The Tipping Point in Distance Education May Be Closer Than You Think

Over my past 15 years in online higher education, most related industry research came from the Sloan Consortium (now Online Learning Consortium, or OLC). Many higher education institutions did not offer online courses earlier on and many whose experience was limited to traditional classroom instruction were skeptical of the new format. As a result, OLC surveyed provosts annually to monitor changing perceptions of online education. While the acceptance of online learning improved over time with chief academic officers, faculty acceptance at traditional institutions trailed.

Fortunately for institutions offering online programs, students didn’t heed the cautions of faculty and provosts, and online enrollments increased steadily. In fact, in February 2016, the Babson Survey Research Group reported that 5.8 million American college students took at least one online course the prior year, representing approximately 28% of all students enrolled in 2015.

While I don’t pretend to be a futurist, the confluence of several events over the past year led me to rethink why the number of students studying online might one day exceed that of those attending traditional campuses. Daily headlines continue to reflect state budget crises. Despite politicians’ claims to the contrary, the U.S. economy has not recovered since 2008, and many states continue to have revenue shortages causing them to cut funding to agencies, including public institutions of higher education. Many of those institutions increase tuition at rates higher than the increase in the consumer price index or simply cut programs and services to make up for reduced state funding.

As an executive in higher education, I fully understand the concept of “sticker shock” experienced by fellow parents in financing their children’s college studies. However, it did not truly register with me until my own children began their college search process last year. The colleges that they considered are ranked in the U.S. News & World Report top 100. As a dutiful dad, I created a matrix to compare the data (quantitative and qualitative) for their favored institutions, including tuition and fees, room and board, acceptance rate, # of students, SAT/ACT requirements and averages, and discount rates/merit scholarships. Several of those schools have estimated annual costs exceeding $70,000 annually.  I know how to access College Navigator and find tuition and fees and net price for any institution, but now have much more compassion for fellow parents who experience sticker shock.

Even though my wife and I attended private universities, the tuition gap between public and private institutions today is hard to ignore. Even more noticeable is the total cost of attendance gap between APUS (our core mission is to educate those who serve; mostly working adults) and most of these schools (whose students generally fall into the more traditional ages of 18-22 with a substantial percentage of them receiving support from their parents). While APUS does not offer the same ambiance of living on campus and socializing with classmates, the associated costs are becoming less affordable for many. An online student, in contrast, can study with peers from across the country and around the world and do so from their office, home or while travelling. Students who can’t afford room and board have a less expensive option.

Whether you are a professional educator or just someone who has helped your children or others with homework, it’s clear that few people learn alike. The adaptive technology that enables online courses to provide “personalized learning” is improving rapidly. If you take a course where your incorrect answers prompt the learning management system to adjust and serve additional material until you master the concept, you’re likely to learn more than if you sat in a large class with lectures and textbooks. APUS has partnered with a company offering this type of software, Realizeit, to build courses for our new Momentum™ competency-based programs.

My children have attended traditional schools since kindergarten. None of them offer online courses. Last summer, one of my daughters took an online biology course. I observed more of the course than I expected because the virtual school that offered it, National Connections Academy, required a contact for teacher-parent updates and supervision of some quizzes and exams. The course was well designed, mixing reading and viewing assignments with tutorials and quizzes, and allowing for adequate review of concepts before major tests and exams.

I viewed more of the content and delivery of that class than any of the traditional classes attended by my daughter (not that I know any parent who has been invited to observe high school classes with their children). Because of the well-organized design of the online course, I believe that she learned more from that class than from some of her traditional high school classes. As an added bonus, the cost of the course was substantially less than the tuition at her private school, when divided by the number of classes she takes annually.

I recently read an article, “In 18 Years, A College Degree Could Cost About $500,000,” citing a study by investment company Vanguard stating that college tuition has increased an average of 6% annually over the past 20 years. If tuition, fees, room and board continue to increase at the same rate over the next 18 years, one year at a private institution will be more than $120,000 and public institutions will average $54,000. I believe that the availability and scalability of online courses and programs will preempt this scenario unless an elite institution chooses to continue to take advantage of the scarcity of an educational experience at their institution. I also believe that many traditional institutions relying on tuition and fees as their primary source of revenue may plateau unless they succeed in diversifying their revenue stream and/or build a very large endowment. States will likely consolidate public colleges in order to reduce duplicative offerings and lower their overall cost of funding.

While many parents like me would like to see their children attend traditional college, it is unaffordable for many. Cost is a top reason why students fail to graduate. At the same time, today’s Millennials are much more comfortable accessing the Internet for answers, services and social connections. Living in a dorm and attending classes in the traditional semester format may not be as important to these students as they consider their options. As demand for online courses continues to increase, some institutions will price their courses more competitively to capitalize on the scale of their offerings. I therefore believe we are close to a tipping point where the number of students taking online courses will increase at a higher rate than it has over the past few years.