Officials had expected to raise $6 million for the project, but were only able to secure $748,000 in private funds.
The university gave the program a $6.9 million interest-free line of credit. The university hopes to repay the loan by selling at least 7,000 spots in online classes to about 5,000 non-UC students, possibly in China, said University of California Vice Provost Daniel Greenstein.
Greenstein is making a trip to Beijing and Shanghai this week to gauge the interest of Chinese universities that might want to supplement their curriculum or prepare students to study in the U.S., he said.
The Associated Press contributed to this report.