As college leaders scroll through their perilous spreadsheets this summer, anxiously looking for the most productive way to spend their meager resources, this may be the time for them to rethink their usual approach—and aggressively invest in online education.
After all, with national on-campus enrollments faltering, online numbers continue to speed forward.
Informed projections say that American universities have already run out of 18-year-olds to fill the millions of freshmen empty seats in their classrooms. Those demographic realities have already forced dozens of colleges to go under. If colleges continue to follow the usual practice of routinely adding or subtracting a few dollars from existing programs rather than working to move into new markets, their schools may soon be at risk.
These crucial economic facts have been known for years. So why haven’t otherwise thoughtful senior academic officers absorbed these lessons, adopting virtual instruction to lift higher education out of its deepening financial hole?
Reluctance to go online is often influenced by a major sabotaging myth—that digital instruction is far too expensive for most colleges, with media stories touting the high cost of putting even a single class online. One article reported that Udacity, a company that creates large-scale online courses, budgeted $200,000 per course, while edX charged $250,000 for its design and consulting services. Forbes noted that the giant online program management (OPM) company called 2U invested $5 to $10 million in software and marketing to launch an online MBA at the University of North Carolina.
With reports citing such whopping numbers to go online, it’s no wonder some senior academic officers are anxious to jump in.
So let’s take a look a little more calmly at how to go online without going bust.
Piggybacking Online Investments
At Stevens Institute of Technology, where I was dean of online learning in the early days of digital education, a prescient benefactor thought it might be a good idea to experiment with a $350,000 investment to launch a couple of online master’s. That was back in 1999. Today, that modest seed money has bloomed online into 18 master’s and 50 graduate certificates, representing 3,000 online and blended enrollments today; over time, generating millions in digital tuition revenue.
Starting off cautiously, following Stevens, any college can introduce digital programs step-by-step, building virtual degrees by corralling a few daring faculty members to work together with a couple of new hires—especially an experienced instructional designer. Most colleges already buy learning-management software for its on-campus students that can serve as the virtual campus infrastructure.
And colleges don't need to launch their first online degrees all at once. Tactically, it’s wise to build only the one or two needed to deliver for the first semester. Tuition generated from those initial courses is likely to subsidise the next ones. And so on. By the time a college is ready to launch its next round of online degrees, tuition revenue from those delivered in the initial semesters will help drive the next few.
At Stevens, that self-financing, piggyback method allowed us to go on over the life of our online programs, without ever resorting to outside funding again, drawing exclusively on online revenue from delivering digital courses semester after semester. I took the same approach when I moved to NYU and it worked there as well.
In a telephone interview earlier this month, John Vivolo, director of Online Education at Katz School of Science and Health at Yeshiva University, dismissed inflated online development costs feared by many college leaders. “A full program, say, of six courses, should cost $150,000 to $200,000,” Vivolo said. For a number of years, I worked alongside Vivolo at NYU Engineering School’s virtual education unit, Tandon Online.
Of course, many say that the biggest cost is not building programs but getting the word out with marketing efforts. This, too, can be done with a college's existing staff, argues Vivolo. Rather than building a costly digital recruitment and marketing team from scratch, new online programs can partner with existing university promotion departments, sharing expertise and budgets.
“Often, the problem is not money,” Vivolo argued, “but stubborn academic political intransigence that prevents residential marketing staff from supporting new digital programs. If you treat online and on-campus equally, your recruitment investment can easily be piggybacked.”
In another cost-saving move, Vivolo encouraged new online units to enlist student support in video recording and editing online courses, among other technical crafts. “Accept that your courses may not be perfect at first, but by exploiting rapid prototyping, they’ll get better and better every year,” Vivolo reassured. “Starting off, you needn't run super interactive courses. Some video and a few PowerPoints should do the trick.”
My own experience at The New School, where I run an online certificate, “Designing Online Learning Programs,” is instructive. This generation of online student support workers can be remarkably intuitive about mastering digital techniques, often helping to produce surprisingly high-quality online courses at low cost. Recently, at a recording session of a course I will be delivering online at The New School, I was struck by their professional command of the medium.
Of course, colleges can move faster into the online world by turning to one of the dozens of vendors out there that help colleges build programs, including some that may even invest substantially in building and promoting digital programs. Among these are full-service OPMs that will not only act as an investment bank, subsidizing programs for a percentage of tuition revenue generated, but also perform course-building functions as well as global digital recruitment. By contrast, fee-for-service vendors offer an à la carte menu, delivering a range of technical, pedagogical and recruitment services, allowing a college to manage part of the effort, while the company does the rest.
Chances are right now, your CFO and other top academic leaders may be considering upgrading the college gym or installing a new vegan station in the cafeteria, or buffing-up a giant lecture hall with whiz-bang projection equipment. None of these attractive improvements will add a single tuition dollar to the bottom line. It’s far more prudent to shift whatever cash a college can earmark from neutral or even negative tuition-generating investments and convert it into digital currency, attracting an entirely new stream of online revenue.
Of course, there is no guarantee that by introducing virtual instruction your college will hit it out of the park; but avoiding it, there is a good chance you'll strike out.
When Newbury College, a small, private liberal-arts school in Brookline, Massachusetts, closed this spring, its president, Joseph Chillo, was asked whether anything could have been done to save it.
“Yes,” he said. “We should’ve been doing online.”
