A Virtual Revolution in Teaching

A virtual college campus lives inside the computers of University Access, where thousands of students electronically gather for class inside the stacks of PCs.

Machines abound in the company’s ritzy Hollywood offices, where the only physical ties to scholastic tradition are felt pennants from USC and Indiana University that decorate employee cubicles. Clean-cut and perky, the young staffers talk about “digital” this and “futuristic” that with the fervency of Silicon Valley prospectors convinced they’ve hit upon the next big idea.

Maybe so.

“The way people want to learn is changing,” said Tom O’Malia, director of the entrepreneur program at USC’s Marshall School of Business.

Hoping to attract everyone from middle managers in Shanghai to teenagers in Sioux Falls, S.D., corporations and colleges have invested at least $300 million in the last few years on the Internet college gamble. One in three U.S. colleges now offers some sort of accredited degree online, more than twice as many as last year.

Demand for online executive training alone--a small piece of the electronic learning pie--will burgeon by 2002 into a $7.1-billion market, according to research analysts at International Data Corp.

“There’s so much money to be made doing this,” said Jaime McKenzie, editor of the Educational Technology Journal in Bellingham, Wash. “Everyone’s racing to grab students and their checkbooks.”

But although the promise is huge, so are the possible pitfalls.

If schools start mass-marketing their courses online, will they keep their elite reputations? Will students get as good an education as those who physically sit in the lecture hall? What happens as corporations move into the college market and use people with no classroom experience to teach? What’s to keep a top professor from freelancing course work to a competing organization? And how much cachet will a “dot-com” degree have in the real world?

No one has answers, but online education just keeps coming.

London-based Semple Piggot Norrie Aquino, a legal education company, offers a British law degree program taught entirely on the Internet. Stanford University has lured thousands of students to its online master’s program in electrical engineering. And UNext .com, an ambitious start-up backed by convicted junk bond king Michael Milken and built on a fistful of partnerships with elite universities, launched its first six courses last month.

The demand for online education grows out of a simple problem: There are about to be too many students and not enough classrooms.

The enrollment at California public colleges and universities, for example, is expected to swell from nearly 2 million students in 1998 to 2.7 million by 2010, according to a report by the California Postsecondary Education Commission.

Sensing a chance to keep growing without the expense of adding buildings, some of the country’s most prestigious schools are examining ways to put their curriculum online. One of the most simple approaches is to partner with Deerfield, Ill.-based UNext.com, which seeks to capitalize on the reputation of top schools.

When a major corporation--such as a Disney or a Sony--wants its staff to take finance courses, UNext is betting that the company would rather turn to someone that provides courses with ties to Ivy League schools instead of a local college.

It’s a plan that convinced Columbia University to license its name and contribute business courses to UNext. In return, Columbia and UNext’s other founding partners--the University of Chicago, Carnegie Mellon University, Stanford and the London School of Economics--will receive a cut of revenue from online classes.

It may seem like a win-win situation, but such deals are far from clear-cut. Partnerships between colleges and start-ups are beginning to raise legal questions, such as how schools can reconcile their tax-exempt status as educational institutions with their for-profit role as Net players.

“There are no clear answers at this point. It’s going to be up to the courts to deal with it,” said Scott Soffen, an education analyst at the financial investment group Legg Mason Inc.

Choosing the Right Course

What students ultimately see on the screen depends on which school they attend.

Fubramani Harihara, a software engineer at computer giant Cisco Systems Inc., wanted to take some electronics classes to expand his technical skills and boost his chances for a higher-paying job. But married, with a child in preschool, the 61-year-old said he had neither the time nor the money to go back to school full time.

After looking into several Net-based programs, Harihara signed up for Stanford’s online electrical engineering master’s program. He soon faced the same workload as on-campus students, putting in four to five hours a day to complete assignments and watch prerecorded lectures broadcast over the Web.

UNext.com, which caters to non-degree-seeking students, relies heavily on text-filled Web pages and avoids using videotaped speeches.

“Lectures are dead. They are not a good way to learn,” said Andrew Rosenfield, UNext’s chairman and chief executive. “People want to learn what they need to know, not what professors want them to know. You can only do that on the Internet.”

In one UNext finance class, the student is cast as a newly hired manager at a PC manufacturer. There is talk that the company could merge with another firm, one that makes hand-held computers.

The student must study the financial history and business models of the company’s biggest competitors, figure out whether the company should pursue a merger, and ultimately find a partner that would be a good match.

Each step of the way, he must complete a series of homework problems and e-mail them to the course instructor. The workload ranges from a simple list of ideas, to a spreadsheet detailing a company’s financial performance, to a detailed memo about why the merger would work.

To students, the key benefit of such virtual offerings is flexibility and time. Students can log in at their leisure, e-mail their papers and post notes to classmates whenever they want.

The drawbacks, of course, are that students typically can’t buttonhole a teacher’s aide to answer a question immediately, can’t turn professors into mentors and can’t gather spontaneously to bounce ideas off classmates.

The amount of time given to complete a class can make a big difference in student-teacher interaction, said Lisa Metros, a UNext instructor. “The longer [the] time frame, [the more] people worked at their own speed, and I had more of a chance to interact with everyone. As long as the class remained pretty small, it was easier to manage that personal interaction.”

Metros’ experience was echoed in a study recently published by a group of tenured professors at the University of Illinois. Called “The Online Pedagogy Report,” it found that online classes can offer a “great educational experience.”

But to be most effective, class size should be limited to 40 people or fewer, according to the report.

“There is no magic number, but all of the empirical data says it’s relatively small,” said John R. Regalbuto, a chemical engineering professor who was chairman of the group. “If you want to teach well online, it takes a lot of time.” More students mean more costs for the school or lower-quality instruction. “That’s the trade-off, and it’s one that [profit-oriented] administrators won’t want to accept.”

So far, the corporate-run courses tend to be oriented toward business applications, tapping into the market for managerial and executive training. Colleges are experimenting with a variety of courses, with the verdict still out on how well liberal arts--which can emphasize classroom interaction--will translate into online instruction.

The Ins and Outs of Logging On

The admission guidelines for these programs range from stringent to wide open. At Stanford, for example, online engineering students must meet the same criteria as those on campus.

But at corporate-run programs, such as UNext and University Access, classes are open to anyone who can pay the fee. Typically, they market package deals to businesses, which sign up groups of employees in exchange for a break in prices that otherwise can range from as little as $300 to more than $2,000 per student.

In university-run programs that grant degrees, however, students pay a premium for taking courses over the Net.

Stanford’s online students pay more than their on-campus counterparts: Classes cost $1,600 and $2,000 in the real world, versus $2,985 in cyberspace. The school also resells Internet curriculum to corporations and other schools, collecting licensing fees of up to $50,000.

The prices are higher, in part, to offset the cost of creating online courses. But the rates also reflect what the market will bear for the convenience of online education--older, working students will pay more, and the companies they work for often foot most or all of the bill.

“We profile ourselves as a niche marketer,” said Andy DiPaolo, senior associate dean at Stanford’s School of Engineering and executive director of its Center for Professional Development.

That’s a strange sentiment for an educator, say critics, who worry that online’s potential riches have school administrators such as DiPaolo acting more like venture capitalists than teachers.

But Stanford is not alone in this practice.

Duke University’s Fuqua School of Business offers a virtual MBA program in which working executives travel to different continents each semester for two-week residencies, then do the remainder of the classwork via the Web. Students pay $89,700 in tuition.

The fee covers--among other extras--a laptop computer, printer, an array of software and dorm expenses. Those who venture to Durham, N.C., to attend Duke in the flesh pay $52,400 for their MBAs.

Universities say they are still struggling to set the right price points and enrollment limits for online courses. Since cyber-classrooms never run out of desks, there is a temptation to open up enrollment, bringing in a gush of tuition money.

Some proponents of online education believe that schools should tap the Internet’s ability to cheaply reach large numbers of people. William A. Draves, president of the nonprofit group Learning Resources Network, said a single, energetic professor could handle an Internet class of thousands of students.

But such mass-marketing would destroy the value and exclusivity of the degree, said Blair Sheppard, senior associate dean for programs at Duke’s Fuqua School.

“We could offer 60,000, 100,000 MBAs, but we want to be an incredibly desired product that far more people want than can get,” Sheppard said. Two 90-member classes enrolled in the program last fall. “There’s a huge temptation to get into the business where it’s student-to-computer only.”

While schools try to strike a balance between profits and prestige, many educators are scrambling to define their role in this digital domain.

In traditional course work, a professor creates and leads each class. But online, professors can easily be replaced once the course is built and posted. On the Net, no one knows who’s really answering those e-mail questions.

At UNext, for instance, the much-touted Ivy League professors won’t be teaching the classes. The professors lend their names and insights to UNext’s staff, which then creates the electronic material and posts it on the Web.

The people who actually run the classes are UNext employees--people the company has hired to act as online mentors, grade homework and answer students’ questions.

Some have teaching experience. Others, like Metros, do not.

“I’ve held a lot of supervisory roles in corporate finance,” Metros said. “I bring real-world experience to the class.”

Yet in the rush to grab talent, universities have found themselves competing against their own instructors.

This was the case for USC’s O’Malia. He was hired in 1997 by University Access, the Los Angeles-based start-up, to develop online courses on entrepreneurship. O’Malia later became a minority shareholder in the company and a member of its board of directors.

O’Malia declined to say how much he was paid in cash and stock by University Access.

Industry sources say professors can get $5,000 to $10,000 merely for lending their names to Web programs. For instructors who actually help develop courses and lecture online, the paycheck can be $100,000 or more a year.

Although O’Malia was working for University Access, his employers at USC’s Marshall School agreed to develop Internet material with a rival of University Access--Caliber Learning Network Inc. of Baltimore.

Critics at the school cite O’Malia’s arrangement as a conflict of interest, but USC officials and O’Malia say both arrangements make the university more of a “catch” as an online partner.

“No one signs professors to exclusive contracts,” said O’Malia, who claims that he has been asked to develop courses by 50 different for-profit, online education ventures. “But that’s got to change someday.”