What is the first place you would try to cut educational classroom costs if you were running a college?
If you have a good head for business, it probably didn’t take you long to realize that high-enrollment introductory courses are the place where you could save the most dollars without harming the quality of your overall educational product.
Stop to think about it. If you are a college that needs to offer a remedial writing course to 100 students, you are probably going to pack them all into one lecture hall for a course taught by one professor - maybe with a few teaching assistants to help with grading. You are not going to send those 100 students into 10 classrooms, because that would cost a lot more.
There are other reasons why big courses are the best place to cut costs. As students pick their majors, they are going to need a number of smaller classes. Maybe 15 history majors will take a course on Britain During the Industrial Revolution. Maybe 20 chemistry majors will need to take a lab course. You can’t cut costs on small-enrollment courses like those, and you can’t eliminate them. So you are going to have to save money on those high-enrollment courses we discussed a paragraph earlier.
In case you think this discussion is theoretical, think again. Colleges really do evaluate costs in just this way. With tight budget dollars, they need to.
It might surprise you to know that there is a nonprofit organization, The National Center for Educational Transformation (THENCAT), that helps colleges and universities cut the cost of delivering learning to students. NCAT runs initiatives, including The State and System Course Redesign program, that help colleges reduce costs and improve quality.
Here’s an example of how NCAT is currently planning to help redesign the Intermediate Algebra and College Algebra courses at Jackson State University in Mississippi. These are big courses, usually delivered to about 2560 students who are divided into 88 classroom sections. Under NCAT’s plan, course costs would be cut significantly. The number of weekly lecture hours in Intermediate Algebra, for example, would be reduced from three to two, and students would be required to spend two hours each week in computer labs staffed with teaching assistants. As a result, Jackson State could cut the cost of College Algebra from $173 to $135 per student. That’s a savings of 22%. For Intermediate Algebra, Jackson State would reduce per-student cost from $153 to $125. That’s a savings of 18%. So by redesigning these two courses, Jackson State could save something in the area of $128,000.
Such savings can be a key to survival for many colleges. Consider the fact that when NCAT recently administered a program that helped 30 colleges redesign high-enrollment introductory courses, those colleges were able to reduce the cost from $170 to $111 per student in those courses. We are talking about tens of thousands of students here.
But now, I’d like to ask you to get out your pencil and do a little more math. Because those 30 colleges are still charging students about $1,000 for those courses. So through course redesign, they are dramatically increasing their profit margins.
How are those institutions using the dollars that they are freeing up through course redesign? They are redeploying those monies to subsidize other parts of their universities, like low-enrollment courses, less popular degree programs, new buildings, sports teams, faculty pensions and other features. However, many students – particularly commuters, adult students and distance education students – neither want nor benefit from these amenities. These “non-traditional” students are the fastest growing segment of higher education – and they are the same students that universities are packing into high-enrollment courses.
These facts and trends point up another reason why StraighterLine represents such a remarkable educational value. We deliver our courses at far lower cost because we don’t have lawns to mow, pensions to pay, or seminars to offer to small numbers of students in their majors. We don’t have to worry about packing hundreds of students into lecture halls, because we don’t have any lecture halls. Could we possibly charge $1,000 for, say, our online College Algebra course, instead of charging only $39 dollars for it, after you have enrolled for a monthly fee of $99? Well, we could try.
But we have a feeling that we know how the marketplace would respond if we suddenly raised our costs in that way. In an age when students are so concerned with educational expenses, only cost-effective institutions will survive.