Faculty Organization Claims Savings of Online Education Are Missing

Colleges are pressured to increase tuition for online programs due to costs associated with development and delivery.

A new report claims online education programs do not decrease costs for students and colleges.
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The idea that online-only programs in higher education will save both students and colleges money may be just a far off "pipe dream," according to a new report from the Campaign for the Future of Higher Education.

The national faculty organization released the report, the second in a series of three examining the influence of private money in online education, on Wednesday and examined instances in which online education programs actually increase costs for students. Rather than delivering lower prices, the authors of the report argue that colleges will be increasingly pressured to push tuition prices higher to cover costs associated with delivering online programs.

"In sum, the push for more online courses has not made higher education cheaper for students," the report says. "The promise has always been that it will – but that day always seems to be in the future."

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Not only are there costs associated with delivering online programs, the report says, but there are also costs in developing the programs. The report quotes Phil Hill, an e-learning professional who has consulted with universities.

"Quality online education costs real money – registration systems, instructional design, course instructors, academic oversight and quality assurance, LMS and collaboration systems, student services, marketing and enrollment support," Hill said. "Someone has to pay."

And because those developing online programs may not always be familiar with those costs, they may run into financial difficulties when the program development is already under way, which could result in a need to cover costs by increasing tuition.

The report examines the increasing tuition prices of for-profit colleges and universities that primarily deliver their programs online. Citing a 2012 report from Sen. Tom Harkin, D-Iowa, the report shows average tuition at for-profits in 2009 was much higher than that at public, four-year colleges and public community colleges: $14,000 per year, compared with $7,000 and $2,500, respectively.

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Even some public universities overprice their online programs, the report says. Tuition for a four-year face-to-face business administration program at a California State University system school costs students slightly less than $22,000, while the same degree taken online through the system's Fullerton campus costs more than double that, at $47,700. And the situation is even worse at private, for-profit colleges, the report says.

A similar four-year degree offered online through Ashford University costs nearly $50,000, and more than $70,000 at the University of Phoenix.

The report also takes issue with the commonly held belief that massive open online courses, or MOOCs, will radically reduce the cost of higher education. Comparing a free education through MOOCs to free materials at a public library, the report claims that's the only part that is free: the educational experience. But in order to receive a certificate of completion for the course, students must pay a fee.

The report goes so far as to say the price and perceived lack of quality in online programs could harm low-income and minority students who seek higher education to move forward in life, but at an affordable price.

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"For many students who do not come from rich families, increased job opportunities and upward mobility are an important (but certainly not the sole) value of a higher education degree," the report says. "The educational prestige and competitive employment edge will stay with the traditional universities and the more privileged students who attend them."

Because online programs are typically targeted toward middle- and lower-income students, the authors say online education's promise of increasing access could actually increase social inequality.

But Jeff Davidson, strategic initiatives manager of The Free Education Initiative at the Saylor Foundation, says the savings of online education can already be seen in certain cases. Institutions such as the Southern New Hampshire University and Excelsior College offer competency-based and online degree programs for under $10,000.