Evolve or dissolve. That advice, from a recent report on virtual universities, played out in two news stories this past week. The University of Texas’ online division is staring down a deep budget hole as it loses a longtime subsidy. And in Utah, budget cuts have killed a 10-campus online consortium.
Those and other predicaments reflect the growing pains of public online education. As programs mature, their business models have come under more scrutiny. The Texas and Utah cases speak to difficult questions facing states: What role should those programs play? How should states pay for them? Or should they?
Technology growth in the 1990s prompted a surge of online-learning collaborations. The groups prodded member colleges to put classes online, pooled courses into collaborative degrees, and supported online programs with promotions. Some became little more than state- or systemwide online catalogs.
Fast forward to 2009: With budgets strained, every state is looking at how it pays for online learning, which can be a big expense. “As these organizations have evolved over the last decade, how they were set up and funded is becoming more important,” says Rhonda M. Epper, co-executive director of Colorado Community Colleges Online. If a virtual university was paid for with a grant or one-time financing, or relies on a big appropriation, “those are getting looked at more closely and maybe reconsidered,” she says.
Such is the setup in Texas. The project, which does not grant degrees, won praise for brokering collaborative programs. But its success rests on an investment of some $22-million from endowment earnings. The university system will phase out that subsidy by 2012.
The recession is driving other states to stretch, diversify, or cut those types of programs. That strikes some observers as shortsighted. Consortia proponents say the groups can both save money and pay dividends in ways not always evident on a balance sheet. Member colleges can avoid duplicating programs and services. And the flexibility of the programs can help retain working students who may be one flat tire away from dropping out, along with their tuition.
“The challenge is that, if you view these collaborations simply as a cost center, you are missing the return,” says Myk Garn, director of educational technology at the Southern Regional Education Board.
How Much Has Changed
But analysts who praise consortia see a flip side: Colleges can be capable of running online learning themselves now; 10 years ago, they may have needed an impetus. Now they may end up absorbing the functions of some consortia.
Some have already retrenched or faded away, leaving behind old Web sites and the news releases that hyped them. More may be at risk.
“There are other models out there that aren’t bringing value to the system, quite frankly,” Ms. Epper says. “Like the online catalog, for instance: I don’t know that that’s necessarily needed anymore. Students can do their own Web searches pretty easily.”
The Utah eLearning Connection, which is to disband by June, gave students access to online courses offered by 10 public colleges through one application and one registration site. The idea was to help them “swirl,” or take classes from multiple institutions. But most seem to prefer their distance education straight. Just 200 were using the consortium.
“Most students were actually being very well served by the institutions themselves,” says Charles A. Wight, associate vice president for academic affairs at the University of Utah.
The question for Texas is how to avoid Utah’s fate. There is “no one best financial model,” argues a recent paper, “The Funding of Academic Collaborations,” by the technology cooperative WCET and the Western Interstate Commission for Higher Education. There are "few and fewer funding choices." And sometimes failure is "not about effective financial models but about fights for power, control, and money."
“It doesn’t matter who is being served or how well,” says Russell C. Poulin, an author of the paper. “People look at that line item and have other things they want to do with that line item, because they weren’t the ones who created that organization.”
Some virtual universities have found financial footing through entrepreneurial savvy, per-course fees, revenue-sharing deals, and other income sources. Texas may join them. It is exploring a plan to build large bachelor’s-degree programs for adults who never finished college. With its experience, says the online-education analyst Richard Garrett, Texas has “a strong hand to play.”
