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In an eerie replay of the early 1970s, when correspondence courses suddenly mushroomed with access to guaranteed student loans and GI Bill educational benefits, the abrupt expansion of Title IV aid-eligible online programs recreated many of the same abuses that had plagued correspondence courses 30 years earlier. Across many institutions—particularly for-profit ones—enrollment skyrocketed, predatory recruiting practices spread, student supports and career placement services suffered, and fraudulent and deceptive marketing proliferated. Without requirements for good, much less minimal, standards for student outcomes, many institutions—especially proprietary colleges—saw the opening of distance education as little more than a cash-grab, a chance to sacrifice educational quality for profits.

Today, advocates of online programs claim that the potential of modern-day online learning to revolutionize higher education vastly outstrips that of the correspondence schools of the past. They are right—interactive online learning and high-speed internet open up learning opportunities that the founders of the Famous Writers School never envisioned. In light of that potential, many, including Education Secretary Betsy DeVos, have suggested lifting restrictions on higher education to allow innovation to bloom.

Yet recognizing the need to reduce regulatory barriers to innovation does not mean that legislative and regulatory guardrails on postsecondary online learning should be eliminated or drastically scaled back. To date, the biggest and most rigorous longitudinal studies of online learning have found that these courses generally have a poor return on investment, failing to significantly boost subsequent earnings for students¹ and depressing student grades and retention rates.² With the benefit of experience and advances in online instruction, those disappointing early results could well—and hopefully will—change in the years ahead. But only the most naïve or most ideological advocates of online programs³ fail to recognize that exclusively online colleges have yet to fulfill their potential.

The unwelcome truth is that there is still abundant reason to create and maintain consumer protections, both for taxpayers and for students. Even staunch advocates of the theory of disruptive innovation like Clayton Christensen and Michael Horn acknowledge that online learning has yet to achieve its promised benefits in remaking higher education, in part because “federal financial aid seems to have gummed up the disruption [process]: the easy [federal] revenue has encouraged some [for-profit] schools to indiscriminately enroll [students], often at the expense of quality, and has discouraged cost reduction.”⁴

At every turn, the opening of federal dollars to new, cheaper-to-operate business models has led to the same outcome: abuses of students and taxpayer dollars. After World War II, tens of millions of dollars in veterans’ benefits were wasted on for-profit and correspondence education that far too often proved worthless for landing jobs. In the 1970s, the opening of federal loan dollars to for-profit higher education led poorly performing correspondence schools to expand dramatically and exploit government largesse at the expense of students and taxpayers. As one salesman at the time explained about the new pot of seemingly “free money” from the government: “I could go down in the ghetto and stand on the corner and enroll all kinds of people if it is free. He doesn’t care if the course is airlines, insurance adjusting, hotel-motel management, or what, if it is free, going to be paid for by the government and you can get him a job….This is a salesman’s dream.”¹⁰

The regulatory changes that the Department of Education seeks today, which would diminish the role of costly personalized instruction and interaction in distance learning and boost incentives for for-profit companies to shortchange educational investments to increase profit margins, may well be a salesperson’s dream. But eliminating consumer safeguards will almost certainly have the same effect as previous deregulatory efforts.

Only the most naïve or most ideological advocates of online programs fail to recognize that exclusively online colleges have yet to fulfill their potential.

The innovations of tomorrow will look wholly distinct from the college-by-mail programs of the past and will use more sophisticated technologies. Yet for all those apparent differences, the distance education landscape has been marred by the continuation of past abuses in the last several years, with the rise and fall of several predominantly-online for-profit behemoths that assured vulnerable students they would find well-paid careers in high-tech fields but which failed to deliver on their promises. The cautionary tale of correspondence schools suggests that unfettered access to federal dollars will lead to more scandals in which colleges place their bottom lines over their commitment to education—sullying, instead of burnishing, the worthy cause of innovation.