The Cost of Online Education: A Deeper Look Behind the Numbers
Many people assume that online education should be cheaper than in-person learning due to its lack of physical facilities and scalability. However, a recent survey of college online-learning officers revealed that 83% of online programs in higher education cost students as much as or more than traditional in-person courses. This surprising result has sparked widespread confusion and frustration among students like Emma Bittner, who are left questioning the pricing model of online education.
The survey, conducted by Eduventures for the nonprofits Quality Matters and Educause, found that about a quarter of universities and colleges even add an extra “distance learning” fee on top of regular tuition costs. Kevin Carey, vice president of education and work at New America, a left-leaning think tank, highlights that many institutions view online education as a lucrative revenue-generating opportunity.
The Price Disparity and Student Perceptions
According to a 2024 survey by New America, 80% of Americans believe that post-high school online learning should be cheaper than traditional in-person programs. This sentiment is not unfounded, as technology has significantly lowered costs in various industries. However, universities argue that they have to invest more in advising and support for online students, impacting the overall cost.
Despite the expectations of lower costs, the reality is quite different. Online instruction at four-year public universities costs, on average, $341 per credit, higher than the $325 for face-to-face tuition. Similarly, private universities charge an average of $516 per credit for online learning, compared to their in-person courses.
Challenges and Cost Drivers
One of the key reasons behind the higher costs of online education is the substantial startup expenses and technological requirements. Online programs need specialized technology specialists, infrastructure, and additional resources like advisers and support services for remote students. The need for individualized support limits the economies of scale that online programs can achieve.
Moreover, online courses require significant planning and development time for faculty members. Incorporating new technology and creating engaging online content can be time-intensive, leading to increased costs. Dylan Barth, vice president of innovation and programs at the Online Learning Consortium, emphasizes that providing comprehensive student services remotely adds to the overall expenses.
Financial Strategies and Market Dynamics
While 60% of public universities and more than half of private universities make a profit from online education, they often reinvest the revenue into their general operating budgets. This financial strategy, known as cross-subsidization, is a common practice in higher education where certain programs subsidize others.
Duha Altindag, an economics professor at Auburn University, notes that universities view online education as an additional revenue stream rather than a tool for efficiency. Moreover, consumer perceptions play a significant role in setting prices, with high costs often equated with high quality.
Student Outcomes and Job Market Challenges
Despite the high costs, online students face lower success rates compared to their in-person counterparts. Research indicates that online students receive lower grades, have higher withdrawal rates, and are less likely to graduate on time. This can lead to increased expenses for students and potentially impact their employment prospects.
Employers also exhibit some reluctance to hire graduates of online programs, with applicants holding online degrees receiving fewer callbacks for job interviews. However, there have been instances of online programs offering significantly lower tuition rates, such as the $7,000 online master’s degree in computer science at the Georgia Institute of Technology.
Looking Ahead: Potential for Change
As competition intensifies in the online education space, there are signs that prices could decrease. Institutions like Western Governors University and Southern New Hampshire University are offering more affordable online programs, challenging the traditional pricing models. Moreover, universities are beginning to cut ties with for-profit online program managers, reducing revenue-sharing agreements that inflate costs.
Despite the challenges and complexities surrounding online education pricing, the landscape is evolving. With increased competition, technological advancements, and changing consumer expectations, the future of online education costs remains uncertain. As students like Emma Bittner navigate the online learning environment, the quest for affordable, high-quality education continues to drive discussions and innovations in the field.
