For instance, Arizona State University Online, a revenue-sharing relationship between Pearson, a for-profit company best known as a publisher, and Arizona State University (ASU), yielded $6 million in profit in 2011 for ASU. Projections are that it will yield $200 million in profit by 2020. Many other non-profit colleges with large online programs tout the substantial profits generated by online programs that are re-invested in on-ground facilities. Thus, online students are being substantially overcharged to generate profits that subsidize face-to-face learners, faculty and administrators.
These business strategies would be fine if colleges were businesses subject to the competitive pressure of the marketplace. Each college would develop its best model and compete equally on quality and price. But nearly all colleges are supported by direct and indirect taxpayer funds and many colleges have direct government backing and support. This preferred market position, combined with the lack of objective and public standards for course recognition, creates a tension between “public” degree-granting authority and the revenue-generating engine of course delivery.