Module 6: The costs and economics of student support
Module 6 was quite an eye-opener as Huelsmann takes a wide view on learner support, in particular the costs associated with providing learner support. This is important to know as dropout rates affect revenue. In essence, we need learner support to keep students learning and keep their revenue. Learner support encompasses many items including tutoring and teaching; advising and counseling; and library, registration, and other administrative services. In addition, management issues need to be taken into consideration. This could include planning, organizational models, staffing and staff development, designing services to meet learner needs, serving special groups (such as disabled or non-native English learners).
Talk ensued about Perraton's efficiency (costing) cube. In essence it is the relation between volume, media sophistication and the interactivity. As stated by Huelsmann (2010) the fixed costs in distance education are generally related to media sophistication, the variable cost per student is strongly influenced by the level of interactivity. Yet all these forms of interactivity (e.g. videoconferencing, online conferencing) between students and teacher, irrespective of the technology used, claim the teacher’s time and increase variable costs. Also to note, the Internet and videoconferencing influence the cost per student as much as face-to-face tuition does.
In talking about costs, there are some assumptions that can be made:
1. Online learning has a different cost-structure than F2F education.
2. There are fixed and variable costs to be considered in the total (or average cost) formula.
3. Online learning has a generally lower variable cost per student. This is its strategic advantage. Even though often online learning may require a higher up-front investment, these higher costs can be spread across many learners.
4. The high level of fixed costs is often seen as a guarantee for quality. The rationale for expecting online learning to be more cost-effective than conventional teaching is the combination of comparatively low variable cost per student and high fixed costs safeguarding quality (effectiveness). High quality and low costs, according to this line of thinking, can only be achieved in large systems which have a further positive and intended effect: increasing access.
In knowing this information, it would seem that the big demand for education is easily rectified by taking the online education route. After all, the efficiency path would lead to lower average cost per student. It seems to be all about numbers. There is an initial cost up front; however, driving the numbers of students up lends itself to a tidy and potentially awesome profit. Online education (also referred to as distance education) can also be the answers to overcrowding in colleges or in developing countries where facilities are scarce. During this module, the debate between efficiency verses quality became more and more apparent. In essence, cutting costs on course development, particularly learner support may back-fire in terms of quality and cost-effectiveness. The final consensus is that learner support increases retention, consequently increasing revenues. .
The required readings for this module included the following:
· Simpson, O. (2008). Cost-benefit of student retention policies and practices. In W. J. Bramble, Panda, S. (Ed.), Economics of distance and online learning: Theory, practice, and research (pp. 162-178).
· Rumble, G. (1997). The costs and economics of open and distance learning.
Chapters 12.
Simpson (2008) states the following need to be taken into account when discussing the economics of distance and online education:
1. Return on investment (ROI) for all involved - students, institutions, governments and society
2. The resale value of education
3. The willing to pay concept
4. The existence of educational investment risk
Simpson (2008) concludes there are advantages to distance education, yet there is the weakness of low retention rates which decreases revenues. To solve the problem is to invest in student retention. Simpson created a convincing argument to me
As I was readings Rumble's (1997) chapter12, The costs and economics of open and distance learning, I made note of his observations:
· "There are savings on delivery costs if libraries incorporate digital documents" (p. 146). How true, what a cost savings in postage and the manual labor required to mail it.
· "Technology will substitute for the labor costs of teaching" (p. 147). Maybe yes, maybe no. I student will learn via the online format, however when a concept needs explained it gets turned back to the teacher.
· "Service costs in a range of industries are being brought down as institutions invert traditional processes, such as student services, to focus more on web-based self service models" (p. 148). Yes, registering online does take the place of the human substantially, but there will still be the need for human intervention when issues arise. Also is the thought of technological failure.
· "..while there is no doubt the costs of technology will come down, the fact remains that those that are unable to afford e-education are being written out of the game" (p. 151). Absolutely, those who are not technological savvy (or willing to learn) are slowly being squeezed out.
· "Distance education courses by definition do away with at least or sharply reduce the amount of contact between teachers and students, replacing this with independent study" (p. 151). For the most part yes, for those that can be successful in their independent studies and can budget their time wisely, but how about the ones who have no sense of time management?
