Deficit Reduction Act expands federal spending on online education

"It took just a few paragraphs in a budget bill for Congress to open a new frontier in education: Colleges will no longer be required to deliver at least half their courses on a campus instead of online to qualify for federal student aid.

That change is expected to be of enormous value to the commercial education industry. Although both for-profit colleges and traditional ones have expanded their Internet and online offerings in recent years, only a few dozen universities are fully Internet-based, and most of them are for-profit ones." ...

Campus-based schools disagree and say the change would compromise the "prestige" of a campus-based education.

"The bill in question, the Deficit Reduction Act of 2005, contains a clause [S.1932.ENR - Title VIII, Subtitle A, Sec. 8002] that kills the so-called 50 percent rule, which prevents a college that enrolls more than 50 percent of its students at a distance or provides more than half its courses through distance-learning from receiving federal financial aid.

"Congress' action means that universities which are mostly or entirely based on the Internet will now have access to the same federal aid other universities do. The 50 percent rule was instated in 1992 to protect against education fraud and diploma mills that offer bogus degrees."

However, they acknowledge "Some traditional colleges where online enrollment is threatening to spill over the 50 percent mark were also asking for the rule to be rescinded."

Dan Miller likes the idea and says, "if you just want the learning and the degree and don’t care about missing the sorority events, the ball games, and the keg parties on a traditional campus, you can check out some interesting options. Obviously, the cost is a fraction of what the typical colleges cost as well."