What might be the extra cost to be incurred for online learning?
Which Of The Following Might Be An Indirect Cost Of Online Learning For Institutions?
Campus Massive Open Online Courses (MOOCs) are becoming a staple in universities and colleges across the country. Online courses offer students the opportunity to study without setting foot on campus. Similar to the rise of online classes, however, they come with a wide variety of up-front costs. According to edX, a MOOC delivery platform, the overhead of running an online class is more than twice as expensive as a traditional classroom. While a traditional classroom requires fixed costs (class space, faculty, material), online courses require variable costs (online servers, bandwidth, content, software, etc.) that vary in size. For this reason, the exact impact of online courses on costs is not yet completely clear.
Some analysts have suggested that MOOC costs tend to rise with each additional class offered through MOOC platforms. A recent July research paper by Michael Davis, which analyzes the economic costs of MOOCs, finds that a RAND Corporation study from 2013 undervalues the cost of running an online course. This analysis by RAND does not account for peer comparison effects; it compares the cost of an individual MOOC to a single-semester college student’s online course at another online public university. Professors who teach the class at each public university may have different teaching methods, and online courses may be different from individual classes in terms of student demographics and aspirations.
But costs do rise as MOOCs become more popular. Despite being initially cost-competitive with bricks-and-mortar institutions, a 2016 MOOC survey by the Sloan Consortium found that “by the end of 2015,” costs “increasingly align with those charged for classroom-style education in some disciplines, and reach greater parity with highly selective on-campus offerings.” Both online and in-person, online learning “does not seem to bear the same economic stigma,” explained Samuel Wertheimer, president of the National Academy of Learning Science, a technology non-profit, and currently a visiting professor at Brown University’s School of Education. Universities and colleges “are trying to shed the low-value stigma that discourages the most motivated learners from enrolling” in online courses.
One of the key aspects of this debate is the degree to which MOOCs will require public funding. For one, tax-favored, tax-exempt retirement accounts such as 403B funds (meaning 401Ks were established), now provide up to $10,000 in tax-free tuition waivers to college faculty. But some economists are concerned that these waivers come at a cost. Michelle Steiner—Senior Economist at the Fiscal Policy Institute, a Washington D.C.-based organization focused on education and economic inequality—concludes that: “The benefits of higher education are slowly being siphoned away from working families and toward the richest households.” The issue is particularly relevant in the case of students enrolled in MOOCs who will not be covered by tax-free stipends offered by tax-exempt retirement accounts. She explains, “How does MOOC-offering institutions account for those faculty members who aren’t getting waivers? The usual answer, of course, is to take out a student loan.”
Meanwhile, Min Weber, a professor of higher education at the University of Florida and author of The Online Future: Learning in the Digital World, finds a direct correlation between online courses and rising costs for students. MOOC courses, he writes, may “result in higher marginal costs,” with higher costs than traditional education (including the revenue the institute and others cite from deduction, those that offer information about their fees, and fees related to the material).
A popular MOOC platform, Coursera, launched in 2012, raising over $100 million in venture capital in 2013 and generating over $400 million in revenues in 2017. Although the fees paid by MOOC students have increased over time, in 2013, the model cost Coursera over $8 per student in revenues. As of September 2018, that number was a little under $5.6 million. The final cost-savings are still uncertain, with a report from Coursera estimating “a handful of universities” lost between $30 and $300 per student per year. For those universities, the model may be a smart business decision. For others, however, the numbers don’t add up. As for another MOOC platform, edX, the costs for running those platforms for the University of California system, which joined edX in 2013, are just over $1 million annually, according to an academic staff salary survey.