The United States Open University will close in June after failing to attract enough students, writes Alison Goddard.
The Open University has spent some £9 million over the past four years to establish the Denver-based USOU, a sister organisation offering American qualifications.
Carolynn Reid-Wallace, chair of the directors of the USOU, said: "The decision to close follows a difficult period in which student enrolment growth has been slower than anticipated. Our action has become essential once our parent, The Open University, determined that the substantial additional funding that would be necessary to achieve stability could not be justified in terms of current market decisions."
Brenda Gourley, who took over as vice-chancellor of The Open University last month, said: "The decision to end our support of the USOU experiment is an economic one dictated by circumstances beyond our control."
According to an OU spokesman, the USOU has 560 students against a target of 750. Many of these opted for less profitable undergraduate and short courses rather than postgraduate qualifications. As a result, the USOU made about half its projected revenue.
A note sent by Professor Gourley to OU staff says that students who are working on USOU courses because their home institution gives credit for completing them will be allowed to continue.
Staff who were seconded to the USOU from the parent organisation will return to the OU and resume their posts or be offered appropriate alternatives. All contractual terms for staff employed directly by the USOU will be honoured in full, as will those for the USOU's suppliers.
Professor Gourley added: "While this eventuality is a setback to our original plans for work in the US, we will continue to consider appropriate forms of operation as the market conditions improve. The investment in USOU has had positive results. One positive outcome is courses being brought back to the UK."