The number of distance education programs increased 72 percent between 1995 and 1998. At Penn State, we have launched a virtual university that we are calling our World Campus to offer degree and certificate programs to location bound students. While still in the early stages of development, the World Campus in its first year had one thousand enrollments, including some students from other countries. The distance education phenomenon is an intriguing and important opportunity for institutions that want to expand their flexibility in serving students and their reach nationally and internationally. Yet it poses a number of challenges for those universities that wish to become involved.
Distance education involves a very different economic model from resident education.
Start-up costs are high, requiring most of the program monies to be spent before the first tuition dollar ever comes in. Institutions must be able to make a significant investment up front. Most will never see a profit, and many will lose money unless they have government support. This makes distance education difficult for those who operate on a cost recovery basis. In countries whose educational systems are free to students or charge just token fees, distance education initiatives have to be entirely subsidized.