Are online courses saving money for students?



No. Many online courses are, in fact, more expensive.

For example, tuition at for-profit colleges, which have the highest concentration of online courses and programs, is considerably higher than in traditional colleges and universities.[1] In 2009, the average tuition was $14,000 a year at for-profits; $2500 at public community colleges; and around $7,000 at 4-year public colleges. As the chart below from a 2012 U.S. Senate report shows, the cost of certificates and degrees varies significantly as well[2]:

Increasingly, many public and non-profit colleges are expanding their own online degree programs; and very often they are charging students more, not less, for these online courses. For example, while four years of full-time enrollment in a face-to-face Business Administration program in the California State University system will cost $21,888 in 2013-14, that same degree will cost $47,700 when taken at the Fullerton campus through CalState Online, the system-wide online venture of the California State University system.[3]

Four years of online coursework for a Business Administration degree through for-profit colleges cost even more:

$49,560 at Ashford University,
$60,000 at Capella University,
$66,780 at Kaplan University, and
$70,200 at the University of Phoenix.[4]

MOOCs, or “Massive Open Online Courses,” seem (and are billed as) in a class by themselves: they are “open” to anyone who wishes to enroll, and they are free. No wonder they are touted as a revolutionary, democratizing innovation that will make education available everywhere—at no cost.

Will they lower the cost of college degrees for students?

Not according to campus Presidents around the country. Only 8% of those responding to a recent Gallup survey agreed strongly that MOOCs will be a solution to the rising cost of education for students.[5]

One reason why has been pointed out by Patricia MacGuire, President of Trinity College: “The idea that this is going to stay free and these companies have the best, most altruistic motives is just not believable,” she said. “Somebody is going to make a lot of money off of this.”[6] This fact may not have dawned yet on everyone, but it is obvious to those in “the ed tech business” where much of the conversation about MOOCs centers squarely on how the companies offering them will make money. [7]

While the “business model” or the “how” of profit-making from MOOCs is still a work in progress, the general trajectory is clear. MOOCs are free now just as many educational TV shows and books from the public library are free; if you just want an “educational experience,” you can watch a documentary, read a book, or take a MOOC. But if you want a degree or a certificate or anything from the MOOC that carries real value in the “marketplace,” you will have to pay.[8]

Already, for instance, students are being charged for “certificates of completion,” and there is considerable talk about charging them for what is called “premium services.”

“Premium Services” for MOOCs works like this. MOOC providers are collecting massive amounts of data on students by offering their courses “for free.” When they reach large enough numbers, their database will make it profitable to charge a subset of users for “extra” services. With MOOCs, students could pay for “pseudo-transcripts,” for instance, or detailed information that tells potential employers how they did in particular courses—even in comparison to other students in that course or other students in a larger database.[9]

If the numbers enrolling are “massive” enough, the courses can remain free – if virtually valueless in the marketplace. According to venture capitalist John Doerr (one of the main backers of the MOOC provider, Coursera) if a sufficient number of people out of “millions of learners” pay for premium services MOOC providers could easily make a healthy profit.[10] As this observation suggests, the corporate provider and investor enthusiasm for the “massiveness” of MOOCs may not be so much about spreading knowledge as it is about getting a big enough set of potential consumers to generate profits.[11]

The bottom line for students? The push for more online courses has not made higher education cheaper for them. The promise has always been that it will –but that day always seems to be in the future.

Even if online providers are able to create demonstrable savings for students compared to face-to-face higher education, there is still the issue of value for dollar.

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. There are many reasons to question whether online degrees are a good value for money on that score, not the least of which is the result of a survey showing that employers do not respect online universities.[12]

Even MOOCs, which get a halo of legitimacy from being offered by respected institutions, will not “compete” with the real deal. The educational prestige and competitive employment edge will stay with the traditional universities and the more privileged students who attend them.[13]

With MOOCs and online higher education being directed primarily at middle- and lower-income students[14] and non-elite institutions, we need to ask not only whether those students are getting value for their educational dollar but also whether we as a country are, under the banner of “increasing educational access,” actually increasing social inequality.[15]