(Bloomberg ) Three times a week almost 13,000 students at Liberty University assemble for an hour of singing and speeches, evoking the spirit of a revival meeting that also attracts Republican politicians and Christian celebrities such as New York Jets quarterback Tim Tebow.
The collegians make up just 14 percent of the student body. The Lynchburg, Virginia-based school founded by Baptist minister Jerry Falwell in 1971 has an additional 82,500 online students, more than twice as many as three years ago, making Liberty the largest, private nonprofit university in the U.S.
"When I look at those numbers it still boggles my mind," said Jerry Falwell Jr., a soft-spoken lawyer who took over the institution after his father died in 2007.
Nonprofit private and state schools alike are discovering what for-profit colleges such as Apollo Group Inc. (APOL)'s University of Phoenix and Washington Post Co. (WPO)'s Kaplan University figured out more than a decade ago. Faced with a swelling number of overleveraged student borrowers, cuts in public subsidies and paltry endowment investment returns, they are embracing the Internet as a viable alternative to educating students.
Liberty stands out because it is growing like for-profit colleges did before competition and federal scrutiny of recruiting tactics and graduation rates crimped their business, according to David Clinefelter, chief academic officer at the Learning House. While Liberty is capitalizing on a niche in the evangelical community, which accounts for about a quarter of the U.S. population, it is also helping chart a course for other schools to expand online, he said.
"There's a science to it and Liberty is applying it very well," said Clinefelter, whose Louisville, Kentucky-based company advises schools on setting up Internet-based operations. "The margins are bigger in these online programs if the institution can figure it out."
For Liberty, using technology to reach the masses is in its DNA. Falwell was one of the original televangelists, starting the Old Time Gospel Hour program shortly after founding the Thomas Road Baptist Church in Lynchburg in 1956. Liberty's Home Bible Institute began in 1976 and in 1985 the school started an external degree program using videotapes, which morphed into the online operations about five years ago.
When his father died, Falwell Jr., 50, reorganized the university, which teetered on the edge of bankruptcy in the early 1990s, while his brother Jonathan took over the church. He appointed administrators to all of Liberty's schools and colleges to coordinate and improve Web course offerings. Faculty members, which outside of the law school aren't offered tenure, were given incentives to teach the courses.
Liberty Online occupies about 40,000 square feet in the main administrative building on the Lynchburg campus and employs about 300 people who recruit, enroll and advise prospective and existing students. With most online students paying $325 a credit hour, Web-based revenue this academic year has surpassed the residential program, which costs about $27,000 for tuition, room and board.
"These stumblebums down here in this redneck town are plotting to provide volume education around the world," Ronald Godwin, 75, Liberty's provost and a former Washington Times Corp. executive, said half mockingly. "We are already printing money, but we are doing this because it is our mission."
Falwell Jr.'s father, who founded the Moral Majority and helped elect Ronald Reagan president in 1980, vowed to build a standard bearer for evangelicals akin to what the University of Notre Dame is to Catholics and Brigham Young University to Mormons.
Amid the rapid growth, Liberty has stuck to its evangelical roots. In order to graduate, everyone must take creation studies, which balances the teaching of evolution with the view that God created the world, including fossils that only appear to be millions of years old. Residential students can be fined or expelled for drinking, smoking or having sex out of wedlock, among other infractions.
Faculty members are similarly held to standards and must be Christian. Led by its activist law school, Liberty is a litigant in one of the remaining lawsuits against President Barack Obama's Affordable Care Act, arguing that the law infringes on the free exercise of religion and its opposition to abortion.
"This dream of turning it into Notre Dame won't work for Liberty," said Adam Laats, an assistant professor in education and history at Binghamton University in Binghamton, New York. "Liberty University faculty will always be more constrained in the breadth of intellectual diversity they can welcome."
That isn't stopping the school from trying. While it was founded as a Bible college, it has been bolstering its liberal arts curriculum as its online operations expand, adding new programs of study such as cinematic arts. The law school, which opened in 2004, was fully accredited in 2010. There are about 160 programs online, from an associate degree in accounting to a doctorate in theology, according to the school website.
The interactive courses are typically offered over eight weeks and guide students through assignments, tests, papers and discussion groups. The call center in Lynchburg fields questions both over the Web and telephone.
Jasmine Lovelady, a 26-year-old online psychology major in Prairie Farm, Wisconsin, transferred from for-profit Ashford University, saying Liberty offered a higher quality education and better suited her values.
"It's more flexible," said Lovelady, who is married and works full time. "I don't have to commute somewhere to do it."
Liberty also dissects its competition, going so far as enrolling six employees from its online division at for-profit schools to monitor them.
As competition from other universities grows, Liberty has begun exploring whether it can offer classes in different languages with an eye on the overseas market, and is also forming a for-profit subsidiary to consult with other schools on setting up their own programs, Falwell Jr. said.
Liberty is also remaking its campus near the foothills of the Blue Ridge Mountains. It has broken ground on a $50 million library, $40 million medical school, dormitories, welcome center and a 2,500-seat baseball stadium next to its football field. There's a snowless, synthetic ski slope overlooking the college from a nearby mountain. In the past two years, the university has borrowed more than $200 million to finance construction.
Falwell Jr., whose mild manner contrasts with his father, who infamously blamed the Sept. 11 terrorist attacks on pagans, abortionists, gays and lesbians, said the university has taken another step to becoming the next Notre Dame by applying to have its football team be eligible to play in nationally televised bowl games.
"It doesn't matter what they say about you," said Falwell Jr., echoing his father. "It's that they're talking about you."