College Online: The Internet's Next Big Thing just might be going to school. Are the new online programs digital diploma mills or the future of education? With a new generation of students logging on, traditional colleges aren't waiting to find out.(SOCIETY)

Nicholas Jimenez leads a complicated life. As an executive with Computer Associates, he's lived in three countries in five years. Right now he's in So Paulo, Brazil, but "I don't know how much longer I'll be here," he says. "One year? One month?" That uncertainty--plus his hectic work schedule--makes it difficult for him to take classes to gain the skills he needs for a promotion. So when NYUonline, an offshoot of New York University, began offering Web-based courses in February, Jimenez, 27, signed up. He logs on to read tutorials on Management and Organization Principles and chat with his professor. Says Jimenez: "I can take classes wherever I am, whenever I want."

College will always convey a certain image: Gothic buildings filled with postadolescents listening to tweed-clad professors. But the Internet is blurring that picture, and State U is quietly morphing into College.com. To be sure, a virtual university is no place for Felicity or her just-out-of-high-school friends; they want the full campus package, kegs and all. But "typical" college students--18 to 22 years old, living in dorms, studying full time--make up only 16 percent of enrollments today, says Arthur Levine, president of Teachers College at Columbia University. They're far outnumbered by the 79 percent of adults who lack diplomas. Many of these folks have kids, work irregular hours or travel, which makes night school impossible. The result: millions of adults are dialing for diplomas. They're attending start-up schools you've never heard of--and prestigious ones like Columbia, Stanford and Duke. By the end of the year, according to researchers at InterEd, 75 percent of all U.S. universities will offer online course work, and 5.8 million students will have logged on. Study any time! College has never been more convenient.

Many cybereducators hope to get rich in the process. Online courses constitute just $350 million of the $240 billion higher-education industry today, according to Merrill Lynch, but will grow to $2 billion by 2003. The stock market has been so enamored of online education (or "e-learning") that venture…