Executive summary

The goal of PEOI's first year operations is to initiate the projects that will make PEOI online professional courses accessible and affordable by millions of disadvantaged students. This is part of PEOI's strategy to expand its course offerings by locating funding sources and establishing relationships with corporations, universities, faculty and prospective authors.

The problem addressed by PEOI is the high cost of virtual education that is expensive to design, to deliver (with faculty supervision) and to support (with auxiliary service); moreover, students must buy textbooks. PEOI charges nothing for course delivery. Anyone can study for free. And there are no textbooks to buy. There are only modest fees if a course completion certificate is needed. PEOI professional courses contain everything a university course would have, and focus on e-learning quality and flexibility (with cases, assignments and tests, as well as full text).

PEOI is already fully functional and self-sustainable now. Students study and take tests. Funding is needed only to start developing new courses in PEOI first year operations involving appointing an executive director, a projects manager, an accountant and an administrative assistant, and equipping an office with a basic minimum. This project will be evaluated on the basis of course development proposals put into action. The total funding needed is $450,000.

Issue addressed

Disadvantaged people all over the world are deprived of professional training opportunities because of where they live, time constraints or insufficient income. Among these students are those unemployed seeking retraining, mothers staying at home with children, disabled individuals, workers with families, immigrants and persons from minorities who can't keep up with the pace of college semesters, rural poor people who can't afford traveling to college or costly online courses, and poor students all over the world, for whom just a little training would open the door to employment, self-respect and a better life.

The advent of computers, the internet and the large volume of newly emerging distance education promised learning anytime anywhere that would overcome these problems. But that did not happen. online courses cost today as much as those in class. There are three reasons why most online courses cost so much. First, putting any new technology into use is expensive. To justify their online offerings, universities seek to make them self-sustainable rapidly, and use short amortization periods. Second, in order to meet accreditation standards, online course delivery turns out to require as much faculty involvement as courses in class. Third, joint costs for auxiliary services such as library, advisement, placement, gym and cafeteria are allocated to online courses because online students should not be, in principle, excluded from these services also because of accreditation requirements.

Thus, whether online students at traditional universities need faculty supervision and auxiliary services or not, they have to pay for the entire bundle. Since demand for online education is strong, universities do not perceive price as a problem. Moreover, rigid schedules are common, periodic presence on campus is occasionally required, and buying at least one textbook raises costs further. These are constraints that can put taking a course online out of reach.

Yet, the actual marginal cost of one more student reading a course online is negligible. This justifies a large volume of free educational opportunities on the internet. But the free material is very dispersed and not organized in a manner that permits control of knowledge. It is impossible to use it for professional advancement. The result is that those who can afford to pay for well organized online education can take advantage of it, and those who can't are excluded. This is one of the facets of the digital divide, but the problem discussed here is much bigger.

The American legislature attempted to address the issue with a 1998 amendment to the Higher Education Act of 1965 by making funding available for Learning Anytime Anywhere Partnerships (LAAP). But abuses were reported and departures from standard course requirements were shown to undermine quality education. Funding for LAAP was discontinued in 2002. The Fund for Improvement in Post Secondary Education (FIPSE) is the alternative open to institutions of higher education but its budget has been reduced by more than half.

PEOI free e-learning solution

PEOI seeks to fill this void by offering professional education that is truly accessible and affordable by all, as well as conceived as complete university level courses with control of knowledge. PEOI's solution is to unbundle the cost of online education. Unbundling means that curriculum design, course development, faculty supervision, auxiliary services, course delivery, grading and attestation are all looked upon and accounted for separately. The purpose of unbundling is to let students pay only for what they need, and choose to go through a PEOI course at a university for credits at full price (but at no cost to the university), as enrolled PEOI students for nominal fees, or on their own at no charge. PEOI is not an accredited institution and offers no auxiliary services (as present). Faculty supervision is optional and contracted separately. Course development is expected to be funded externally with corporate contributions (as corporate employers would use PEOI courses at no charge), or with a system of surcharges. There are no textbooks to buy. PEOI only charges fees of $100 to enrolled students seeking a course completion certificate (but scholarships are available), and $20 to $100 for in-person final test taking. The bottom line is that PEOI is able to charge nothing for course delivery.

As can be verified at www.peoi.org, professional courses (i.e. not review courses) include not just reading the text, but also taking graded quizzes and comprehensive examinations to verify understanding of material, going through assignments and cases, using links to source materials and references, and leaving feedback evaluation, comment or inquiry. All that a graduate university course requires is there. PEOI's focus is on e-learning quality and flexibility (e.g. using cases, doing assignments, answering questions, and not just memorizing text). At the conclusion of each chapter a multiple choice test helps verify acquired knowledge. In addition, when prerequisites of fundamental knowledge are mandated, they are included in the form of review courses (such as four review courses now present on PEOI).

After four years of development, PEOI's multilingual platform is now fully tested, and has been functional for almost a year. Over one hundred students already study and take tests in four review courses and one professional course. Free virtual education on PEOI is a reality.

PEOI improves higher education

Although PEOI's target beneficiaries are disadvantaged students, as a consequence of PEOI's collaboration with universities, PEOI also helps improve higher education. PEOI does not compete with universities, but offers them its courses at no cost to be used in class or online. Because these are courses that colleges normally do not have enough students to run, it helps them retain students and attract additional local students. Since PEOI courses cost nothing, that helps lower the overall cost of higher education. Finally, because PEOI courses are open platforms which faculty is invited to modify for each targeted audience, that helps identify and formulate standards of virtual course content design quality.

Courses offered by PEOI

Professional courses that PEOI offers are courses that are mostly technical and can be studied without an instructor, that most universities do not offer, for which students are likely to be most motivated to study on their own, and that can make a significant impact in the life of students. Among such courses are those that prepare an individual for an examination or for an employment required training. For instance, preparation for civil servant exams could represent a number of courses. PEOI professional course currently offered, Financial Analysis, is typical of courses to be developed. Although, it is rather advanced, it is most appropriate for virtual students because the profession involves research work that does not require to be in an office.

Retention of copyrights to PEOI courses can be an issue. Ideally, PEOI would like its course content development to be similar to that of open source programs, with free access to all and continuous additions from faculty that use courses. Realistically, for initial acquisitions, a variety of situations may come up from an outright donation (such as the courses donated by John Petroff), to retention of copyrights by a funding corporation. Even a need to pay royalties to a given author cannot be excluded. In all cases, PEOI will strictly enforce its conflict of interests policy stated in Article 4, and its prohibition against private inurement state in Article 9 of its Bylaws (see "About us" on peoi.org web site). Whatever the arrangements for initial acquisition, all PEOI material is accessible on its web site free of charge, with no limitation on its use, except for proper citation of source and no resale for profit.

PEOI's goal and strategy

PEOI's goal is to undertake a major expansion of course offerings to serve millions of needy students. To accomplish this, a number of projects have been identified:
- conduct feasibility study of "virtual partnership" with corporations, universities, course authors
- recruit faculty/authors
- contract for corporate employee training
- develop course content based on public domain material
- seek free existing online educational material that can be transformed into professional courses
- edit and update existing courses
- survey students to determine what types of courses and procedures are most needed
- add at least one more foreign operating language (Spanish)
- translate courses into foreign languages
Project size varies from a few thousand dollars to millions (for the virtual partnership in particular). PEOI's strategy described at "About us" on peoi.org web site anticipates a need for close to $14 million mostly for course development and mostly from corporate funding.

The goal of first year operations is to activate the projects by writing project proposals, approaching potential funding sources, and adjusting strategy in response to gathered information.

Staff needed

The staff necessary to carry out the tasks of the first year of operation is
- an executive director: it is John Petroff who had extensive experience in higher education both as professor and administrator, he is the founder of PEOI, the creator of the web site and the writer of several courses; his CV can be accessed through Contact in "About us" on peoi.org;
- a projects manager: his/her qualifications include experience in writing proposals, administrating projects, teaching and designing e-learning;
- an accountant: he/she must be a self starter to set up PEOI accounting books, with a rounded experience in all accounting aspects, preferably in a non-profit organization; he/she will be asked to participate in putting together budgets, and acting as treasurer, in the first year of operations;
- administrative assistant: general administrative experience is necessary, with heavy exposure to work on computers and web sites.
(Note that no salary will be paid unless approved by an independent compensation committee.)

Outcomes

The performance of the first year of operations can be assessed with the following elements
- number and size of projects written and submitted
- number of contacts made with authors, and new courses proposals received
- number of contacts with institutions of higher learning, corporations and organizations
- number of grant applications written
- number of faculty signed up as PEOI instructor
- number of new student registrations
- volume of traffic on web site

Budget

Expenses:
Compensation of officer $ 60,000
Salaries for manager 60,000
accountant 36,000
assistant 24,000 120,000
Payroll related expenses (20%) 36,000
Insurance 5,000
Rent 24,000
Telephone 5,000
Postage 5,000
Printing 15,000
Travel 60,000
Depreciation 10,000
Auditing/legal fees 10,000
Supplies/publications 8,000
Other 50,000
Total expenses 410,000
Assets purchased net of depreciation 40,000
Total funding needed 450,000
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No revenues are expected the first year. The equipment purchased includes basic office furniture and computers for four persons ($10,000 each), as well as essential office appliances such as copying machine and air conditioners ($10,000) for total of $50,000 amortizable over five years.

Evaluation

The performance of the first year of operations can be judged by the outcomes listed above. The evaluation is proposed to be a self-assessment by PEOI staff to be submitted to all funding agencies. It is quite clear that the potential for PEOI's overall strategy and subsequent chance for funding will depend directly on the quality of the outcome of first year operations.

Sustainability

First year operations are naturally only the first phase of a series of projects requiring funding over seven years. After that,PEOI's operation will be self-sustainable because all the testing, grading, grade composition and course writing procedures are automated and require only a little intervention. Only course development requires substantial funding. However, to the extent that PEOI continuously updated courses deliver the intended life long learning for alumni professional development, alumni support may in the future fund new course additions.

The organization

PEOI is a not-for-profit fund organized in the state of Pennsylvania on March 5, 2001, and exempt under 501(c)(3). PEOI currently has no office and operates out of the home of John Petroff. PEOI server is located in Hong Kong, seems to perform satisfactorily at a cost of $65 per year, and could accommodate ten more courses and a thousand students for that price. At present, PEOI has one other director than John Petroff, who is Xenia Culbertson, John Petroff's sister. PEOI bylaws require an independent board. New directors are eagerly sought.

Funding efforts

This proposal is PEOI's first fund raising effort. Up to now, as described previously, PEOI's web development, course writing and out-of-pocket expenses have been handled by John Petroff himself for an estimate amount in excess of $1 million. Applications are sent to all foundations interested in education, digital divide and help for the disadvantaged (women at home, disabled, unemployed and rural poor, in particular). Should funding not be obtained or only partially received, the plan is to trim down and postpone.

Conclusions

Traditional higher education fails to address the needs of many disadvantaged students, commercial professional training is very expensive, online education at community colleges is also expensive, free online educational material is inappropriate for professional development, and legislative efforts are taking steps backwards. PEOI's free e-learning is the solution. It is effective, high quality and extremely economical. Moreover, by helping colleges retain students, by lowering cost of higher education, and by stimulating formulation of e-learning standards, PEOI helps improve higher education. Funding is needed to initiate the projects that will expand PEOI course offerings and serve millions more disadvantaged students. Giving disadvantaged people an income earning chance now will alleviate much bigger problems and needs for assistance in the future. PEOI can help disadvantaged students, but only with financial support.