Strictly Business: For Schools and the Online Learning Management Companies That Serve Them, Offering Full-Degree Online Programs Is More Than Just an Academic Pursuit

Article excerpt

When Jackson State University opened for classes this year, it marked its fifth anniversary in the online education business by adding a full four-year, undergraduate degree program in early childhood education to its offerings.

"It's certainly a part of the future," says Dr. Willie Brown, vice president for information and process management at Jackson State, about online full-degree programs.

Jackson State is among a growing number of historically Black colleges tying part of their future survival and growth strategy to the online education industry.

In its 2010 HBCU Distance Learning Report, the Howard University Digital Learning Lab identified 19 HBCUs offering online degrees last fall, an increase of 58 percent over fall of 2006. While the majority of online degrees were offered by public HBCUs, private HBCUs appeared to be catching up.

A variety of forces are converging to make the online education business appealing to HBCUs and other minority-serving institutions this decade, say higher education experts and online education services vendors.

With increasing competition from other higher education providers like community colleges and for-profit universities, HBCUs have seen their traditional student base shrink, leaving them scrambling to find new sources of students and revenue. In such a landscape, online education can become a powerful lure, providing a near global reach to thousands more potential students--if the startup costs can be conquered. Last decade, several large schools lost millions of dollars on their online education ventures, due in part to the unexpectedly high costs of running the entire operation in-house.

[ILLUSTRATION OMITTED]

Full-degree online programs have since become more affordable for cash-strapped schools via the emergence of online learning management companies. They are willing to provide most of the initial investment required to convert traditional face-to-lace learning programs to online programs, allowing many smaller, private or under-resourced schools to seriously consider taking the leap. In Jackson State's case, a private company allowed it to move from just offering online courses, which can be launched easily and inexpensively, to a full-degree program, a costly proposition that requires a four-year catalog of courses and a long-term commitment to students who enroll.

Many of the smattering of learning management companies sweeten the deal by handling the marketing and recruitment themselves. The result: Smaller schools can end up with the same kind of high-profile, glitzy marketing they've seen online giants like the University of Phoenix pull off with phenomenal success in recent years.

Another by-product is more partnerships emerging between student-hungry schools and online learning management companies. The schools provide the academic lesson plans and instruction. The management companies provide the technical expertise, marketing and student retention services. If all goes well, both sides split the profits over time.

[ILLUSTRATION OMITTED]

Risky Business

Making it in the online education business is not as easy as it sounds, however.

"It's like producing a movie," says Dr. Roy Beasley, director of Howard's online programs and author of its HBCU Distance Learning reports. "Online is not cheap. It's labor intensive. But, if you get it right, you can make money."

Most schools, and the vendors they work with, are guarded about discussing costs and profit potential, a sign Beasley and others suggest indicates that only a few schools are making money on their ventures now.

There is money to be made, however, as evidenced by the rapid of companies like Blackboard Inc., the nation's leading provider of course management software. Its products are used by more than 30 percent of the nation's postsecondary schools.

Blackboard, a publicly traded, Washington, D. …