As the world's fourth largest economy, California often finds itself presented an example of sustainability and progress. Yet more than fine wine and entertainment the Golden State exports; online degrees are now available through the state of California university system. NBC LA reports that the latter has now joined "the University of California to offer entire degree programs through online instruction."

This new online system already makes available master's degree programs, but California has a grander vision of education outside the traditional classroom. The new effort will ensure that thousands of students are able to earn degrees without leaving their homes.

This new online initiative will allow the California university system to stretch its already limited budget further and to allow students who wouldn't otherwise be able to attend university to earn a degree. The system poses problems, though. Just how will the university ensure that its online degrees adhere to the same standards as its traditional degrees? How will it prevent cheating and other forms of academic fraud?

While the University of California is looking to expand its online presence, other universities are reaching out to out-of-state students to replenish their coffers. The Ames Tribune reports that state budget cuts are "prompting Iowa State University to recruit more out-of-state and international students." Out-of-state students pay more than $20,000 a year to attend the school, while residential student pay a fraction of that cost. It's easy to see, then, why state universities are betraying their own students.

These tactics are working. Iowa State now boasts 7,791 out-of-state students. Last year that number was 4,748. Its graduate program too saw a marked increased in out-of-state students.

With state universities grabbing their share of the out-of-state, online education pie, what are the for-profits up to? Last year, it seemed like a safe bet that if you were to short sell stock in, say, University of Phoenix or Ashford University, your fortune would be made. Or so claims an article at TheDeal.com. "Share prices of the for-profit companies have indicated varying bursts of confidence and anxiety," it reports.

There was exuberance in June when the Department of Education's rules appeared, followed by sideways trading and periodic multipercent drops. Recent weeks demonstrate the pattern. Hedge fund manager James Chanos, founder of short-selling firm Kynikos Associates LP, who is credited with foreseeing the collapse of Enron Corp., jarred the stocks when he called the sector a "national disgrace" at a New York conference.

For-profit education is a doubtful horse to bet on. With the Democrats cowed, it seems an easy call to make: The for-profits are back in the game. "Both for-profit supporters and for-profit shorts have at least one thing in common: the belief that the long-term outlook supports their case," TheDeal.com article continues. With for-profit revenue being made up of federal loans – almost 90% of their profits come from federal money – the for-profits better hope that the Department of Education doesn't rein them in.

Some for-profits are already in trouble. Industry analysts anticipate the for-profit education sector to shrink considerably, especially as more nonprofit organizations launch their own online education programs. Comparisons are odious – and when comparisons are to Enron, they are particularly so.

The world of distance education is exceedingly volatile. Schools will rise, and schools will fall. But the students are going to be the only ones left holding the bag. Such is the way of the world, you might stoically conclude. And so it may be. Yet whatever progress humanity has managed to make as a species is the result of sound rather than suspect means. The issue comes down to value. Do for-profit universities – or any university offering online courses and degrees – produce it and, if so, for whom? Stockholders and executives may soon come to learn that their wealth is of the most fragile sort; it threatens to vanish in the air once the larger economy reaches a point of exhaustion, which is the point where there are more claims on value than actual value produced. At such a point, everything, as two famous critics of capitalism put it, "melts into air." This indeed seems to be the point toward which the postsecondary education sector – nonprofit private, for-profit private, and public alike – is headed. The only thing to say is, "Hold onto your mortarboards."