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Online Education More Expensive But Not Necessarily More Profitable

By CityTownInfo.con Staff
October 22, 2009

A new report released today about online education indicates that students enrolled in such programs often pay higher fees, but many colleges and universities are unaware if the programs are actually profitable.

The study, entitled "Managing Online Education--2009," was conducted by WCET and The Campus Computing Project and was based on a survey of senior officials at 182 public and private nonprofit colleges. Nearly half of those institutions reported that tuition for online classes was often higher than face-to-face programs, but 45 percent said they were unsure if the online programs generated profits.

"The fact that many of campus officials couldn't say their programs were profitable, I found interesting," said Kenneth C. Green, who directed the study and was quoted in Inside Higher Ed. "Because the lure of this for the past decade has been, 'We're going to make a lot of money on distance ed.'"

He noted that profitability has been hard to gauge because many institutions don't keep track of online students or faculty and staff time devoted to online course delivery.

The Chronicle of Higher Education notes that students in some online programs may pay as much as 10 percent more than face-to-face programs. Yet the survey also found that in one-third of the institutions, tuition was the same for online and on-campus classes, and one-fifth reported that online classes were lower.

The study also found that students on online programs may need to pay additional fees. For example, 19 percent of respondents said that online students were required to pay an average of $232 as a one-time registration fee.

The survey data confirms that online education is becoming more popular. Fully 94 percent of the survey respondents reported enrollment gains in their online programs between 2006 and 2009. Additionally, 38 percent reported a one-year gain of 15 percent or more in online programs.

"The enrollment data, coupled with the new information about organizational transitions in online education programs, document the official 'arrival' of online education," noted Green in the report's executive summary. "These data confirm that campuses confront new operational and managerial challenges as online education moves from the periphery to become a much larger and more significant component of the instructional portfolio for many institutions."

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