Why Online Costs Less, Not More

Robert Ubell critiques a new study on the costs of face-to-face and online higher education.

March 8, 2017

In a recent study comparing online with face-to-face courses, the online learning group WCET concluded that virtual courses are more expensive than those delivered on campus. If you focus on the report’s narrow results, based merely on course tuition and fees, as well as selected instructional elements, you’re sure to be led astray. We’ve seen perplexing media stories that inflate the report’s puzzling findings; “Online Education Costs More, Not Less,” declared a headline in a leading story in Inside Higher Ed.

The study found that digital courses are not only more costly to produce than on-campus classes, but on the whole, after adding fees, online tuition is greater, too. While the results may be technically accurate, based on the limited terms set by the study’s investigators, its broader analysis is seriously flawed.

As an on-campus student, to get to your class each morning you either drive from your apartment and park your car at the nearest college lot, or you roll out of your dorm room bed and stroll across campus. After showing your ID to a security guard, you might stop off at the cafeteria for coffee and a bagel. After class, you may wander over to the campus gym to work out. None of the costs of these common university services outside of the classroom -- parking, dormitory, grounds maintenance, security, cafeteria, and fitness center -- were calculated in WCET’s research, nor are any of them available to remote learners. 

And while it appears to make perfect sense, when comparing online with on-campus teaching, to identify elements of instruction only -- such as faculty compensation, instructional design and learning materials, among nearly two dozen other items selected for review in the WCET study  -- to appreciate the crucial distinctions, what was ignored may be more decisive than what the study counted as essential.   

In his widely read blog,  consultant Tony Bates was quick to puncture the report’s methods and conclusions, commenting that it “confused rather than clarified the discussion about costs and price.” Troubled by its research bias, Bates observed that most elements under review in the study covered distance education, while routine expenses running face-to-face classes, especially substantial “sunk” costs, like buildings and parking, were largely missing.

Even the budget for academic information technology was excluded, while software that manages learning management systems, naturally found its way in.  An institution’s LMS -- used equally by residential as well as remote students -- represents merely a fraction of the substantial sums invested in information technology more generally. Excluded, too, are more commonplace costs of face-to-face education -- air-conditioning in the summer, heat in winter, cleaning services all year long -- costs conventionally lumped into “overhead,” expenses that fully apply on campus, but not one penny of which supports distance learners. Compared to the vast sums required to house an on-campus population, the costs of virtual instruction are trivial.

The WCET team dug meticulously into the data it collected, but it failed to ask all the right questions, nor did it look over the classroom walls to uncover meaningful clues elsewhere on campus. Residential students don’t attend classes in isolated nodes in undifferentiated space. They enter their face-to-face courses as part of a rich complex of academic, social, and learner services that, together, constitute the modern campus. To isolate the face-to-face classroom from the total on-campus student experience makes little sense. Today, the cost of running a substantial university, largely to accommodate residential students, often runs into tens of millions of dollars a year. A tiny fraction of these costs promote remote student instruction.  

Looking at on-campus tuition from a student’s perspective, in a far more incisive way than the study, families soon discover that it does not include air fare or gas to travel to and from campus, nor tolls or other travel expenses to get to college, say, four or five times a year. Nor does it include student accommodation and meals. The College Board says that, on average, families must add about $10,000 a year to cover room and board. 

In a virtual course, however, even if you’re hit with a modest technology fee, tacked-on to online tuition, that’s it. There are no surprises — no extra travel costs or room and board to cover. Yet WCET’s in-depth survey, with responses from 197 senior college and university officials, concludes that tuition for digital courses is greater than on-campus prices, leaving us with the false impression that the total cost to earn a digital degree is more expensive than face-to-face education.

Calculated from inside a family’s budget, going online is hands-down far less expensive than face-to-face instruction. Compared with their on-campus peers, students taking virtual classes save many thousands of dollars a year. To appreciate the difference in price between digital and face-to-face education, it’s misleading to look at what students pay for individual courses only -- a curiously institutionally centric exercise.  It’s far more revealing, as well as decidedly more practical, to calculate what families can afford -- based on a thorough account of everything that goes into earning a degree -- not on what counts in tallying a university balance sheet.

The knockout blow to the belief that online is more expensive than residential instruction comes from this thought experiment:  Your college is faced with enrolling, say, a thousand new students. To accommodate the unexpected increase in your on-campus population, massive new facilities will be needed — new academic buildings, lecture halls, laboratories and, of course, classrooms, requiring millions of dollars in unbudgeted charges. If your institution is like some in the U.S., chances are your trustees and managers will face a crisis, concluding that your college cannot afford to enroll them, forcing your eager new freshmen to apply elsewhere. In an illuminating alternative, however, enrolling a thousand new students online will be nothing like what is required on campus. More faculty, of course, and an additional cadre of instructional technologists, but not much more. Your thousand new students will be very welcome online.


Robert Ubell is Vice Dean Emeritus of Online Learning at NYU’s Tandon School of Engineering. A collection of his essays on virtual education, Going Online: Perspectives on Digital Learning, was recently published by Routledge. He can be reached at [email protected]


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