Struggling with the costs of teaching in higher education

Writer’s block

As I have mentioned before, I am currently writing an old-fashioned book (you know, the thing with paper sheets bound together) on the integration of technology into universities and colleges, and I have been struggling with a chapter called ‘Resources, money and decision-making’, which looks at the resources needed for, and the cost, of e-learning.

Now it’s not the usual writer’s block of not knowing what to write. I know exactly what I want to write, but it is the academic’s challenge of substantiating what I want to say. Where is the evidence? It would really help to have some secondary support in the form of other publications, or even (the delight of doctoral students) some ‘triangulation’, to support what I am going to write. But I can’t find any bloody research on the costs of e-learning (other than my own stuff (1995), the costings of Carol Twigg (1999) at the National Center for Academic Transformation, and an article by a former colleague at the UK Open University, Greville Rumble (2001), which focuses entirely on fully online courses. There is also Kevin Kruse’s ElearningGuru blog, which is more a methodology than actual research on costs – but nevertheless still valuable).

I have searched through most of the academic e-learning journals (57 of them), and nary a mention of cost. We have papers on meta-data, semantic meaning, personal learning environments, communities of inquiry, e-portfolios, serious games, constructivism and meaning, connectivism, learning communities, you name it, but questions regarding the resources needed to offer a given amount of blended learning, or the comparative costs of face-to-face versus blended learning, are just not in the 57 journals I have surveyed. The real problem of course is that it is not just lack of research on the costs of e-learning that’s the problem, but the lack of research on the costs of any specific modes of teaching.

So I’m facing the typical challenge of trying to prove a negative. Just because you can’t see a black cat in a dark cellar, it doesn’t mean it isn’t there. Similarly, just because I can’t find any research on costs of teaching, it doesn’t mean that there are none.

So you can imagine my delight when Volume 38, Number 3 of ‘Planning for Higher Education‘, devoted almost entirely to Issues in Higher Education Finance’ arrived in the mail. There was indeed some very interesting findings in the papers in this volume, some of which certainly is of value in supporting what I am going to write in the chapter.

The cost of teaching in universities is NOT going up much faster than inflation (at least in the USA)

First, the papers dispelled a myth that has been gaining dangerous traction in political circles, namely that the cost of teaching in public higher education in the USA is increasing much faster than inflation. In fact, total educational revenues (state grants plus student tuition revenues) for universities grew at an annual rate of less than 1% from 1987 to 2006. It is certainly true that student tuition fees have rapidly increased, but this is because the cost per student given in grant funding by state and federal governments has dropped almost in proportion to the increase in tuition fees. Thus universities and colleges have used tuition increases to make up the difference (Macpherson and Schulenberger, 2010). It is also true that overall expenditure in universities has grown more rapidly (just under 2 per cent per annum over the same period), but most of this growth is in areas that are ‘self-financing’, such as research, residences, clinical practice and athletics. Thus institutions have generally held down the costs of teaching. However, rather than cutting costs, they have relied mainly on keeping revenues constant through extra tuition fee increases each year.

Moving from the concept of ‘public good’ to ‘private good’?

By reducing state funding and increasing tuition fees in the public sector, the higher education system in the USA is clearly moving from funding higher education as a public good to that of a private good, as it transfers a growing proportion of the costs more to those who participate in post-secondary education (or their families).

The World Bank supports this view, because it argues that the economic benefits of higher education are considerable for those who qualify, and those that benefit most from it should contribute more of the cost. Indeed, they argue that high levels of state support mean that low income families pay a disproportionate level of tax towards a system from which they do not generally benefit.

However, it should be noted that even the current level of tuition fees in the USA nowhere covers the true teaching costs of a university or college education. All public sector post-secondary teaching still receives a substantial direct subsidy from state funding, although that proportion is gradually decreasing each year.

Is it different in Canada?

Generally, provincial governments fund a much greater proportion of the costs of teaching in public universities through direct grant than in the USA. As a result tuition fees are generally lower, although they vary considerably from province to province and program to program. The cheapest tuition fees are in Québec.

Interestingly, on the same day I got my copy of the Planning for Higher Education journal, the Globe and Mail ran an article on tuition fees in Québec. It noted that the full cost of an MBA at McGill University was $22,000 per student, but the tuition fee was only $1,672, plus administrative and other fees. The combined cost of government grant plus tuition fees though came to only $12,000, which meant that each MBA student was being heavily cross-subsidized, presumably by low cost programs such as a Bachelor in Arts. Not surprisingly the Dean of the Business School wants to increase tuition to $29,500 a year. He points out that while McGill overall is ranked as one of the best 25 universities in the world, the Business school is ranked only 95th of the ‘world’s top business schools.’ However, this leads to another myth.

Does money equate to quality?

Wellman (2010) writes: ‘The assumption that money is related to quality is so deep-seated that there are remarkably few analyses about whether it is true’.

Indeed, she quoted a study that found no correlation between revenues and degree productivity, and another that found that ‘total resource availability is less relevant than how institutions use the resources they have.’ Yet revenues per student are one of the critical factors in university rankings.

A time to look at the costs of teaching?

This brings us back to how decisions are made internally about how to allocate costs to teaching, and in particular, to e-learning. Wellman (2010) comments that ‘relatively few institutions incorporate data on costs into internal decision-making about budgets, which continue to be primarily incremental and revenue based rather than spending based…they have yet to connect the dots between spending and other aspects of institutional performance.’ In other words it’s easier (lazier) to increase tuition fees than look at being more cost efficient (and hence keeping down tuition fees). Indeed, if universities DID become more efficient they may lose even more government grant and hence go lower in the world university rankings!

How decisions are made internally about how to allocate costs to teaching of course is crucial to the issue of e-learning. What does it cost, and does it lead to improved performance? Without adequate data, it is difficult to answer that question. However, Wellman notes that ‘The way resources are used within the institution remains quite opaque.’ Hence my frustration. I’m working in a dark cellar without a light.

Conclusions

This edition of Planning in Higher Education is excellent, if you are interested in the costs of higher education. It did provide me with some nice quotes that I can use to explain why it is difficult to write about the resources needed to support e-learning, and why it is almost impossible at the moment to measure its cost-effectiveness.

In the meantime, if you have a figurative flashlight that will illuminate any articles, web sites or publications that provide actual data on the costs of e-learning, please let me know – I will be eternally grateful!

References

Bates, A. (1995) Chapter 8: Web-based learning: costs and organizational issues, in ‘Technology, e-Learning and Distance Education‘ London/New York: Routledge

Brinkman, P. and Morgan, A. (2010) Financial Planning: Strategies and Lessons Learned Planning for Higher Education, Vol. 38, No. 3, pp. 5-14

McPherson, P. and Shulenburger, D. (2010) Understanding the cost of public higher education Planning for Higher Education Vol. 38, No. 3, pp. 15-24

Rumble, G. (2001) The Cost and Costing of Networked Learning Journal of Asynchronous Learning Networks, Volume 5, Issue 2

Seybert, J. and Rossol, P. (2010) What drives instructional costs in two year colleges Planning for Higher Education Vol. 38, No. 3, pp. 38-44

Twigg, C. (1999) Improving learning and reducing costs: re-designing large enrollment classes Troy NY: The National Center for Academic Transformation: for more recent detailed costs, go to the NCAT web site, find an individual case, and click on course planning tools

Wellman, J. (2010) Improving data to tackle the higher education ‘cost disease’ Planning for Higher Education Vol. 38, No. 3, pp. 25-37