2006 November 11 Saturday
Online Education Rising Rapidly

Online education is taking off.

The Sloan Survey of Online Learning, "Making the Grade: Online Education in the United States, 2006" shows tremendous growth in online learning in America. The complete survey is available at www.sloan-c.org/publications/survey/index.asp.

"This is the largest study to date and it tells us online learning is growing without any sign of a plateau," says Jeff Seaman, chief information officer and survey director, The Sloan Consortium. "There were nearly 3.2 million students taking at least one course online this past fall, up from 2.3 million just last year."

The fourth annual survey is a collaborative effort between the College Board and the Sloan Consortium. It's based upon responses from more than 2,200 colleges and universities nationwide and represents the state of online learning in U.S. higher education.

"We include Sloan questions in the College Board's Annual Survey of Colleges to better understand the state of online learning at our country's institutions of higher education," said Hal Higginbotham, chief information officer, the College Board. "The insight we gain from the survey enables us to better serve those who benefit from online courses, those who traditionally wouldn't otherwise have the opportunity to connect to college success."

The survey also finds a larger percentage (62 percent) of chief academic officers agree the learning outcomes in online education are now as good as or superior to face-to-face instruction while 57 percent say it is critical to their institution's long-term strategy.

In addition 73 percent agree online education reaches students not served by face-to-face programs. "Offering courses online increases enrollment particularly among populations like working adults and others who traditionally have not been able to access higher education," says Frank Mayadas, program director, Alfred P. Sloan Foundation.

The Sloan Consortium is the nation's largest association of institutions and organizations committed to quality online education and administered through Babson College and Franklin W. Olin College of Engineering.

The College Board adminsters the SAT tests to millions of college bound students every year. The Sloan Foundation was founded by legendary GM CEO Alfred P. Sloan who also co-founded the Sloan-Kettering medical center in New York City. These are not marginal organizations just making up a sensationalist press release to promote themselves.

The growth in online education is inevitable for a couple of reasons. The technological reason is that web bandwidth costs keep dropping while simultaneously computers and software become ever more powerful. The technological infrastructure to deliver courses to people in offices and homes keeps getting better.

But there's also the cost problem of old brick and mortar schools. In inflation-adjusted terms college costs have risen an astounding 35% in just 5 years.

WASHINGTON, D.C.—The College Board today announced that at four-year public colleges the increase in average tuition and fees slowed for the third year in a row, but prices are still up 35 percent from 5 years ago, after adjusting for inflation. The increase in average tuition and fees for two-year public colleges in 2006-07 was just slightly above the inflation rate. At all institutions, the net price—the average price students pay after grants and tax benefits are considered—is significantly lower than the published price. Total student aid increased by 3.7 percent to $134.8 billion in 2005-06, but total federal grant aid failed to keep pace with inflation. Even without factoring in inflation, the average Pell Grant per recipient fell by $120.

This is ridiculous. The students aren't getting 35% more knowledge or a 35% increase in the quality of knowledge and they aren't getting taught in ways that let them learn 35% faster. Worse yet, their starting salaries haven't risen 35% and the incomes of their parents haven't risen an average of 35% adjusted for inflation (or even not adjusted for inflation).

Evidence of these trends, along with average 2006-07 college prices and 2005-06 student aid data, is documented in the reports, Trends in College Pricing 2006 and Trends in Student Aid 2006. Also released today was a 2006 supplement to Education Pays: The Benefits of Higher Education for Individuals and Society, which documents the monetary and nonmonetary benefits of higher education, in addition to differences in participation and success across demographic groups.

Aside on the benefits of education: Studies that compare outcomes for those who go to college and those who do not tend to exaggerate the benefits of education. Why? Smarter people spend more years in school. Also, upper class well connected people spend more years in school. Unless the effects of IQ and family are adjusted for studies that compare people by years of school will tend to exaggerate the benefits of more education.

The claim here that student aid reduces the real effects of tuition increases is misleading. For kids whose families are not poor the grant aid is less or missing altogether. The tuition increases therefore effectively become a mechanism to tax the rich to give to the poor. A familiar story.

Published tuition and fee charges at four-year public colleges average $5,836 in 2006-07. There was a $344 increase over last year, which represents 6.3 percent, or 2.4 percent after adjusting for inflation. The average total tuition, fee, room, and board charges for in-state students at public institutions are $12,796.

After grant aid and tax benefits are considered, full-time students enrolled in public four-year colleges and universities pay on average about $2,700 in net tuition and fees. After declining or just keeping pace with inflation each year between 1996-97 and 2002-03, the average net price students pay at public four-year colleges has increased even more rapidly than published prices for the past four years because grant aid has not kept pace.

Published tuition and fee charges at four-year private colleges average $22,218 in 2006-07. The $1,238 increase over 2005-06 represents an increase of 5.9 percent, or 2 percent after adjusting for inflation. The average total tuition, fee, room, and board charges at private four-year colleges and universities are $30,367.

Full-time students enrolled in private colleges and universities pay on average about $13,200 in net tuition and fees after grant aid and tax benefits. Because of growth in grant aid and tax benefits, the net price students pay has increased more slowly over the past decade than the published price.

Published tuition and fee charges at two-year public colleges average $2,272, $90 more than last year. The 4.1 percent increase is less than one-half of one percentage point above the rate of inflation. After grants and tax benefits are considered, full-time students enrolled in public two-year colleges and universities pay less than $100 on average in net tuition and fees. After adjusting for inflation, the net price students actually pay is lower in 2006-07 than it was a decade earlier.

Students have to pay so much more per year that they have to spend more time working while in college and hence they get their degrees later and end up paying off more debt starting at later points in their lives.

Forgone earnings for students who are devoting their time to their studies constitute a significant portion of the cost of attending college. These costs are higher the longer it takes students to earn their degrees. Among bachelor's degree recipients in 1999-2000, those who began their studies in four-year public colleges and universities took an average of 6.2 years to earn their degrees, and those who began in four-year private institutions took an average of 5.3 years to earn their degrees.

Remedial courses can add to the time it takes students to obtain degrees because they do not generally count toward college credit. Over one-third of first- and second-year college students have taken remedial courses since high school graduation. Among those who took remedial courses in 2003-04, first- and second-year students took more remedial math (77 percent) and remedial writing (35 percent) than other remedial courses.

The time spent in school and cost of education can't keep rising. People are turning to cheaper, more convenient, and faster alternatives. Hence the rise in online courses. High resolution video recordings of the best quality lectures (rather than lectures by teaching assistant grad students from foreign countries with undecipherable accents), web-based testing available any time day or night, web-based delivery of slide shows and animations, and online question and answer sessions are all going to speed up and lower the costs of education.

Smart kids sitting at home in their early teens will be able to move through college courses 12 months of the year as rapidly as they want to push themselves. Bright motivated kids will be able to finish their educations years sooner and for savings of tens of thousands of dollars. Since they will be able to get higher skilled and higher paying jobs sooner they will win doubly by spending less on education and getting on to paying off education costs and building their adult lives sooner.

Share |      By Randall Parker at 2006 November 11 10:51 AM  Education Online

Fred said at November 11, 2006 11:55 PM:

Quite an interesting post. Maybe 15 years ago, I read an article about for-profit universities such as a the University of Phoenix, and felt chilled. The university as I had known it was going to be "vulgarized" out of existence. Now, having taught in universities for several years, I think that for-profit institutions, along with distance-learning, and anything else that pressures traditional universities to entertain some awareness of reality, is of benefit.

Some thoughts about waste and expense in American universities:

1. As I have said in response to a previous post, we try to encourage (force) way too many people to enter higher education. Students should be able to drop out of the educational system at 14 if they so choose. They should graduate from high school at 16. After that, there should be a variety of educational/vocational opportunities, based upon DEMONSTRATED ability and potential. Not on hopes, dreams, fantasies, social pieties, avoidance of reality, avoidance of work, etc.

2. Developmental studies courses have no place in universities. Students who are close to, but not yet ready for, university work should attend a community college, go back to high school (wouldn't that be interesting) or get some text books and study on their own. People actually used to do this (sit and read on their own) in the past, and it is a proven form of distance learning that works for those with the ability and self-discipline to make it work. Actually, regardless of how much formal education one has, it remains essential to learning. By the way, most developmental studies students (at least, where I have taught) never graduate from the institutions in which they are enrolled. This is simply a fraud which wastes the public's money, the university's resources, and the student's time and money.

3. The proliferation of research universities generates huge waste. Most faculty members at most research universities never generate enough valuable research to make this effort worth the time and money. The system of demanding research is itself flawed in that one must publish early in one's career simply to avoid being fired, whereas publishing later is a matter of promotion and salary increase. However, those in the sciences and technical fields are far better positioned to publish early in their careers than are those in the humanities. For example, mathematicians tend to do their best work in their 20s. Usually, by the time they are 40, they have nothing left to add. People in the humanties tend to do their best work (my estimate) in their 50s. Different disciplines have different 'peak' ages of productivity. It's rare that even a brilliant humanities scholar has anything relevatory to say before his or her mid 30s. Among other things, they just haven't had enough time to read and let the ideas sift down. Most professors at research universities should actually be teaching a full-load (four classes per term), not two classes, as their research never really amounts to much.

4. The proliferation of bullshit disciplines, degree programs, and courses. There are a lot of topics studied and discussed in universities because they are trendy, they are easy, and they are popular with the the students, who like to sit around listening to themselves "think." The question shouldn't be, "are these topics of any value," but rather, given that most university students have only a very limited time in which to acquaint themselves with the most important areas of knowledge, "do these 'disciplines' qualify?" They almost never do. I have nothing against people in a magazine article or at a cocktail party analyzing Maddona's latest video performance. They might even have something mildly interesting to say about it. But it's just not important enough to merit attention in a university curriculum.

5. Universities as resort destinations. Due to the proliferation of research universities (point 3), universities compete for decent students by building lavish student centers, sports facilities (both for the "scholar athletes" and for the awkward nerds), and other attractions that, while admittedly pleasant, aren't necesary for learning and cost a hell of a lot of money. This is in part a reflection of the fact that there are not enough talented students to fill all of the research universities in America. So, the universities fight over the decent students (supply exceeds demand).

6. University-funding Wonderland. I once had a conversation with a friend who worked in the office of the Dean of Arts and Sciences. We were discussing the fact that, despite a sustained drop in enrollment in English, the number of English department faculty would be growing (they already didn't have enough to do). The rationale? Five years earlier, the university had projected the need to expand the department, before the decline in enrollment became evident. Having drawn up this plan, evidently, there was no turning back "Why not," I asked, "just delay the new hirings and see whether or not the decline in enrollment reverses or continues?" He answered that "by bringing new blood into the department," the university would be better able to attract more English majors. From a financial standpoint, this didn't make a lot of sense to me. Actually, it made no sense to me. Even in the graduate program, I doubt that more than a handful of the students chose to enroll based upon the desire to study with a particular "faculty star." Actually, there were no "faculty stars." Of course, it was all just a rationalization to waste money.

I realize that your post was about distance learning, but I hope that my comments have shed some light on why college education in brick-and-mortar institutions is so much more expensive than it needs to be. Believe me, there is much more that I could add. As it happens, however, I enjoy teaching in a brick-and-mortar school. I like speaking to and with students in a classroom, not online, and what's more, I think that there are significant intangible benefits to learning in "a place of learning." Then again, I'm a bit of a romantic on this point. But I also think that universities, particulalry the public ones, have an obligation to keep their costs down and to exercise some mature judgment about what their students do and don't need to study. If universities are frivilous and wasteful, people will look elsewhere for the knowledge that they need, which is as it should be.

Ned said at November 13, 2006 5:51 AM:

Fred -

Your comments are excellent and confirm my own experiences. Most universities inhabit an economic wonderland which is totally isolated from market forces. This is especially true in the humanities, where most of the faculty do very little and where promotion and tenure decisions are often based more on political correctness and affirmative action criteria than real acheivements. Once tenure is obtained, productivity usually decline substantially. At the middle to lower end of the education scale, far too many students attend universities. Many are poorly prepared and get little out of their encounter with higher education. However, they (and their families) all vote, so the education bureaucracy and the politicians are reluctant to turn them away. Anyway, the more students enrolled, the more money the universities can demand from the taxpayers. Yet at the upper end of the scale, at places like the Ivies plus other elite instutions like Stanford, MIT and Duke, competition for the best students can be fierce.

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