1. Slide 1 Online Instructional Cost Study Minnesota State Colleges and Universities B oard of Trustees November 13, 2007

2. Slide 2 Objectives of the Study Address the question: What is the cost of online instruction in relation to the cost of classroom instruction? Provide a basis for strategic planning given the increasing student demand for online courses and programs Improve competitive advantage in the online marketplace

3. Slide 3 Components of Study 1.Findings Instruction (50% of total costs) Course development Non-instruction 2.Demand in the online market 3.Assessment of quality 4.Tuition 5.Business case 6.Next Steps

4. Slide 4 What is an “online” course? A course that is predominately online where a maximum of two activities may occur face-to- face in a classroom. Two other types of courses have a portion of instruction online: –Web-enhanced: Limited classroom time –Web-supplemented: No reduced seat time –These are not considered “online” courses

5. Slide 5 Findings for FY2007 1. Institutions have developed online courses and related support using a variety of strategies a)Online is developing at different rates b)Online has been funded primarily through local and incremental resources c)For those that have been delivering online courses the longest, online has been integrated into the organization and is becoming just another (albeit important) mode of delivery

6. Slide 6 Findings for FY2007 2. Online instructional expenditures are comparable to those for classroom a)Statistical Analysis Online not a strong indicator Other factors are more important –Faculty, course and institutional characteristics b)Direct expenditure comparison About half (51%) of online sections were more expensive Other factors –Faculty profiles of both are similar –Costs appear to be trending down

7. Slide 7 Cost-effectiveness of online delivery continues to increase Number of online students, sections and courses

8. Slide 8 Findings for FY2007 3. Course development costs for online courses appear to be slightly higher a)Part of instruction b)Data not available from information system c)Conducted survey d)Institutions generally spend more for online course development than for classroom e)Institutions add courses with available institutional funds f)Much of the course development has been done by faculty without institutional or system support

9. Slide 9 Findings for FY2007 4. Non-instruction: lack of available data makes drawing conclusions difficult a)Data not available - expenditures not tracked by student type b)Conducted survey A few consider online costs as distinct and are able to identify specific online costs Others view activities as being shared and cannot readily identify online-specific costs c)Costs for online appear to be slightly higher d)Services provided to online students are usually the same as those provided to all students e)Online students also take onground courses

10. Slide 10 Most online students in MnSCU are also enrolled in classroom courses Headcount Students in Online Courses 16% 19% 25% 22%

11. Slide 11 Findings for FY2007 Summary Instructional costs are comparable –Online course development costs are slightly higher Non-instructional costs for online appear to be slightly higher –Difficult to draw firm conclusions –Differences among institutions Need to view online costs within larger context of demand and market

12. Slide 12 MnSCU online enrollment growing 7%10%12%17%22%25% Online as a % of total Online Student headcount in credit courses

13. Slide 13 Online enrollment nationally has more than doubled in past five years Fall enrollment estimates “Online Nation: Five Years of Growth in Online Learning” Sloan Consortium, November 2007

14. Slide 14 Assessment & Quality Assessment of online quality – on par or ahead of onground Accreditation for all online programs –Sanctioned through Higher Learning Commission Course-level quality assurance –Course Site-readiness rubric –Quality Matters initiative Online student satisfaction surveys –24 institutions are using instrument Audits of online student support services http://www.centss.org/ http://www.centss.org/

15. Slide 15 Tuition What is market-driven tuition? MnSCU Board policy 5.11 Market-driven tuition: “Colleges and universities may set and charge market-driven tuition for customized training, continuing education, distance learning, non-credit instruction, and contract post-secondary enrollment options programs.”

16. Slide 16 Tuition Charged in the Online Market Tuition Rates of Largest National and Regional Online Providers Average tuition for a full-time full-year student Data from Education Department, National Education Statistics when available, or organizations’ websites

17. Slide 17 MnSCU market-driven tuition Average rate per credit difference between online market-driven tuition and regular tuition rates is $27 or 20% Market-driven tuition rates for online range from $113 to $192 per credit 15 of the 16 institutions with the highest market-driven tuition rate differentials are out-state MnSCU Finance studying tuition issue

18. Slide 18 Business Case The business case for support and delivery of online is made at the institution Each institution weighs the factors affecting how they deliver and support online courses – including mission, cost, demand, and tuition Minnesota Online assists with basic infrastructure, marketing, and student support services – through funding from the $5 per online credit charge back to institutions

19. Slide 19 Next Steps 1.Determine the best model to assist institutions in serving students most effectively Collaborative and coordinated Competitive and independent The role of the institution and the system 2.Ongoing analysis Incorporate findings into Finance tuition study