Bricks to Clicks Trend Enriching Education Sector

This article details a trend identified at a Bank of America Securities conference on human capital, May 12 2003: increasing numbers of adult students in the United States are choosing to educate themselves through online courses rather than on college campuses. This trend, as the author explains, is "fueling the growth of higher-margin online businesses at education companies. Online student enrolment growth is topping 60% at major publicly traded education companies, as new technology offers the convenience of home study..."

For example, Apollo Group Inc. said that revenues from its University of Phoenix Online programme recently rose 62%, compared with 18% growth in its classroom-based business. Apollo's online business is about 50% more profitable than its offline one. Post-secondary education firm Education Management Corp. claimed that its online student numbers tripled to reach 3,000 last year. Strayer University, which offers classes to working adults, said that the number of students taking classes online jumped 69% to 6,372, as compared to a year earlier. Classroom-based enrollment at 13 campuses fell by 6% during the first quarter; online rolls grew 47%.

Companies say that, while online courses are more expensive upfront, they are less expensive in the long run due to lower maintenance costs.

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