Another One Bites the Dust

Of all the projects to build international online universities, U21 Global might have been the most ambitious. Universitas 21, the international consortium of highly reputed research universities that opened U21 Global in 2001, predicted the program would enroll 500,000 students and be netting $325 million annually by 2011.

But the program has been fraught with financial losses over its eight-year run, and currently enrolls only 5,000 students. A number of affiliated universities have walked away, including four in the last two years.

Now U21 Global is reassessing its educational goals. The University of Melbourne, the program’s top university partner, this week said it would stop putting money into the program, which broke even for the first time this year. The university will retain the $15 million in equity it has already invested, but Universitas 21 will relinquish its controlling interest in the underachieving project to the Manipal Group, an Indian firm that deals in education as well as health care, manufacturing, and financial services.

Manipal plans to shift U21 Global’s focus from master’s degrees to “corporate education,” Ian Marshman, Melbourne’s vice principal and a U21 Global board member, has said.

Melbourne spokeswoman Christina Buckridge described corporate education as “short, non-award courses, sometimes tailored to a big corporate’s particular needs.” She said U21 Global is already providing such instruction for firms on several continents, and that "it is a successful direction."

Melbourne’s announcement comes a week after the Observatory on Borderless Higher Education, a British-based think tank, released a report including U21 Global among a number of failed attempts by high-profile institutions to build profitable online degree programs -- notably the University of Illinois Global Campus, which was marked for closure last spring.

So how did the project go from its original goal of half a million online students and nine-figure profit margins with backing from 18 internationally recognized universities to being turned over to a private company in India as a vehicle for corporate training and communications?

The Observatory's report lays out several theories. One, offered by a professor at one of the universities that recently withdrew from the project, is that U21 Global has failed to ensure that its degree programs would be widely respected by putting curricular quality control not in the hands of its affiliated higher-learning institutions but a “quasi-independent” oversight body called U21 Pedagogica.

“Students who buy the products have no guarantee that their qualification will be recognized internationally,” the report quotes Jane Kelsey, a professor of law at the University of Auckland, as saying. “Courseware design is contracted out, not necessarily to academics from shareholding universities. There is no commitment to collegial governance, participation by the student body, or academic freedom.”

Kelsey’s complaints about the apparent lack of faculty involvement in U21’s quality assurance model echo the concerns expressed by University of Illinois professors as they fought the Global Campus’s use of adjuncts to teach their courses. The Observatory report notes that several North American universities -- New York University, the University of Michigan, and the University of Toronto -- chose not to affiliate themselves with U21 Global for similar reasons.

Philip Altbach, director of the Center for International Higher Education at Boston College and an expert on global educational consortia, said that while he lacks specific knowledge of the U21 program, he imagines it would be difficult to craft course-design and governance models that satisfy the conventions and standards of many different countries. “Putting together programs across different campuses in different countries -- with different educational traditions, different ways of measuring credits, different ideas about standards -- all of these things are not so easy to put together,” Altbach told Inside Higher Ed.

U21 Global may also have erred in setting its price substantially higher than the fees at brick-and-mortar institutions in China, one of its primary targets, the report says. According to a 2005 article by Judith Walker of the University of British Columbia, which was still affiliated with the program at the time, it cost a student in China $7,000 to enroll in a U21 Global program, while the sticker price for equivalent programs at Chinese universities averaged only $2,000.

The Asian market is coveted by many distance education programs -- but many have already tried to court it and failed, says the Observatory, citing a 2004 article by Simon Marginson, now a professor of higher education at Melbourne. “For most students in Asia, an online degree accessed from home is a less attractive form of cross-border education than a degree acquired in a foreign nation or from a foreign institution offering programs in the student’s own country,” the report says. It added that Asian students are often turned off by the fact that online education offers fewer networking and language-learning opportunities.

Molly Chin, a spokeswoman for U21 Global, said the project may have simply set unrealistic goals. "U21 Global was established back at the height of the dot-com boom and had ambitious revenue aspirations as did many technology ventures established at that time," Chin said in an e-mail to Inside Higher Ed. "We have since revised our business expectations in light of changing circumstances, including in particular the more recent global financial crisis."