Why do online classes cost more?

-- Sandy Sweep

Why does online learning cost more? Why, indeed, when there aren’t costs for such things as heat and lighting, as in a traditional classroom?

To address the issue head-on and avoid “Minnesota Nice,” it must be noted that colleges are not in the business of losing money. But it should not be automatically assumed that online education originated solely as a revenue source. Rather, its birth was a response to both declining enrollments and student time constraints.

But what about the cost? It is true that keeping up with technology costs money—big money. It is also true that over time the same technology costs less. Consider a 27” conventional television. One can be purchased today for less that $200, compared to $1000 just 10 to 15 years ago when they were cutting-edge technology. Why? Because, the technology costs needed to produce that television were incurred long ago and do not require any new technology to produce it today. However, a 26” wide-screen LCD HDTV today will cost $1700. This same television will likely follow the same road and cost $200 in the future, but the latest technology features cost more now.

The number of online courses has risen steadily nationwide over the last five years. There are a growing number of online-only universities as well, which creates a dilemma for campus universities to maintain student enrollment. Universities are a business and need to stay competitive to stay in business. True, universities receive state aid, but as that aid is decreasing, the need to market programs and solicit enrollment increases.

So, in looking at the costs of online technology—a must to keep a competitive edge and maintain enrollment—what are these costs? According to a study by the University of Maryland University College, which spent more than $1 million to initialize its online program, 31 percent of costs are attributable to faculty salaries, 15 percent to marketing, 12 percent respectively to IT help and program coordination, 10 percent to course development, nine percent to administrative overhead, four percent to Web administration and the remaining seven percent is attributable to a variety of other smaller costs.

This breakdown of costs is constant with any online course. Program setup costs are additional, but are a one-time only expense. Setup costs include, but are not limited to, program technology infrastructure, and assessment managers to monitor performance and satisfaction, and instructor training. And as noted above, these setup costs can reach thousands, if not millions, of dollars. Robert E. Myers of University of Maryland’s University College stated online programs are “bloody expensive to develop and develop well.”

Additionally, Meyers states, that “From the very beginning, we had to combat the myth that online learning is cheaper to produce and deliver than face-to-face curricula…but we are finding that as people become more sophisticated and knowledgeable about the online-education space, there are fewer people out there that you have to disabuse of the myth that online is cheaper.”

What is the future of online learning costs? It’s been shown that the cost of online learning is high at inception, but as technology advances, costs decrease. The findings of a Sloan-C research study exploring the financial costs and profitability point to two conclusions: Universities aren’t losing a lot of money on online learning programs, but at this stage they are not making much, either. Thus, additional costs are being relayed to the student. This is true of traditional course costs, as well.

So, will the $46 per credit difference in online courses versus campus classes dissipate over time at Metropolitan State University? That is a question this newspaper will attempt to answer in future issues.

To read the report on online learning costs, go to http://www.chronicle.com/free/v47/i23/23a04101.htm

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