Online Instructional Cost Study Minnesota State Colleges and Universities Board of Trustees November

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Online Instructional Cost Study Minnesota
State Colleges and UniversitiesBoard of
TrusteesNovember 13, 2007
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Objectives of the Study

• Address the question What is the cost of online
  instruction in relation to the cost of classroom
  instruction?
• Provide a basis for strategic planning given the
  increasing student demand for online courses and
  programs
• Improve competitive advantage in the online
  marketplace

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Components of Study

• Findings
• Instruction (50 of total costs)
• Course development
• Non-instruction
• Demand in the online market
• Assessment of quality
• Tuition
• Business case
• Next Steps

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What is an online course?

• A course that is predominately online where a
  maximum of two activities may occur face-to-face
  in a classroom.
• Two other types of courses have a portion of
  instruction online
• Web-enhanced Limited classroom time
• Web-supplemented No reduced seat time
• These are not considered online courses

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Findings for FY2007

• 1. Institutions have developed online courses and
  related support using a variety of strategies
• Online is developing at different rates
• Online has been funded primarily through local
  and incremental resources
• For those that have been delivering online
  courses the longest, online has been integrated
  into the organization and is becoming just
  another (albeit important) mode of delivery

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Findings for FY2007

• 2. Online instructional expenditures are
  comparable to those for classroom
• Statistical Analysis
• Online not a strong indicator
• Other factors are more important
• Faculty, course and institutional characteristics
• Direct expenditure comparison
• About half (51) of online sections were more
  expensive
• Other factors
• Faculty profiles of both are similar
• Costs appear to be trending down

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Findings for FY2007

• 3. Course development costs for online courses
  appear to be slightly higher
• Part of instruction
• Data not available from information system
• Conducted survey
• Institutions generally spend more for online
  course development than for classroom
• Institutions add courses with available
  institutional funds
• Much of the course development has been done by
  faculty without institutional or system support

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Findings for FY2007

• 4. Non-instruction lack of available data makes
  drawing conclusions difficult
• Data not available - expenditures not tracked by
  student type
• Conducted survey
• A few consider online costs as distinct and are
  able to identify specific online costs
• Others view activities as being shared and cannot
  readily identify online-specific costs
• Costs for online appear to be slightly higher
• Services provided to online students are usually
  the same as those provided to all students
• Online students also take onground courses

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Most online students in MnSCU are also enrolled
in classroom courses
Headcount Students in Online Courses
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Findings for FY2007

• Summary
• Instructional costs are comparable
• Online course development costs are slightly
  higher
• Non-instructional costs for online appear to be
  slightly higher
• Difficult to draw firm conclusions
• Differences among institutions
• Need to view online costs within larger context
  of demand and market

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MnSCU online enrollment growing
Online Student headcount in credit courses
Online as a of total
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10
12
17
21
25
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Online enrollment nationally has more than
doubled in past five years
Fall enrollment estimates
Online Nation Five Years of Growth in Online
Learning Sloan Consortium, November 2007
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Assessment Quality

• Assessment of online quality on par or ahead of
  onground
• Accreditation for all online programs
• Sanctioned through Higher Learning Commission
• Course-level quality assurance
• Course Site-readiness rubric
• Quality Matters initiative
• Online student satisfaction surveys
• 24 institutions are using instrument
• Audits of online student support services
  http//www.centss.org/

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Tuition

• What is market-driven tuition?
• MnSCU Board policy 5.11
• Market-driven tuition
• Colleges and universities may set and charge
  market-driven tuition for customized training,
  continuing education, distance learning,
  non-credit instruction, and contract
  post-secondary enrollment options programs.

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Tuition Charged in the Online Market
Tuition Rates of Largest National and Regional
Online Providers Average tuition for a full-time
full-year student
Data from Education Department, National
Education Statistics when available, or
organizations websites
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MnSCU market-driven tuition

• Average rate per credit difference between online
  market-driven tuition and regular tuition rates
  is 27 or 20
• Market-driven tuition rates for online range
  from 113 to 192 per credit
• 15 of the 16 institutions with the highest
  market-driven tuition rate differentials are
  out-state
• MnSCU Finance studying tuition issue

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Business Case

• The business case for support and delivery of
  online is made at the institution
• Each institution weighs the factors affecting how
  they deliver and support online courses
  including mission, cost, demand, and tuition
• Minnesota Online assists with basic
  infrastructure, marketing, and student support
  services through funding from the 5 per online
  credit charge back to institutions

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Next Steps

• Determine the best model to assist institutions
  in serving students most effectively
• Collaborative and coordinated
• Competitive and independent
• The role of the institution and the system
• Ongoing analysis
• Incorporate findings into Finance tuition study

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Online Instructional Cost Study Minnesota
State Colleges and UniversitiesBoard of
TrusteesNovember 13, 2007
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RESOURCES

• NOT PART OF PRESENTATION

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C. Non-instructional costs
How the Minnesota Online 5 per credit
institutional fee assessment funds are spent
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Why its difficult to separate online from other
student costs- EXAMPLE

• Most students use both online and campus-based
  services

Form of Registration FY2007
Web registration 80
Other methods 20
Source ISRS
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Why its difficult to separate online from other
student costs- EXAMPLE
More classroom courses use the online learning
management system than online courses
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Profile of Students

MnSCU Research and Planning, FY2006
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Context and demographics

• Purpose of Online Delivery
• To promote access
• To meet market demand
• To respond to increased competition
• To operate efficiently and effectively
• To meet stakeholder expectations
• From the Minnesota Online charter, 2002