Nearly nine in 10 colleges plan to expand online programs to meet surging demand—a complete reversal from just two decades ago when policymakers actively restricted digital education. At that time, the “50% rule” required colleges and universities to seek special approval if more than half of their courses or programs went digital, or if more than half of their students participated in online learning. This was a regulatory response to legitimate concerns in the 1990s around correspondence courses (read as: paper, pencil, mail), educational quality and student protection.
But a collaboration between Quality Matters, Eduventures and EDUCAUSE has resulted in new data that reveal how today’s digital learning landscape has fundamentally shifted.
According to the 10th edition of the Changing Landscape of Online Education (CHLOE 10) Report, nearly three-quarters of institutions report increased interest in online education from graduate students, 66% from adult undergrads and 60% from historically traditional-age college students.
Chief online learning officers surveyed shared that as a result, institutions of higher education can barely keep pace with student demand for online learning, and most remain structurally unprepared for the transformation they are attempting to manage.
“Online learning has moved from the margins to the mainstream of higher education. The real story isn’t just the demand; it’s whether colleges can adapt their culture, structures and teaching models fast enough to keep pace,” says Dr. Bethany Simunich, vice president of innovation and research at Quality Matters and co-author of the report.
We’ve moved from policy debates about limiting online education to a reality where colleges struggle to meet legitimate demand. But this transformation exposes a troubling pattern that continually plagues higher education: institutions consistently lag behind market forces they helped create, then scramble to catch up when disruption becomes unavoidable.
The Behavioral Economics of Student Choice
The growth in students’ interest in online education challenges assumptions about the demand for this modality, particularly in a postpandemic era. Traditional undergraduates increasingly choose digital courses despite expressing preferences for in-person learning, a cognitive dissonance that chief online learning officers noted as particularly revealing.
Behavioral economists recognize this contradiction as the gap between stated preferences and revealed preferences. Students may idealize campus life, but their enrollment decisions shed light on education’s new reality: the need to accommodate work schedules, housing constraints and financial pressures can make traditional college attendance economically untenable for a growing number of learners.
“Since 2020, demand for online learning has surged, yet too many students still hit unnecessary roadblocks that delay or derail their degree,” says Shawna Thayer, CEO of Sophia Learning, an online platform that provides self-paced, transferable college-level courses. “The real test for institutions is making sure students can get the credits they need, when they need them. Remove those barriers, and you give students a clear, efficient path to completion.”
Dr. Mark Milliron, president and CEO of National University, describes today’s online learners as the “and-ers”—working adults, caregivers and veterans logging in from job sites, kitchen tables and military base housing. “We build systems that fit their lives—anytime, anywhere—not the other way around,” Milliron says.
The demographic driving this demand mirrors my experience crafting distance education policy 20 years ago. These aren’t traditional students choosing convenience over rigor. They’re learners for whom campus-based education may represent an inaccessible luxury and who need education to bend around existing responsibilities rather than the reverse.
The Capacity Paradox: Where Need Meets Institutional Failure
Beneath these encouraging statistics about a growing interest in online education among learners lies a concerning disparity. Public four-year institutions report ambitious expansion plans, with over half expecting to launch five or more new online programs in the next three years. Community colleges—which often serve the populations most dependent on flexible, affordable education—tell a starkly different story: only one in five plan similar growth.
This capacity mismatch becomes more troubling when it’s considered alongside persistent infrastructure gaps. A decade after the CHLOE Report first identified digital access barriers, 95% of institutions still report broadband and device access concerns, with community college students disproportionately affected.
The pattern is emblematic of a broader challenge in American higher education: market dynamics reward institutions for serving populations with existing advantages while underinvesting in those serving students with the greatest need. Community colleges, already constrained by funding limitations, struggle to provide the comprehensive faculty development and student support systems that effective online education often requires.
The AI Integration Paradox: Institutional Myopia Repeats
Perhaps most revealing in the data is how institutions are approaching the integration of artificial intelligence. While 77% of chief online learning officers believe AI will become crucial within two years, only 23% have developed institution-wide strategies. Another 66% of these professionals describe fragmented, department-level efforts with no coordinated approach. Nearly 10% have no AI strategy whatsoever, which should concern anyone who remembers how unprepared institutions were for pandemic-driven online learning demand.
“[The finding] that nearly 10% of institutions have no AI strategy is a five-alarm fire for higher education,” says Josh Jones, CEO of QuantHub, a data and AI skills training platform offering online courses and credentials. “We’re watching history repeat itself. This mirrors exactly how universities approached online learning in 2010, and we know how unprepared that left them for 2020. But this time, the stakes are higher. [I]nstitutions without coherent AI strategies aren’t just falling behind—they’re failing to prepare students for a fundamentally transformed workforce.”
Higher education leaders and policymakers alike have a habit of treating transformative technologies as experimental rather than strategic opportunities. I observed this behavior in the early days of policy development for distance education. Then, when demand exploded during the pandemic, many institutions discovered that pilot programs provided an insufficient foundation for institutional transformation.
The growing need to prepare the workforce for AI makes the fragmentation across higher education institutions even more consequential than the online learning adoption curve. Current institutional approaches favor operational efficiency over educational innovation: 49% of survey respondents cited AI’s potential for workload reduction and 46% noted its potential for course preparation. Fewer institutions are exploring personalized learning or intelligent advising. This suggests institutions may be optimizing AI for administrative convenience rather than student outcomes.
The Faculty Development Stagnation
Despite a decade of online education growth, institutional investment in human capital has plateaued. Only 28% of institutions report faculty are fully prepared for online course design, a figure largely unchanged since 2020. Meanwhile, adjunct faculty teach 47% of online courses, meaning institutions are putting the pressure of maintaining instructional quality and mastering evolving technologies on some of their least-supported instructors.
This creates a vulnerability that compounds the AI strategy fragmentation problem. “When nearly half of online courses are taught by adjuncts, fragmented AI strategies become even more dangerous,” Jones says. These instructors, often working across multiple institutions with minimal institutional support, become students’ primary interface with AI-enhanced learning environments—yet they receive the least comprehensive training.
The pattern mirrors trends in American higher education’s employment practices, where institutions have increasingly relied on contingent faculty while reducing investment in professional development. From a policy perspective, these are the same institutional capacity constraints we encountered when expanding distance education access two decades ago: removing regulatory barriers meant little if institutions lacked human resources to deliver quality education at scale.
Market Competition as Innovation Driver
The competitive landscape in higher education has intensified, with 83% of public four-year institutions reporting increased online competition, which suggests a maturing market. But rather than triggering a race to the bottom, this pressure appears to be driving innovation in student support systems and educational quality.
Michael London, founder and CEO of Uwill, which provides teletherapy and digital mental health services to colleges, identifies this as higher education’s next competitive frontier. “Online learning is only as strong as the support behind it,” London says. “To ensure students thrive, we must provide online student services that are as innovative and accessible as the courses themselves. Mental health support isn’t optional; it is a foundation for successful learning in any environment.”
This evolution represents significant progress from early distance education debates, when critics worried that online students would be isolated and under-supported. Online program leaders now recognize that online learners require more comprehensive support, not less, precisely because they’re balancing education with complex life circumstances.
National University’s NEST Co-Learning Center exemplifies this strategic thinking, blending virtual access to academic coaching, mental health support and career services with physical spaces for in-person connection. It’s designed around the recognition that online learners need support systems engineered for their actual lives rather than traditional campus services adapted for an online environment.
The competitive environment is also accelerating credential innovation, with community colleges leading transformation despite capacity constraints. Investment in non-degree credentials like certificates and microcredentials has more than doubled since 2018-19, with nearly 70% of public two-year colleges driving innovation while four-year institutions lag despite similar student demand.
Quality Standards in Competitive Evolution
Perhaps most encouraging is how market pressure appears to be elevating quality. Michael Zimmerman, president of Campus, an online two-year college, notes that student expectations have evolved considerably. “Students are looking for more affordable and relevant pathways to achieve their career goals,” says Zimmerman. “And it’s not only working adults fueling the demand for online, it’s Gen Z too. But Gen Z expects more than what colleges have typically delivered online. They want community and personalization.”
Industry leaders report that AI integration is revolutionizing quality standards and course design processes. “When I talk with faculty and instructional designers, it’s clear that AI is starting to reshape how they think about quality and course design,” says Dr. Whitney Kilgore, chief academic officer iDesign, a firm that works with colleges to design online programs. “The conversation isn’t just about access anymore; it’s about how to use technology to raise the bar on quality.”
This sentiment represents a fundamental shift from the access-versus-quality debates that shaped early distance education policy. Today’s challenge isn’t whether online education can match the quality and rigor of in-person courses; rather, it’s whether institutions can innovate quickly enough to meet rising expectations while maintaining educational integrity.
Strategic Imperatives for Institutional Leadership
The institutions that will thrive are those learning from the online education adoption curve rather than repeating it. While the CHLOE 10 Report documents many of these institutional challenges in detail, the strategic implications point to a few critical adaptations for colleges and universities:
Develop comprehensive AI strategies immediately, before they become crisis-driven necessities. This means establishing governance structures that integrate AI planning into academic and operational strategies, comprehensive faculty development programs and student success metrics designed for AI-enhanced learning environments.
Address the community college capacity crisis as both an equity imperative and economic necessity. Policymakers and institutional leaders must recognize that the greatest unmet demand for accessible higher education exists at institutions serving the most economically vulnerable populations. Targeted investments in technology infrastructure, faculty development and student support at these institutions represent crucial interventions for maintaining higher education’s social mobility function.
Invest in systematic faculty development that goes beyond emergency pandemic training to encompass both innovation and technological literacy, with particular attention to supporting adjunct faculty who deliver nearly half of online instruction but receive the least institutional support.
Engineer student support systems around online learners’ complex life circumstances rather than adapting campus-based services for digital delivery. This includes flexible scheduling for advising and support services, proactive intervention systems and comprehensive mental health resources accessible outside traditional institutional hours.
Build coherent data capabilities that enable evidence-based decision making about program design, student success intervention and institutional effectiveness.
The regulatory framework that once restricted online education has evolved to enable innovation. The question now is whether institutional strategies can evolve as rapidly as student needs and technological capabilities. This is a challenge that extends far beyond higher education to encompass how established organizations adapt to technological disruption.
As someone who witnessed the first wave of online education policy development, I’m struck by how far we’ve traveled from those Capitol Hill hearing rooms where lawmakers worried about students taking too many courses online. Now, the work begins to figure out how to scale digital education responsibly and ensure it serves the learners who represent higher education’s future.