The for-profit online education industry seemed unstoppable only a few short years ago. Stock prices of companies like The Apollo Group were flying high, right along with the student numbers at their biggest subsidiary, the University of Phoenix. Then came the 2008 financial collapse and the arrival of a much less friendly regulatory regime. And before long, both the financial health of higher ed for-profits and their enrollment numbers were in freefall.
Now, Apollo’s stock is trading at $19 down from its 2012 high of $58 and enrollment at UP is down 15% over the same period. To deal with the fall, UP has had to axe over 800 employees and shut down 25 campuses across the country.
DeVry, another one-time high performer in the sector, has had to take similar steps in order to deal with a new economic reality that saw their enrollment plummet by nearly 10%.
With the economy slogging through a protracted malaise, consumers are beginning to scrutinize their online education options like never before, signaling the start of an industry correction that will lead more prospective students to demand higher quality from their online investment. Research shows that when students are considering a non-profit college or university they generally consider a number of schools before choosing. When it comes to for-profit universities,more than 50 percent look at only one school before enrolling. These students were looking for convenience over quality, and the for-profits had a customer-first business philosophy that smashed through the ivory tower’s seemingly impenetrable fortress of reputation-driven enrollment.
However, those who claim that this is the beginning of the end of online education in higher ed are rending their garments too soon. As Dr. Carlos Campo points out in an article for The Huffington Post, this could actually be good news, because this spasm could be a sign that bad actors are being slowly but surely washed out of the industry. Taking their place are companies whose focus and resources go towards delivering high quality academic content rather than marketing and recruitment.
Until two years ago students who were interested in attending an online-only college had to do their own leg-work to determine the quality of their chosen institution. They didn’t have guides like the ones published by the U.S. News & World Report which annually ranks traditional schools based on measures such as graduation rate and SAT scores.
Although the magazine has now stepped up with a version of its guide that looks at online universities as well, it only uses three criteria to rank them: faculty expertise/training (25%), student services/tech (25%), and student engagement, which counts for 50% each school’s final score.
Another quality measure of online education is “Quality Matters” (QM) a “faculty-centered, peer review process that is designed to certify the quality of online and blended courses.” QM was developed at the University of Maryland, and uses 40 categories to help ensure that best practices for online education are used in course development and implementation. Some schools are using QM to “certify” their online courses, though it is not yet clear that the general public sees the value of this new validation. Blackboard, the largest learning management system provider in America, recently announced a partnership with QM, designed to “offer clients a complete solution to their consulting needs for quality online courses to improve the online education experience.”