Do Online Courses Really Save Money? A New Study Explores ROI for...

Digital Learning

Do Online Courses Really Save Money? A New Study Explores ROI for Colleges and Students

By Jeffrey R. Young     Apr 12, 2018

Do Online Courses Really Save Money? A New Study Explores ROI for Colleges and Students

Many college leaders have looked to online course delivery as a way to reach more students at a reduced cost, in hopes of increasing access to higher education. But so far questions remain about whether high-quality online programs can be delivered for less cost than traditional classes.

A new study called "Making Digital Learning Work," released by Arizona State University this week, takes a deep dive into the “return on investment” of large-scale online efforts at six colleges and universities. (Disclosure: The research was supported by the Bill and Melinda Gates Foundation, which also supports projects at EdSurge.)

“Most studies that addressed the economic impact of digital learning focused only on the course level, and did not take not central administrative and program-level costs into account,” the report notes, adding that they attempted to do just that.

The six case studies all have one thing in common: they look at huge online efforts (all of the institutions enroll at least 20,000 students, and have at least 20 percent of those students taking one or more online courses). The colleges studied are Arizona State University, University of Central Florida, Georgia State University, Houston Community College, Kentucky Community and Technical College System and Rio Salado Community College.

All of these colleges set up extensive centralized staffs to support online offerings, which the report identifies as a key component to their success. UCF, for example, has a 90-person team “that includes instructional designers, media support resources, faculty professional development staff, and quality assurance staff.” At ASU, a centralized innovation team called EdPlus employs 250 people.

With that kind of large-scale and strategic effort, the report suggests that the costs of delivering education can be reduced. “When we compared the overall costs of online courses with average costs at four of the institutions in the study, we found that the savings for online courses ranged from $12 to $66 per credit hour, a difference of from 3 percent to 50 percent of the average credit hour costs,” the report says. “Digital learning can help institutions reduce costs and pass along savings to students through three primary mechanisms: raising student-to-instructor ratios, drawing on a broader network of adjunct faculty, and avoiding additional operations costs.”

Of course, not every college is willing or able to build a large online-learning infrastructure or change their culture to focus on online classrooms.

“It is not meant to be a ‘something for everyone’ proposition,” said Lou Pugliese, senior innovation fellow and managing director of the Action Lab EdPlus at ASU, in an interview.

So does an online program have to be big to be successful? Pugliese said he knows of plenty of smaller online college programs that serve students and institutions well, but he says the successful ones take “a very strategic approach”—such as focusing online efforts on a single degree program, such as a nursing program, rather than just experimenting with online courses here and there.

One common barrier to building online programs is resistance from faculty members, the report note. And that makes sense, since the case studies show that the faculty role can change considerably when a college shifts strategically to serving an online audience. At Rio Salado Community College, for instance, officials developed a centralized system for course design, where “22 full-time faculty chairs develop courses with the support of a central team that includes subject-matter experts, instructional designers, media support staff, and production staff.” Adjuncts—some 1,500 of them—teach based on these materials, which they can add personalized videos to.

The report recommends working closely with faculty throughout the process, “by giving faculty a voice in key decisions, providing professional development opportunities, and fostering a culture of pedagogical innovation.”

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