EDUCATION For-profit courses face a challenge from schools online

Adults are turning to the Internet to update job skills.
DOW JONES NEWSWIRE
NEW YORK -- Charlie Brown, an art instructor at a Minneapolis correspondence school, was immortalized in a pencil sketch by colleague and women's softball coach, Charles Schultz.
"He'd draw a little cartoon on people's day-timers -- a little boy with a mitt -- and the caption, 'Don't forget the game on Tuesday,' " said Steve Unverzagt, director of marketing at the Art Instruction Schools, where Schultz was both a student and a teacher in the 1940s. "He received a C-plus for his assignment on 'Drawing of Children.' It was and still is a challenging course."
Enrollments in distance-learning programs such as the Art Instruction Schools -- also known for its Tippy the Turtle "draw-me" scholarship contests once advertised on matchbooks -- have come a long way since the days of recruiting students through matchbook-cover ads and late-night Sally Struthers commercials.
Keeping hold on market
But the for-profit education industry is facing a challenging new course of its own: holding on to the market of working adult students that it, in large part, created.
Distance-education enrollments in U.S. colleges and universities have nearly doubled in recent years, as working adults turn to the Internet for a convenient way to learn new jobs skills and earn more money. As a result, companies such as Apollo Group Inc., Career Education Corp. and DeVry Inc. -- each of which offers online-degree programs -- have joined the ranks of the largest universities in the nation, in terms of enrollment.
But as the earnings of these companies soar, analysts say they face mounting competition from the tens of thousands of online courses scheduled to pop up at mainstream schools this fall.
Peter Stokes, executive vice president of Eduventures, an education-consulting firm in Boston, said rising enrollments and revenue at the for-profits have led administrators at public and private not-for-profit schools across the country to re-examine old attitudes about distance-learning, once looked down upon by the academic establishment.
"Apollo has become a darling of Wall Street, and you are beginning to see university presidents and deans start to say that maybe these guys aren't the antichrist," Stokes said, "and that maybe they are doing something right in showing so much growth."
An example
Apollo Group, parent of the University of Phoenix Online, for example, has seen its enrollments rise 163 percent to 187,495 online and onsite students in 2003, from about 71,400 in 1998, according to spokeswoman Ayla Dickey. Apollo's earnings in the latest quarter rose 46 percent, compared with the year-earlier period, while revenue increased 32 percent.
Enrollments in distance-education courses rose 89 percent to 3.1 million between 1998 and 2001, according to a July report from the National Center of Education Statistics, a division of the education department. Public institutions were more likely to offer distance-education courses, but private four-year institutions are also offering more courses online.
Harvard University, through its extension school, offers 40 of its 500 courses over the Internet for credit toward certificates, bachelor's and master's degrees. Len Evenchik, director of distance and innovative education at Harvard Extension School, said other schools within the university also experiment with and offer some version of distance-education courses.