Public Universities Drive Online Education Growth

[Cheesesteak]

Degrees@StateU.edu

Online University Enrollment
Soars as Quality Improves;
Tuition Funds Other Projects
By DANIEL GOLDEN - May 9, 2006 - Wall Street Journal

Pratiksha Patel and her brother, Jignesh, both decided to earn college degrees over the Internet. But while Jignesh enrolled at the for-profit University of Phoenix, Pratiksha sought a more selective, prestigious school. After scanning a list of America's top 100 colleges, the Culver City, Calif., resident chose the University of Massachusetts.

Ms. Patel, a procurement-company operations manager with a community-college degree, was admitted to UMass's online program in business administration in spring 2004 and maintains an "A" average. She has visited the UMass campus only once, but she takes courses from its regular faculty, gets lots of feedback and develops friendships with classmates, just as on-campus students do. "With outsourcing, I wanted to be competitive and include a quality education in my skill set," says Ms. Patel, a 32-year-old single mother who contributes to online class discussions after her two children go to bed.

While overall higher-education enrollment in the U.S. is virtually stagnant, online enrollment is skyrocketing, and the recent repeal of a federal rule requiring colleges to provide at least half of their instruction on campus will boost it more. By early 2008, one out of 10 college students will be enrolled in an online degree program, Boston-based market research firm Eduventures estimated last year.

Public schools are driving much of the growth. Overcoming skepticism among some faculty members, state universities are capitalizing on their traditional advantages -- quality education at affordable prices -- to attract a nontraditional student body: online learners who often live out of state. What's more, the online programs generate millions of dollars that can be ploughed back into university operations.

At UMass, online enrollment has quadrupled to 9,200 students since 2001. Most are working adults between the ages of 25 and 50, and 30% are from out of state, compared with 20% of on-campus students. UMass's online applicants undergo the same admissions review as candidates for on-campus slots and can choose among 61 programs, ranging from a master's degree in business to certificates in gerontology and casino management.

Tuition is slightly higher than on-campus students pay, because Web-based courses aren't state subsidized, enabling the online program to net a projected $10 million this year for other university endeavors. For instance, online students pay $670 a credit toward a professional master's degree in business administration, compared with $540-$600 for on-campus students. Still, UMass's online program is a bargain compared with some for-profit ones: Ms. Patel says she has paid $18,000 in tuition for two years at UMass, while her brother paid Phoenix $24,000 over a similar period.

"Public universities are moving into the online environment extremely rapidly," says Gary Miller, associate vice president for outreach at Pennsylvania State University, which has 5,691 students taking online courses, up 18% from the prior fiscal year. "It's part of our mission as a land grant university of reaching out to people. The question in our case wasn't 'Should we do this?' but 'How do we do it right?' "

UMass Online's advertising slogan, "Because Quality Matters," is a subtle dig at for-profit online schools, which admit nearly all comers and have faced numerous government investigations and lawsuits alleging shoddy instruction, high-pressure sales tactics and financial-aid fraud. Jignesh Patel, who graduated from the University of Phoenix in 2005, says his undergraduate program in business administration wasn't as demanding as his sister's. "I feel her textbooks had a stronger in-depth look at the subject matter," he says, adding that he had less contact with faculty because some of his courses were only six weeks long.

In a conference call with analysts in late April, executives of Laureate Education Inc., which has more than 21,000 students in its for-profit online programs, mostly offering graduate degrees, said that growth in new-student enrollments is slowing because of increased Internet advertising by public and private nonprofit colleges.

But Brian Mueller, president of Apollo Group Inc., which operates the University of Phoenix and other educational institutions, predicts that demand for online education "is going to so outstrip the supply in the next five years" that there's room for all comers. State universities may have an edge "from the brand standpoint," he says, but competition for online students "is also going to be about your ability to deliver very efficiently." Apollo Group has 160,000 students seeking online degrees, more than any other for-profit provider in the U.S.

As state universities compete vigorously with online for-profits, they are also outpositioning most of the elite private schools. Stanford University offers online master's degrees in such subjects as electrical engineering, biomedical informatics and computer science, but top schools have been reluctant to tarnish their famous names by offering Web-based undergraduate degrees. "We tend to focus so much on the learning experience on campus," says Dartmouth Provost Barry Scherr. "That specific atmosphere you try to create at top-tier liberal-arts institutions is really hard to duplicate online."

Some elite schools have offered noncredit courses. But their success has been mixed. Earlier this year, Oxford, Stanford and Yale shut down their noncredit online venture because, the program's Web site says, "the cost of offering top-quality enrichment courses at affordable prices was not sustainable over time."

Other private nonprofit colleges have stepped up online efforts, but overall they lag behind state universities. According to a study backed by the Alfred P. Sloan Foundation, 51% of public colleges offered online degree programs in business in fall 2003, compared with 27% of private nonprofits. Many of the public universities were previously pioneers in other forms of distance learning, including correspondence study, video conferencing and continuing education programs at far-flung sites such as military bases.

Few of the adult students who enter online programs at state universities are coming in as true freshmen, and they are generally held to the same admissions standards as on-campus students who enter with some college background. That means they are judged mostly on their grades in college courses and their work experience. But applicants for online graduate degrees, such as M.B.A.s, often need to take the standardized tests for such programs.

At the University of Illinois' Springfield campus, which mainly serves transfer students from community colleges, 1,830 of the campus's students, or 42%, are taking at least one online course this semester, and online enrollment is up 30% from a year ago. Online education has "been able to transform a small regional campus to serve a national audience," says Burks Oakley, associate vice president for academic affairs at the University of Illinois.

University of Maryland University College, the open-enrollment arm of the state university, had 51,405 online students in fiscal 2005, up from 9,696 in 1998. Nearly 40% of online students at UMUC, which has a 60-year history of holding classes on U.S. military bases, are American military personnel around the world -- a market that the University of Phoenix also targets.

State university administrators say they have raised the quality of online courses so they are nearly as good as on-campus offerings. Although online programs are often criticized for having high dropout rates, Mr. Oakley says 92% of students who enroll in an online course at Illinois-Springfield complete it, close to the 94% retention rate for on-campus students. To discourage cheating, which is hard to police online, Illinois-Springfield has students take proctored exams at a library or college.

To win over dubious faculty members, UMass frequently offers faculty a one-time development fee, typically $2,000 to $2,500, for converting a classroom course to an online one. At the Boston campus of UMass, faculty are also paid $4,120 to teach an online course, compared with only $3,713 for a classroom course.

Robert Nakosteen, a tenured associate professor of economics and statistics at UMass, Amherst, says he used to be "one of the real skeptics." Still, he agreed to teach a graduate course online, in part because the extra pay enabled him to travel to Sweden to research the Swedish labor force. He says the quality gap between online and classroom education is diminishing, and he is impressed by both his students and the technology, including software that enables students to see and hear him manipulate a spreadsheet and explain the data. This summer, he plans to teach the course again -- from Sweden.

Pratiksha Patel may someday take Prof. Nakosteen's course, because she plans to apply to UMass's graduate program in business administration. In the meantime, she's looking forward to receiving her bachelor's degree later this month, alongside a "virtual friend" and classmate from San Diego, whom she will meet for the first time at graduation. "I'm going to Amherst, getting the cap and gown, and having the experience of walking down the aisle just like any other student," she says. "I already booked my ticket."