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Published in Print: April 21, 1999, as For-Profit Company To Offer High School Diploma Over Internet

For-Profit Company To Offer High School Diploma Over Internet

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Students soon will be able to earn a high school diploma anytime, anywhere, through a for-profit company that has been started by the University of Nebraska at Lincoln.

The courses will be online versions of traditional correspondence and television-based courses from the Independent Study High School, a fully accredited school that the university has owned and operated since 1920, according to Donald Helmuth, a vice chancellor at the university and the interim president of Class.com Inc.

While many schools and other organizations provide high school courses online, Class.com apparently is the first to offer a high school diploma from an accredited school on a for-profit basis.

Leaders of higher education groups agreed that the project was breaking new ground.

"The model is fairly unique. It's an example of how the technology is going to foster a lot of entrepreneurship, partnerships, and collaborations," said Jamie P. Merisotis, the president of the Institute for Higher Education Policy, a Washington think tank.

But Mr. Merisotis was one of several observers who raised concerns. "On the other hand, it's going to add tremendous complexity to our system of assuring quality," he said. "What you're talking about is an accredited entity brokering courses and course materials with a for-profit entity."

The university's division of continuing studies spent three years turning courses from the Independent Study High School into an online format using the World Wide Web, databases, and interactive tools such as electronic mail, chat rooms, and a computer tracking system that lets teachers monitor the amount of time students spend with different curricular materials, Mr. Helmuth said.

Development of those technologies was financed in part by a $17.5 million, five-year "Star Schools" grant from the U.S. Department of Education.

Tax Issues

Class.com has licensed the technologies as well as the school's curriculum from the university, which will continue to own the company. Class.com also has hired, at least temporarily, seven faculty members at the independent-study school, which enrolls 2,000 students, including home schoolers, child actors, and rural residents.

Having access to the complete curriculum from an accredited school helped Class.com vault over what normally would be formidable obstacles to starting an online high school. The school's accreditation from the North Central Association of Colleges and Schools covers the online courses, Mr. Helmuth said.

A student who completed a minimum of 40 required courses would receive a college-preparatory diploma, not a high-school-equivalency credential, from the Independent Study High School.

The company's plans go beyond selling courses to individuals, Mr. Helmuth said. It will try to sign contracts with school districts and even state departments of education to provide courses to large numbers of students. It will also seek other partners to put content into its online format.

Already, 623 students are taking 20 online courses, most of them from a special education district in California. Twelve more courses are expected to be ready by October, with a total of 55 courses planned.

A prime reason for spinning off the for-profit company was to allow it to be more entrepreneurial, Mr. Helmuth said. A for-profit company has far more latitude than a nonprofit organization in rewarding successful employees through salaries and bonuses--an important factor in conducting an aggressive marketing campaign.

Money that the university earns from the venture will be poured back into its own distance-learning programs, Mr. Helmuth said.

Careful legal arrangements, including licenses, independent boards of directors, and approvals from various government officials were needed to protect the university's nonprofit tax status, observers noted.

Edward M. Elmendorf, the vice president of government relations and policy analysis at the American Association of State Colleges and Universities in Washington, said it appeared the company had "jumped through the right hoops," though he was not familiar with the details related to the university's tax status.

Mr. Elmendorf said the company, if it succeeds, may help the university compete with for-profit educational institutions in getting a piece of what is expected to be a huge future market for online education worldwide.

"Public institutions in general aren't very good at marketing what they do. This sounds like an innovative approach," he said.

Vol. 18, Issue 32, Page 12

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