Contents The $96 billion for-profit education industry is getting in on elearning. In 1999, elearning revenues were reported to be about $500 million for this group, as reported by And it is not just the for-profit educational institutions that want a piece of the elearning market. The online entrepreneurs who first tapped the for-profit institutions are now entering agreements with the not-for-profit institutions. Note that U.S. education spending for not-for-profit organizations is a huge market:
  • $340 billion for K-12
  • $250 billion for higher education
  • $63 billion for corporate training
Roughly two-thirds of this money pays for teacher salaries and benefits. A growing number of universities and internet entrepreneurs are betting that the virtual campus will do away with costly annoyances like professors and classrooms. They view the entire education field as a huge, and relatively untapped market. expects the elearning revenues to grow 10 to 15 times faster than overall education-industry revenues in 2000. Such schools as Duke University's J.B. Fuqua School of Business and Cornell University's are now selling online courses (Duke's B-School Goes into Business and Dartmouth College's Amos Tuck School of Business).

When academic institutions grow to closely involved in commercial activities, "they appear less and less as charitable institutions seeking truths and serving students, and more and more as huge commercial operations that differ from corporations only because there are no shareholders and no dividends." - Derek Bok, former Harvard president

However, some schools are taking a harder look at distance learning. The University of Illinois believes that many other campuses have taken a "badly commercial motivation" in their implementation of elearning (Faculty Report at U. of Illinois Casts Skeptical Eye on Distance Education).

Finally, it is not just educational elearning that is on the rise. The educational market as a whole is doing well due to the job market being hungry for employees with technical and business skills as reported in Business Week's Education Stocks Are Getting A's Again.

Schools in Crisis?

Critics warn that our schools are in desperate need of repair. They always seem to be declaring some sort of crisis in the schools...but rarely bother to spell out what cataclysm is imminent. For example, Jason Roberts, CEO of Panmedia Corp. (the developer of stated, "Classrooms kill most learning before it can happen" (Go to the Head of the Class!).

Roger Schank (The Shank Tank) also sees education in a crises and his silver bullet is having most, if not all learning performed via the computer.

However, in Scientific American's report, The False Crisis in Science Education, the authors argue that we ought to be more skeptical of claims of crisis and other educational experts agree with them. There are three reasons to doubt that the educational system is in crises:

  • Past crises have led to lots of spending and legislation -- nearly 1,000 laws passed since the 1970s to force reforms on schools, but have made little change in what students learn.
  • A close look at the statistical evidence reveals no sudden decline in the science and math knowledge of those leaving high school. In fact, scores on national tests have been inching upward for more than a decade.
  • From 1980 to 1995 college enrollments swelled by 29 percent, despite a steady drop in the population of college-age kids.
Clifford Stoll's High Tech Heretic, Why Computers Don't Belong in the Classroom and Other Reflections lays a convincing argument against computers in the classroom. He believes we need to spend more time on the human elements that provide social interactions, rather than wasting huge sums of money on technology. He says that for years we have been claiming that "information is power." Yet who has the most information in the average neighborhood? The librarians -- and they are famous for having no power at all.

Diploma Mills

Internet degrees can often be obtained quickly and easily. For example, Columbia State University offered a degree for $2,000 and the summation of a $25 textbook. The American State University gave a degree for $1,890 and a 2,000-word thesis (Is the Internet Becoming a Bonanza for Diploma Mills?.

"Students will be able to shop around, taking a course from any institution that offers a good one. Degree-granting institutions will have to accommodate this," said Roger Schank (The Virtual Classroom Vs. The Real One). He continues with, "They will resist at first, but eventually society will realize that anyone is entitled to the best courses, and barriers will fall. Quality education will be available to all. Students will learn what they want to learn rather than what some faculty committee decided was the best political compromise."

However, some leaders in the educational field fear that higher education will be splint into two sections (Mother Jones, January & February 2001. Digital Diplomas, p.36):

  • Brick Universities for those that can afford them.
  • Click Universities that offer glorified education for everyone else.
Professor Carole Fungaroli, a professor of English at Georgetown University and the author of Traditional Degrees for Nontraditional Students, says, "I see this as a class issue. Who is going to end up in these distance learning courses? Single moms, working parents -- the very people who most desperately need social contact as part of their educational experience."

Watered Down Degrees?

A study found that 77% of human resource officers did not consider a degree from an online only institution to be the equivalent to a campus-based diploma and more that 60% were concerned that online course students lacked social interaction with peers (Press & Washburn, 2001).


Press, P. and Washburn, J. (2001). Digital Diplomas. Mother Jones. January/February 2001 Issue.



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Created January 21, 2001
Updated October 28, 2007


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