Offering Online Courses: A Cost-Effective Adventure for Distance Education Providers?

Higher education is faced with a surge in enrollments without having to invest capital funds for brick-and-mortar infrastructure growth. Many colleges and universities have been quick to include distance education in their programs to increase in cyberspace what they have difficulty doing physically (Boet-tcher, 2000; Morgan, n.d.; Tallman, 2000).

In the preparations for “going the distance,” most providers include in their prognosis the cost of acquiring a server and other equipment and designing an infrastructure necessary to offer online courses successfully. What is often missing are policies and procedures for faculty training and for faculty compensation for teaching online. In addition, once the technology is in place, there are additional questions to answer such as whether there are limits to class sizes in online environments, to what extent faculty have been trained in online teaching, and how faculty are compensated.

The cost of making a course available for the first time can differ considerably. Traditionally in academe, faculty have designed and developed the courses they are responsible for as an additional task to their daily work. Boettcher (2000) gives a formula for time committed to designing a three-credit course. It includes preparation of materials, presentation of materials in class (lecturing), interaction with students related to the course in and outside the classroom, testing, assessment, and grades assignment. The total number of hours comes to about 135, based on 15 weeks of 3 hours a week and the conservative ratio of for each hour spent in class another 2 hours are spent out of class. Maxey (personal communication, 2005), estimates that the cost of updating and teaching a three-credit course is about $3,500.

A leaflet that appeared a couple of years ago made the assumption (while advertising a conference on “Developing Online Courses”) that the average online class will have 100-1,000 participants. Should any decision makers worry that these cash cows could trample something of value, the next bullet item in the leaflet assured them that “there’s more learning in high enrollment courses.” These assumptions are too confused to be taken seriously. It is, of course, possible to offer courses to 10,000 or more people, but it is not likely that this will happen soon, and still less likely that they would produce more learning than typical face-to-face classes (Cahoon, 2000).

Although there is a wide variety of issues involved in putting a course online, concrete information is scarce. This is understandable, as there are many varying factors such as the cost of the technology used, the sophistication of the technology, the complexity of the course/program, and the method used for its development.

Based on figures that have been made available by the University of Massachusetts Boston (Maxey, personal communication, 2005), three principle methods can be used to design a course (see Table 1).

It will be clear that designing and developing a course using a course team approach, although much more expensive, leaves time for faculty to focus on pedagogical issues and allows staff to keep up with the latest developments in technology and learning management systems. Few faculty members have the time to devote to the learning curves associated with all the tasks of online course development. The benefit for students is that a course created through the efforts of a development team is more likely to meet high quality standards (Ragan & Terheggen, 2001).

Frank Mayadas, the director of the Sloan Foundation’s Asynchronous Learning Network, says they encourage participating institutions to limit their course development costs and to avoid making use of much very high-priced media. Their advice is to spend between $5,000 and $15,000 to develop a course. Many commercial companies spend much more on developing courses: some have put millions of dollars into a single course, making it impossible to compare their costs with those of nonprofit universities. According to Mayadas, the model the Sloan Foundation offers ensures that the cost of creating the course is not too high, and that the cost of delivery is roughly the same as if it is delivered on campus. It is expected that eventually the cost of creating and teaching an online course will end up being 20% lower than the cost of developing and teaching a traditional course. Leroy W. Dubeck, the chairman of the budget committee of Temple University’s Faculty Senate, remarked that many colleges greatly underestimate the cost of designing, developing, and offering online courses and programs. It seems that those who think that they will make money may be disappointed. Some universities offer online course with an extra overhead, and still manage to get students, while other universities include technology fees to increase their income from online courses. In all cases, numbers are important to get the investment back (the money spent on developing the courses, paying faculty, and offering quality support services). Myers, of Maryland’s University College, says that online programs are expensive to develop and even more expensive to develop well. He added that administrators who want to recoup their development costs on online programs will have to spend more time creating and following a business plan than they are accustomed to. Maryland University College spent slightly more than $1 million on its online MBA program, and is “very close” to having fully recouped the development costs. The $1 million was used to buy the program’s technological infrastructure and to create an assessment team to monitor the performance and satisfaction of students and faculty members, among other things (Carr, 2001).

Not all programs, though, have proved financially viable. Maryland officials, for instance, canceled a distance program in engineering management. Other institutions are trying to get a better handle on costs and revenue-generating potential to determine how quickly they should expand their online programs (Carr, 2001).

At the Rochester Institute of Technology (RIT), the Sloan study was timely because university administrators had decided to broaden their program and needed to figure out how much that would cost, says Christine Geith, RIT’s executive director of online learning. She recognizes that it is one thing to put one course online. The costs are really easy to identify, and the faculty member can shoulder the burden of being the virtual university, but if initially the distance program counts for 10% of the total operations, it is important to seriously consider how to set up student support services.

Pamela Quinn, the assistant chancellor at the Dallas County Community College District’s R. Jan LeCroy Center for Educational Telecommunications, observes that many colleges are hitting a point where they have to decide whether they want to become fully ramped-up distance education providers and, if they do so, some may have to add new positions such as instructional designers to their online programs. To make such decisions, it is important to be well aware of what the cost and the benefit of online education is for the providing institute and what additional resources are necessary if one wants to include distance education programs and courses. Costing may be a complicated and challenging business. There are the fixed costs (generally independent of the number of students enrolled) and the variable costs (influenced by the number of students enrolled). Enrolling a greater number of students will not influence the fixed costs, but one will need more instructors, and have an increase in variable costs like communication. These are considerations and decisions that are not based on just trying out, but have to be grounded in serious strategic planning, taking the market and its opportunities and threats into consideration. The Sloan studies, in fact, varied considerably in what they counted as costs or expenses. A study to examine the costs of an online master’s program in information systems of the Drexel University found that there are three main categories of costs that make online programs expensive to deliver: technical support, technology, and extra faculty. However, if the money saved on buildings and land is taken into account, distance learning can become considerably more cost-efficient. The number of enrollments is crucial in these cost-efficiency calculations (Carr, 2001).

In just one year, from 2003 to 2004, online enrollment in the United States increased from 1.98 million to 2.35 million (Allen & Seaman, 2005). This means that more online instructors will continue to be needed and increasing numbers of those who used to teach face-to-face will gradually have to familiarize themselves with online teaching. Some will gladly accept the challenge, while others may do so reluctantly.

Management theorist Peter Drucker predicted some ten years ago that higher education institutions in their current form will be relics in a matter of a few short years. His message was clear: change or die (Lenzer, 1997). Regardless of whether faculty consider online education a positive or negative development, they may have to go with the flow. Institutes that provide online courses have the important role to ensure faculty are well trained so that the change from face-to-face teaching to online teaching is a smooth one. Emphasizing that content is more important than technology may encourage faculty to face online delivery as part of their teaching obligations and enrich their experience.

It is generally agreed that distance learning requires more time on the part of the faculty (Grenzky & Mailand, 2001). According to Morgan (n.d.) faculty spend half an hour per week with each student outside of class in distance learning. Based on Morgan’s survey, faculty noted an over-50% increase in time needed when teaching online courses; others, however, reported that the time is nearly double that of traditional courses (McKenzie et al., n.d., as cited in Parker, 2003).

The general agreement among online faculty is that teaching online courses is more labor intensive, may be the reason that students often complain that the instructors do not have enough time for them. Beaudoin (2005) speaks about the invisible instructor in online teaching.

Student satisfaction in online courses is highly correlated with interaction with the instructor (Shea, Swan, Fredericksen, & Picket 2001; Trippe, 2001). Many online instructors, however, do not have the experience of having been an online learner. They have only been involved in one side of the process: the instructional process. That is different in traditional education. We have all spent years sitting in a classroom and have been exposed to the “sage on the stage.” It may thus, sometimes, be not easy for online instructors to imagine how students feel if they, for instance, do not hear from their instructor, or get an ambiguous answer to a question they have posted. Online students sometimes are very much aware of the absent instructor; as one student wrote, “the noncommunication of the instructor made me depressed,” and another student, discussing the presence/absence of the online instructor, wrote, “I have had online instructors who have constantly been absent, they got in touch with us only once or twice during the 16 week course.” Class size may be a very important factor in how faculty engage in online teaching. The compensation structure often encourages increased class size. Class size and compensation vary across the country. One college in Illinois sets class sizes at an average of 25, with no more than 30 students, maximum, while a community college in Oregon has more than 100 students enrolled per instructor (Maitland, Hen-drickson, & Dubeck, 2000). As with determining the cost of putting a course online, there seems to be no formula for determining the maximum number of students an instructor can efficiently and effectively manage. Lynch and Corry (1998) are of the opinion that some faculty can be hired exclusively for course design, while others will be hired for instruction. Looking at cost-efficiency the number of students makes a difference. If instructor A receives $3,200 for teaching an online management of distance education course to 10 students during 16 weeks, and the following year instructor B receives the same amount for teaching the same course, but has 30 students, the cost per student for instruction is $200 in the first case and $67 in the second case. The concern that the quality will diminish with an increased number of students, and thus more work seems to be a valid one.

Financial compensation is not necessarily the only reward. To do something well, one must be motivated. Motivation may be extrinsic, such as receiving release time or extra pay, or it may be intrinsic, such as self-satisfaction or intellectual stimulation. In a review of 102 articles, Parker (2003) looked at the intrinsic rewards listed by faculty

Research showed that self-satisfaction, flexible scheduling, and a wider audience making it possible to teach one’s preferred classes often, are intrinsic motivators for online faculty, while stipends, decreased workload, release time, and new technology are extrinsic motivators. Appealing to the motivators of the faculty will contribute to ensuring dedicated, efficient, effective and affective student support.

In this article, we have looked at only two aspects of online teaching and learning: (a) the preparedness of institutions to go online as reflected in the their awareness of the need for a strategic plan and a concern for overall quality and (b) the role of faculty as critical in motivation and in the achievement of successful online teaching and learning. Although many other issues are involved in the decision to offer online courses, the centrality of the above factors causes them to merit special attention.