2008 July 13 Sunday
High Gas Prices Drive Online Education Growth

High gasoline prices are driving another nail into the coffin of bricks and mortar educational institutions.

The vast majority of the nation’s 15 million college students — at least 79 percent — live off campus, and with gas prices above $4 a gallon, many are seeking to cut commuting costs by studying online. Colleges from Massachusetts and Florida to Texas to Oregon have reported significant online enrollment increases for summer sessions, with student numbers in some cases 50 percent or 100 percent higher than last year. Although some four-year institutions with large online programs — like the University of Massachusetts and Villanova — have experienced these increases, the greatest surges have been registered at two-year community colleges, where most students are commuters, many support families and few can absorb large new expenditures for fuel.

In this case high gasoline prices are catalyzing a change that is beneficial for other reasons. Automation of the delivery of lectures and course material is a needed step to tame and lower educational costs. This shift isn't doing much yet to lower course prices. But I predict that will change.

Enrollments in online classes expanded rapidly early in this decade, but growth slowed in 2006 to less than 10 percent, according to statistics compiled last year by researchers at Babson College in Massachusetts. Some recent increases reported by college officials in interviews were much larger, which they attributed to the rising cost of gasoline. Pricing policies for online courses vary by campus, but most classes cost as much as, or more than, traditional ones.

That cost difference is going to change because much of the cost is in development of materials and fixed administrative costs. Eventually some institutions will go for much larger volumes of students and emerge as low cost leaders. This will drive a shake-out and the number of colleges will decline.

We might see a split emerge between course content generation and test administration. Take calculus for example. State governments could mandate that their state colleges record calculus lectures and make them freely available. Then only the tests would be charged for. Video recordings of dozens of different teachers delivering basic calculus lectures might become available for free. But to get credit for knowing calculus you'll have to pay to take a series of tests from an accredited college.

Share |      By Randall Parker at 2008 July 13 11:22 AM  Education Online

Dave said at July 14, 2008 8:29 AM:

You can already get a lot of stuff on youtube.
"Calculus in 20 Minutes Part 1"

You might argue its not high quality, but its an introduction a least.

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