The Rise of eDegrees

Virtually every state's higher education system has climbed aboard the distance-learning bandwagon. But their reasons and approaches vary enormously.

Passing through the University of Maryland in College Park, it's easy to miss the two buildings on the extreme western edge of campus. The red bricks and white cupolas blend into the Georgian architecture. Flags reading "University of Maryland, University College" are the only distinguishing characteristic.

Until recently, those buildings didn't attract much attention from the state of Maryland, either. But in the past few years, the University of Maryland, University College has become impossible to ignore. With 71,000 students, UMUC is the largest of the 11 branches of the state university system.

Of course, 71,000 students would barely fit in the Orange Bowl, let alone a pair of four-story buildings. In fact, UMUC's "campus," which includes high-tech computer labs, a conference center and an impressive Asian art collection, does not have any classrooms for students.

All classes are taken either online, through television or at more than 150 satellite campuses in 30 countries. UMUC was established in 1947 to educate military personnel and promote adult education, but it wasn't until the advent of the Internet that it reached a large-scale audience, as well as garnered state funding and involvement in the process.

Like other "virtual universities" nationwide, UMUC is being transformed from a small outpost of adult education to a major force in higher education. Although most states have had adult education or university extension programs for many decades, the Internet has invigorated those efforts, enabling states to reach people who previously didn't have the time or means of transportation to complete or embark on a degree. But while it seems that every state is jumping into the distance learning market with the broad goals of furthering adult education and improving higher education, they are going about those aims in vastly different ways. From state to state, the structure, content and business practices are being tailored to meet specific needs.

"We tease ourselves because we can all say that we're the fastest growing of our kind, because we're all so different," says Mary Beth Susman, CEO of Kentucky Virtual University. "Nobody can really say yet which organizational structure will be the most effective."

KVU and UMUC represent the two main structural models for state distance education, with lots of variation in between. UMUC acts as an independent branch of the state university system, awarding degrees and developing its own courses. Other virtual universities operating along this line include Penn State's World Campus and the University of Wisconsin's Learning Innovations program.

By contrast, Kentucky Virtual serves as a clearinghouse for the distance-education courses offered by all of the state's four-year universities and community colleges. Instead of getting a degree from Kentucky Virtual, students choose one of the state's existing campuses and work within its rules for degree requirements and transfer credits. KVU serves as a central point for students--coordinating admissions, providing support services and even fielding a virtual football team. In doing so, KVU goes beyond many other consortia, such as the Southern Regional Electronic Campus and the California Virtual Campus, which simply feature a searchable list of online courses offered by universities in their geographic areas. Other schools, such as the Western Governor's University, fall somewhere in between the two models, awarding degrees but using classes from a variety of other institutions.

Thus far, no model has emerged as the definitive favorite. Both the consortium model--chosen by the majority of state universities--and the independent university model have their pros and cons. Although consortiums require less investment and pose fewer problems with accreditation, independent universities offer advantages in terms of consistency of quality and increased marketing potential. In general, independent virtual universities tend to focus more on marketing to students outside of their state, while consortiums are more inclined to concentrate on the local population. In consortiums, the majority of the students tend to take just a few classes online, while basing themselves physically at one of the state campuses.

Just as virtual universities have chiseled out their own structural models, they have also worked out ways to address social and economic issues in their respective states. In Kentucky, for example, the state is most interested in targeting those previously missed by higher education. A new initiative is planning to reach the estimated 900,000 in the state who are functionally illiterate (out of a total state population of about 4 million). The idea of teaching literacy through online education may seem ironic, but the state is confident that by emphasizing audio and visual elements, the program will be successful. The university has also embarked on an aggressive marketing plan to increase enrollment and education, putting advertisements in public libraries and on public transportation. "We're 42nd out of 50 for people holding bachelor's degrees," Susman says. "We need to get Kentuckians back in school."

Kentucky's growing emphasis on adult education reflects a changing attitude nationwide toward reaching out to underserved populations. "State universities traditionally have educated people who are already educated," says Sally Johnstone, director of the Western Cooperative for Educational Telecommunications at the Western Interstate Commission for Higher Education. "Continuing education has not been the primary mission of most colleges and universities." Part of the increased emphasis on adult education comes from the realization that states need a skilled and educated work force to remain competitive economically.

In Michigan, the impetus for distance learning came not from the higher education community but from the automotive industry, which urged the creation of Michigan Virtual Automotive College in 1996. Recognizing potential for further growth, the institution was expanded in 1998 and renamed Michigan Virtual University, focusing on filling worker shortages in information technology, health care and education fields. In one of its biggest endeavors, the university announced in March that it would provide some 700 IT classes free to those involved with education and small businesses.

In addition to being governed differently from other higher education institutions in the state, MVU works in close partnership with the state's economic development agency and career development agency. "The concept of higher education almost forever has been institutions do it, states don't do it," Johnstone says. "Now we're doing something where the states are a little more involved. There's more channeling of resources, as opposed to, `Here's the money, go do good work.'"

Although boosting literacy rates and training workers are noble goals, many states are launching virtual universities as a business enterprise, with the expectation of a financial windfall. "Virtual universities are looked at as cash cows," says Peter Ewell, a senior associate at the National Center for Higher Education Management Systems. "Everyone thinks they are going to make a lot of money and they're afraid of being left behind."

Richard Hezel, president of the consulting firm Hezel Associates, believes virtual universities could make money fairly quickly. He says that although the start-up costs are somewhat high--between $20,000 and $40,000 per course--if the universities are managed well, it's possible to be in the black by the end of their third year.

Others doubt the ability of these universities to see a profit. "Nobody is making very much money on distance education," says Gary Matkin, dean of continuing education at UC Irvine. "When you really cost it out, it's not a great business to be in."

Financial concerns don't seem to have held many universities back from entering the marketplace. A study by the National Center for Education Statistics found that between 1995 and 1998, the number of universities offering distance education increased by one-third and the number of courses available online doubled. The study also noted that public universities were more likely to be involved in online learning than private ones, with 78 percent of public four-year universities and 62 percent of two-year institutions offering distance education, as opposed to 19 percent of private four-year colleges.

In part because of the flood of new players, business at virtual universities has become increasingly competitive. Instead of competing once for a student's matriculation, universities can battle for every class that a student takes. In addition, geography is no longer an advantage; a student living in California can just as easily take a class through Kentucky or Maryland. "I feel like we're competing with everybody," says Gerald Heeger, president of UMUC. "We compete with other institutions in our own state, state institutions in other states, premier IT institutions, graduate management programs."

In a sign of solidarity in this emerging market, four universities with somewhat similar programs--Penn State's World Campus, the University of California at Berkeley's extension program, Wisconsin's Learning Innovations program and the University of Washington--have formed an alliance to share information and negotiate with vendors. At the same time, those universities stopped short of what UMUC has done: spinning off a for-profit subsidiary. Maryland OnLine, UMUC's profit- seeking entity, is used to market the university and form partnerships with the private sector.

By creating a for-profit company, a university has easier access to large amounts of capital. The companies can draw outside investors with the promise of future returns on their investment. No longer burdened by bureaucratic red tape, they are also able to make decisions faster. Maryland's Heeger even plans to offer stock in Maryland OnLine sometime in the future.

Some critics of the for-profit strategy are convinced that with an impending economic slowdown, there won't be enough venture capital to sustain such companies. Other skeptics question the for-profits on ethical grounds. "It's simply against the grain of what state universities do," says Ron Phipps, senior associate at the Institute for Higher Education Policy. "What happens when the tail starts wagging the dog? Are you offering courses not because they'd be good for society but because they're making money?"

In South Dakota, officials are also hoping that virtual universities will help solve cash-flow problems. Although their model is completely different from those in other states, it is equally controversial. As one of the states with the lowest per capita expenditure on education, South Dakota is using its online capabilities to stretch resources at its traditional universities. For example, the state is cutting out some duplicate classes and replacing them with online classes available across the university system. "We don't need six history courses," says Tad Perry, executive director for the South Dakota Board of Regents. "We just need one good one." So far, the university system has whittled down two degrees to the point where all the classes required for those majors are not available at any one campus. To major in physics or French, students must take some of their classes online.

Not surprisingly, some professors in the South Dakota system are resistant to this sort of streamlining. Indeed, this approach worries academics generally. "The thing with offering just one history class online--we have a gazillion interpretations of history," says Ruth Flower, director of government relations at the American Association of University Professors. "I would really dread the day when we pick the top history class from one historian and teach that to everyone in the nation."

All of this emphasis on the structure and purpose of distance education begs the question: Are students really learning anything? Distance education has been around in the United States since the 1870s, and has been taught through correspondence, radio and television. Although the Internet allows for the courses to reach a larger population, the underlying issues remain the same ones that were debated in the 19th century. Proponents of virtual universities readily agree that distance education is fundamentally different than in-classroom learning. But they don't think that different means inferior in quality. They argue that distance education may even give more of a voice to students who are shy or have difficulty expressing themselves verbally. At UMUC, for example, educators take great pains to ensure a quality educational experience. Classes are limited to 25 students each and students are often required to participate a certain amount. The university also holds fast to a requirement that all undergraduate exams be monitored in person.

Those involved in distance education are working to ensure support services for students, such as tutoring and libraries. "Universities think that education can serve the whole world and all they have to do is put it online," Johnstone says. "For those of us who have worked with distance education, that's the easy part. The hardest part is helping people at the other end."

Opponents of distance education, meanwhile, argue that the experience cannot possibly replicate what goes on inside a classroom. They liken distance education to giving a student a textbook, rather than actually teaching the material. Critics also fear that resources given to distance education will detract from resources that should be going to traditional classroom education.

"It's unfortunate that there's two camps: There's the people for distance education and the people against," Phipps says. "We've got to get out of that mold because distance education is here to stay. It's not going away."