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March 1, 2006

Congress Eliminates 50% Rule for Online Education

The New York Times is reporting that Congress has removed a requirement for colleges that they must offer at least half of their courses on campus to qualify for federal student aid.  The change was authored by Reps. John Boehner (R-OH) and Howard McKeon (R-CA) and attached as a rider to a budget bill.  The rule was put in place in 1992 when studies showed that many online schools were set up just to get federal money.

The article points to a number of interesting developments in online education and the way business is done in Washington.  The tools and technology to promote online learning have changed since 1992.  Webcasting, interactive meeting software, classes conducted by chat, for example, are all possible with the commoditization of computers and software.  Computers that cost several thousand dollars in 1992 can now be had in the $300-400 range.  With the penetration of broadband into the average household (now around 64% for active Internet users in the United States), the delivery of educational media is viable with more or less stable strategies in place.

So what's the problem?  The possibility of fraud prompted the original fifty percent rule.  According to the story, the Department of Education's Inspector General was noted as saying that for-profit schools (such as those pushing online education) comprised 74 percent of his fraud cases.  But countering that was  aggressive lobbying combined with campaign cash donations given to Boehner, McKeon, and PACS that they control.  Not hurting the effort was the hiring of A. Bradford Card, brother of Andy Card, former Transportation Secretary and current White House Chief of Staff.  Lobbyist Card said he never contacted his brother about the issue, and congressional staff for Boehner and McKeon denied the changes in law were prompted by $313,000 in campaign contributions.

While this development opens up online education to more individuals, there is still the problem with accreditation and reputation.  This has very real implications for the job market when someones credentials are from a school with a weak reputation.  Perhaps that's where the real market shake out is going to take place.  There is more detail in the article.  You can find it here.

March 1, 2006 | Permalink

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