A decade ago, a résumé boasting a degree from an online university probably would have drawn a chuckle from a prospective employer, followed by a quick trip to the wastebasket. While a fully online education still is not as highly regarded as a traditional one, experts say, momentum appears to be changing that. Last year, full-time online programs' share of the bachelor's degree market rose by 17 percent to 8.3 percent, according to research firm Eduventures. "In general, there's an increasing respect for these institutions," says Steve Isaac, CEO of EducationDynamics, an education marketing firm.
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Still, online degrees are most useful for those who didn't finish college but are employed and looking to get ahead, notes Trace Urdan, managing director at investment bank Signal Hill Capital. Only about 57 percent of college students obtain a degree within six years of starting school, creating a massive market for degree completion options, which online universities have sought to fill.
Tuition at most for-profit institutions is about $10,000 annually for a full load, and many employers are happy to pick up the tab, as evidenced by the sizable portion of online universities' revenue coming from employer-sponsored tuition reimbursement, says Urdan. He says those looking for their first job may find that online degrees have marginal value, though the University of Phoenix and Kaplan are battling that perception with aggressive marketing campaigns.
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Alex Clark, vice president for public relations at Apollo Group, the University of Phoenix's parent, points out that Apple, Boeing, Google, and the FBI have all sent workers there. "It's not fair to say that employers don't value online degrees," Urdan says, "because I think that they do for employees that they already know and trust."
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