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Explosive Online Education Growth Could Slow

Nearly a million more students were taking at least one online course in the United States during the fall 2009 term than the previous year. That dramatic growth rate is about 10 times higher than the growth rate of the overall higher education student population, 21 percent versus 2 percent. Those are the findings of the latest research in "Class Difference$: Online Education in the United States, 2010," a multi-year project that examines online education in this country, performed by Babson Survey Research Group in collaboration with the College Board and funded by the Alfred P. Sloan Foundation.

Researchers surveyed 2,500 colleges and universities nationwide and found that about 5.6 million students were enrolled in at least one online course in fall 2009, the most recent term for which figures are available.

"This represents the largest ever year-to-year increase in the number of students studying online," said I. Elaine Allen, co-author of the study and professor of Statistics & Entrepreneurship at Babson College. "Nearly 30 percent of all college and university students now take at least one course online." When the survey work was begun in 2002, less than one in 10 students was taking an online class.

The research has found that the concentration of online students tends to be at the largest institutions. Those schools with 5,000 or more online students, while representing only 11 percent of all institutions with online enrollments, engage fully two-thirds of all online students.

Virtually all the latest expansion in online enrollments has come from the growth of existing offerings, not from institutions new to online that are starting new programs.

The authors reported that academic leaders are seeing an impact from the economic downturn that's greater this year than last year--with increased demand for both face-to-face and online courses. In all cases the increase in demand for online is greater than that for the corresponding face-to-face offerings, the report stated.

The financial crunch is changing up the mix of winners and losers in higher ed. "While the sluggish economy continues to drive enrollment growth, large public institutions are feeling budget pressure and competition from the for-profit sector institutions," Allen said. At the same time, she added, "the for-profit schools worry new federal rules on financial aid and student recruiting may have a negative impact on enrollments." The United States Department of Education released new rules in October 2010 intended to tighten student aid programs at colleges and universities and protect students from aggressive or misleading recruiting practices.

The authors hedged their bets regarding future prospects for online courses and programs, which have seen a compound annual growth of about 19 percent over the period in which the survey has been taken. On one hand, they write, "The evidence for past years has shown little, if any, indication that this growth is slowing." On the other hand, they noted, the largest institutions have begun to experience a slowing in their growth rate. "Even with the very rosy enrollment numbers presented,... this year marks the first time that there is any evidence, albeit slight, that the time of unbridled growth may be ending."

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