Analysis Finds Online Degree Programs Not Always a Money-Saver

A new report has found that an online degree program in many cases can be more expensive than a degree from a brick-and-mortar institution, according to Devon Haynie of U.S. News.

An analysis of about 300 programs ranked by U.S. News shows that it is more expensive on a per-credit basis to take an online undergraduate course than a comparable on-campus course. The average per credit, in-state cost for an online bachelor’s program is $277 compared with $243 per credit at brick-and-mortar schools.

However, online education comes in behind more expensive options:

Online undergraduate education is less per credit, however, than traditional education at private schools and for out-of-state students at public institutions.

The American Association of State Colleges and Universities and the Learning House recently conducted a survey finding that more than 60% public universities charged the same tuition for face-to-face courses as they charged for online courses.

The survey, which will be published this October, involved 400 public universities. It also reveals that 36% of the schools charged more for online tuition.

For schools that don’t already have an online program up and running, creating one is a significant investment, says Susan Aldridge, a senior fellow at the association. “The courses cost more to develop, take more time to develop and take more time for the faculty to teach,” says Aldridge. “In order for students to succeed in these online courses, 24/7 technical support, reference librarians, writing labs, automated degree plans and tutoring need to be available.”

Ray Schroeder, associate vice chancellor for online learning at the University of Illinois—Springfield, said that schools spend a large amount on training their faculty to teach effectively on online platforms and it is “an expensive, ongoing endeavor.”

“Most faculty members come prepared to teach face-to-face,” Schroeder says. “They need substantial training and support in order to teach effectively. It’s not a one-time training.”

However, John Ebersole, president of Excelsior College, said he is not agreed that online education must or should be more expensive. Excelsior College is a New-York based institution that offers online education, and according to Ebersole, online education is cheaper for colleges to provide because they do not have to invest in creating or maintaining facilities. “Those savings, he said, should outweigh the cost of any initial investment in technology.”

“If my online students aren’t going to take advantage of the cafeteria, going to the student union, participating in the extracurricular activities and we don’t have the building costs, why isn’t it cheaper?” he says.

According to online education experts, investment in faculty training may be a reason. Schroeder said that it is very difficult “to make an online program more inexpensive for students when schools are using the same faculty for their online programs that they are using in their brick-and-mortar programs.”

Full-time faculty members are expensive, Schroeder says, which is why some online programs hire instructors who don’t receive benefits and who may not have advanced degrees.

Among U.S. News-ranked schools, Penn Foster charges students less than the average cost of credits. The school made this possible in part by trimming faculty costs.

According to CEO Frank Britt, the school has a different instructor-student ratio, allowing the school to “deliver a high-touch experience” and spend only 7% of its budget on faculty costs, as opposed to around 70% to 80% as most colleges do. “It also allows the school to charge students less – Penn Foster charges $79 per credit, Britt says.”