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Is online tuition less than in-person tuition?

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One of the biggest education stories this spring was how many students - of all ages - have transitioned to virtual online learning in some format. Of course, this transition was, for many students, not their choice: schools, colleges and universities closed due to the coronavirus and were forced to quickly figure out how to make their educational experiences available to a dispersed group of students.


Depending on who you are and where you or your child was studying, your experiences may have been dramatically different. While some colleges have extensive experience with online education, others do not... 


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Now, colleges and their students (or prospective students) are wondering if the fall of 2020 could also be online. 


Those who had their hearts set on an in-person experience may not know much about online education and how it’s priced.


Online education offers many benefits to students - it is convenient, and you can complete courses on your own time and (socially-distanced) place. But is it also cheaper?


Average cost of online education

The answer is, yes, online education is less expensive - on average.


A set of universities have specialized in online education and only offer courses online. This means they can support large class sizes and don’t have big campuses, dorms, or other facilities to support. Many of these universities have also focused on affordability, meaning their prices are lower than you’d typically see from traditional higher education.


For example, Western Governors University has among the lowest prices among online-only providers. They charge by 6-month term, and the average bachelor’s degree there costs $16,500 (total!). 


When a university has both a campus and online programs, the cost of tuition can differ between those two - even if you’re studying at the same university. 


Those universities that are teaching many students online and have expertise in online education are likely to have reduced their costs of online education compared to their campus - so if you’re studying online, it will be cheaper. This is because their business strategy is to expand. Schools may charge different fees depending on where you study and may charge different amounts per credit hour.


Take Southern New Hampshire University, a private university which has one of the largest online student populations but also has a campus. The online programs there cost $320 per credit hour. In person, campus tuition is priced annually at $30,756 - so depending on the number of credits you’re taking, it’s at least three times that (30 credits per year is a full courseload, which would come to $1,025 per credit).


At the University of Florida, another very large online player, tuition and fees come to $3,876 for online students in-state. On-campus, that number is $6,380.


In many cases, though, you will not get any discount for being online. A recent analysis from US News & World Report found (from a set of 170 public colleges), the average tuition price for in-state students studying online was $316 per credit hour. For those students studying on campus, the average price was $311 per credit - in other words, the cost was very similar. 


(Notably, for the 168 private colleges they looked at, the online price per credit was $488, compared to the average on-campus price of $1,240 per credit.)


Why is online education sometimes MORE expensive than in-person education?


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Students (like the one above) may feel that online education should be cheaper. Many have demanded partial refunds for not just the room and board charges of this semester, but the tuition charges as well. There are several ongoing class-action lawsuits related to this as well (one of the most prominent examples is at the University of California).


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Many are shocked to learn that in some cases online prices can be higher than in-person! Here is why.


From the college or university’s perspective, the cost of providing an education online is not necessarily reduced. Not only do you still have to pay professors, instructors, and graduate students, but you have to implement and manage new (expensive) software, provide video hardware and other equipment, and train and support both the faculty and students to use those things. Technical support can be a big need, which it isn’t on a campus.


Think of, for example, the small liberal arts college which offers intimate in-person instruction -- that college will need to invest across many departments to change their systems and processes.


And if you have the same number of students as you had on campus, you can’t get economies of scale - which could reduce the cost for each student.


Colleges might also argue that the value you get is the same. Ultimately, individual classes are wonderful venues for learning specific skills and information. But what colleges are “selling” is the cumulative value of those learning experiences: a degree. So, someone might argue, who cares if a few semesters out of the total experience are online?


However, students may understandably feel differently. While getting the degree and the career that results from it is certainly one major reason people go to college, many students also care deeply about the social learning experience (which exists online but not in the same way it exists in a classroom) and about interpersonal relationships and friendships (again, harder to form online). For those students, the value they are getting is reduced - and therefore so should the price.


How to tell if your online tuition will be more expensive next fall

While there are some rules of thumb, every college is forming its own pricing strategy according to its student population, funding, and other business considerations (see here for a good summary of why a decline in enrollments could lead colleges to drop prices out of necessity). 


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So, unfortunately, you’ll need to do your own research to determine what your online education costs might be. Here are some steps:

  1. If the college currently offers online undergraduate programs, check on the pricing and compare apples to apples as we did above.
  2. Did the college consider reducing or refunding some tuition for the spring semester (not just room and board)? Has it made any statements about its intentions for the fall so far? For example, USC has said it will not - and that does not bode well for an online “discount” if campus is closed in the fall.
  3. You can always ask. Colleges, frankly, may not know the answer yet - but as the “customer” you certainly have the right to know what you’ll be paying and for what before you sign on the dotted line.
  4. Ask for more aid in advance. If the sticker price doesn’t change, getting more financial aid now can reduce your cost and make it a more comfortable investment, regardless of what happens in the fall.


Please stay in touch with Edmit as we track all the news from colleges across the country and help you find this information. We’ll get through it together!

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