Do online colleges make the grade?

"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."

That may be an exaggeration, but education investors certainly enjoyed good returns over the past ten years.

Can they deliver a quality education? 

Gansler points out that any business has to offer a competitive product to stay afloat. "Online universities like DeVry or the University of Phoenix are by now some of the largest universities in the country," he says. "If they were turning out inferior students, it would be bad business. None of them are getting any smaller."

In fact, he says, the for-profits are growing faster than their nonprofit counterparts.

"If you look at the numbers of accredited online colleges," Gansler says, "about 80 percent are nonprofits. But if you look at demand and consumption, the students we are connecting to schools through are heavily biased toward for-profits. That's partly because those schools are far more aggressive, but also because they have the ability to produce new curricula and offer new programs quickly. They're better at adjusting to the demands of the marketplace."

Conscious of the need to overcome perceptions of inferiority, some for-profits are quantifying performance standards and outcomes to better entice students. For example, "The University of Phoenix has a new academic quality board to ensure their academic outcomes are equal to or greater than their traditional cohorts," says Gansler.


According to Breneman, studies suggest that the education someone gets from learning online "is about the same as sitting in a classroom. Lots of very reputable institutions have online components. So the delivery method in and of itself is not suspect."

Accreditation an indicator 

For online schools and their brick-and-mortar counterparts, the ultimate indicator of quality is accreditation, but this can be a complex issue. While most countries have government organizations regulating academic standards, the U.S. relies on independent agencies -- and there's a confusing proliferation of them. A bogus university is likely to advertise accreditation by a bogus accrediting body.

Three kinds of accreditation -- national, regional and programmatic -- are recognized by the U.S. Department of Education, says Michael Lambert, executive director of the Distance Education & Training Council, or DETC, a nonprofit specializing in the accreditation of higher education institutions whose programs are offered primarily by distance. DETC, which is a national accrediting body, got its start accrediting correspondence schools in the 1920s.

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