Do online colleges make the grade?
By Marilyn Bowden • Bankrate.com

For-profit schools offering university degrees online have performed well on Wall Street. Since 2000, shares of DeVry, for example, have nearly tripled in price, while Apollo Group shares are up more than sevenfold. Strayer Education shot up tenfold over the same period.

But are these schools good investments for their students?

Unlike distance-learning options offered by traditional colleges and universities, for-profits, whose primary presence is not a tree-lined campus but a Web site, have had some difficulty gaining credibility. In a recent survey by career information provider Vault, most employers consider online degrees acceptable, but not as credible as traditional degrees. Nearly two-thirds of survey respondents said they would prefer job applicants who graduated from a traditional college over those with online degrees.

But experts say that's changing. While they may not always be best for those who aspire to acquire a doctorate in philosophy or a dramatic career change, the evidence suggests online schools accredited by reputable agencies can be a practical alternative for working adults who want to complete a degree or update career skills.

Online schools For-profit colleges offer another delivery method for ye olde correspondence schools, but tuition and fees run high relative to traditional public universities.

Higher education at a high price 1. Testimony from a student 2. Can they deliver quality? 3. Accreditation an indicator 4. Cost of an online education 5. Problems of credit, credibility

Testimony from a student
Andres Llanos, for one, found online studies to be a perfect fit. He wanted to go back to school for a degree in accounting, but had a family to support, he says. After making sure the degree he got would be valid not only in his home state of Florida but anywhere in the country, he opted to take online courses at DeVry University, one of the larger for-profit schools whose programs are offered primarily over the Internet.

"I liked the flexibility they could offer someone like me who needed to work full-time," Llanos says. "It gave me the opportunity to study after work and family time."

He says the experience was so positive that he went on to earn a master's degree online -- this time at Keller Graduate School of Management.

Like Llanos, most students enrolled in online universities have historically been employed adults between the ages of 23 and 40, says Andrew Gansler, president of the Prospecting Services Division at EducationDynamics, headquartered in Hoboken, N.J.

"A lot of the early growth was driven by MBA programs for working professionals and people looking for career-oriented skills," he says. "More recently, though, bachelor completion programs have emerged for people who want to complete their degrees without having to put their lives on hold."

In the U.S., about 2 million students -- or close to 10 percent of all those enrolled in higher education -- "are taking courses in fully online programs at accredited degree colleges, and never set foot on a campus," says Sean Robert Gallagher, program director and senior analyst at EduVentures, a higher education research and consulting firm based in Boston.

"That's up from just a few hundred thousand a few years ago," he says. "So there's been great growth."

Their rapid evolution made for-profit schools a growth industry on Wall Street, says David W. Breneman, dean of the Curry School of Education at the University of Virginia in Charlottesville.

"Now that they're quite a mature industry, they can't keep producing 30 percent growth year-over-year," he says. "But anybody who bought when they first went public would be a millionaire by now."