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NYU Online, Other Distance Education Ventures Closed
NYU Online, the for-profit distance education company started by New York University in 1998, closed down in November after reportedly incurring about $25 million in start-up costs. The company joined a growing list of for-profit distance education ventures—including those affiliated with the University of Maryland University College and Temple University—that closed down after failing to turn a profit or attract the additional investment necessary to continue operating. Earlier this year, the University of Michigan withdrew from an international consortium, Universitas 21, that had formed a partnership with Thomson Learning, a division of the Thomson Corporation, to develop a "major e-education business."
The chief executive officer of NYU Online attributed the company’s closure to the fact that "the economic tide has shifted," but some observers say that for-profit spin-offs of traditional universities never had particularly promising business models. "To sell something, you need customers who want it, and you need to be able to supply it to them," says Andrew Feenberg, a philosophy professor at San Diego State University who was involved in creating the first online education program in 1982. Feenberg is a proponent of distance education based on strong faculty participation, but he says that many administrators, seduced by corporations that promoted distance education as a way to make big profits, tried to implement automated education systems to save money on faculty salaries. "No one really knew how to do online education well enough to make students happy with the product," he says.
Frank Mayadas, who directs a Sloan Foundation program that makes grants to colleges and universities to permit electronic access to learning resources, agrees that faculty involvement is key to a successful distance education program. "The NYU effort did not involve NYU faculty, who I think are the major asset of a university," Mayadas comments.
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