Can we keep offering online education on the cheap?
When “Degree” Becomes “Kind”
When changes like that happen, they upend “cost per student” calculations. When the marginal cost of another section is simply the cost of the adjunct who teaches it, the college comes out ahead with reasonable enrollments, even at our low tuition level. But when enrollment gains hit the point that you have to start adding staff in the library, the financial aid office, OSD, and the like, you fall behind again pretty quickly. That’s roughly where we are with online. The enrollments, and expectations of those enrolled, are getting to the point where we can’t just run it off the corner of someone’s desk anymore. That means an abrupt increase in our overhead costs at a time when any increase in overhead is deeply suspect, if not out of the question.
Much of the popular discussion of the economics of online education -- both in the press and in the academic blogs -- just gets it wrong. The institutional savings, if any, don’t come from larger class sizes. If you do online education right, it’s labor-intensive. Frankly, if reducing labor costs is your primary motive, you can’t do much better than the traditional overstuffed lecture taught by an adjunct. On a per-student basis, the labor costs of that are minuscule. The institutional savings from online education come mostly from infrastructure. Adding server space is dramatically (and increasingly) cheaper than adding classroom space. You don’t have to add parking, or heating costs, or seats in the library. When your physical campus is running full, this is no small consideration.
When you can add students without adding to infrastructure, and without adding to your support staff, you can come out ahead. We’ve coasted on that for several years now.
It’s becoming clear, though, that we can’t keep coasting that way. Online students are starting to demand a full panoply of services, and to expect that those services will be available on the same basis as the classes themselves. And the numbers now are big enough that the workarounds are simply untenable.