Faculty Coalition: Forget About Cost Savings with Online Programs

• By Dian Schaffhauser
• 10/16/13

Cost savings promised by the expansion of online education are tough to pinpoint, including those programs that promise to be free for students. That's the latest pronouncement from the Campaign for the Future of Higher Education, a coalition of faculty groups. Last week, the Campaign issued a report questioning the speed with which online education is being promoted in higher ed. This week the organization issued a new report — the second of three — that examines the idea that innovations in online education can somehow fill the gap left as public funding for colleges and universities dries up.

The report examined several areas: the cost of tuition at for-profit colleges that offer their courses and degree programs online, the financial structures of massive open online courses (MOOCs), and the online degree programs developed for public institutions by "bundled service" and MOOC providers.

According to the Campaign, there are no guarantees that online courses save students money. Quoting from a report issued by United States Senator Tom Harkin in 2012, the report noted that the average tuition and fees at for-profit institutions are higher than public colleges. The discrepancy is most apparent in certificate programs and associate degrees, where the expense is more than four times higher in the former than in the latter. A bachelor's degree from a for-profit school averaged about 20 percent more than the cost of analogous programs at public universities.

But even as public institutions introduce their own online programs, they frequently charge students more for those courses, the report said. For example, a business administration program from the California State University System costs $21,888 in 2013-2014 in face-to-face classes; the same degree is $47,700 through the system's CalState Online.

The Campaign declared the idea that MOOCs could lower the cost of college degrees a "pipe dream."

"While the 'business model' or the 'how' of profit-making from MOOCs is still a work in progress, the general trajectory is clear," the report's authors wrote. "...If you want a degree or a certificate or anything from the MOOC that carries real value in the 'marketplace,' you will have to pay."

Charges referenced in the report include the current practice of charging students for "certificates of completion." In the future that could expand to include fees for obtaining transcripts or the right to report to prospective employers how well a given course was completed compared to the other students who attempted it.

The report went so far as to suggest that MOOCs could increase social inequality: "The educational prestige and competitive employment edge will stay with the traditional universities and the more privileged students who attend them."

Then there's the expense inherent in developing online courses. The report cited an e-learning expert who has advised universities on setting up online programs: "Quality online education costs real money — registration systems, instructional design, course instructors, academic oversight and quality assurance, LMS and collaboration systems, student services, marketing and enrollment support. Someone has to pay."

The Campaign refuted the arguments that online courses could be recorded and reused ("all quality courses have limited shelf life"), that more students could take the same course because the class wouldn't be limited by physical constraints (MOOCs have a "dismal" completion rate), or that fewer faculty would be needed (the reduction in instructors is more than offset by the addition of people for designing, developing, delivering, support, and sustaining the instructional technologies supporting the course).

In those agreements in which a public institution contracts with a private company — a bundled service provider — to develop, market, and produce online degree programs, the report noted, "the companies usually take about 50 percent of all tuition revenue generated by the online courses using their services." In one situation, the provider receives 70 percent.

What these companies — including MOOC platform operators — gain in return, the report added, is exclusive access to the intellectual content developed by faculty at publicly funded institutions.

Much of the momentum for expanding online programs is driven by a "bandwagon mentality," the report's authors wrote, "It is just much easier to join the crowd. Faculty, staff, and administrators who do so with enthusiasm and without question are regaled as 'innovators.' Online supporters in state legislatures get credit for 'doing something' about the higher education crisis and offering 'solutions' that don't require significant state investment."

The best that can be hoped for, the Campaign suggested, is more complete accounting by universities of the costs to produce online courses, more comparative data on tuition prices for face-to-face and online credit-bearing courses, and greater openness and transparency about the terms of contracts between public colleges and online providers."