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Online education attracts students, profits
NEW YORK (Reuters) -- Farzad Naeim earned his engineering doctorate the traditional way, by attending classes and lectures at the University of Southern California. But when he decided to get a law degree some 20 years later, sitting in a classroom just wasn't an option. Instead, he attended class by logging on to his home computer in Los Angeles, California -- often at night after his two children were in bed or in a hotel room 1,000 miles away when traveling on business. "Over the years I have attended classes from all over the world -- China, Italy, England, you name it," said Naeim, who recently received a Juris Doctor degree from Concord University of Law, the world's first online law school set up by Kaplan Inc., a post-secondary education and test preparation firm. Naeim originally wanted to study at a school across the street from his office but finally opted for a virtual classroom. "With my schedule, sitting physically in the classroom for four evenings a week was impossible," he said. Having passed the California bar exam, Naeim is changing positions at the earthquake engineering company where he has been for 20 years. He will become company counsel after having worked as an engineer and research director. Students like Naeim who want to juggle work, family and studies, have helped fuel growth at education companies, sending shares of some of them to multiyear highs. Five of the top 25 growth companies selected by Business Week magazine are education firms, which cite online education as their future profit driver. Corinthian Colleges Inc. said online registrations in its recent quarter rose 82 percent to more than 7,300. Online enrollment has been surging more than 60 percent at major publicly traded education companies, analysts said. Putting class on pauseRocketing demand has delivered profits, said Apollo Group Inc., operator of the largest U.S. private university. Net income for its University of Phoenix Online during the recent quarter more than doubled to $3.1 million. Long-distance education has been around for a decade, but only recently have schools been able to develop a sizable and profitable business, as high-speed Internet connections make real-time interaction possible. At Concord, lectures are delivered on the Web, and contracts and corporations are debated in chat rooms. "You can put the guy on pause and grab a cup of coffee," Naeim said, adding that he has made friends with classmates from all over the country via the Internet and telephone.
Instructors who teach online said students tend to participate more when they face a computer screen instead of a room full of people, and they can set their own pace. "It's no longer one-size-fits-all," said Andrew Rosen, president of Kaplan, which is expected to be the largest revenue generator at its parent, the Washington Post Co. , as early as this year. So far the results at Concord have been encouraging. Six of 10 graduates passed the February California bar exam, where the average pass rate was just 37 percent. Career Education Corp., which offers courses from business to culinary arts, said the job placement rate of "click" students is 98 percent, higher than the 94 percent of traditional classroom attendees. Career Education Chief Executive John Larson said online students on average are 10 years older than those on-site. "Online students have more work and education experience, they have the ability to self-regulate themselves and (get) the jobs done," he said. The University of Phoenix Online even successfully persuades students to pay 15 percent more for studying in a virtual classroom. Its president, Brian Mueller, said the premium covers high start-up costs of the technology infrastructure, technology support and faculty training fees. "At Online, we don't have to worry about building dormitories, gyms or marching bands," Kaplan's Rosen said, "so we can focus all our energy on the education." Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Online students have more work and education experience, they have the ability to self-regulate themselves and (get) the jobs done.
