The Cost (Not Price) of an Online College Course

The Cost (Not Price) of an Online College Course
Burck Smith

Maybe you want to get a college degree, but want to first take a few online courses to better judge your motivation. Or, maybe you need to take some prerequisite courses prior to graduate school. Or, maybe you just want to save some money on your degree.

Whatever the reason, if you are searching for online college courses, you are almost certainly seeing a huge variance in prices.

For instance, a three-credit course at Arizona State University Online is about $1500. The same course at a community college is, on average, about $330 for in-state students or $700 for out-of-state students. StraighterLine offers most courses for $49 each on top of a $99 per month membership fee (courses end up being about $150 per course on average).

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Further, colleges charge a fixed fee no matter whether or not you complete your course – increasing your financial risk. With such wild variation, what are you actually paying for?

What It Costs to Deliver an Online College Course

Rather than look at college’s published online course price, let’s look at what it costs to deliver an online college course. A college needs:

  • A professor
  • Course content
  • A learning management system
  • Additional academic support like tutoring (optional)
  • Additional non-academic support like advising and tech support (optional)
  • Identity verification and anti-plagiarism services (shockingly, optional)

Next, let’s look at what this costs on a per-course, per-student basis.

1 - Most college professors, particularly online, are adjunct professors.

Adjuncts get paid dramatically less than full-time professors. In fact, the average adjunct salary is about $2,800 per course. Let’s assume that the average is $3,000 per course with a 30 student enrollment. Therefore a professor’s time costs about $100 per student: Cost – $100

2 - Course content

A professor might have built her own content or, more likely, the content comes bundled with a textbook adoption from a major publisher. If not from a publisher, it could be free to the student as an Open Educational Resources (OER). StraighterLine uses professionally built content from McGraw-Hill, Rosetta Stone, Acrobatiq and other publishers. In all cases, the content is effectively free to the school. Cost – Free

3 - Learning Management System (LMS)

Most colleges run their courses through an LMS like Moodle, Canvas or Blackboard (StraighterLine uses Moodle). Though LMS’ used to be expensive, the per-student prices have dropped dramatically. Indeed, Moodle is a free, open-source solution. Though prices will vary, a college may spend between $5 and $20 per-student. If each student takes 5 courses, it’s hard to add much more than $5 per student. Cost – $5. 

4 - Tutoring, Advising, Mentoring, Tech Support

Though colleges are not required to offer any of these services, most do. Having access to live academic and non-academic help is a great safety net. However, having co-founded and run SMARTHINKING, an online tutoring company, prior to starting StraighterLine, I can attest to the fact that students use less services than they anticipate.

Also, a few students will use a lot of services and many will use none. Finally, many of these support services are provided by the professor. A StraighterLine membership includes access to live, on-demand tutoring from SMARTHINKING and access to student advisors who can help with course navigation, credit transfer and technical problems. At a college, a student will use about an hour or less of services. Cost – $30.

5 - Identity Verification

Though colleges are not required to proctor exams, it is increasingly becoming common industry practice. Interestingly, colleges often charge an extra fee for online proctoring! However, should it be bundled with the course, it will cost the school about $20 per session. StraighterLine uses ProctorU and there is no additional fee to the student. Cost – $20.

Add It All Up

Add it all up, and it’s hard to get much more than about $155 per student per course in direct costs. Yet over 90% of colleges charge the same OR MORE for online courses than for face to face. Colleges do this because they don’t want to price their online courses such that they undercut the revenue from their face-to-face courses.

By making it confusing, difficult or impossible to transfer equivalent courses from other sources, colleges are able to keep the prices of their online courses much, much higher than the cost of delivery.

"Over 90% of colleges charge the same OR MORE for online courses than for face to face."

One of the questions that I often get asked is “how can StraighterLine offer more online support services than most colleges but at a vastly lower price?” My answer is simply that StraighterLine’s prices reflect the true cost of online course delivery rather than the price a college has grown accustomed to charging.

Burck Smith (@burck) is the CEO and founder of StraighterLine.

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