The world of higher education has a strange dichotomy unfolding. Once laughably feeble, online institutions such as the University of Phoenix, owned by the Apollo Group ( APOL), and DeVry University, part of DeVry ( DV), are undergoing an enrollment explosion and rapid expansion as renowned brick-and-mortar schools are slashing budgets, shrinking freshman class sizes and freezing development projects. The reason for this shift is likely driven by the models on which these institutions are built. The stock-market decline has pinched even the most gaudy of Ivy League coffers. Large university endowments, which are a major source of the schools' operating income, are concentrated in non-cash investments that have tumbled. Harvard, for example, lost $8 billion, or 22%, of its endowment's value in the four months since the fiscal year ended in June. And the Cambridge, Mass.-based university, the oldest in the U.S., may have lost even more. The fund hasn't yet reported results of its recent private-equity commitments. With these vast pools of capital taking enormous losses, budgets have to be slashed to ensure expenses can be met. This has resulted in an opportunity for online universities, which are not beholden to donors or endowment performance, to make gains on the old guard of higher education. Publicly traded Apollo and DeVry have approached higher education in the same way any for-profit company approaches its products, and the market has approved. Apollo is up 3.95% this year, and DeVry has eked out a 2.2% gain, while the benchmark S&P 500 has almost halved over the same period.