That's only the beginning, said Michael Horn, co-author of "Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns".
"Our projections show that 50 percent of high school courses will be taught online by 2013. It's about one percent right now," said Horn, executive director of education at Innosight Institute, a nonprofit think tank in Massachusetts.
K12 Inc, which provides online curriculum and educational services in 17 U.S. states, has seen student enrollment rise 57 percent from last year to 41,000 full-time students, said its chief executive, Ron Packard.
Much of the growth is in publicly funded virtual charter schools.
"Because it is a public school, the state funds the education similar to what they would in a brick and mortar school, but we get on average about 70 percent of the dollars," Packard told Reuters.
"We don't usually get capital dollars, or bond issue dollars. Sometimes we don't get local dollars. So on average it works out 70 percent of the per pupil spending that an average school in the state would receive," he said.
"We're getting the kids who the local school is not working for. And the spectrum goes from extreme special education to extremely gifted kids," he said.
U.S. investment bank Morgan Stanley says K12 and similar companies look set to capture an increasing share of the $550 billion publicly funded U.S. education market for children aged from about 5 to 18 as more U.S. states adopt virtual schools.
Virginia-based K12 recently opened an office in Dubai to expand overseas. Packard says he expects strong offshore demand for American primary and secondary education tailored for foreign nationals who want to enter U.S. universities.
Apex Learning Inc, based in Bellevue, Washington, is seeing a similar surge in demand. It started in 1997 by offering online advanced-placement courses to parents and individual schools but now sells an array of online classes for entire school districts and state departments of education.
"Over the last two years in particular we have seen very, very significant growth in the interest and demand for our type of digital curriculum," Apex chief executive Cheryl Vedoe said in a telephone interview.
Apex enrollments rose 50 percent to 300,000 in 2006-2007, and likely grew at the same pace last year, she said.
"Where we see the greatest growth today is actually in brick and mortar high schools for programs for students who are not succeeding in the existing programs," she added.
Online tutoring is also expanding rapidly. Bangalore-based TutorVista, which launched online U.S. services in 2005, estimates its average global growth in active students at 22 percent a month - all taught by "e-tutors" mostly in India.
Horn expects demand for teachers to fall and virtual schools to boost achievement in a U.S. education system where only two-thirds of teenagers graduate from high school - a proportion that slides to 50 percent for black Americans and Hispanics, according to government statistics.
"You deliver education at lower cost, but you will actually improve the amount of time that a teacher can spend with each student because they are no longer delivering one-size-fits-all lesson plans," he said. "They can actually roam around."
