This project examined: states' organizational and financial models of virtual colleges and universities (VCUs); statewide goals for which VCUs were created; and policies, programs, and student participation in VCUs. Data came from a survey of all known statewide and systemwide VCUs and interviews with VCU leaders. Overall, VCUs are gravitating toward two service models (one that is centralized and provides services to students, and another this is a distributed service model where the VCU hosts an online catalog but institutions provide most of the services). Most VCUs are expanding access to geographically underserved populations. Most VCUs were initiated with direct or indirect state appropriations and continue to rely heavily on this funding source for operations. However, some VCUs are building sustainable revenue streams. Out of 20 goals studied at the VCUs' founding and at present, current goals are more attuned to increasing state/system higher education efficiency and meeting state workforce needs. Most VCUs are expected to play a role in system/state level policy change related to distance learning. In general, the higher a VCUs funding level, the higher it perceives its overall goals have been met. The more highly funded and more centralized it is, the greater impact on policy change a VCU is likely to report. Research methodology and study participants are appended. (Contains 18 references.) (SM)