Emma Bittner considered getting a master's degree in public health at a university near her home in Austin, Texas. But the in-person program cost tens of thousands of dollars more than she had hoped to spend.
So she checked out master's degrees she could pursue remotely, on her laptop, which she was sure would be much cheaper.
The price for the same degree online was … just as much. Or more.
"I'm, like, what makes this worth it?" said Bittner, 25. "Why does it cost that much if I don't get meetings face-to-face with the professor or have the experience in person?"
Among the surprising answers is that colleges and universities are using online higher education to subsidize everything else they do, a survey of the people who manage these programs finds. And some schools are spending significant amounts on marketing and advertising for it.
The result is that 83% of online programs in higher education cost students as much as or more than the in-person versions, according to an annual survey of college online-learning officers. The survey was conducted by Eduventures, an arm of the higher education consulting company Encoura, for the nonprofits Quality Matters and Educause.
About a quarter of universities and colleges even tack on an additional "distance learning" fee, the survey found.
Universities and colleges "see online higher education as an opportunity to make money and use it for whatever they want to make money for," said Kevin Carey, vice president of education and work at the left-leaning think tank New America.
Widespread confusion about costs
Bittner's confusion about the price is widespread. Eighty percent of Americans think online learning after high school should cost less than in-person programs, according to a 2024 survey of 1,705 adults by New America.
After all, technology has reduced prices in many other industries. And online courses don't require classrooms or other physical facilities and can theoretically be taught to a much larger number of students, creating economies of scale.
But, in addition to using online revenue to help pay for other things, universities say they have had to spend more than they anticipated on advising and support for online students, whose academic performance, on average, lags behind their in-person counterparts.
The concerns about cost come as online higher education is projected to pass an impressive if little-noticed milestone this year: For the first time, more American college students will be learning entirely online than will be learning 100% in person.
That's according to an estimate made in January by Richard Garrett, Eduventures' chief research officer.
Among the reasons: Learning online offers scheduling flexibility for people also juggling jobs and families. It's being particularly pushed for professional certificates and graduate degrees. And the online sector got a boost from the COVID-19 pandemic, when just about everyone was forced to learn remotely.
Meanwhile, more institutions seeing the revenue potential are scrambling to get in on it.
How much an online degree can cost
Bringing down the price of a degree "was certainly a key part of the appeal" when online higher education began, Garrett said.
"Online was going to be disruptive," he added. "It was supposed to widen access. And it would reduce the price. But it hasn't played out that way."
Today, online instruction for in-state students at four-year public universities costs, on average, $341 a credit, the independent Education Data Initiative finds. That's higher than the average $325 a credit for face-to-face tuition.
This adds up to about $41,000 for a degree online, compared with about $39,000 in tuition for a degree obtained in person.
Two-thirds of private four-year universities and colleges with online programs charge more for them than for their face-to-face classes, according to the survey of online managers. For private universities and colleges, the average tuition for online learning comes to $516 per credit.
Community colleges collectively enroll the largest number of students who learn entirely online. The Eduventures survey found that all the community colleges surveyed charge those students the same as or more than their in-person counterparts. That's likely because community college tuition overall is already comparatively low, Garrett explains.
Startup costs and technological hurdles
Social media is riddled with angry comments about this, with many students echoing Bittner's questions about how learning online could possibly cost more.
Online education officers respond that their programs face steep startup costs and need expensive technology specialists and infrastructure.
In a separate survey of faculty members by the consulting firm Ithaka S+R, 80% said it took them as much time, or more, to plan and develop online courses as it did in-person ones because of the need to incorporate new technology.
Online programs also need to provide faculty members who are available for office hours, plus online advisers and other resources, exclusively to support online students. For the same reasons, many online providers have put caps on enrollment, limiting those expected economies of scale.
"You still need advisers, you still need a writing center, a tutoring center, and now you have to provide those services for students who are at a distance," said Dylan Barth, vice president of innovation and programs at the Online Learning Consortium, which represents online education providers.
Part of the higher education playbook
Still, 60% of public universities and more than half of private universities are taking in more money from online education than they spend on it, the online managers' survey found. About half said they put the money back into their institutions' general operating budgets.
Such cross subsidies have long been a part of higher education's financial strategy, under which students in classes or fields that cost less to teach generally subsidize their counterparts in courses or disciplines that cost more. English majors subsidize their engineering classmates, for example. Big first-year lecture classes subsidize small senior seminars. Graduate students often subsidize undergrads.
"Online education is another revenue stream from a different market," said Duha Altindag, an associate professor of economics at Auburn University who has studied online programs.
Universities "are not trying to use technology to become more efficient. They're just layering it on top of the existing model," said New America's Carey, who has been critical of some online education approaches.
Another page that online managers have borrowed from higher education's traditional pricing playbook is that consumers often equate high prices with high quality, especially at brand-name colleges and universities.
"Market success and reputation can support higher prices," Eduventures' Garrett said. It's not what online courses cost to provide that determines the price, in other words, but how much consumers are willing to pay.
With online programs competing for customers across the U.S., rather than for those within commuting distance of campus or willing to relocate, at least some universities and colleges are spending large amounts on marketing and advertising.
Lower grades and reduced chances of graduating
Meanwhile, online students — while they're paying the same as or more than their in-person counterparts — have generally poorer success rates.
Online students get lower grades than those in face-to-face education, according to research by Altindag and colleagues at American University and the University of Southern Mississippi — though the gap is narrowing.
Students online are more likely to have to withdraw from or repeat courses and are less likely to graduate on time, these researchers found, which further increases the cost.
And students who learn entirely online at any level are less likely to have graduated within eight years than students in general.
Lower-income students fare especially poorly. Researchers say this is in part because many come from low-resourced public high schools or are balancing their classes with work or family responsibilities.
If they do receive degrees, online-only students earn more than their entirely in-person counterparts for the first year after college, Eduventures finds — perhaps because they tend to be older than traditional-age students, researchers speculated. But that advantage disappears within four years, when in-person graduates overtake them.
For online graduates, challenges in the job market
For all the growth in online higher education, some employers appear reluctant to hire graduates of it, according to still other research from the University of Louisville. Employment applicants who listed an online, as opposed to in-person, degree were about half as likely to get a callback for the job.
How strongly consumers feel that online higher education should cost less than the in-person kind was evident in lawsuits brought against schools that continued to charge full tuition even after going remote during the COVID-19 pandemic.
Students had part of their payments refunded under multimillion-dollar settlements with the University of Chicago, Pennsylvania State University, Rensselaer Polytechnic Institute, the University of Maine System and others.
Yet consumers keep signing on. For all the complaints about remote learning at the time, its momentum seems to have accelerated since the pandemic, according to an analysis of federal data by Phil Hill, an education technology consultant.
Sixty percent of campus online officers say that online sections of classes tend to fill first, and nearly half say online student numbers are outpacing in-person enrollment.
Signs of improvement
There have been some widely cited examples of online programs with dramatically lower tuition, such as a $7,000 online master's degree in computer science at the Georgia Institute of Technology (compared with the estimated nearly $43,000 for the two-year in-person version). That program has attracted thousands of students and a few copycats.
There are also signs that prices could fall. Competition is intensifying from national nonprofit providers such as Western Governors University, which charges a comparatively low average of $8,300 per year, and Southern New Hampshire University, whose undergraduate price per credit hour is a slightly lower-than-average (for online courses) $330.
Also, universities have started cutting their ties with for-profit middlemen, called online program managers, which take big cuts of up to 80% of revenues. Nearly 150 such deals were canceled or ended and not renewed in 2023, the most recent year for which the information is available, the market research firm Validated Insights reported.
Another thing that could lower prices: As more online programs go live, they no longer require high up-front investment — just periodic updating.
"It is possible to save money on downstream costs if you offer the same course over a number of years," said Justin Ortagus, director of the University of Florida's Institute of Higher Education.
While that survey of online officers found a tiny decline in the proportion of universities charging more for online than in-person classes, the drop was statistically insignificant, however. And as their enrollments are projected to plummet, institutions increasingly need the revenue from online programs.
Emma Bittner, in Texas, ended up in a new online master's program in public health from a private university that was cheaper than the others she'd found.
Her day job is at the national nonprofit Young Invincibles, which pushes for reforms in higher education, health care and economic security for young Americans. And she still doesn't understand the online pricing model.
"I'm so confused about it. Even in the program I'm in now, you don't get the same access to stuff as an in-person student," she said. "What are you putting into it that costs so much?"
This story about the cost of online higher education was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education.
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