At a Techonomy conference in San Fransisco, Bill Gates was asked by an audience member whether he thinks that online schools may become more prominent than traditional schools. In his response, he outlined the following points:

In the United States, educational institutions are allowed to operate with a great deal of freedom. Accreditation is awarded to schools that meet basic standards of academic quality. These standards are determined and developed by private organizations.

Educational institutions are granted accreditation by specific accrediting agencies. There are three different types of agencies in the United States: regional, national, and programmatic. Each type of agency accredits a different category of schools and programs.

When it comes to getting an online education, several problems can crop up. A school could, for example, lure students in with the promise of low tuition fees and a fast route to graduation. If this deal sounds too good to be true, that's because it is. Schools can only offer such deals when they do not have accreditation, or when they have accreditation from an agency that does not have federal recognition.