“Ramping up on-line courses will likely mean higher revenues for Liberty, because such courses can bring in hefty federal financial aid and student tuition payments at low institutional cost.”
from Campus Progress: Liberty University, based in Lynchburg, Va., is famous for the fact that it is evangelical and conservative. Founded in 1971 by the late Jerry Falwell, Liberty University started out as means of counteracting what the right perceived as liberal and anti-religious bias on many American campuses. Kevin Roose, a Brown University student who wrote a book about his experiences as a year-long undercover student at Liberty University, once said he’d answer questions like, “True or false: Noah’s ark was large enough to accommodate various kinds of dinosaurs” in class during his time there.
Now Liberty University is gaining recognition for its share of federal student aid. For the 2009-2010 school year, the latest available data from the Department of Education, the school pulled in more than $445 million in federally subsidized student aid, putting it at the top of the list of schools receiving federal aid in the state of Virginia. More than $55 million of last year’s aid at Liberty was in Pell grants; this compares with the 2008-2009 school year, when just 29 percent of its students received Pell grants.
This expansion is in large part due to its new online-only classes, called Liberty University Online, which enroll 52,000 of the school’s students (compare that with its 12,000 students who live on campus). Such an expansion means the school spiked in its percentage of student aid by 56 percent.
Liberty is expanding into an ever-growing sector of higher education. The Chronicle of Higher Education estimated the online-only higher education industry is experiencing near-exponential growth. In 2004, an estimated 780,000 students were enrolled in online-only programs; in 2009, that number jumped to 2.14 million and is expected to reach 3.97 million by 2014. Such programs usually appeal to colleges and universities because the costs of supplying such courses is inexpensive, usually employing a part-time professor to grade some homework. Online courses also appeal greatly to low-income students, who often seek flexible learning while they balance work or family responsibilities, and low-income students often garner sizable federal student aid packages for colleges and universities.
Liberty University Online offers numerous programs, everything from classes for high school students to doctoral programs in counseling. To be sure, such an expansion into online education isn’t necessarily a bad thing. The Department of Education released a meta-analysis last year [PDF] that found that “on average, students in online learning conditions performed modestly better than those receiving face-to-face instruction.” However, the report also noted that the programs that worked best are ones that “blended elements of online and face-to-face instruction with conditions taught entirely face-to-face.”
Schools that tend to have the highest default rates and lowest graduation rates tend to be for-profit schools, which have the highest numbers of online-only classes and degrees. According to numbers released recently by the Department of Education, about a quarter of for-profit students default on their student loans within three years of graduation.
Liberty, however, because it’s a non-profit school that once had a relatively small student body, has historically had a low three-year default rate. Its most recent three-year default rate was just 7 percent, on par with other private non-profits. The expansion into online education could cause its default rate to skyrocket, given that their student population has expanded more than fivefold. And even if Liberty’s default rates are low, its overall graduation rate (completion within 150 percent of time allotted for the program) is just 44 percent, relatively low compared to other non-profit private schools.
Liberty also tripled its expenditures on lobbying in a single year, spending $90,000 on lobbying in 2009, up from $30,000 in 2008. Final lobbying disclosures for 2010 haven’t yet been filed; though quarterly reports for the first half of 2010 indicate Liberty spend less than $5,000 each quarter.
Ramping up on-line courses will likely mean higher revenues for Liberty, because such courses can bring in hefty federal financial aid and student tuition payments at low institutional cost. But it remains to be seen if Liberty can maintain its low default rates after expanding its student population to an educational approach known for its uncertain employment outcomes.
Kay Steiger is the editor of CampusProgress.org.