all 15 mislead potential students about their programs' cost, quality and duration, or the average salary of graduates," according to an Aug. 4 New York Times article.

Policymakers also deserve criticism for not addressing the regulations governing higher education, which are stifling innovation and protecting the status quo in an industry that could use some shaking up. As Carey writes, "The most prestigious accreditors will only recognize institutions: organizations with academic departments, highly credentialed faculty, bureaucrats, libraries and all the other pricey accoutrements of the modern university. These things make higher education more expensive, and they're not necessary if all you want to do is offer standard introductory courses online," which is StraighterLine's business model.

But such companies will never attract students without being accredited. When some for-profit colleges can remain accredited while deceiving students and committing fraud, and others trying to deliver a better product are forced to find ways around the rules, the regulations need rethinking.

There's a strong argument to be made that the importance of college is vastly overstated, and that many people would benefit more from technical training than from a bachelor's degree. But it is undeniable that in many sectors, a college education is now essentially a requirement for workers, and that on average, college-educated students make much more than those who only complete high school.

While many online colleges suffer from high dropout rates and leave their students jobless and debt-ridden, the potential online education holds should be obvious to anyone who has used a computer. With our workforce struggling and the economy stagnant, it's more important than ever that politicians make it easier for forward-thinking ventures to offer students new, quality choices in higher education.


Dan Davidson '11.5 is a political science concentrator from Atlanta. He can be reached at daniel_davidson(at)



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