A Texas Company Sees Online Learning as Growth Industry in Latin America

Whitney International, which owns institutions in in Colombia and Brazil, plans to expand its low-cost programs

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Text: Whitney at a Glance

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By MONICA CAMPBELL

Anapoima, Colombia

Jhon Harold Peña works in the stockroom of a country club. His wife, Marta Castiblanco, cleans guest rooms. Those are the types of jobs many cling to here in this small town set among rolling hills, a place where wealthy residents of Bogotá, a two-hour drive away, escape to enjoy resorts and good weather.

But the young couple is anxious for change. So when they heard about the five-foot satellite dish being installed at a local school, and the distance-learning opportunities it would open up, they took notice.

"We've always wanted to study but never had the chance," says Mr. Peña, a 34-year-old father of three.

Now the couple heads once a week to the school, which becomes a virtual campus in the evenings, to attend satellite-transmitted lectures from a private university in Bogotá.

Mr. Peña is going for an online technical degree in financial management, while Ms. Castiblanco studies tourism.

The virtual campus is part of an aggressive push into Latin America by Whitney International University System, a Bermuda-based company with management offices in Dallas that markets itself as providing "mass access to the highest quality, most affordable postsecondary education in the world."

While distance learning is hardly new, Whitney is part of a growing group of for-profit players that spot unmet demand for higher education in Latin America and other parts of the developing world.

Since the 1990s, the number of private colleges in Latin America has mushroomed along with the growing number of young people eager to earn more money and advance their careers.

The growth of private colleges is also explained by the lagging status of public institutions, which are often underfinanced and unable to serve a growing applicant pool.

Whitney is a newcomer. Founded in 2005, it began its distance-learning courses only this year, after raising $36-million from investors for new ventures worldwide (see box, Page A28).

The company has no doubt noticed the success of other for-profit companies in Latin America. Baltimore-based Laureate Education, for example, has invested in or acquired campus-based and online universities around the world over the past decade and has done well in Latin America. In July the company announced its acquisition of the Technological University of Mexico, a major private university with several campuses around the country, and the Latin University of Costa Rica, that country's largest private institution. Laureate enrolls more than 400,000 students worldwide.

"For-profits are the logical purveyors of distance learning," says William Tierney, director of the Center for Higher Education Policy Analysis, at the University of Southern California. "They can go to market faster than traditional colleges, and the potential they see is enormous."

Testing Ground

Whitney sees online courses as a growth industry in an increasingly wired world. "We want to move people away from sweatshop jobs," says Randy Best, the company's founder and chief executive. Achieving that goal, as well as succeeding commercially, he says, hinges on bringing higher education to the marginalized populations that are largely shut out of traditional universities.

Mr. Best has named several online-education heavyweights to Whitney's advisory board, including Gerald A. Heeger, who, as president of University of Maryland University College, led a distance-learning project that enrolled nearly 100,000 students there. Roderick R. Paige, a former U.S. secretary of education, is also a board member.

In Latin America, which Whitney is entering before planned ventures in India and other Asian countries, the company has acquired controlling stakes in four institutions: Brazil's University Center Jorge Amado, Panama's Isthmus University, and two community colleges in Colombia.

The company also has alliances with several other institutions, including Argentina's 21st Century Managerial University and Colombia's Grancolombiano Polytechnic, which oversees the classes in Anapoima along with those at four other distance-learning sites in Colombia; 32 sites are planned by the end of this year.

Eventually Whitney aims to blanket Latin America through alliances with other small, mostly lower- to middle-tier private institutions, especially those offering associate and bachelor's degrees in high-demand areas like engineering, marketing, and business administration. By the end of this year, the company expects to enroll at least 40,000 students in distance-learning classes in Latin America. It hopes to double that number by the end of 2009.

"With a bit of technology and affordable tuition, we're reaching thousands of people," says Patrick Albert, the company's chief financial officer.

Whitney says its profits will come from tuition, earnings from the institutions it has acquired, and doing business with other universities (those agreements are not public).

Tuition for the distance-education students is generally priced at about half of what on-campus students pay. At Grancolombiano Polytechnic, that comes to about $450 a semester for distance-learning classes.

Cost and Quality Concerns

Still, that is a lot of money in Colombia, where the average pay is about $7,300 a year, according to the United Nations Development Programme.

"It's expensive, but students who want to study will make tuition payments a priority," says Carlos Forero, general secretary of the Colombian Association of Universities, a Bogotá-based nonprofit group of private and public institutions. (Grancolombiano Polytechnic is not a member, although it is licensed to operate by the government.)

Some of Whitney's distance-learning students receive low-cost loans through the government-run student-loan agency. Others may receive loans through their employers or commercial banks. Mr. Albert says the company is working to begin a student-loan program in Brazil and is evaluating a similar venture in Colombia.

Some education experts, however, worry that students are sacrificing time and money for a degree that may not be widely recognized, even within Colombia.

On Grancolombiano Polytechnic's Web site, a promotional video about the distance-learning program says students receive their degrees from a "prestigious and recognized institution." But Mr. Forero was only vaguely familiar with the university. "It might be considered a midlevel institution," he says.

The lack of regulation worries Kevin Kinser, an associate professor of educational administration and policy studies at the State University of New York at Albany.

For-profit institutions and online-learning programs in developing countries generally go unregulated, he says, so there is little oversight of the extent to which the goal of increasing enrollment is more important to a company than maintaining quality.

"Who is asking what exactly students are getting in return?" says Mr. Kinser. "Or is it the mentality that something is better than nothing?"

Ana Lúcia Gazzola, director of Unesco's International Institute for Higher Education in Latin America and the Caribbean, based in Caracas, Venezuela, echoes that concern.

"Very little is known about Whitney or its partner universities," she says. "I strongly suspect that what we are seeing here is a commercial service operating at the margins of the education system, with hardly any oversight."

Ms. Gazzola also notes that Grancolombiano Polytechnic's distance-learning program is not accredited by the government (although some of the university's other academic programs are), and that such vetting is not required for it to operate.

"Is it just the university's word that its online degrees have value?" she asks. "Who is making sure that people are sacrificing their time and money for something valuable? Are they being cheated? We need to start demanding that countries take responsibility and add safeguards to ensure quality."

Colombia's vice minister for higher education, Gabriel Burgos Mantilla, says that while the government can accredit distance-learning programs, very few carry that distinction. Even so, he argues, distance learning is a "great opportunity" to bridge the urban-rural education gap.

He acknowledges that quality is a concern. "We must make sure that these programs offer a solid curriculum, that the technology works, and that tutors are qualified to work with students," he says, noting that those are among the factors considered when distance-learning licensing agreements are renewed every seven years.

For their part, officials of Whitney, Grancolombiano Polytechnic, and other Latin American partners of the company say they plan to have their distance-learning programs accredited by either national or international agencies.

"We will start the accreditation process soon," says Pablo Michelsen Niño, rector of Grancolombiano Polytechnic.

The Crucial First Year

This is Whitney's year to begin proving that it can help, not hinder, its students.

At Grancolombiano Polytechnic in Bogotá, on a small, posh campus set in the capital's southeastern hills, the company has linked the university to its hemisphere-wide satellite network, based in Panama, and outfitted it with a small television studio. Whitney also gets the remote distance-learning sites up and running, converts course material for online use, and trains faculty members to deliver courses from the studio.

In return, partner universities develop the online curriculum and offer their brand names.

Like other online degree programs, some lectures are transmitted live by satellite; others are recorded and uploaded for the mandatory weekly classes.

Distance-learning students are tested monthly, with exams based on the lectures and online texts. Professors, but more often their assistants, engage with students during the week in online forums.

At first Nidia Mercedes Jaimes, a mathematics professor, bristled at the idea of speaking into a camera instead of a room full of students. "I'd never even seen a television studio," she says. "I was nervous as heck."

She now feels more comfortable and interacts every day with some of her 250 students in the online forums. "I want students to feel accompanied and get feedback right away," she says. "They aren't here on campus, so they need the extra motivation."

Mr. Michelsen, the rector, agreed to the alliance with Whitney because, he says, he wanted a "new education model that didn't just serve the privileged few." He was also impressed by Whitney's mix of online learning and on-site student interaction.

'Things Are Tight'

In a town like Anapoima, where most prospective students hear about the distance-learning classes by word of mouth, Whitney's success may be determined by how those students judge the venture.

On a recent evening, about 15 students in a business-administration class sat at worn wooden desks in a classroom with thatched bamboo walls and a metal roof. Under dim fluorescent lighting, they took notes during a satellite-delivered lecture projected on a roll-down screen. A local elementary-school teacher, doubling as proctor, took their questions on slips of paper and e-mailed them to Bogotá, where an assistant gathered queries from all of the distance-learning sites in Colombia. Professors responded to some of the questions in real time.

Next door, about 10 students did group work in a small computer lab. Outside, another 10 swatted at mosquitoes while studying at rickety picnic tables by the light of a few bare bulbs.

"A better setup would be nice" says Jimmy Benavidas, an unemployed 31-year-old father studying for a bachelor's degree in public administration.

Keeping the overhead low is important to Whitney. For now its focus is on getting established and making sure the technology works smoothly, says Alvaro Andrés Lozano, director of the company's program in Colombia.

"It's not like students are coming up to us complaining about a dumpy picnic table," says Mr. Andrés. "They says, 'Hey, thanks for coming here."

True, most of the students appreciate the convenience.

"Bogotá is too far. I couldn't afford to live there, plus I'd never see my family," says Mr. Benavidas. And he values the computer skills he is acquiring along the way. Many students say they didn't know how to surf the Internet or work e-mail before taking these classes. Unable to afford Internet access at home, most go to an Internet cafe to download course work and join in the online forums.

Costs can be another drawback. Money for tuition is hard-earned, and students say they weigh the costs every time they head to class.

Even though Mr. Peña, the stockroom worker, and his wife qualified for a 50-percent discount on tuition for first-time students, they will not be able to sign up for another semester unless a low-interest loan comes through.

"My three children are about to start school," says Mr. Peña, who earns about $400 a month and lives in a humble home, with concrete floors, off a dirt road. "Things are tight. There's no money to spare."

The couple hopes to continue studying. Mr. Peña aspires to leave the country club and run his own business, perhaps selling computer parts. Ms. Castiblanco would like to become a tour guide.

For now they'll continue with their long work days, followed by late-evening study sessions at the kitchen table once the kids are asleep. "I sometimes wonder what will become of this," says Mr. Peña. "We'll have to wait and see."