Will vice-chancellors save money through online learning?

In these tough times, vice-chancellors certainly want to economise. More online learning may seem like a good way for universities to save money, but is it really?

Worldwide, interest in new educational media has often focussed on whether they offer real savings: government ministers, civil servants and even teachers ask whether learning will cost less if the new media are deployed (Eicher et al, 1982). A parallel question is whether learners learn as much (or more) using these media as they did with the old.

Research on radio and television yielded answers: costs were lower given large enough audiences (economies of scale); learning through the new was probably as good as learning through the old, though the findings varied widely depending on audience, content and pedagogy (Schramm, 1977). Early research on costs of computer-assisted learning and training (Hawkridge et al. 1988) yielded similar answers, but before the Internet arrived economies of scale were harder to achieve than with broadcasting.

This sort of research has included discussions of methods and models, but without arriving at satisfactory conclusions about the best way to cost these new media. Anyone who sets out to establish the costs of online courses is probably in for a hard time!

First of all, you have to choose the costing model you’ll use. That reminds me of George Bernard Shaw’s little joke: ‘If you were to take all the economists in the world and place them end to end they still wouldn’t reach a conclusion.’ You might want to consider fixed costs (that don’t vary with the numbers of students) and variable costs (that vary with the numbers of students). Capital costs? Recurrent costs? Overheads? Content creation or production costs? Delivery costs? Depreciation? Inflation? Costs to the institution? Costs to the students? And so on.

That well-known author on technology-enhanced learning, Tony Bates, formerly at the Open University and the University of British Columbia, has been analysing the costs over seven years of offering a fully online master’s degree programme from a ‘major research university’. Of particular interest to the University of Leicester, this is a programme using open content.

Of the $2.85m whole life (seven years) costs, he estimates that 24% was planning and development, 9% maintenance, 36% delivery and 31% administration and overheads. But notice that these costs excluded technology, software and infrastructure. There were on average 67 students a year (so there weren’t great economies of scale) and, whilst the programme broke even in year 3, it took until year 7 to recover the early-years’ deficit.

Based on this example, Tony Bates judges that “Open content is not going to lead to major cost savings in online learning. Even without creating new content, someone will have to select, assess and modify open content, or provide some kind of curriculum framework or guide for students studying a subject or topic.”

He suggests that “If we want to bring the costs of online teaching down without sacrificing quality, we need to focus on administration and overheads.”

The latest medium under consideration is the technology of e-books and e-book readers. On the face of it, this technology provides immense cost savings compared with paper and print. ‘Books Vs. E-books: Does One Have to Win?’, published in Newsweek, claims that the average cost of producing a hardback (priced at $26) is $4.05, while the average cost of producing the same as an e-book (priced at $9.99 for a download) is only $0.50. The news item does not, however, offer a basis for these costings.

Should the Beyond Distance Research Alliance apply what has been learned from research (e.g., Rumble, 2001) to costing the newest technologies introduced into online learning? Perhaps, but I suggest that vice-chancellors – and others – may have to wait for an answer to their question. They’ll go on asking.

David Hawkridge


Eicher, J.C., Hawkridge, D., McAnany, E., Mariet, F. and Orivel, F. (1982) The economics of new educational media. Vol. 3. Paris: Unesco.

Hawkridge, D., Newton, W. and Hall, C. (1988) Computers in company training. London, Croom Helm.

Rumble, G. (2001) ‘The costs and costing of networked learning’. Journal of Asynchronous Learning Networks, 5 (2), 75-96. www.aln.org

Schramm, W. (1977) Big Media, Little Media: Tools and technologies for instruction, Los Angeles: Sage.

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