Snip: Click here for the full story. The enrollments for online doctoral applicants will fill the slack, to include universities like Walden, Capella, Northcentral, Argosy, Colorado Technical and the list is endless.
Most residential programs provide financial support to PhD students so I can see why they are cutting down admissions for PhD programs. A typical PhD student gets about 20K a year in financial support plus free tuition from the University. On the other hand, online schools charge a small fortune per student so I don't see them cutting down any admissions anytime soon. The reality is that if graduates from traditional programs are not having an easy time, this will also have an impact in online PhD enrollments as more students would realize that there is no point to have one of these degrees but just the right to call yourself a doctor.
I bet that we will see more people applying to the online doctorate programs if the traditional ones are cutting back. I am an adjunct at a large state funded university and they froze admissions to their english, philosphy, and history doctorates until 2012, due to the budget cuts. The same university is also going to raise the admission requirements for their business and pyschology related doctorates.
Unable to Pay Supervisors I see it that supervisors are not paid thus universities don't want to carry on accepting more and more PhD Candidates. One example is CSU Waga which did not pay their offshore supervisors and thus dropped many of their candidates half way even though they paid the full sum of fees.