Let's Deregulate Online Learning

By Burck Smith. Both nonprofit and for-profit colleges profit, usually handsomely, from providing online courses. While aggregated data on cost and revenue are difficult to find, all the recent online-learning business models point to substantial profit margins. The quick growth of for-profit colleges results from recognition that an online course can be priced as if it had the same overhead as a face-to-face course, when it has almost none. Nonprofit colleges use the same tactic when offering prestige-label online degree programs in conjunction with private-sector providers who share the tuition revenue. Colleges running separate online divisions usually transfer their profits back to the main campus, thereby using revenue derived from online students to subsidize campus-based expenses.