be employed. The adult age cohort is the fastest growing
segment of students in postsecondary education. Although
the number of high school graduates likely will have a sub-
stantial effect on the growth of institutions of higher learn-
ing over the next decade, the growth of the number of
working adults returning to school is likely to be just as sig-
nificant. For many of the reasons already mentioned,
e-learning is well situated to address the educational needs
of working adults.
Expenditures Support
E-Learning Growth
We live in a world of advanced technology that has
placed new demands on employers and employees, result-
ing in the need for a more technically trained population.
Public and private institutions of higher education must
Chapter 3 E-Learning in Postsecondary Education
49
35 & Over
19%
22–34
43%
21 & Under
38%
FIGURE 3.4
Enrollment in Higher Education Institutions (by Age). (Source: U.S. Department of
Education, National Center for Education Statistics.)
continue to adapt to these demands. As an observer from
Wall Street, it is clear to me that where there is change,
there is opportunity. Postsecondary education is clearly an
area where select e-learning for-profit companies can capi-
talize on the increased demand for lifelong learning.
Throughout the 1990s, there was a general push toward
privatization of a broad range of services. Postsecondary
education has been at the center of many policy issues, and
public institutions are likely to become the target of tax
cuts and the victims of increasing competition for state
funds. As the cost of education has continued to rise, fed-
eral and state appropriations have decreased, causing many
state schools to cut instruction, programs, and infrastruc-
ture, even in the face of a growing base of students.
As a result, it was only a matter of time before the pri-
vate, for-profit enterprise leaders began to realize the ineffi-
ciencies in the system for higher education and began to
offer a redefined product designed with the demands of
contemporary students in mind. This pattern is demon-
strated by the growth in expenditures in the higher educa-
tion sector (see Figure 3.5). High-quality, convenient, and
cost-effective postsecondary education is the hallmark of
successful for-profit education companies. If you believe
that the system for postsecondary education is in need of
improvement, then this need presents opportunities to
for-profit institutions, such as e-learning companies, to de-
liver improved educational outcomes.
The Wired Tower
50
According to data from the U.S. Department of Educa-
tion, aggregate revenue for institutions of higher education
was slightly over $208 billion in 1998. This is up almost 60
percent since 1985 and is projected to increase another 30
percent by 2005. However, the revenue and expenditure
statistics illustrate that state and federal funding of postsec-
ondary education has been decreasing and that students
enrolled in public postsecondary institutions are footing a
greater proportion of the tuition bill to offset the loss of tax-
payer support. While federal, state, and local governments
continue to divert tax dollars toward other social priorities,
the cost of education is shifting from taxpayers to students.
Students are increasingly likely to search out the schools
that will offer them the best return on their investment.
For-profit e-learning companies can address the educa-
Chapter 3 E-Learning in Postsecondary Education
51
$131.4
$163.9
$187.9
$214.2
$244.1
$100
$150
$200
$250
$300
1985 1990 1995 2000 2005
FIGURE 3.5
Growth of Expenditures on Higher Education ($ in Billions). (Source: U.S. Department of Education, National Center for
Education Statistics.)
tional needs of many students, as they focus on disciplines
with economic value and are more flexible in terms of
scheduling and convenience.
In addition, technology and education are converging at
a rapid pace. Institutions are aggressively spending money
on technology. Information technology (IT) spending by
higher education institutions is projected to increase over
50 percent between 1998 and 2003 to $4.8 billion (see Fig-
ure 3.6). This 9 percent annual growth in technology
spending will be driven by a number of factors, including an
increasing number of schools and total enrollments, ad-
The Wired Tower
52
$3.1
$3.3
$3.6
$3.9
$4.3
$4.8
$3.0 $3.5 $4.0 $4.5 $5.0
FIGURE 3.6
Total IT Spending by U.S. Higher Education Institutions 1998–2003 ($ in Billions). (Source: U.S. Department of
Education, National Center for Education Statistics.)

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