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Speeding Toward a Slowdown?

November 16, 2010

Online college enrollments grew by 21 percent to 5.6 million last fall, the biggest percentage increase in several years, according to a report released today by the Sloan Consortium and the Babson Survey Research Group.

At the same time, the authors say online growth might begin to slow down in the near future, as the biggest drivers of enrollment growth face budget challenges and stricter recruitment oversight from the federal government.

Nearly one million more students took an online course in fall 2009 than in the previous year, according to the new survey, which drew responses from 2,583 academic leaders at both nonprofit and for-profit institutions across the country. That is the biggest numerical increase in the eight-year history of the report, and the largest proportional increase (21.1 percent) since 2005. Online enrollments have grown at more than nine times the rate of general enrollment since 2002. Almost a third of all college students in the country take at least one course online.

The conventional wisdom has been that the economic crisis has spurred at least some of that growth, as adults looking to increase their job prospects have gone back to school for a new degree. Three-quarters of the institutions surveyed said the recession drove interest in their online programs. In the year since Sloan administered its survey, there has been more talk of online enrollment growth as a strategy for making up for shrinking state allocations at public university systems — especially in places like California, where some think a massive online expansion could lift the state university system out of financial ruin, and Minnesota, where possible Republican presidential challenger Gov. Tim Pawlenty has made the idea of less-expensive online public higher education one of his talking points.

But Jeff Seaman, co-director of the Babson Survey Research Group and co-author of the new Sloan survey, says that shrinking state allocations could actually stall the growth of online programs. The survey shows that 62 percent of public institutions saw their budgets take a hit in fall 2009 (a proportion almost twice as both nonprofit and for-profit privates). Since public institutions enroll 60 percent of all online students, the fact that state systems might not have the resources to continue building out their online education infrastructure could have a chilling effect on online growth in general, says Seaman. (The Campus Computing Project last week released results from a more limited survey, wherein nearly two-thirds of public institutions said student demand for online courses exceeded their capacity to provide those courses. Seaman notes the consistency of that sample with his own findings.)

Another sector that has driven online growth has been for-profit higher education, and this sector, too, could see enrollment growth slow down in the near future. For-profit colleges make up 27 percent of all online enrollments, and are “the leader among institutions in including online in their strategic plans,” according to the Sloan report. In contrast to the publics, about half of the for-profit institutions saw their budgets increase as a direct result of the economic downturn.

But two keys to the rapid growth of for-profit institutions have been their aggressive recruiting tactics and ability to accept federal financial aid, says Seaman, factors that could be limited by new federal regulations and publicity over abuses in light of a damning report from the Government Accountability Office earlier this year.

Given that the economic crisis has left more students needing financial aid to enroll in college, he says, the new rules could be a drag on online enrollment growth at big for-profits such as the University of Phoenix, Kaplan University, and Ashford University, which enroll more than half a million online students between them. “There has been a clear focus on the for-profit sector,” notes the Sloan report, citing a Congressional press release asserting that for-profits enroll 11 percent of all students and 43 percent of all loan defaulters.

As for quality, mainstream acceptance of online education continued its steady upward trend, with two-thirds of academic administrators agreeing that it is “at least as good” as face-to-face — with public universities and for-profit institutions agreeing, unsurprisingly, at higher rates than private nonprofits.

A more surprising finding was that when asked about the quality of education at for-profit colleges versus nonprofits, 30 percent of top academic administrators at for-profit institutions said they thought the quality of education at for-profits was inferior to that of nonprofits.

Seaman told Inside Higher Ed that despite the temptation to read that response as a validation of the criticisms regularly heaped on for-profits, the answer is still somewhat ambiguous: the respondents were not necessary confessing that their own institutions provided a second-class education — only that nonprofits are better on balance. Even for-profit institutions that are confident in their own offerings might recognize that they share a classification with some “clunkers,” says Seaman.

For the latest technology news and opinion from Inside Higher Ed, follow @IHEtech on Twitter.

 

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