By Paul Glader

BERLIN - What is the Harvard, Yale or Princeton of online education?

Let’s face it. There isn’t one. Yet.

To me, this shows the industry still has a lot of maturing to do. And this is my challenge to the industry. Focus on quality. Create a champion school that truly shows the potential for technology in education or blended education.

So far, the most heartening sign is when Stanford University hosts a class about Artificial Intelligence online and sees thousands of people sign up for it. But this is one class. Most of the other coursework online from MIT, Yale or other top schools is open source for good will and not for actual coursework. The story earlier this week about University of California adding 26 online classes is also heartening. But its budget for the program is shaky.

So far, in the online education market we largely see:

1) Free curriculum online from top schools like MIT. With no degrees.

2) Open-source models like Khan Academy and Alison.com. Not for accredited degrees.

3) For-Profit schools that cater to adult-learners, working students, students in the military and underprivileged populations. They offer degrees, but are not well-regarded (details below).

4) Curriculum companies like K12 Inc. and others contracting with school districts and high schools to provide online curriculum to these schools.

Education technology firms should continue to partner with high schools, community colleges, and universities to offer general classes and remedial tutoring. Perhaps they should also introduce a university at the top end to prove the potential for online education? Instead, they are largely creating bottom-feeder institutions that, so far, try to gobble up federal money. They are often creating institutions that give students a canned, quick education that isn’t worth as much in the marketplace. The industry has been tainted by these actors.

Yes, online education theoretically helps the masses - adult learners and underprivileged learners. And that’s good. This is a noble mission and should continue. But - because admission standards are lower, coursework is perceived as less rigorous and default rates are higher - it also creates a perception and a reality of lower quality. It reminds one of maxims such as, “buy cheap, buy twice.”

The start of good business is providing a good product. So far, the degrees from for-profit colleges are not as well-regarded as most traditional universities. The admissions standards and academic standards for online coursework have proven to be low. A report by Mark Kantrowitz,publisher of FinAid.org in 2009 showed that For-Profit enrollees averaged 20.6 on the ACT, compared to 23.4 by other college students. They showed lower high school GPAs as well.

The business practices have also clearly been questionable. It seems these institutions are too focused on profiting off a lower-cost model and not truly exploiting the technology and cost advantage to create an impressive university. The GAO conducted undercover tests at 15 for-profit colleges found that four of them used fraudulent practices to recruit students and all 15 made deceptive or questionable statements to undercover applicants. For-profit schools had 40% of student loan defaults and are fending off new lawsuits alleging unethical practices in recruiting, inflation grading and fraudulently retaining students in order to minimize defaults and drop-outs while maximizing profits.

The For-Profits should take this as a challenge to clean up their act,  improve quality as well as to compete on price. It is wise to lower their prices to challenge and compete with community colleges and lowest-tier state colleges. Many of the colleges such as Kaplan University and University of Phoenix say they are making changes on both quality and price. This flight to quality must continue.

Online schools would grow back in favor with the government if they could find ways to give more general education classes (American Government, Psychology 101, Music 101) online at lower prices. These would have to be high quality and transferable to other colleges. They should be taught by faculty who are paid well and who have enough time to grade with care, rather than cranking out students and degrees like Chicken McNuggets. Providing high quality general education classes is a clear way for online learning to shine, to add more efficiency to the college industry and more productivity to the economy.

For-profit entrepreneurs - or philanthropists - should also think about creating a few premier mostly online institutions that have competitive admission criteria, well-paid visionary faculty and blended models of on-campus and online learning. Such a Harvard of online learning would go a long way to being a standard-bearer for quality. It would guide other For-Profits as well as traditional colleges toward new approaches. It would have tough admissions policies and top-flight technology. It would have superstar faculty and, perhaps, a blended learning model where students were on campus for 25% to 50% of the year and taking part in travels, public service or hands-on working or learning the rest of the time. Entrepreneur Mike Feerick spoke about some of these ideas during our interview with him.

One could argue that firms like Embanet.com are beginning to bridge the gap by providing ways for schools like Boston University and Brandeis simple ways to take coursework on line. Perhaps the next step in online education is for brick and mortar schools to put more coursework online and being to take market share back from the online colleges? Or perhaps rules on acquisitions loosen up and mergers will lead to better quality? Someone in the industry, this week, told me they thought the next Harvard of online education will actually be … Harvard. Harvard has an extension school that offers online classes. And some Harvard alums recently wrote about what Harvard should do when, not if, it launches more online classes.

Schools like Frei Universitat’s Center for Global Politics has two Master’s Programs online (90% of the work in your home country, 10% of the work in person at Frei’s campus in Berlin). It’s an oasis of innovation (though low-fi, without video or power point to accompany reading material and syllabi) in a sprawling, traditional campus on the West side of Berlin. We need to see more models like this.

Harvard University has inspired generations of students and faculty since it was founded in 1636 with money from John Harvard. Who will create the Harvards, the MITs and the Berkeley’s of the online education world? When will the University of Phoenix stop being the punch line for comedians? That’s when for-profits will be taken more seriously and less at risk to die a greedy death.

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Glader is managing editor of WiredAcademic.com and a Robert Bosch Fellow in Germany for 2011-2012. You can reach him at [email protected].