Published: Friday, 4 Sep 2009 | 3:35 PM ET

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Thanks to the recession, Internet schooling is taking on growing importance—and gaining acceptance.

The huge cost of a higher education—plus the need by many laid off workers to learn new skills—has sparked a sharp increase in the number of people taking online courses. And online degrees, especially from well-known institutions, are gaining acceptance among educators and employers.

Some 3.94 million people were enrolled in at least one online course in fall 2007, up 12.9% from 2006, according to studies by Sloan Consortium, an online education service provider. By contrast, the overall enrollment in higher education during that period only grew at a 1.6% rate.

The enrollment number for this year, coming out in November, is expected to be considerably higher. Today, almost 85% of college students are taking online courses of some kind.

“The recession has been a bonanza for the online education industry,” says Frank Mayadas, program director at Sloan Foundation, an advocacy group for education and parent of Sloan Consortium. “It comes as a result of a mixture of pursuit for convenience, fear for job loss and desire to recharge while unemployed.”

As unemployment rate spikes to near 10%, more working adults are taking online courses either to find a better job or to keep their jobs.

“It’s always good to have some leverage behind my name,” says Michael Hounshel, 35, a high school graduate and father of three. He entered an online associate degree program at Ivy Tech Community College in Indiana after being laid off from a travel management company about a year ago.

For Hounshel, opting for the online program was to save fuel costs and enjoy flexible study hours.

“There would be no possible way for me to juggle between family, kids and a potential employer if it was not for the online program,” Hounshel says. All together, Hounshel estimates he saved about $160 a month on gas he would have had to pay to drive to campus twice a week.

According to Vicky Philips, founder of geteducated.com, a website ranking online programs in the US, online programs usually cost as much as regular classroom programs. What really lures many into taking courses online is it allows people to compare tuitions and opt for more affordable programs without leaving home.

“It’s the first time they can chop on cost and shop for education,” Philips says.

Maryam Alkhas, a 53 year-old physical therapist seeking a doctorate degree at New York University, is planning on switching to a similar program offered online by Boston University. Alkhas is expecting to save $500 on each credit, or $10,000 all together on tuition, while still keeping her job in New York.

As more students flock to online courses, established schools are taking notice. Many consider it more feasible to invest in online programs in today’s economic times.

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According to Jane Conoley, dean of the Education Department at University of California, Santa Barbara, the school is discussing plans to build its 11th virtual campus to curtail costs on building physical facilities, especially given the ever-shrinking state budget.

While many still have reservations about the quality of online courses, studies by U.S. Department of Education show that online learning courses are as effective as classroom-based instructions, if not more.

The study further proves the “blend model”—combining face-to-face instruction and online elements —is the most effective. According to Marshall Smith, Senior Counselor to U.S. Secretary of Education, online education has been working effectively for the last decade.

For that reason, Smith says Congress is considering a $650 million budget for technology improvement in schools from Obama’s Recovery Act.

The Department of Education "is very supportive of online learning,” Smith says in an interview.

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UC Santa Barbara's Conoley also says online courses are effective. She cites a study in which students at the University of Texas, Austin who took a course online posted similar test results as those who took the same course in a classroom.

Conoley says that today’s technology allows online elements such as data, pictures and videos to enhance interaction among students as well as that between students and instructors.

Online diplomas also enjoy various degrees of acceptance among employers. Surveys done by geteducated.com show that employers are more and more satisfied with workers with online degrees. Yet still the majority prefer online degrees from colleges with long history.

Since many existing online courses are blended with classroom instruction to make up the full curriculum, diplomas usually don’t specify the online part. Under comparison, students taking the whole degree online are less acceptable. Experts also point out that employers generally have little concern about vocational online degrees.

According to Andrew Steinerman, education sector analyst at JPMorgan, many companies today encourage their employees to take virtual courses/degrees by reimbursing the tuition. JP Morgan, according to Steinerman, is also offering such benefit to their employees.

Still, not all online programs are worthwhile, especially since the industry is still relatively new.

“It's very important that the industry deliver quality courses and qualified instructors" says Mayadas of Sloan Foundation,  “Only when people realize it’s quality education and you’ve got to earn it, it will work.”

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