Online Colleges: Staggering & Growing Numbers

Here is a great article from WSJ on changes in the higher education legislature that starts making the for-profit college / university category more and more attractive, especially in the online format.

Last year, for profit education companies generated about $17 Billion in revenues. This number has grown steadily from $10 Billion in 2001, and there is reason to believe, that it will continue to go up. While we celebrate the $10 Billion online advertising market, we hardly pay attention to this quiet revolution happening in Education.
Companies like Apollo (Nasdaq: APOL) also need to start tapping into the education requirements of the emerging markets, for the International opportunity is also enormous.

India, for example, cannot satisfy the need for engineering education at the moment. Anybody who knows engineering of any decent calibre and is qualified to teach, is fast lured away from academia into highly paid industry careers.

KK Sengupta, an education entrepreneur I met in Kolkata this January, told me that there are 1,346 degree engineering colleges in India with annual student intake of 440,000 students plus 1,244 polytechnics with annual intake of 265,000 students. The teacher shortage in these colleges is severe, and a lot of very old professors are teaching obsolete material.

If I were Apollo Group, I would go do deals with all these colleges and convert them into University of Pheonix satellite campuses, and deploy online training abundantly and unapologetically.

I don’t know much about the situation in China, except that the Government there is very keen on online education, and is already trying to bridge shortfalls via online endeavors.

Net net, I think, online education is a great category, and especially as the Net-savvy MySpace-Facebook generation comes of age, the category will become increasingly more compelling.