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Getting the Money Right

12/12/2006

By Judith V. B'ettcher, Designing for Learning

A clear sign that online and distance learning is maturing is that we are struggling with how to organize and fund these programs on an ongoing basis. One of our early questions regarding online learning, e-learning, or blended learning programs was, “Can we do it?” A question that quickly followed was, “Can we make any money doing it? We now face the next question, which is “What are the organizational structures and financial models that support revenue, sustainability, and growth of online programs?

Judith V. B'ettcher

Judith V. B'ettcher

Informal interviews with a few online learning leaders in the spring of 2006 provided a few insights into this question. (The leaders – all with extensive experience in the design, development, and implementation of online learning programs – represented large, mostly public and some private higher education institutions. Data from a wider range of institutions is contained in Business Models for Online Learning: An Exploratory Survey.) The most basic insight is that online learning is a business and that we must approach it with this mindset if we are to be successful. Other insights from the interviews suggest the need for increasing: A.) the differentiation of the markets that online programs are serving and B.) the organizational structure of the institutional organization supporting these programs.

The comments by the leaders interviewed suggest that funding models for distance and online learning are strongly influenced by these three institutional variables:

Organizational structure and mission . Is online learning part of a strategic institution-wide initiative or an initiative primarily being launched by a college? Obviously, broad institutional support means better infrastructure, more available and consistent services, and more stable budgets.

Purpose for online learning and distance learning. Are programs for increasing access or serving campus students? Programs designed for access serving working professionals and place-bound students are generally better funded, as tuition revenues can be more flexible. (This generally means higher.)

Institutional leadership. When leaders identify distance/online learning as a strategic part of an institution’s future, more favorable funding models are likely.

A good example of a strong institutional leader in this area is Graham Spanier, president of



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