Online Education Spawns Business, Politics

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Online Education Spawns Business, Politics

By Neil Munro
Staff Writer

California officials are beginning to grapple with the business and political issues raised by their emerging online university, which could redistribute the flow of students and dollars among the states' 301 colleges and universities.

"There are a lot of issues that need to be brought to the table," said Tad Funakoshi, project manager for the California Virtual University, which is slated to open by January.

The new online education technology allows students to receive education courses via the Internet. This will likely give a business advantage to wealthier, technology-intensive universities over smaller, technology-poor colleges, said Jim Farmer, senior consultant in education technology at Systems Research Inc., Oklahoma City, Okla.

Already, the technology is shifting the flow of students and tuition away from established four-year colleges that serve full-time students, and toward schools that offer evening and online courses, Farmer said. "That appears to be a shift of 5 percent per year. So in five years, existing traditional institutions will have lost 25 percent of their revenue," he said.

As the technology changes education, "there will be the same changes in colleges that you saw in the software business. Some colleges are not going to make it," he said.

In early September, the CVU's policy committee started to consider the issues, and should eventually send its recommendations to California Gov. Pete Wilson, said Funakoshi. He declined to say when the recommendations would be sent to Wilson.

Wilson established the CVU in 1996 after the Western Governors Association established its online project, which is dubbed the Western Virtual University. Wilson declined to take part in the Western Governors Association's plan, partly because California officials hope to use their CVU project to attract more students from other states and from foreign countries.

"One of our greatest exports is education services," said Funakoshi.

In operation, the CVU is slated to offer an electronic gateway to education courses offered by the state's 301 private and state-supported universities and community colleges. The lineup includes nine large universities in the state-funded University of California system, which is based in Oakland, Calif., 22 state-supported colleges, 106 community colleges and roughly 164 private colleges.

The CVU is slated to become fully operational by early summer next year. A limited pilot phase scheduled for late this year may slip into next January, said Funakoshi.

However, some of the community colleges are poorly equipped and may need help to fully participate in the CVU, he said. That's where the CVU organization could offer some help, perhaps in cooperation with industry, he said. "It may be that we will be the best ones to do that, or a company might do that. ... We're not really clear," he said.

The cost of putting an established course online can be $15,000 to $50,000, said education experts.

Larger universities have the funds to put their courses online well before smaller colleges, said Farmer. For example, the state-sponsored University of California at Berkeley already offers 60 online courses, and expects to offer 175 courses online by the end of 1998, according to a university press release. These courses include marketing, the biology of cancer and systems analysis, and can be used to win college credits for a degree at Berkeley or other California universities.

Another issue to be debated by the CVU's organizers is an expected reshuffle of students and their dollars once the online site becomes operational, Funakoshi said.

For example, universities offer a different package of services than community colleges, which have many students enrolled in introductory courses, self-improvement courses or courses that grant a certificate rather than a degree.

This focus on lower-cost courses helps the community colleges hold down tuition bills, perhaps allowing them to offer high-quality online introductory courses to students that would otherwise have paid much higher tuition for similar courses at more prestigious, four-year colleges, Funakoshi said.

This could allow students to rearrange their education to cut their tuition bills, perhaps by taking foundation courses via a community college's online service before transferring to a university to receive a degree, Farmer said.

That's one of the issues being debated by the CVU's policy board, Funakoshi said.

"Over time, there will be some of that. But I don't think that will be a major outcome," said Chuck Hill, coordinator of the University of California's Extension Online service, which offers Berkeley's 60 online courses. Instead, students will enroll at a variety of local colleges, where they will be able to use top-quality online courses in specialized subjects. "The bulk of the fees [generated by the course] would go to the [organization such as Berkeley] that is putting the course up" on the network, he said.

Hill's online service has enrolled 650 students paying $250 to $400 per course. Enrollment should rise by 1,500 students per year, he said.

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