The US Congres recently opened the flow of student financial aid to online universities. Since 1992, the government required that, to be eligible for financial aid, higher education institutions must provide at least half of their classes in person. This change brings new competitive challenges to “traditional” universities.
The influence of for-profit institutions is growing. The NY Times reports:
Nonprofit universities and colleges opposed such a broad change, with some academics saying there was no proof that online education was effective. But for-profit colleges sought the rollback avidly.
“The power of the for-profits has grown tremendously,” said Rep. Michael Castle, a Delaware Republican and a member of the House Education and Workforce Committee who has expressed concerns about continuing reports of fraud. “They have a full-blown lobbying effort and give lots of money to campaigns. In 10 years, the power of this interest group has spiked as much as any you’ll find.”
The days of the non-entrepreneurial university appear numbered.