A Sensible Higher Ed Business Model for Online Degrees: Are We There Yet?

Jim ShimabukuroBy Jim Shimabukuro
Editor

Not yet, but we’re getting close.

Devon Haynie, in “10 Most Inexpensive Online Bachelor’s Programs for Out-of-State Students,”1 provides signs that higher ed has reached a milestone in the quest for a business model for online degrees that makes sense for the population that needs it most — students and families of students who simply can’t afford today’s high cost of a bachelor’s degree.

For students from low-income families, the bottom line is tuition that can be paid through minimum-wage part-time jobs. In other words, can they earn enough working 20-30 hours a week to pay their tuition?

In a time when tuition is rising instead of falling, online technology has been the light at the end of a very long tunnel. But until now, that light has remained distant and dim, receding rather than growing closer, with colleges viewing technology as added value to onground traditional courses and calling the mix “blended” while driving the cost of education even higher.

To further stymie the growth of online courses, they make them as unattractive as possible, continuing to charge online students the same fees as their onground counterparts even when they don’t use the same resources. To further stick it to online programs, out-of-state fees are also charged, effectively shutting out the potentially large disruptive population of nontraditional and low-income students.

But all of that is changing. At last.

For example, Mary, a hypothetical student who lives at home with her parents and works 20 hours a week at the counter of a fast-food restaurant in Wai’anae, Hawaii, can now earn enough to pay her tuition at Texas Tech University, where she’s working toward a bachelor’s in Special Education and Teaching. The cost per credit hour is $213, and she needs 120 credits to graduate. The total cost for four years is $25,560, which breaks down to $6,390 a year or $3,195 a semester. 

At minimum wage, she nets barely enough to cover tuition costs, but she works full-time during the summer to earn a little extra. With additional financial help from her parents, she’s able to get by without taking out a student loan. Ironically, tuition at her home state university, the University of Hawaii at Manoa, is nearly double that of Texas Tech, even when she takes online courses. For out-of-state students, the cost is a whopping $15,348 per semester, and this is for online courses, too.2

Texas Tech, by the way, is not her only option for an affordable online college degree. She can find similar opportunities at Georgia College & State University, Emporia State University (KS), Georgia Southern University, Lamar University (TX), Minot State University (ND), Sam Houston State University (TX), Mayville State University (ND), Fort Hays State University (KS), and Valley City State University (ND).

The key to lowering cost is the elimination of irrelevant fees that have been historically associated with on-campus, face-to-face courses. Online students, both out-of-state and in distant parts of the state, generally don’t place an additional burden on existing physical campus facilities such as classrooms and parking lots. In other words, the potential pool of online students is primarily nontraditional, that is, they’re usually not the ones who register for full-time on-campus courses. The result is a win-win for the colleges and for nontraditional students.

This trend toward affordability is still evolving. In the coming months and years, costs will more than likely drop even further when colleges realize that:

  1. Online faculty can easily work from their homes, eliminating the cost of on-campus offices, equipment, supplies, and related costs such as maintenance and utilities.
  2. They could and should collaborate across institutions in course and program offerings since campus location is irrelevant for online students and faculty. This would mean a wider range of courses and programs for students with each partner specializing in specific fields, eliminating the costs associated with offering the full spectrum of similar courses on every campus.
  3. Many courses can be self-paced, with rolling or flexible start-end dates, allowing some students to complete courses faster, reducing their time in college and hastening their entry into the workforce.
  4. Some or many course requirements could be met via MOOC certificates or credits, completed online with no specific location requirements.
  5. Online classes are free from the space and time restrictions associated with onground classes. Thus, class size can vary, with MOOC-style numbers a very real possibility with a single professor heading a team of teaching assistants, which could include upper-division students and paraprofessionals.
  6. Online courses, free from the limitations of classrooms, invite unbundling, which could mean a remapping of features historically associated with traditional courses. Quizzing and testing for the majority of courses could be consolidated in a single online service. So could the evaluation of writing and the moderation of discussion forums. Further unbundling might include the role of professors, allowing for the teaming of content or skills specialists who aren’t officially teachers with instructional specialists who are.
  7. Online library and learning support services could be centralized on specific campuses even when they’re in different state systems, eliminating the need to replicate them on every campus.
  8. Many if not most traditional students will supplement their onground schedules with online courses, reducing the strain on campus resources.
  9. Leadership in lowering costs is not coming from the Harvards and Stanfords but from state colleges in unfamiliar and often remote locations. Unbound by tradition and heavy investments in buildings and grounds, they’re more apt to think outside the box and go with what works, what makes sense.
  10. College students are changing. The traditional student is being replaced by the new traditional student, and as much as s/he values the onground campus experience, she also values the internet where communication, information, and learning is available 24/7 from anywhere via smartphone. She’s equally comfortable in both learning environments, but she’ll expect each to be media relevant, that is, learning activities must be geared to the appropriate medium. On the one hand, activities that can be done efficiently online should be done online. On the other, activities that require in-person interactions should be done in classrooms. This means moving some class sessions online and freeing the space for other classes, increasing the number of classrooms without the cost of constructing and maintaining new ones.

This lowering of the cost of a bachelor’s degree is a huge step in the right direction in the application of technology to education. By cutting costs, colleges are helping underserved students and their families overcome a primary hurdle in attaining the American Dream.

__________
1 US News, 19 June 2015.
2Regular Tuition Schedule 2014-2015,” 2015-2016 Catalog, web. (WebCite alternative)

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