Research

Study: Online Schools Have Not 'Dethroned' Faculty

• By Dian Schaffhauser
• 05/20/19

Does online learning spend more on technology and less on people? That's the latest question posed by Eduventures Chief Research Officer Richard Garrett, in an essay published on the Encoura website. This was a follow-on to a recent brief he posted that examined whether online learning could help institutions deliver a lower-cost education to more students. In that setup, he concluded that the higher the portion of fully online students a school had, the less the school spent per student.

In his latest analysis of IPEDS data, Garrett specifically examined the situation of private, nonprofit four-year schools (while suggesting that the outcome could be applied to public four-year institutions as well).

The primary expense for instruction was wages and benefits. Even during a period in which "hundreds of millions of dollars" has been dedicated to educational technology, spending on humans has remained remarkably consistent as a share of the total instructional spend over the last decade, making up 69 percent — or about $15,300 per student — between 2008 and 2017.

Spend per student in private, nonprofit four-year schools. Source: Encoura Eduventures Research

Online schools spent far less on the combination of instruction, support and service than "conventional" schools ($5,110 per student compared to $32,580). However, the breakout was quite different between those two. While conventional schools spent 66 percent of that on instruction, online schools spent 38 percent; and while conventional schools spent 34 percent on the combination of academic support and student services, online schools spent 62 percent for the same expense categories. Most of that heavy spending for online schools was "on technology, not people," Garrett wrote.

Why was instruction a smaller portion of the spending in online schools compared to traditional schools? Because they've found ways to reduce faculty time per student, allowing instructors to "oversee" a larger number of students in total. The slack was picked up by automation and support staff.

However, instructional costs still made up the largest segment of spending even for online schools. While online schools can "eschew" pricey real estate, perhaps limit full-time faculty, rely on "cheaper support staff" and use asynchronous instructional practices that allow for "less faculty time per student and greater economies of scale," in relative terms, Garrett stated, "almost all instructional spend still goes to faculty."

Online learning, he noted, "has not managed to dethrone the faculty." Nor does it equate to lower people costs.

The analysis is openly available on the Encoura website.