As enrollment in online universities grows, students want to know: Why spend so much?

The result is that 83% of online courses in higher education pay more or more than in-person versions, according to an annual survey by university online learning officials. The survey was conducted by Eduventures, a department encouraged by the higher education consulting firm, because of the quality and education of nonprofits.

The survey found that about a quarter of universities even had to pay extra “distance learning” fees.

Universities and universities “see online higher education as making money and using it for any opportunity they want to make money.”

General confusion about costs

Bittner’s confusion about price is common. According to a 2024 survey of 1,705 adults in New America, 80% of Americans believe that online learning after high school should be less expensive than in-person plans.

After all, technology reduces prices in many other industries. Online courses do not require classrooms or other physical facilities, and theoretically, can be taught to more students, thus creating economies of scale.

But besides leveraging online income to help other aspects, universities say they have to spend more than they expect to advise and support online students, whose academic performance is on average behind their face-to-face.

The concern about the cost is because online higher education is expected to be an impressive milestone this year: for the first time, college students in the United States will learn entirely online rather than in person.

This is based on estimates made in January by Eduventures Chief Research Officer Richard Garrett.

One reason is that online learning provides people with flexibility in arrangements and is also cluttered for work and family. Especially professional certificates and graduate degrees. Online, when almost everyone is forced to learn remotely, the online field has been enhanced in the pandemic.

Meanwhile, more and more institutions are seeing revenue potential being struggling to participate.

How much does an online degree cost

Garrett said that when online higher education begins, putting a level of price “is certainly a key part of the appeal.”

“Online will be disruptive,” he added. “It should expand access and lower prices.”

Today, the Independent Education Data Program discovers that online coaching for four-year public colleges is an average of $341 per credit per credit. This is higher than the average loan of in-person tuition fees of $325 per loan.

Online degrees total about $41,000, while in-person degrees are about $39,000.

According to a survey of online managers, two-thirds of private four-year colleges and universities charge more for their in-person courses. For private universities and universities, the average tuition fee for online learning is $516 per credit.

Community colleges collectively recruited the largest number of students who were fully online. The Eduventures survey found that all community colleges surveyed charge these students the same or more for face-to-face peers. This may be because tuition fees for community colleges are already relatively low overall, Garrett explained.

Startup costs and technical barriers

Social media has angered comments on this, and many students responded to Bittner’s question about how online learning might be more costly.

Online education officials replied that their plans face huge startup costs and require expensive technologists and infrastructure.

In another survey of faculty and staff by consulting firm Ithaka S+R, 80% said they spent a lot of time or more planning and developing online courses because it required the merger of new technologies, so they spent a lot of time.

Online courses also require support for online students specifically for faculty and staff available for office hours, as well as online consultants and other resources. For the same reason, many online providers have limited caps when it comes to registration, thus limiting those expected economies of scale.

“You still need a consultant, you still need a writing center, a coaching center, and now you have to provide those services to students at distances,” said Dylan Barth, vice president of innovation and program at the Online Learning Alliance representing online education providers.

Part of the Higher Education Script

The online manager’s survey found that despite this, 60% of public universities and more than half of private universities earn more money from online education than they spend. About half said they put the money back into the agency’s general operating budget.

This cross-subsidy has long been part of a higher education financial strategy, where students in these classes or fields often subsidize their peers in higher-cost courses or subjects in these lower-cost areas. For example, the English major subsidizes their engineering classmates. Large first-year lecture course subsidizes small advanced workshops. Postgraduate students often subsidize undergraduate students.

“Online education is another source of income from different markets,” said Duha Altindag, associate professor of economics at Auburn University.

New U.S. Carey, which criticizes some online education approaches, says universities “do not try to use technology to become more effective.”

Another page that online managers borrow from traditional pricing scripts for higher education is that consumers often equate high prices with high quality, especially in prestigious universities and universities.

“The success and reputation of the market can support higher prices,” said Garrett of Eduventures. In other words, the cost of online courses is not the cost of online courses, but how much consumers are willing to pay.

As online programs compete with clients across the United States, rather than within a campus commute distance or willing to relocate, at least some universities and universities spend a lot of money on marketing and advertising.

Lower grades and graduation opportunities

Meanwhile, online students pay the same or more as their face-to-face peers, but their success rates are usually poor.

According to Altindag and colleagues’ research, online students have lower grades than in-person education, and although the gap is narrowing, American universities and the University of Mississippi in the South have lower grades in research.

The researchers found that online students were more likely to exit or repeat classes and were less likely to graduate on time, which further increased costs.

Students who study fully online at any level are less likely to graduate within eight years than the average student.

Low-income students perform particularly poorly. This is partly because many people come from low-resource public high schools or are balancing with work or family responsibilities, the researchers say.

Researchers speculate that if they do earn a degree, online students alone receive a full reward for the first year after college, Eduventures found — perhaps because they tend to be bigger than traditional students. But when face-to-face graduates surpassed them, that advantage disappeared within four years.

For online graduates, job market challenges

According to other research from the University of Louisville, some employers seem reluctant to hire graduates for all the growth in online higher education. Listing online rather than in-person employment applicants, the likelihood of a degree is about half the chance of getting a callback.

Consumers believe that the cost of online higher education should be lower than face-to-face lawsuits, i.e., those lawsuits continue to charge full tuition fees even in distant lawsuits amid the COVID-19-19 pandemic.

Students refunded part of their payments under multi-million dollar settlements under the circumstances of the University of Chicago, Penn State, Rensselaer Polytechnic, University of Maine Systems, etc.

However, consumers keep signing. According to an analysis of federal data by educational technology consultant Phil Hill, the momentum seems to have accelerated since the pandemic for all complaints about distance learning at the time.

60% of online campus officials say online courses tend to fill first, and nearly half say online students exceeds face-to-face enrollment.

Signs of improvement

There are some examples of widely cited online courses with lower tuition fees, such as the $7,000 degree in Computer Science from Georgia Tech (compared to an estimated $43,000 for a two-year live version). The program attracts thousands of students and several imitators.

There are also signs that prices may drop. Competition among national nonprofit providers such as Western Governor’s University is growing, with the company’s average of relatively low, at an average of $8,300 per year, while the Southern University of New Hampshire is relatively low, with undergraduates per credit at New Hampshire, which costs slightly less than online courses (for online courses).

Additionally, universities have begun to connect with for-profit middlemen, known as online planning managers, who can cut revenue by up to 80%. Market Research firms reported that nearly 150 such transactions were cancelled or ended and were not renewed in 2023, the latest year that the information is available.

Another thing that can lower prices: With more and more online plans coming online, they no longer require high upfront investments – just regular updates.

“If you offer the same course, you can save money downstream costs,” said Justin Ortagus, director of the University of Florida College of Higher Education.

Although a survey of online officials found that the proportion of online fees was lower than that of online classes, the decline was statistically insignificant. And, because their enrollment rate is expected to plummet, institutions are increasingly in need of income from online programs.

Emma Bittner of Texas ended up getting a cheaper public health program from a private university than other universities she found.

Her daily work is invincible for young jobs in the national nonprofit organization, which has promoted reforms in higher education, health care and economic security for young Americans. And she still doesn’t understand the online pricing model.

“Even in my current plan, I’m confused, you can’t get the same things as students in person,” she said. “What you’re going to invest is going to cost a lot of money?”