Costs and Pricing of Distance/Online Education Programs

Costs and Pricing of Distance/Online Education Programs

A Joint Report

from

Indiana University, Purdue University, and Ball State University

to the

Indiana Commission for Higher Education

December 9, 2011

Barbara Bichelmeyer, Indiana University

Steve Keucher, Indiana University

Mike Eddy, Purdue University

Mary Sadowski, Purdue University

Jennifer Bott, Ball State University

Bernard Hannon, Ball State University

When Tim Berners-Lee and CERN launched the World Wide Web in 1991 in order to develop a

“pool of human knowledge … which would allow collaborators in remote sites to share their

ideas,” they certainly could not have fully comprehended the ways in which that action would

revolutionize higher education. One of the most profound changes to higher education as a result

of the Web has been the development and growth of distance/online education programs. The

ability to send and receive text, images, video, sound, and other multimedia between individuals

or groups of people at a distance either synchronously (in real time) or asynchronously

(independent of time) is redefining the relationship between teacher and student, which is the

core feature of the academic enterprise. Together, this new capability and this new relationship

are leading to the restructuring of higher education programs and services, policies and

processes, markets and competition, revenues and costs.

The impact of the web on higher education has been so complex and so pervasive that, even after

20 years, we are still coming to terms with what exactly online education is, as accreditors and

stakeholders work to build consensus toward a clear definition that will allow us to manage and

monitor online education. A fundamental question still to be decided: is online education any

program in which any student may select courses to create an experience in which 50% or more

of the courses were taken online, whether or not the higher education institution intended the

degree to be online (Higher Learning Commission, 2011, p.1); or is it more appropriately the

Sloan Consortium’s definition of an experience which a higher education institution intentionally

designs, with 80% or more of coursework being online (Allen & Seaman, 2010, p.4)?

One reason online education is so difficult to define is that online education may take so many

forms, which involve so many different elements of the instructional experience, such as

presentation, interaction, and testing. Further, some forms of online instruction are more

appropriate for certain types of learning than others, making it impossible to take any absolute

view of the value or lack thereof of online education. This point was well-articulated by William

G. Bowen, president emeritus of both Princeton University and the Andrew W. Mellon

Foundation, currently serving on the boards of Ithaka/JSTOR. Bowen recently published the

best-selling book, Crossing the Finish Line: Completing College at America's Public

Universities (2009), and his special interest in the application of information technology to

education is evident in his founding of Ithaka Harbors, an organization launched to accelerate the

adoption of productive and efficient uses of information technology for the benefit of higher

education. During his address at the Indiana University-Bloomington Graduate Commencement

in May 2011, Bowen noted:

Online learning is not a panacea. Being around other smart people … is a huge

advantage — not only in acquiring knowledge in the abstract but also in learning

how to work effectively with others. This is why MIT, in its pioneering web-

based OpenCourseWare project, distinguished sharply between what on-campus

MIT students would learn from actually being at MIT and what off-campus users

of MIT materials could learn. Non-campus-based users could learn a lot, but not

as much as those who had on-going interactions with fellow students and faculty

members as well as access to the materials available to everyone on the MIT

website. That said, there is absolutely no doubt that appropriate uses of online

methods of instruction have an enormous amount to contribute to educationally-

effective modes of teaching. But this does not mean that even the most

sophisticated approaches to online learning … are equally well-suited to all

subjects. … Nor should one approach any discussion of whether to embrace

online learning from an “all or nothing” perspective. … even Indiana, with its

renowned technological infrastructure, is in very early days in developing and

testing how best to employ rapidly evolving online technologies. …

Accreditation Requirements for Distance/Online Education

The variety of types of online instruction available, the appropriate uses for each type of

instruction, and the importance of interaction to education are three key issues around which

higher education accreditors are organizing their expectations for distance/online education.

Prior to the advent of the Web, students who studied at a distance generally did so through

“correspondence education,” which is defined by the Higher Learning Commission (the

accrediting body for all Indiana University and Purdue University campuses), as “when an

institution of higher education provides instructional materials and exams to students who are

separated from the instructor; in which interaction between the instructor and student is limited,

is not regular and substantive, is primarily initiated by the student, and which are typically self-

paced.” Further, “correspondence education is not distance education” (Higher Learning

Commission, 2011, p.2).

Conversely, the Higher Learning Commission (HLC), defines distance education as education in

which information and communications technologies are used “to deliver instruction to students

who are separated from the instructor and to support regular and substantive interaction between

the students and the instructor, either synchronously or asynchronously,” (Higher Learning

Commission, 2011, p. 2). Regular and substantive interaction between student and instructor is

the value added brought to distance education by the World Wide Web - though this type of

interaction from a distance was not possible before the web, it is both the goal and the

expectation of online/distance education at HLC- and other regionally-accredited higher

education institutions today.

In 2009, the Council of Regional Accrediting Commissions published Guidelines for the

Evaluation of Distance Education (On-Line Learning), which highlight nine hallmarks of quality

for distance education, to which institutions are to demonstrate compliance during accreditation

reviews. The nine hallmarks of quality are:

1. On-line learning is appropriate to the institution’s mission and purposes.

2. The institution's plans for developing, sustaining and, if appropriate, expanding on-line

learning offerings are integrated into its regular planning and evaluation processes.

3. On-line learning is incorporated into the institution’s systems of governance and academic

oversight.

4. Curricula for the institution's on-line learning offerings are coherent, cohesive, and

comparable in academic rigor to programs offered in traditional instructional formats

(emphasis added).

5. The institution evaluates the effectiveness of its on-line learning offerings, including the

extent to which the on-line learning goals are achieved, and uses the results of its evaluations

to enhance the attainment of the goals.

6. Faculty responsible for delivering the on-line learning curricula and evaluating the students’

success in achieving the on-line learning goals are appropriately qualified and effectively

supported.

7. The institution provides effective student and academic services to support students enrolled

in on-line learning offerings.

8. The institution provides sufficient resources to support and, if appropriate, expand its online

learning offerings.

9. The institution assures the integrity of its on-line learning offerings.

The availability of multimedia communication and both synchronous and asynchronous

interaction through the World Wide Web has created an expectation about distance education

that was previously both unheard of and impossible, which is that online education can and

should be comparable in academic rigor to programs offered in traditional instructional formats.

The expectation that the online format, which is wholly different than on-campus instruction,

could have the same rigor of experience and interaction is a testament to just how revolutionary

the World Wide Web has been to higher education.

Brief Overview of Key Benefits of Distance/Online Education

Though the word “revolutionary” may seem to be hyperbole, the key benefits of Web

technologies are changing the landscape of higher education as leading institutions incur

significant new costs in order to drive the development of online education programs. Key

benefits of distance/online programs for students and institutions include:

1. Reduced travel. The conveniences afforded by online technologies lead to significant cost

and time savings for students, as they no longer need to drive to campus, buy parking

permits, walk into classrooms, go to the library to access resources, or to meet face-to-face

with faculty or other students in order to participate in educational experiences (Cornford &

Pollock, 2003; Evans & Haase, 2001).

2. Flexible scheduling. The same technologies that reduce/remove the need for students to

travel to campus also create opportunities for and convenience of flexible scheduling so

students can watch lectures, communication asynchronously, and access library resources

24/7, which allows students to participate in educational experiences that might otherwise not

be possible due to demands at work, home, and other personal responsibilities (Jung, 2003).

3. Interactivity. Web 2.0 technologies such as social networking, blogs, wiki, online

communities and video communications have greatly improved and increased opportunities

for students to interact with instructors and other students, allowing students to ask questions

and to receive quick and frequent feedback from instructors, and to engage in interpersonal

interactions with other students, across the dimensions of both time and space (Jung, 2003).

4. New markets. Online instruction that can be delivered instantaneously around the world

removes the limitations of geography and time, and means that any and every education

provider has the potential to reach a global market (Bartolic-Zlomislic & Bates, 1999; and

Evans & Haase, 2001), though, obviously, the potential of reaching a new market may not

actually be worth the cost of accessing it.

5. Greater scalability. Access to new markets means that the same courses can be used to

educate more people, thereby increasing the scalability of online courses (Evans & Haase,

2001), which should lead to decreases in average cost per course enrollment as enrollments

rise (Arizona Learning Systems, 1998).

6. Increased competition/Improved quality. As education providers take advantage of Web

technology to move in to new markets, increasing competition is expected to unleash market

forces that will eventually improve the overall quality of education, as competitors vie for

student enrollments (Bartolic-Zlomislic & Bates, 1999).

Cost Analyses of Distance/Online Education

Not long after the launch of the Web, administrators, evaluators and researchers began to

conduct cost-benefit analyses of online education, and to engage in the related endeavor of

identifying and quantifying cost differentials between this form of distance instruction and in-

class instruction. Such studies have been ongoing; those reviewed in the preparation of this

report include Bartolic-Zlomislic & Bates, 1999; Bacsich et al, 1999; Whalen and Wright, 1999;

Kilby, 2001; Morgan, 2001; Cornford & Pollock, 2003; Inglis, 2003; Jung, 2003; Robinson,

2003; Rumble, 2003; Bartley and Golek, 2004; Bettcher, 2004; ASHE, 2006; Bramble & Panda,

2008; North Carolina General Assembly Program Evaluation Division, 2010.

This cost analysis section of the report will address three concerns: 1) an overview of cautions

regarding cost analyses of distance/online education, 2) descriptions of significant costs for

online education as experienced at Purdue University and Indiana University, and 3) an overview

of findings from cost analyses published in peer-reviewed journals, handbooks from the field of

distance education, and government reports.

Cautions regarding Cost Analyses of Distance/Online Education

As Web technologies have developed over the years, methods of conducting such analyses have

also improved; yet there are still cautions that remain relevant and which should frame any

conversation about calculating costs of online education.

Factor of Use. Rumble (2003) notes the main message that emerges after the review of multiple

cost studies is “there are a great many caveats that have to be made to any statement about the

costs of technology within education. The problem is that the cost of a given technology is not

just driven by the hardware and software costs of that technology but by other factors – of which

the working practices underpinning the use of the technology is perhaps the most important”

(p.708). It is not the technology itself, but how the technology is used that may be the most

important factor in determining true cost. This point is particularly well-taken with regard to

whether and how much Web technologies are used to create interaction between instructors and

students, and as instructors facilitate and monitor student-to-student interactions.

Hidden Costs. Inglis (2003) warns about confounding effects of hidden costs when attempting to

calculate the costs of online education, particularly when trying to compare online costs with the

costs of other forms of education: “… there are invariably some costs that remain unaccounted

for. The ‘hidden’ costs can distort the basis of comparison. The costs of long-established

methods of delivery are usually well-understood, whereas the costs of emerging methods of

delivery are often not all known. Comparisons of this type therefore tend to understate the costs

of newer methods of delivery while fully accounting for the costs of existing methods. The effect

is to place new methods of delivery in a more favorable light,” (p.735).

Variation of costs. After review of multiple studies of costs-effectiveness of early online

education, Jung (2003) found that even in studies which established cost-effectiveness of

distance education, “costs vary substantially from one situation to another and are influenced by

a number of factors,” and most generally, findings are that cost-effectiveness increases “as the

number of students increase and the number of courses declines” (p.717). A further challenge in

dealing with variation of costs is the variability of faculty salary, and balancing faculty-student

ratios, since in order to achieve satisfactory faculty-student interaction class sizes typically need

to be smaller and are therefore more costly

Descriptions of Significant Costs for Online/Distance Education at Purdue, IU and Ball State

This section of the report provides a description of the experiences of faculty and administrators

at Purdue, IU and Ball State as we’ve gone about organizing for, developing, and implementing

online/distance education, in order to provide a context for and perspective of what online

education includes, how implementation occurs, and what impact it has had and is having at

these institutions.

One reason generally given by those who assume online education is less costly than on-

campus education is that online courses do not require classroom space. Online may still

require classroom space depending on whether and where faculty synchronously or

asynchronously record lectures for viewing by students. Given the primary mission at IU

campuses is to on-campus programs, there will continue to be a need for and ongoing

commitment to maintenance of existing facilities at IU campuses. Calculations based on

these assumptions indicate that online courses produce a savings of $8.68 per credit hour

(about $26 per 3-credit course) on classroom space for each student. “While significant, this

savings is not enough to offset the additional costs of online education, such as class size that

often are 20-35% smaller” (Schnabel, 2011, p.17).

The activities involved in “lecture-capture,” the most basic approach used to convert class

lectures to online formats for courses such as Engineering Professional Education at Purdue,

make additional costs of distance education immediately apparent. The instructor is recorded

while teaching an on-campus course; lectures are then distributed to distant students by

streaming video. Distant students are given access to the instructor by phone and online.

Exams are administered to distant students on paper or online using a proctor. Costs of

recording and distributing the lectures include classroom/studio facilities, recording and

editing equipment, staff to record and edit, facilities and staff to manage materials, costs of

distributing exams, and additional instructor hours in working with distant students. Using

the lecture capture method, all the regular instructional costs are incurred and the distant

aspects are additional costs to be recovered.

For more progressive online course models at Purdue, an upfront course conversion effort is

required. Generally, 10 hours of development are required for each hour of instruction, and

these hours may be distributed among an instructor and instructional development personnel.

The development of a three-credit course may represent about 450 hours of effort or .2 FTE.

Beyond development hours for staff, additional costs include the maintenance of a learning

management system (e.g., Blackboard) which includes staffing (technical, administrative,

and customer support), hardware, and software licensing. Costs for development of produced

video segments, animations, and simulations, etc. which enhance learning can be significant.

As an example of processes involved in the adaptation of a master’s degree course with high

interactivity and group-based projects, one such conversion at IU-Bloomington involved the

instructor and a team of five instructional and interface designers. The design team engaged

in thirteen activities throughout the process of adapting, designing and developing the

distance course, which involved:

Confirmation of goals and objectives of the course

Identification of major content components of the course

Establishment of overall technology strategy for the course - web pages for presentation,

group discussion forum to foster team interaction, announcement listserv to communicate

time-sensitive messages to the entire class, email messages from instructor for project

feedback, and web chats for weekly office hours

Interface design - identification of specific web pages and links needed, as well as

content needed on each web page

Template design for each element of instruction - syllabus page, schedule page,

presentations pages, assignments pages, resources, etc.

Determination of navigation paths and navigation structure for the course website

Gathering of instructional materials from previous lectures, textbooks, journals, websites

to provide and write content for the course website

Coding and editing of web pages

Usability testing with students, and subsequent changes and updates

Uploading to university learning management system and servers, testing of functionality

and compatibility, and re-coding of problematic files

Student orientation to course technologies and training to work in online environment

Development of comment/suggestion function to gather students’ input for periodic

maintenance and upgrading of the course website

Ongoing monitoring of students’ interaction with course materials, university technology,

and technology support for students throughout the course (Bichelmeyer, Misanchuk &

Malopinsky, 2001).

Both Purdue and IU have found that updating and revising of online courses is a more time-

consuming and expensive proposition than for traditional instruction. For a traditional course,

the instructor generally works alone to modify lecture notes or even entirely revise the lecture

sequence. To revise an online course requires the involvement of various technologies and

often, instructional support staff. Time expended in this manner is in addition to the time

spent in the intellectual effort of revising the content itself. In fast-changing technical fields

like engineering, fresh lectures are recorded each term and costs are incurred.

The Master's of Nursing program, one of Ball State's first online programs, is currently

entering a three-year revision process. Because of their reliance on simulation to teach

principles of nursing and the interconnectedness of the courses within the program, this

revision process requires all faculty members' input, as well as significant technology and

instructional design staff time and effort. The planning process for course revisions will take

several months in order to sequence the material, incorporate significant peer-to-peer and

faculty-student interaction opportunities and develop rich-media content in support of student

learning outcomes.

Purdue University representatives note that every distance learning course is considered to be

a highly visible public representation of Purdue University, more so than a typical classroom

on campus. As such, an online course is not an activity that is limited to an instructor, but

typically involves efforts by an array of administrators and support staff. (An online course is

less like the creation of a novel or a painting that is an individual effort, and more like a film

production that requires a team effort.) Examples of team production are quality reviews in

which the University ensures a precise content match between online and on-campus courses

and programs; and assurance of technological efficacy and quality student experience —

neither of which occur for on-campus courses, and both of which require staff effort. Purdue

University has only recently scaled-up undergraduate courses, and it is important that the

courses meet or exceed the face-to-face expectations and take full advantage of the

technologies offered today. Obviously, it costs more to develop and operate courses at the

high end of the quality scale.

IU faculty and staff report that one of the main reasons online education is generally more,

not less, expensive than on-campus instruction at both the undergraduate and graduate levels

is that online courses require that instructors pay greater attention to individual students than

is needed in on-campus courses in order to ensure equivalent interactivity and quality of the

educational experience. (Consider that an instructor teaching a class on-campus may simply

look around the room to see which students are sleeping, texting, or engaged in other forms

of inattention, while the instructor of an online course must ask a question or create an

activity to elicit responses that ensure students are engaged with the course, and then

generally needs to provide feedback to students’ responses.) A study of a faculty member’s

interactions with 16 students in one master’s degree course at IU-Bloomington found that the

total number of written responses from the instructor to the students for one semester (in

addition to 15 course lectures and other materials posted on the web) was 546, which

included 61 feedback interactions for assignments (often multi-page documents), 97

feedback interactions in discussion format, and 161 feedback interactions via email

(Bichelmeyer & Pyke, 2002). At IU, units deal with this increase in instructional load either

by “decreasing class sizes, increasing the credit given to faculty teaching online in

calculating their teaching load, or providing additional instructional assistants; all of these

increase cost per student” (Schnabel, 2011).

At Purdue, the notion of “efficiencies of scale” has also proven elusive in distance learning,

as the optimally effective use of student interactions with each other and with the instructor

requires restrictions on class size. It appears the technology that supports grading,

assignments and other interactions, and the logistics of managing interactions between one

instructor and many students challenges assumptions that scaling-up online courses can be

done in the same manner as with high-enrollment face-to-face courses. The process of

scaling-up online to large-enrollment courses has not been found to be as simple as might be

imagined.

IU has found administrative factors that increase the cost of online instruction are the

“technological infrastructure needed to support it, the need to support student access 24/7,

and the greater costs to develop and maintain course materials” (Schnabel, 2011).

Both Purdue and IU have found that, when online learning moves from supporting campus

students to serving new audiences, significant new costs are incurred. Marketing strategies

must be developed, materials developed and placed in appropriate media. Students must be

actively recruited and appropriately supported during their studies. The needs of working

professionals distant from the campus are quite different from those of traditional on-campus

students. Still, both Purdue and IU seek to engage such new audiences in their distance

learning outreach.

Review of Cost Analyses of Distance/Online Education

In this section we review the research and literature of costs analyses and cost-effectiveness

studies for distance/online instruction that uses a variety of technologies in both academic and

corporate settings.

Most cost analyses reviewed for this report distinguish between fixed costs and variable costs

associated with online education: fixed costs being costs that remain the same regardless of

output, and generally being incurred before a course is ever offered; and variable costs being

those that vary directly with the amount of output, generally increasing with the number of

students. Other strategies used to categorize costs use combinations of fixed and variable costs

with costs of course development and costs of course delivery as key bases for analysis.

In this section, findings are presented in an order moving from infrastructure costs, to course

development costs, then course delivery costs, to provide a simple but comprehensive framework

that highlights costs associated with online education, and where appropriate, discussion of how

these differ from traditional, on-campus instruction is included.

Again, note that research findings suggest the costs of online education vary greatly, especially

by institution. Therefore, sweeping generalizations across institutions such as “distance is

cheaper” or “cost the same” or “cost more” are not possible, and are even difficult to make

within institutions, depending on factors such as the technologies used, the amount of interaction

designed into the course, and the size of course enrollments.

Infrastructure

In a very detailed study of actual costs to deliver online education at Marshall University,

Morgan (2001) identified the distribution of costs as being 16 percent of costs for infrastructure,

48 percent for development, and 36 percent for instruction.

Drawing conclusions from cost analyses at multiple institutions, Inglis (2003) concluded that in

all cases, there is a substantial impact initially from the start-up costs associated with the

establishing new infrastructure, the development of new procedures, and the creation of new

organizational structures for student and staff support. Inglis also noted the benefits of shifting to

online delivery particularly justify the initial investment and ongoing costs when the shift to

online delivery offers the opportunity to open up new markets that could not be accessed

economically via existing delivery methods. Inglis further explained, “the costs of online

delivery are likely to fall as the capacity of networks grows, competition for customers increases,

and technology improves. Meanwhile, the costs of existing methods of delivery are likely to

remain stable or even increase” (p.738).

The relationship between capital costs and growing markets has been documented by numerous

others who have conducted cost analyses and cost effectiveness studies of distance/online

education:

Arizona Learning Systems (1998) assumed “that the average cost per course enrollment

should fall as enrollments rise” (p.24).

Bartolic-Zlomislic & Bates (1999) uncovered a general assumption that online learning can

fully recover its costs within only a few instructional sessions; however, these researchers

cautioned that this is not always the case and is highly dependent on how high the costs are

associated with a given online learning program.

Whalen and Wright (1999) found that costs of initial investments in server platforms, costs of

ongoing maintenance, as well as costs of course development, are recouped when they are

distributed among all courses housed on servers and shared by all students taking those

courses.

Jung (2003) found that, though costs vary substantially from one situation to another and are

influenced by a number of factors, most studies generally find distance education to be

increasingly cost effective as there are resulting increases as the number of students served

and when the number of courses needed to reach these students declines.

“The return on investment of a course is determined by the number of students who will take

the course so fixed costs can be amortized over all students, and must take into account the

reusability of the course itself and the hardware and software to deliver it” (Whalen and

Wright, 1999, p. 39).

To summarize findings regarding infrastructure, the high cost of initial investments needed for

online education are generally offset as new markets are developed and the population of

students taking online courses grows. However, this equation is variable and highly dependent

on the costs of course development, the instructor to student ratio of a course, how often a course

may be re-used, and how often it must be updated.

Course Development

The challenge of course development in online instruction is to transform a faculty lecture or a

simple printed lesson transmitted via computer technology into an exciting online classroom with

powerful interactive features for the learner. Bartley and Golek (2004) opined that it is the

responsibility of education and training professionals “to recognize the opportunity afforded by

online instruction to implement these new technologies so that the online environment is a rich

and value-added teaching methodology” (p.174).

The University of North Carolina cooperated with the Program Evaluation Division of the North

Carolina General Assembly Legislative Services Office (2010) on a review of start-up and

ongoing costs of distance education versus on-campus instruction throughout the University of

North Carolina (UNC) System. This study concluded that, compared to on-campus courses,

distance education courses cost more overall to develop. Development of distance education

courses requires additional assistance from staff who have expertise with technological tools and

platforms used to create online classes, which is in addition to the cost of content development

by faculty.

Drawing a similar conclusion from their research, Whalen and Wright (1999) found that, unlike

most on-campus courses, content development for online courses involves six items:

“1) instructional and multimedia design; 2) the production of text, audio, video, graphics, and

photographs; 3) the development of authoring and delivery software, or the cost of licensing

commercial software; 4) the integration, modification, and testing of course content; 5) student

and instructor training; and 6) course testing” (p. 29).

Bettcher’s (2004) research led to a general calculation that it takes 10 hours of development for

every hour of online instruction. She found that development costs of $10,000 per credit hour are

typical (suggesting that a 30 hour master’s degree program can require an investment of

$300,000). However, she also found numerous examples of investments ranging higher, “in the

neighborhood of $15,000 to $20,000 per credit hour.” To account for inflation from 2004 to

2011, these figures could be increased by as much as 20 percent.

Further discrimination of development costs reveals differences in costs for course development

between synchronous and asynchronous courses. Whalen and Wright (1999) found that

synchronous courses required less development time, because the instructor’s availability in real

time to students means that there is less need for the development of multimedia presentation

materials to convey the content of the course. Whalen and Wright also found a factor of “10x”

development time, with an average of 1321 development hours for asynchronous courses, versus

144 development hours for synchronous. “Since development costs depend of the number of

hours required,” these researchers concluded, “synchronous course costs much less to develop”

(p. 32).

There could be additional hidden costs of development that have not been calculated in equations

such as those above. Kilby (2001) noted that in most calculations of development for online

courses, “the majority of the focus seems to be given to the concrete aspect of the course, with

little thought given to the complete integration of email, discussion groups, and chat functions”

Kilby also noted the importance of such features to students, stating, “without the complete

integration of such functions, the learner in the online environment can become lost in the virtual

world, without recourse in times of need” (in Bartley and Golek, 2004, p.174).

In sum, findings from cost analyses studies show that course development for online education is

much greater, generally 10 times the amount, of course development for traditional courses, due

to the need for multimedia materials, which require the involvement of individuals with other

skill-set in addition to the instructor’s content knowledge. Additionally, development costs are

variable depending on the amount of multimedia materials required for a course, which is

generally a function of the amount of synchronous or asynchronous delivery. Further, there may

be hidden costs of development depending on the amount of interactivity designed into a course.

Course Delivery

Three key variables emerge from the research regarding cost effectiveness of course delivery for

distance/online education: interactivity, faculty salary, and student travel. The cost of

interactivity is by far the most commonly addressed variable in the literature related to online

course delivery.

The 2010 report of the North Carolina General Assembly identifies a major hidden cost of online

instruction - greater involvement of faculty in online courses to establish interaction with

students. “Whereas students may sit passively in a classroom, they must interact in distance

courses because the technology utilized for delivery measures their participation” (p.10). As a

result, the report concludes, “Teaching online courses is more time consuming for faculty”

(p.15). Given that faculty time is a limited resource, this additional outlay of time must be

regarded as an opportunity cost.

The NCGA report echoes what numerous other researchers have found regarding the cost of

faculty-student interaction in online courses:

Rumble (2003) found that “in face-to-face tuition there is a clear cost control mechanism in

place – the timetable. The same is not true of online teaching, where the pressure is to

respond to students’ queries rapidly and individually. In one comparative instance reported,

the instructor’s workload more than doubled.” Rumble concluded that “online distance

education systems require more input from teachers than previous distance education

systems, not least because they enable greater interactivity between teachers and students”

(p.712).

Based on his research, Inglis (2003) concluded that the variable costs of online education

“increase because of the additional time taken to communicate in the written rather than the

spoken word, while fixed costs are likely to increase because of the additional investment in

infrastructure and support services” (p.738).

Arizona Learning Systems (1998) stated, “all providers of internet courses… have reported

that this direct communication [between teachers and students] takes more time than

preparation and delivery of a classroom lecture and the corresponding contact with students.

These faculty workload costs have pushed the typical direct cost per course enrollment of an

Internet course above that of the traditional classroom instruction,” (p.20). However, this

report suggested that faculty workload would eventually be reduced through improved

support and processes.

With regard to the comparative cost of faculty for online and on-campus courses, the 2010 North

Carolina General Assembly report stated that “costs for distance education instruction do not

differ from on-campus instruction because faculty costs are the largest factor, and in many cases

the same faculty, or a member of the faculty with a similar salary, teach each type of course”

(page 11). Further, this study found that the cost per student to deliver online courses was 29

percent higher than the costs in traditional classrooms (page 15).

Finally, numerous studies reported the same finding first published by Whalen and Wright

(1999), which is that the high costs institutions bear for course development are offset by

reductions in time required of students to take the course. However, these reductions are

generally experienced by students as decreases in travel time and costs, as well as decreases in

time spent away from work (therefore providing extra time to earn revenue to pay for school). In

other words, it’s the student who sees the return on investment for the high costs of development

for an individual course. Most recently, the 2010 North Carolina General Assembly report noted

that, though tuition may be higher for distance learning, total educational costs for students may

be lower because many indirect costs are reduced eliminated: “Travel costs are less, and there

may be fewer indirect costs such as child care or taking time off work to attend classes” (p.9).

Also, the study found that, if the alternative to distance is full-time campus enrollment, distance

saves students the costs of campus housing and the loss of job income while pursuing a degree.

The summary of findings regarding cost effectiveness of course delivery is that equivalent

amounts of faculty-student interaction in online courses is much more time-intensive for faculty,

and therefore much more expensive per course; that there may not be major savings of faculty

salary for online education because the same faculty who teach on-campus may be teaching

online courses, and that cost savings from online delivery are generally experienced by the

student as time savings from travel and savings from indirect costs associated with attending

school (such as parking and babysitting).

Brief Summary of Cost Analyses of Distance/Online Education

Jung (2003) best summarized the factors that go into cost accounting for online education when

she stated that, beyond technical infrastructure, the factors that affect cost and/or effectiveness of

online education are:

Number of students in a course

Number of courses offered

Amount of multimedia component in online courses

Amount of instructor-led interaction

Type of online education platform used

Choice of synchronous versus asynchronous online interaction

Completion rates (p.721).

Clearly, these factors are highly variable on a course-by-course, program-by-program, and

institution-by-institution basis, and therefore it is not possible to say in any absolute manner or

with any absolute certainty that online education is more, or less, expensive than on-campus

instruction.

Applying the findings from research to IU, Purdue and Ball State, it may be argued that these

institutions are currently experiencing the high costs of investing in infrastructure for online

education, which involves investments in human capital to develop and delivery online courses,

as well as investment in technical infrastructure. Further, the cost of investment in online

education at IU and Purdue may be higher than at many other institutions due to expectations for

high faculty-student interactivity in online courses, and frequent updating of course content that

is expected from research-intensive and comprehensive teaching institutions. Finally, Purdue, IU

and Ball State are clearly at the beginning stages of exploring new markets, and have not yet

developed (and may never develop) large new markets of students for online education

programs.

It appears that Purdue, IU and Ball State may be particular examples of what President-emeritus

Bowen has found in his study of institutions across the country. As he stated in his

commencement address, “At present, online instruction often does cost more because it

frequently requires more student attention than traditional face-to-face modes of teaching. …My

strong suspicion is that obtaining high returns is going to require the up-front investment of large

sums of money in the development of online courses that really make a difference in how

students learn. There have to be huge economies of scale here.”

Pricing Models for Distance Courses and Programs

Purdue Continuing Education commissioned Eduventures (2010) to conduct a review of how

aspirational peer institutions in distance learning priced their online offerings. The institutions

were Texas A&M, University of Wisconsin, University of Maryland, Indiana University,

University of Illinois, University of Georgia, and Penn State University. Results were mixed with

respect to differentials between online and campus tuition and fees: three institutions charged

less for online, two charged more, and one charged the same.

In Spring 2011, IU conducted its own internal study of pricing for online education at peer

institutions for both its research-intensive and comprehensive teaching campuses (including

institutions such as the University of Illinois and Ohio State, as well as Penn State-Harrisburg

and Western Michigan University), and also found pricing policies at the reviewed institutions to

be highly variable.

In the sections below, Purdue, IU and Ball State report on the pricing models used for

distance/online education at each institution.

Purdue University Pricing Models for Distance Courses and Programs

Purdue utilizes three pricing models for distance learning noting that pricing of distance learning

is not based on a costing model.

When Purdue offers courses to full-time campus students, pricing is the standard Board of

Trustee rates. Full-time students pay for online courses along with other courses in their

block tuition.

Purdue distance courses that are available to off-campus nondegree students, employ a

Treasurer-approved rate that is equivalent to the campus rate for state residents and one and a

half times that for nonresidents. This nonresident rate was enacted to make the courses viable

for nonresidents.

For distance degree or certificates for working professionals, pricing is determined by the

market based on studies of the market. Purdue policy states that market-based rates will not

be below campus resident fees. These nonstandard rates are approved annually on an

exception basis by the Vice President and Treasurer.

Again, it should be noted that in no case are tuition or fees based on cost. Broadly speaking,

University standard rates are set to cover University costs as supplemented by state funding,

research funding, and gifts and other revenue sources.

Indiana University Pricing Models for Distance Courses and Programs

At Indiana University, pricing of distance courses and programs has not historically been based

on a costing model.

Currently, Indiana University’s distance education fee rates for resident students generally

match the rates charged for the analogous on-campus program. This practice should not be

considered a university policy, but rather a reflection that as programs were started, the

simplest logic to apply at the time was to use the same fee rates.

For several distance education programs, nonresident fee rates are less that their on-campus

analogs, but generally at least 40% greater than the resident rate, to maintain a meaningful

distinction while recognizing market realities and competition.

Several distance education offerings charge a separate distance education course fee in

addition to the tuition. The fees range from $30 to $50, reflecting a portion of the additional

costs associated with developing and delivering the courses on-line. As with the tuition rate,

these fees were determined on a case-by-case basis.

There are a few notable distance education rates associated with various executive education

and other business programs in which the resident and nonresident rates are the same.

With the establishment of an Office of On-line Education in Spring 2011, IU expects to

develop and implement a set of policies to guide the setting of distance education rates,

taking into consideration costs, competition, and markets.

Ball State University Pricing Models for Distance Courses and Programs

At Ball State University, pricing of distance courses and programs is as follows:

For students taking at least one on-campus course, the tuition and fees are charged at the

same rate for on-campus and online courses.

Students taking no on-campus courses are not charged certain mandatory fees, including

Health, Recreation, Graduate Course and Student Service Fees (all students pay a technology

fee).

Certain programs and courses have additional special fees, but these fees are identical for on-

campus and online offerings.

References

Allen, B. & Seaman, J. (2010). Learning on Demand: Online Education in the United States,

2009. Downloaded from the web November 22, 2011 at:

http://www.sloanconsortium.org/publications/survey/pdf/learningondemand.pdf

ASHE. (August, 2006). Cost Efficiencies in Online Learning, ASHE Higher Education Report.

32(1).

Bacsich, P., Ash, C., Boniwell, K. & Kaplan, L., with Mardell, J. and Caven-Atack, A. (1999).

The Cost of Networked Learning. Sheffield, UK: Telematics in Education Research Group,

Sheffield Hallam University.

Bartley, S. & Golek, J. (2004). Evaluating the Cost Effectiveness of Online and Face-to-Face

Instruction. Educational Technology & Society, 7(4), 167-175.

Bartolic-Zlomislic, S., & Bates, A. (1999). Investing in Online Learning: Potential Benefits and

Limitations. Canadian Journal of Communication, 24.

Berners-Lee, T., et al. (August, 1994). The World Wide Web. Communications of the ACM,

37(8): 907-912.

Bettcher, J. (June 29, 2004). Online Course Development: What Does It Cost? Campus

Technology. Downloaded from the web November 22, 2011 at:

http://campustechnology.com/article.aspx?aid=39863

Bichelmeyer, B., Misanchuk, M., and Malopinsky, L. (2001). Adapting a Masters Degree

Course to the Web: A Case Analysis. Quarterly Review of Distance Education, 2(1), 49-58.

Bichelmeyer, B. & Pyke, J. (March 29, 2002). Feedback in a Distance Learning Environment:

Types and Frequencies. Presented at Indiana University Scholarship of Teaching and Learning

Forum, Bloomington, IN.

Bramble, W. & Panda, S. (2008). Economics of Distance Learning: Theory, Practice &

Research. New York: Routledge.

Cornford, J. & Pollock, N. (2003). Putting the university online: Information, technology and

organizational change. Philadelphia, PA: Open University Press.

Council of Regional Accrediting Commissions (July, 2009). Guidelines for the Evaluation of

Distance Education (On-Line Learning). Downloaded from the web November 22, 2011 at:

https://content.springcm.com/content/DownloadDocuments.ashx?Selection=Document,c00c3f32

-56e5-e011-adf4-0025b3af184e;&accountId=5968

Eduventures. (October, 2010). On-Campus and Online Pricing Models for Select Institutions.

Study Commissioned by Purdue University.

Higher Learning Commission (August, 2011). Substantive Change Application: Distance

Delivery. Downloaded from the web November 22, 2011 at:

https://content.springcm.com/content/DownloadDocuments.ashx?Selection=Document,e356a8b4

-4e91-df11-9372-001cc448da6a;&accountId=5968

Inglis, A. (2003). A Comparison of Online Delivery Costs with Some Alternative Distance

Delivery Methods. In Moore, M. & Anderson, W. (Eds.) Handbook of Distance Education.

Mahwah, NJ: Lawrence Erlbaum Associates, pp.727-740.

http://campustechnology.com/article.aspx?aid=39863

https://content.springcm.com/content/DownloadDocuments.ashx?Selection=Document,e356a8b4-4e91-df11-9372-001cc448da6a;&accountId=5968

https://content.springcm.com/content/DownloadDocuments.ashx?Selection=Document,e356a8b4-4e91-df11-9372-001cc448da6a;&accountId=5968

Jung, I. (2003). Cost-Effectiveness of Online Education. In Moore, M. & Anderson, W. (Eds.)

Handbook of Distance Education. Mahwah, NJ: Lawrence Erlbaum Associates, pp.717-726.

Kilby, T. (2001). The Direction of Web-based Training: A Practitioner’s View. The Learning

Organization, 8(5), 194-199.

Morgan, B. (2001). Is Distance Learning Worth It? Helping to Determine the Costs of Online

Courses. Downloaded from the web November 22, 2011 at:

http://isat-cit.marshall.edu/distance/distancelearning.pdf

North Carolina General Assembly Program Evaluation Division. (2010). University Distance

Education Courses Cost more to Develop but the Same to Deliver as On-Campus Courses.

Downloaded from the web November 22, 2011 at:

http://digital.ncdcr.gov/cdm4/document.php?CISOROOT=/p249901coll22&CISOPTR=46669&

REC=4

Robinson, E. (2003). Return on Investment for Distance Education Offerings: Developing a

Cost-Effective Model. In Howard, et al (Eds). Distance Learning and University Effectiveness.

Hershey, PA: Information Science Publishing, pp.253-277.

Rumble, G. (2003). Modeling the Costs and Economics of Distance Education. In Moore, M. &

Anderson, W. (Eds.) Handbook of Distance Education. Mahwah, NJ: Lawrence Erlbaum

Associates, pp.703-716.

Schnabel, B. (2010). Indiana University Strategic Plan for Online Education. Downloaded from

the web November 22, 2011 at:

http://www.iu.edu/~vpurapp/ssi/doc/StrategicPlanforOnlineEd.pdf

Whalen, T. & Wright, D. (1999). Methodology for Cost-Benefit Analysis of Web-Based Tele-

Learning: Case Study of the Bell Online Institute. American Journal of Distance Education,

13(1): 24-44.

http://isat-cit.marshall.edu/distance/distancelearning.pdf

PURDUE UNIVERSITY Instructional Fee Rates (Tuition) for Online Education Offerings

* The default rate for online instruction is the same as the Trustee‐approved on‐campus rate. Exceptions are noted in the table.

Instructional Fee Rates (Tuition)* Residency 2011‐12

Institution/Campus Level and Program Status Online Rate * On‐campus rate DifferentialPurdue West Lafayette Engineering Professional Education per 3 credit hour course ** Both 3,096.00$ $336.10 / $916.25 per

credit hour $543 per semester

Purdue West Lafayette Engineering Professional Education per one credit hour course ** Both 1,215.00$ $336.10 / $916.25 per credit hour

$543 per semester

Purdue West Lafayette Engineering Professional Education per one credit hour course if 2 or more course taken. **

Both 940.00$ $336.10 / $916.25 per credit hour

$543 per semester

Purdue West Lafayette Engineering Professional Education per 3 credit hour Project/Thesis course **

Both 4,128.00$ $336.10 / $916.25 per credit hour

$543 per semester

Purdue West Lafayette Engineering Professional Education per one credit hour Project/Thesis course **


$543 per semester

Purdue West Lafayette Engineering Professional Education per 4 credit hour Project/Thesis course **


$543 per semester

Purdue West Lafayette Veterinary Technology Distance Learning Program ‐ Undergraduate Both 347.85$ no equivalent N/A

Purdue West Lafayette Agricultural Economics Masters Degree per credit Both 1,145.00$ $336.10/ $916.25 N/APurdue West Lafayette Masters in Industrial and Physical Pharmacy per credit Both 1,000.00$ $336.10/ $916.25 N/APurdue West Lafayette Non Traditional Doctor of Pharmacy Program per credit (Resident) Resident 660.00$ 336.10$ N/A

Purdue West Lafayette Non Traditional Doctor of Pharmacy Program per credit (Non‐Resident) Non‐Resident 1,230.00$ 916.25$ N/A

Purdue West Lafayette Executive Masters in Business Program per module Both 26,000.00$ no equivalent N/APurdue West Lafayette Reading Recovery Program per credit hour fee Both 336.10$ $336.10/ $916.25 N/APurdue West Lafayette International Masters in Management per module Both 25,000.00$ no equivalent N/APurdue West Lafayette Masters in Technology ‐ Building Construction Management per credit

hour (Resident) Resident 682.00$ 336.10$ $273 per semester

Purdue West Lafayette Masters in Technology ‐ Building Construction Management per credit hour (Non‐Resident)

Non‐Resident 906.00$ 916.25$ $273 per semester

Purdue West Lafayette Masters in Technology ‐ Aviation Technology per credit hour Both 750.00$ $336.10/ $916.25 $273 per semesterPurdue West Lafayette Masters in Technology ‐ Concentration ‐ Organizational Leadership

Supervision per credit hour (Resident) Resident 750.00$ 336.10$ $273 per semester

Purdue West Lafayette Masters in Technology ‐ Concentration ‐ Organizational Leadership Supervision per credit hour (Non‐Resident)


Purdue West Lafayette Masters in Technology ‐ Concentration ‐ Information Technology Project Management per credit hour

Both 750.00$ $336.10/ $916.25 $273 per semester


Institution/Campus Level and Program Status Online Rate * On‐campus rate DifferentialPurdue West Lafayette Masters in Technology ‐ Concentration ‐Technology and Innovation per

credit hour (Resident) Resident 750.00$ 336.10$ $273 per semester

Purdue West Lafayette Masters in Technology ‐ Technology and Innovation per credit hour (Non‐Resident)


Purdue West Lafayette Education M.S. Learning Design & Technology per credit hour (Resident) Resident 347.85$ 336.10$ N/A

Purdue West Lafayette Education M.S. Learning Design & Technology per credit hour (Non‐Resident)

Non‐Resident 668.15$ 916.25$ N/A

* Online rates include Technology, R & R and differential fees.

** Engineering Professional Education Degrees include

Masters of Science in Engineering ‐ Interdisciplinary Engineering Concentrations:

Engineering Management & Leadership

Biomedical Engineering

Computational Engineering

Integrated Vehicle Systems

Masters of Science in Aeronautics and Astronautics

Masters of Science in Electrical and Computer Engineering

Masters of Science in Mechanical Engineering

Masters of Science in Industrial Engineering


Institution/Campus Level and Program Status Online Rate * On‐campus rate DifferentialPurdue North Central Undergraduate Distance Education, Resident Resident 209.40$ 209.40$ Purdue North Central Undergraduate Distance Education, Nonresident (for students from

states participating in the Midwest Student Exchange Program)Nonresident 261.75$ 261.75$

Purdue North Central Undergraduate Distance Education, Nonresident Nonresident 525.65$ 525.65$ Purdue North Central Graduate Distance Education, Resident Resident 263.65$ 263.65$ Purdue North Central Graduate Distance Education, Nonresident (for students from states

participating in the Midwest Student Exchange Program)Nonresident 329.56$ 329.56$

Purdue North Central Graduate Distance Education, Nonresident Nonresident 611.80$ 611.80$

IPFW Undergraduate Distance Education Resident 281.05$ 215.85$ IPFW Undergraduate Distance Education Nonresident 281.05$ 564.15$ IPFW Graduate Distance Education Resident 281.05$ 273.70$ IPFW Graduate Distance Education Nonresident 281.05$ 661.00$

* In addition to paying the online tuition fee, IPFW students are assessed the following per credit hour fees: Technology fee ($8.35/credit hour); Student Service fee ($11.90/credit hour); Parking fee ($6.10/credit hour); Facility fee/Repair & Rehab fee/Facility Repair & Exp.fee ($6.25/credit hour). for a total of $313.65/credit hour, which is equal to the Statewide Education Fee.Purdue Calumet HTM Certificate ‐ Undergrad Both 200.00$ no equivalentPurdue Calumet Nursing BHS RN to BSN ‐ pre‐ requisites ‐ Undergrad Both 323.15$ no equivalentPurdue Calumet Nursing BHS RN to BSN ‐ Undergrad both 276.61$ no equivalentPurdue Calumet CET ‐ Undergrad Resident 204.00$ $204.00 /cr hrPurdue Calumet CET ‐ Undergrad Non‐Resident 488.90$ $488.90/cr hrPurdue Calumet ICN English ‐ Undergrad Resident 204.00$ $204.00 /cr hrPurdue Calumet ICN English Non‐Resident 488.90$ $488.90/cr hrPurdue Calumet EDCI ‐ Graduate Both 399.95$ no equivalentPurdue Calumet Educ Admin ‐ Graduate both 399.95$ no equivalentPurdue Calumet IPFW Nursing ‐ Graduate Both 399.95$ no equivalentPurdue Calumet Nursing Online Masters ‐ Graduate Both 399.95$ no equivalent

Note: non‐discounted Nursing Academic partners tuition rates are listed.

Instructional Fee Rates (Tuition) for Online Education Offerings

* The default rate for online instruction is the same as the Trustee-approved on-campus rate. Exceptions are noted in the table.Online

Instructional Fee Rates (Tuition)* Residency 2011-12Institution/Campus Level and Program Status Rate On-campus rate Justification/Explanation/Circumstances

IU Bloomington Business Kelley Blended Program MBA Both 1,500.00$ no equivalent Market- and demand-driven rateIU Bloomington Business Kelley Direct MS/MBA (Public) Both 1,145.00 no equivalent Market- and demand-driven rateIU Bloomington Business Kelley Direct Thunderbird (per term) Both 11,714.00 No equivalent. Market- and demand-driven rateIU Bloomington Business Global Executive MBA Both 1,665.00 Market- and demand-driven rateIU Bloomington Education M.S. in Instructional Systems Technology Both 377.66 377.66 Approved long ago at in-state rates for perceived reasons of access.IU Bloomington Education M.S. in Language Education Both 377.66 377.66 Approved long ago at in-state rates for perceived reasons of access.IU Bloomington HPER Undergraduate, Resident Resident 263.45 263.45 Same as on-campus rate.IU Bloomington HPER Undergraduate, Nonresident Nonresident 316.14 889.03 Lower non-resident rate for marketability/competition.IU Bloomington HPER Graduate, Resident Resident 331.60 331.60 Same as on-campus rate.IU Bloomington HPER Graduate, Nonresident Nonresident 397.92 965.70 Lower non-resident rate for marketability/competition.IU Bloomington HPER M.S. in Therapeutic Recreation Both 331.60 331.60 Approved long ago at in-state rates for perceived reasons of access.IU Bloomington SPEA Master of Public Affairs, Resident Resident 498.00 415.00 Market- and demand-driven rateIU Bloomington SPEA Master of Public Affairs, Nonresident Nonresident 902.00 902.00 Same as on-campus rate.IUPUI Business Kelley Direct MS/MBA (Public) Both 1,145.00 No equivalent. Market- and demand-driven rateIUPUI Business Kelley Direct Thunderbird (per term) Both 11,714.00 No equivalent. Market- and demand-driven rateIUPUI Computer Information Leadership Technology program Both 89.25 $341.90/$977.70 Lower rate set to attract students to certificate programIUPUI E&T Undergraduate Certificate in Computer Technology Both 311.40 $247.90/$860.00 Undifferentiated-by-residency rate set slightly higher than on-campus residentIUPUI E&T Master's in Facilities Management, Resident Resident 414.50 341.90 Market- and demand-driven rateIUPUI E&T Master's in Facilities Management, Nonresident Nonresident 545.00 977.70 Lower non-resident rate for marketability/competition.IUPUI Medicine Undergraduate Histotechnology Both 195.46 $247.90/$860.00 Program originally approved at NW transferred to IUPUI with lower rateIUPUI Nutrition & Dietetics Graduate Certificate, Resident Resident 495.00 303.00 Market- and demand-driven rateIUPUI Nutrition & Dietetics Graduate Certificate, Nonresident Nonresident 610.00 912.10 Lower non-resident rate for marketability/competition.IUPUI Master of Social Work, Resident, On-line Resident 500.00 371.00 Market- and demand-driven rateIUPUI Master of Social Work, Nonresident, On-line Nonresident 600.00 855.00 Lower non-resident rate for marketability/competition.IU East Undergraduate Distance Education, Resident Resident 193.94 193.94 Same as on-campus rate.IU East Undergraduate Distance Education, Nonresident Nonresident 275.07 546.76 Lower non-resident rate for marketability/competition.IU East Graduate Distance Education, Resident Resident 238.06 238.06 Same as on-campus rate.IU East Graduate Distance Education, Nonresident Nonresident 332.63 581.49 Lower non-resident rate for marketability/competition.IU Kokomo Undergraduate Distance Education, Resident Resident 193.47 193.47 Same as on-campus rate.IU Kokomo Undergraduate Distance Education, Nonresident Nonresident 275.08 530.36 Lower non-resident rate for marketability/competition.IU Kokomo Graduate Distance Education, Resident Resident 237.76 237.76 Same as on-campus rate.IU Kokomo Graduate Distance Education, Nonresident Nonresident 332.20 554.95 Lower non-resident rate for marketability/competition.IU School of Continuing Studies Undergraduate Independent Study, Resident Resident 183.07 247.90 Correspondence rate historically lower IU School of Continuing Studies Undergraduate Independent Study, Nonresident Nonresident 212.82 860.00 Correspondence rate historically lower IU School of Continuing Studies M.S. in Adult Education, Resident Resident 297.40 377.66 Lower resident rate for marketability/competition.IU School of Continuing Studies M.S. in Adult Education, Nonresident Nonresident 416.30 1,099.87 Lower non-resident rate for marketability/competition.

Online delivery course fees: Several programs assess a course fee in addition to tuition rates. This fee covers additional costs associated with the course and ranges from $30 at East and Kokomo to $39 to $50 at IUPUI and Bloomington.

EXPLANATION OF RATE DIFFERENCES:* For online rates equal to on-campus, the explanation is this has been the standard policy for IU,* For online rates lower than on-campus, the explanation is to address competition and to attract students/increase demand,* For online rates higher than on-campus, the explanation is that for high-demand programs, we set a market-driven rate to appropriately differentiate ourprogram from competitors.

11/28/2011

For students taking at least one on-campus course, the tuition and fees are charged at the same rate for on-campus and on-line courses

Students taking no on-campus courses are not charged certain mandatory fees, including Health, Recreation, Graduate Course & Student Service Fees (all students pay a technology fee)

Certain programs and courses have additional special fees, but fees are identical for on-campus and on-line offerings

resident non-resident on-campus rate

For UG students enrolled in no on-campus courses $257 $454 same (1) for students in 12-18 hour bracket: $3,341 resident and resident fee + $197 per hour for non-resident

For Grad students all hours charged identical to on-campus except no $52/hr. grad fee $284 $481 same (1) no bracket for grad students - all courses charged per credit hour

MBA Online program $370 $721 $284/$481 On-campus MBA courses charged the same as all Grad programs

Ball State UniversityTuition rates for On-Line Education 2011-12

Costs and Pricing of Distance/Online Education Programs

Documents

Transcript of Costs and Pricing of Distance/Online Education Programs