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We examine the rapid growth of Brazil’s private online higher education sector and its impact on market structure and college enrolment. Exploiting regional and field-specific variation in online education penetration, we find that online programs increase enrolment for older students but divert younger students from higher-quality in-person programs. Increased competition lowers the prices of in-person programs but leads to a decline in their provision. Using an equilibrium model of college education, we quantify that in the absence of online education, the average student would experience 3.4% higher value added. While young students benefit from fewer online options, older students are disadvantaged. Targeted policies limiting online education to older cohorts have the potential to improve value added across all groups.
