Running Head: DETERMINING THE COSTS OF ONLINE COURSES
Is Distance Learning Worth It? Helping to Determine
the Costs of Online Courses
Brian M. Morgan
Marshall University
Determining
the Costs of Online Courses 3
Table of Contents
Acknowledgements 2
Table of Contents 3
Table of Figures 6
Abstract
Background of Online
Courses 10
Definition of an Online Course 10
Why this Type of Education Is Important 10
Costs Involved in
Developing and Teaching Online Courses 13
Determining Categories for Costs 13
Technology Specific Costs 14
Support Personnel Costs 15
Faculty Development Costs 16
Hidden Costs 16
Costs of Developing Online Courses 18
Costs of Teaching Online Courses 19
Sample of Marshall University’s Costs 20
Table 1: Costs of Developing Online Courses 21
Table 2: Costs of Teaching Online Courses 21
Table 3: Technology and Infrastructure
Costs 22
Table 4: Revenue from Online Courses
(Tuition) 22
Table 5: Summary of Costs and Revenues 22
Figure 1: Distribution of Costs for Online
Courses at Marshall University 23
Explanation of Costs 23
Figure 2:
Costs and Revenue Streams for Online Courses at Marshall University 25
Revenue for Online Courses 26
Determining the Costs of Online Courses 4
Sources of Revenue 26
Why an Institution Would or Would Not Want
to Do This 26
What is important for
this type of education to be successful 29
Using Technology as a Strategic Asset 29
Centralization of IT Support 32
Instructional Technology Support 32
Table 6: Analysis of results from faculty
teaching online courses at Marshall University 34
Faculty and Online Courses 34
Administration and Online Courses 35
Students and Online Courses 38
Interactive Web Site
for Determining Costs 40
Disclaimer
How the Site Works 40
Figure 3: Data Flow for Determining Costs
Web Site 41
How Costs and Revenues are Calculated 43
Online
Development/Teaching Surveys 45
Developing Online Courses Survey 45
Table 7: Summary of Results from Developing
Online Courses Survey 45
Figure 4: Breakdown of Compensation Types
for Development of Online Courses 47
Figure 5: Participation Percentages for
Developing Online Courses 47
Selected Comments from Developing Survey 47
Teaching Online Courses Survey 49
• Table 8: Summary of Results from Teaching
Online Courses Survey 50
Figure 6: Breakdown of Compensation Types
for Teaching Online Courses 51
Figure 7: Participation Percentages for
Teaching Online Courses 51
Selected Comments from Teaching Survey 51
Determining
the Costs of Online Courses 5
I
What Do the Results Represent? 55
Online Student Survey 58
Aggregate results 58
Table 9: Summary of Results from the
Flashlight Current Student Inventory 58
What Do the Results Represent 59
Summary 61
References 63
Appendix A
Developing Online Courses Survey 66
Appendix B Teaching
Online Courses Survey 69
Appendix C
Comments Received from Developing Online Courses Survey (names withheld) 71
Appendix D
Comments Received from Teaching Online Courses Survey (names withheld) 99
Appendix E
Faculty Gap Analysis Survey 121
Appendix F
Flashlight Student Current Inventory Survey 122
Determining the Costs of Online Courses 7
Abstract
Before
an institution of higher education ventures into online education, a complete
understanding of costs to be encountered is essential. Although dozens of
methods for delivering courses through distance education have been utilized
for years, the offering of online courses through the World Wide Web has
existed for less than a decade. Many institutions at this time may not
understand the full impact of the costs of online education. This paper will
assist institutions in realizing these costs, whether they are tangible or
perceived. The paper and accompanying web site
(http:/webpages.marshall.edu/~morganl6/onlinecosts/)
will discuss what areas must be considered, what effects online courses may
have on an institution, what costs are involved in the establishment of this
type of venture, and also examine costs and possible problems that may be
encountered with ongoing course offerings.
The
need for this research became evident to as early as 1998 when trying to
research what online courses were costing our University. Marshall University’s
School for Extended Education provided a simple spreadsheet showing how much
the University had paid for the development and teaching of online courses, and
stated that these were the costs of Marshall University’s online course
endeavors. The first thing that entered my mind was the question “what about my
time and effort spent? Who accounts for that?” This sparked interest to look
back at what the University had done and thought about the finances involved.
It was decided that it would be beneficial to see if the investment has been
rewarded. In short, was it all worth it?
Nine
months ago, there was extreme excitement about the possible outcomes of this
project. Nine months later, there is even greater excitement about the results,
and a hope that the information provided herein will be beneficial to those considering
implementing online courses. Since there have not been many books published on
the costs of online education, research focus was through a literature search
of magazine articles, an analysis of gathered surveys, and personal experience.
Although this paper represents the findings of said research, a continued
search for answers in this area with the use of the accompanying web site (http:/webpages.marshall.edu/~morgan16/onlinecosts/)
is necessary.
Determining the Costs of Online Courses 8
Since this is such a gray
area in higher education, there are hopes that this information will provide
other institutions as to what they need to be aware of before deciding to
initiate these types of offerings. After compiling research and survey results,
it was evident there were many things found that had not been considered
beforehand. It was fascinating to find a high percentage of faculty who were
interested in teaching online, but only if administration were to make changes
in such a manner they would be recognized for their efforts. Students at our
Marshall University have been very pleased with their experiences in online
courses to date, something we had no evidence to support until this point.
Some of the greatest
concerns in the area of online courses have been retention and equality of
content being offered. It was gratifying to find that retention rates in online
courses at many institutions, including Marshall University, are in the 70%
range and accrediting agencies are accepting online courses as an acceptable
form of delivery. Another positive experience that resulted from this project
was the accompanying web site (http:/webpages.marshall.edu/~morgan16/onlinecosts/)
that allows individuals to enter data specific to their institution in order to
estimate costs associated with a venture into online courses. This site was
developed from research data gathered over the past nine months. By attempting
to account for all costs involved, the site should provide an institution with
a true overview of the costs in introducing and maintaining online courses.
Online education has
rapidly developed into such a hot topic that it has become the center of
conversation at many higher education institutions. An institution either has
plunged into it headfirst, or is seriously pursuing interest. What more often
than not happens is that higher education Institutions begin offering online
courses without realizing what they will cost 1) to get started and 2) in the
long run. Carlson (1999) insists that to be successful, institutions must
properly plan, convert material, and evaluate their distance education
offerings. Nonetheless, some institutions will never possess the resources to
be able to conduct this endeavor themselves without possibly a partnership.
Online education may not even be the approach that some wish to take.
Because there has not been
much information available regarding how an institution should get started and
what the cost might be, this project is a great opportunity for additional
research and
Determining the
Costs of Online Courses 9
development of a web site where an
individual could answer questions regarding their institution to determine if
online courses will be beneficial or too costly for investment. Some
institutions forced into online education have closed shop, usually because
they were without a well-thought out financial plan. Still others have
prospered.
This paper will provide
insight as to what one should be aware of before venturing into the realm of
online education. The research results should also provide a means to see if
the financial investment of online education will be beneficial. It is easy to
say that no two institutions are the same and, because of this, the web site at
http://webpages.marshall.edu/~morganl6/onlinecosts/ allows the changing
of variables that reflect the affects on the outcomes of the costs. Once users
of the site have made their own entries and comparisons, updates will be made
to reflect changes suggested by those users.
The web site was tested
with findings from Marshall University’s cost analysis regarding online courses
and found to be very accurate. The numbers were not identical, but the ratio of
the institution’s cost to revenue between the site and the paper were within
five percent. Additional comparisons at other institutions will greatly
solidify the site as an invaluable tool. Continued updates and maintenance of this
site will be a personal goal.
The Institute of Higher
Education released a report on March 21, 2000 (Quality on the Line) regarding
guidelines for online courses. Throughout this paper, at some point 23 of the
24 principles that Fleischauer (2000) named as critical elements to have in
place before venturing online were mentioned. The only one missed was that
adequate library resources needed to be supplied to online students.