Oct 162008
Authors: Jim Sojourner

After a string of intense attacks from CSU faculty last week regarding a $12 million loan to create CSU’s Global Campus, CEO Rich Schweigert said the money will be paid back within five years and that the online university will ultimately return a net gain of tens of millions of dollars to the CSU System.

The controversial loan was taken out of a CSU System Board of Governors reserve fund, Schweigert said. The fund exists as insurance for crisis situations such as floods or fires. The fund is rarely used, said Michelle McKinney, Denver Public Affairs director.

When the Global Campus was proposed to the BOG, Schweigert said, they saw it as an investment in the proven online education marketplace, which has seen a 15 to 20 percent growth rate per year in the last decade.

“People characterize it as lost money, but it’s a calculated risk in a proven market,” Schweigert said.

He said Global Campus is required to pay back the $12 million, plus interest, within five years.

But CSU faculty said at a teacher’s union meeting last week that this system is problematic because there is no collateral for the loan, so payment is not guaranteed.

“If they pay it back, fine, but if they don’t, what is the university going to do?” Hogler said, adding that it would be difficult for the university to sue an institution that doesn’t have enough money to even pay back its loan.

Lou Swanson, CSU Vice Provost for Outreach and Strategic Partnerships, dismissed this fear as baseless because Global Campus is an effort to put capital into a new investment that will return the loan amount and more if it succeeds.

McKinney said so far, the online university is hitting all the benchmarks on the way to paying back the money.

She also said the program has been in the works for more than two years, and the faculty should be well aware of the institution and the finances that surround it.

“This shouldn’t be a big surprise to them,” McKinney said.

Schweigert said Global Campus aims to provide the highest quality online education at an affordable price to a different demographic than the physical campuses can reach.

He said more than half of the 445 students registered at Global Campus are 40 years old or older, and many people in this group are not able to get to a physical campus.

Schweigert said one alternative for these people is to get an online education, a field that he said has been abdicated to large, private institutions such as the University of Phoenix.

“We thought it was time to offer an alternative,” Schweigert said. “I can’t tell you how many people thank us for having a different alternative to private, corporate diplomas.”

Schweigert emphasized that Global Campus only aims to compete with private entities and is not intended to draw away any students who are able to attend one of the physical campuses.

“It’s not designed to compete with our other campuses, or any public institution for that matter,” Schweigert said.

Whether designed to or not, Hogler said there is no consensus that the online university will not create competition.

“I don’t think we agree within this college with CSU Global’s position that there is no competition,” Hogler said.

He added that the physical campuses would like to draw the 40 and older demographic to campus, if possible.

Swanson disagreed, saying, “We created this campus to address the needs of Coloradans who can’t get to campus. We want them to have the benefits CSU provides.”

Schweigert said the physical campuses still offer the premier CSU experience, and if students want tenured professors and a hands-on experience, “we want you to go to those campuses.”

Within the online market, however, he said CSU Global provides a quality experience above any other online institution.

Although the professors at Global Campus are not tenured faculty, Schweigert said they are “strictly experts in the online education realm.”

“We have the best online faculty in the industry,” Schweigert said.

He said the average student-to-faculty ratio in classes is 20 to 1, which is better than the 40 or 50 to 1 that many other online universities boast and leads to better faculty-to-student interaction.

Schweigert also said that, while financial gain was not the primary motive in the creation of CSU Global Campus, the possibilities are “not lost on us.”

Schweigert said most projections for the Colorado state budget predict that no money will be available for higher education by next decade as the state is at the bottom of the barrel for higher education funding in the nation.

“It’s not their fault, they have their hands tied,” Schweigert said about the legislature.

Schweigert said Global Campus hopes to have 22,000 enrolled students in five years, and all the profits will go to the physical campuses.

Senior Reporter Jim Sojourner can be reached at news@collegian.com.

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