The headlines during a recession can be very stunning.  Our culture loves sensationalism, and there is no shortage of bad news out there during the current crisis.

Although there is pain everywhere, it’s interesting to see the struggles of many of the country’s educational institutions.  Specifically, Harvard University announced in early December that its endowment lost 22% of its value over the last 4 months and could lose as much as 30% by the end of its fiscal year ending in June.

The Ivy League institution depends on that endowment to feed its operating budget.  In the case of Harvard, 35% of its budget comes from its investments.  Other schools rely on investment money to an even greater degree, up to 50% in some cases.

As a result, you are hearing from schools across the country that tuition increases and budget cuts will be the norm for the foreseeable future.  Given that our higher education system is a business, one can safely say that such business is undergoing fundamental changes.

In such circumstances, there are always those that benefit.  In this case, those that will benefit from the struggles of brick and mortar institutions are the online educators.

That model is inherently more efficient.  More students can be taught with significantly lower costs.  It’s Business 101, and the online model will clearly be the winner as other "traditional" schools struggle.

At the same time, the numbers on the unemployment roles are rising rapidly with no end in sight.  Yesterday’s new jobless claims pushed us close to 600,000 unemployed.  The unemployment rate is heading to a number north of 6%.

The single best way to stay get off those roles is to improve your resume.  One way to do that is with higher education.  The attraction of the online education then is quite strong.

Online institutions are cheap and flexible.  You can improve your lot in life from the comfort of your own home.  Take classes when you can.  And work odd jobs on the side while you’re doing it.

It doesn’t matter how it is done.  Just do it.

And guess what?  People are doing just that and in droves.  That’s why stocks of publicly traded online educators have been faring very well during a difficult period.

In fact, I challenge you to find a better performing sector in this market environment.  You won’t find it. 

What about going forward?  Will the online educators continue to out perform the rest of the market?

I think the answer is yes.  While it would have been buying these stocks a few months ago, there are still gains to be had.  I would go so far as to contend that these stocks would have doubled in value or more had we been in a normal market period.

Of course, if we were in a normal market period with low unemployment, the online education business would not be as strong as it is.  Since I believe that the recession will last longer than expected, I think investor can do well in this space even now.

Here are a few names to consider:

Apollo Group, Inc. (APOL) is a pioneer in online education with its University of Phoenix programs.  Shares trade for 25 times trailing earnings but only 18 times forward earnings.  The company has a strong balance sheet with minimal debt.  For those that like charts, the one-year version for APOL notes a strong reverse head and shoulders tendency, a very bullish signal.

Capella Education Company (CPLA) is a relative newcomer to the online game and is doing quite well.  The company focuses on post-secondary education and serves more than 20,000 students.  CPLA went public in late 2006 at a price in the $20-range.  Shares trade for more than $50 today.  CPLA is pricey from a fundamental standpoint, but they are growing rapidly.  With the IPO, the company has no debt and plenty of cash for expansion.

Like APOL, ITT Educational Services (ESI) is a pioneer in the space.  Its shares suffered a few years back with an investigation into student roles and loans but came out of that situation unscathed.  Shares have been recovering since.  It also has a reverse head and shoulders chart for the one-year period that is bullish for the future.  Shares are a bit cheaper than APOL, and CPLA is trading for 17 times trailing earnings and 14 times forward earnings.

Compared to the brick and mortar schools, the online space has far fewer participants.  In fact, it’s not even close.  To me that means there is fertile ground for growth.  Although investors pay a premium for that growth relative to the rest of the market today, it would appear that the potential reward is commensurate with that price.

I would take a closer look at the online educators despite the chaos in the rest of the market.

This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com.