Page 1 Costs and Pricing of Distance/Online Education Programs A Joint Report from Indiana University, Purdue University, and Ball State University to the Indiana Commission for Higher Education December 9, 2011 Barbara Bichelmeyer, Indiana University Steve Keucher, Indiana University Mike Eddy, Purdue University Mary Sadowski, Purdue University Jennifer Bott, Ball State University Bernard Hannon, Ball State University When Tim Berners-Lee and CERN launched the World Wide Web in 1991 in order to develop a “pool of human knowledge … which would allow collaborators in remote sites to share their ideas,” they certainly could not have fully comprehended the ways in which that action would revolutionize higher education. One of the most profound changes to higher education as a result of the Web has been the development and growth of distance/online education programs. The ability to send and receive text, images, video, sound, and other multimedia between individuals or groups of people at a distance either synchronously (in real time) or asynchronously (independent of time) is redefining the relationship between teacher and student, which is the core feature of the academic enterprise. Together, this new capability and this new relationship are leading to the restructuring of higher education programs and services, policies and processes, markets and competition, revenues and costs. The impact of the web on higher education has been so complex and so pervasive that, even after 20 years, we are still coming to terms with what exactly online education is, as accreditors and stakeholders work to build consensus toward a clear definition that will allow us to manage and monitor online education. A fundamental question still to be decided: is online education any program in which any student may select courses to create an experience in which 50% or more of the courses were taken online, whether or not the higher education institution intended the degree to be online (Higher Learning Commission, 2011, p.1); or is it more appropriately the Sloan Consortium’s definition of an experience which a higher education institution intentionally designs, with 80% or more of coursework being online (Allen & Seaman, 2010, p.4)? One reason online education is so difficult to define is that online education may take so many forms, which involve so many different elements of the instructional experience, such as
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Costs and Pricing of Distance/Online Education Programs
A Joint Report
from
Indiana University, Purdue University, and Ball State University
to the
Indiana Commission for Higher Education
December 9, 2011
Barbara Bichelmeyer, Indiana University
Steve Keucher, Indiana University
Mike Eddy, Purdue University
Mary Sadowski, Purdue University
Jennifer Bott, Ball State University
Bernard Hannon, Ball State University
When Tim Berners-Lee and CERN launched the World Wide Web in 1991 in order to develop a
“pool of human knowledge … which would allow collaborators in remote sites to share their
ideas,” they certainly could not have fully comprehended the ways in which that action would
revolutionize higher education. One of the most profound changes to higher education as a result
of the Web has been the development and growth of distance/online education programs. The
ability to send and receive text, images, video, sound, and other multimedia between individuals
or groups of people at a distance either synchronously (in real time) or asynchronously
(independent of time) is redefining the relationship between teacher and student, which is the
core feature of the academic enterprise. Together, this new capability and this new relationship
are leading to the restructuring of higher education programs and services, policies and
processes, markets and competition, revenues and costs.
The impact of the web on higher education has been so complex and so pervasive that, even after
20 years, we are still coming to terms with what exactly online education is, as accreditors and
stakeholders work to build consensus toward a clear definition that will allow us to manage and
monitor online education. A fundamental question still to be decided: is online education any
program in which any student may select courses to create an experience in which 50% or more
of the courses were taken online, whether or not the higher education institution intended the
degree to be online (Higher Learning Commission, 2011, p.1); or is it more appropriately the
Sloan Consortium’s definition of an experience which a higher education institution intentionally
designs, with 80% or more of coursework being online (Allen & Seaman, 2010, p.4)?
One reason online education is so difficult to define is that online education may take so many
forms, which involve so many different elements of the instructional experience, such as
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presentation, interaction, and testing. Further, some forms of online instruction are more
appropriate for certain types of learning than others, making it impossible to take any absolute
view of the value or lack thereof of online education. This point was well-articulated by William
G. Bowen, president emeritus of both Princeton University and the Andrew W. Mellon
Foundation, currently serving on the boards of Ithaka/JSTOR. Bowen recently published the
best-selling book, Crossing the Finish Line: Completing College at America's Public
Universities (2009), and his special interest in the application of information technology to
education is evident in his founding of Ithaka Harbors, an organization launched to accelerate the
adoption of productive and efficient uses of information technology for the benefit of higher
education. During his address at the Indiana University-Bloomington Graduate Commencement
in May 2011, Bowen noted:
Online learning is not a panacea. Being around other smart people … is a huge
advantage — not only in acquiring knowledge in the abstract but also in learning
how to work effectively with others. This is why MIT, in its pioneering web-
based OpenCourseWare project, distinguished sharply between what on-campus
MIT students would learn from actually being at MIT and what off-campus users
of MIT materials could learn. Non-campus-based users could learn a lot, but not
as much as those who had on-going interactions with fellow students and faculty
members as well as access to the materials available to everyone on the MIT
website. That said, there is absolutely no doubt that appropriate uses of online
methods of instruction have an enormous amount to contribute to educationally-
effective modes of teaching. But this does not mean that even the most
sophisticated approaches to online learning … are equally well-suited to all
subjects. … Nor should one approach any discussion of whether to embrace
online learning from an “all or nothing” perspective. … even Indiana, with its
renowned technological infrastructure, is in very early days in developing and
testing how best to employ rapidly evolving online technologies. …
Accreditation Requirements for Distance/Online Education
The variety of types of online instruction available, the appropriate uses for each type of
instruction, and the importance of interaction to education are three key issues around which
higher education accreditors are organizing their expectations for distance/online education.
Prior to the advent of the Web, students who studied at a distance generally did so through
“correspondence education,” which is defined by the Higher Learning Commission (the
accrediting body for all Indiana University and Purdue University campuses), as “when an
institution of higher education provides instructional materials and exams to students who are
separated from the instructor; in which interaction between the instructor and student is limited,
is not regular and substantive, is primarily initiated by the student, and which are typically self-
paced.” Further, “correspondence education is not distance education” (Higher Learning
Commission, 2011, p.2).
Conversely, the Higher Learning Commission (HLC), defines distance education as education in
which information and communications technologies are used “to deliver instruction to students
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who are separated from the instructor and to support regular and substantive interaction between
the students and the instructor, either synchronously or asynchronously,” (Higher Learning
Commission, 2011, p. 2). Regular and substantive interaction between student and instructor is
the value added brought to distance education by the World Wide Web - though this type of
interaction from a distance was not possible before the web, it is both the goal and the
expectation of online/distance education at HLC- and other regionally-accredited higher
education institutions today.
In 2009, the Council of Regional Accrediting Commissions published Guidelines for the
Evaluation of Distance Education (On-Line Learning), which highlight nine hallmarks of quality
for distance education, to which institutions are to demonstrate compliance during accreditation
reviews. The nine hallmarks of quality are:
1. On-line learning is appropriate to the institution’s mission and purposes.
2. The institution's plans for developing, sustaining and, if appropriate, expanding on-line
learning offerings are integrated into its regular planning and evaluation processes.
3. On-line learning is incorporated into the institution’s systems of governance and academic
oversight.
4. Curricula for the institution's on-line learning offerings are coherent, cohesive, and
comparable in academic rigor to programs offered in traditional instructional formats
(emphasis added).
5. The institution evaluates the effectiveness of its on-line learning offerings, including the
extent to which the on-line learning goals are achieved, and uses the results of its evaluations
to enhance the attainment of the goals.
6. Faculty responsible for delivering the on-line learning curricula and evaluating the students’
success in achieving the on-line learning goals are appropriately qualified and effectively
supported.
7. The institution provides effective student and academic services to support students enrolled
in on-line learning offerings.
8. The institution provides sufficient resources to support and, if appropriate, expand its online
learning offerings.
9. The institution assures the integrity of its on-line learning offerings.
The availability of multimedia communication and both synchronous and asynchronous
interaction through the World Wide Web has created an expectation about distance education
that was previously both unheard of and impossible, which is that online education can and
should be comparable in academic rigor to programs offered in traditional instructional formats.
The expectation that the online format, which is wholly different than on-campus instruction,
could have the same rigor of experience and interaction is a testament to just how revolutionary
the World Wide Web has been to higher education.
Brief Overview of Key Benefits of Distance/Online Education
Though the word “revolutionary” may seem to be hyperbole, the key benefits of Web
technologies are changing the landscape of higher education as leading institutions incur
significant new costs in order to drive the development of online education programs. Key
benefits of distance/online programs for students and institutions include:
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1. Reduced travel. The conveniences afforded by online technologies lead to significant cost
and time savings for students, as they no longer need to drive to campus, buy parking
permits, walk into classrooms, go to the library to access resources, or to meet face-to-face
with faculty or other students in order to participate in educational experiences (Cornford &
Pollock, 2003; Evans & Haase, 2001).
2. Flexible scheduling. The same technologies that reduce/remove the need for students to
travel to campus also create opportunities for and convenience of flexible scheduling so
students can watch lectures, communication asynchronously, and access library resources
24/7, which allows students to participate in educational experiences that might otherwise not
be possible due to demands at work, home, and other personal responsibilities (Jung, 2003).
3. Interactivity. Web 2.0 technologies such as social networking, blogs, wiki, online
communities and video communications have greatly improved and increased opportunities
for students to interact with instructors and other students, allowing students to ask questions
and to receive quick and frequent feedback from instructors, and to engage in interpersonal
interactions with other students, across the dimensions of both time and space (Jung, 2003).
4. New markets. Online instruction that can be delivered instantaneously around the world
removes the limitations of geography and time, and means that any and every education
provider has the potential to reach a global market (Bartolic-Zlomislic & Bates, 1999; and
Evans & Haase, 2001), though, obviously, the potential of reaching a new market may not
actually be worth the cost of accessing it.
5. Greater scalability. Access to new markets means that the same courses can be used to
educate more people, thereby increasing the scalability of online courses (Evans & Haase,
2001), which should lead to decreases in average cost per course enrollment as enrollments
rise (Arizona Learning Systems, 1998).
6. Increased competition/Improved quality. As education providers take advantage of Web
technology to move in to new markets, increasing competition is expected to unleash market
forces that will eventually improve the overall quality of education, as competitors vie for
Institution/Campus Level and Program Status Online Rate * On‐campus rate DifferentialPurdue West Lafayette Engineering Professional Education per 3 credit hour course ** Both 3,096.00$ $336.10 / $916.25 per
credit hour $543 per semester
Purdue West Lafayette Engineering Professional Education per one credit hour course ** Both 1,215.00$ $336.10 / $916.25 per credit hour
$543 per semester
Purdue West Lafayette Engineering Professional Education per one credit hour course if 2 or more course taken. **
Both 940.00$ $336.10 / $916.25 per credit hour
$543 per semester
Purdue West Lafayette Engineering Professional Education per 3 credit hour Project/Thesis course **
Both 4,128.00$ $336.10 / $916.25 per credit hour
$543 per semester
Purdue West Lafayette Engineering Professional Education per one credit hour Project/Thesis course **
Both 1,559.00$ $336.10 / $916.25 per credit hour
$543 per semester
Purdue West Lafayette Engineering Professional Education per 4 credit hour Project/Thesis course **
Both 5,412.00$ $336.10 / $916.25 per credit hour
$543 per semester
Purdue West Lafayette Veterinary Technology Distance Learning Program ‐ Undergraduate Both 347.85$ no equivalent N/A
Purdue West Lafayette Agricultural Economics Masters Degree per credit Both 1,145.00$ $336.10/ $916.25 N/APurdue West Lafayette Masters in Industrial and Physical Pharmacy per credit Both 1,000.00$ $336.10/ $916.25 N/APurdue West Lafayette Non Traditional Doctor of Pharmacy Program per credit (Resident) Resident 660.00$ 336.10$ N/A
Purdue West Lafayette Non Traditional Doctor of Pharmacy Program per credit (Non‐Resident) Non‐Resident 1,230.00$ 916.25$ N/A
Purdue West Lafayette Executive Masters in Business Program per module Both 26,000.00$ no equivalent N/APurdue West Lafayette Reading Recovery Program per credit hour fee Both 336.10$ $336.10/ $916.25 N/APurdue West Lafayette International Masters in Management per module Both 25,000.00$ no equivalent N/APurdue West Lafayette Masters in Technology ‐ Building Construction Management per credit
hour (Resident) Resident 682.00$ 336.10$ $273 per semester
Purdue West Lafayette Masters in Technology ‐ Building Construction Management per credit hour (Non‐Resident)
Non‐Resident 906.00$ 916.25$ $273 per semester
Purdue West Lafayette Masters in Technology ‐ Aviation Technology per credit hour Both 750.00$ $336.10/ $916.25 $273 per semesterPurdue West Lafayette Masters in Technology ‐ Concentration ‐ Organizational Leadership
Supervision per credit hour (Resident) Resident 750.00$ 336.10$ $273 per semester
Purdue West Lafayette Masters in Technology ‐ Concentration ‐ Organizational Leadership Supervision per credit hour (Non‐Resident)
Non‐Resident 970.00$ 916.25$ $273 per semester
Purdue West Lafayette Masters in Technology ‐ Concentration ‐ Information Technology Project Management per credit hour
Institution/Campus Level and Program Status Online Rate * On‐campus rate DifferentialPurdue West Lafayette Masters in Technology ‐ Concentration ‐Technology and Innovation per
credit hour (Resident) Resident 750.00$ 336.10$ $273 per semester
Purdue West Lafayette Masters in Technology ‐ Technology and Innovation per credit hour (Non‐Resident)
Non‐Resident 970.00$ 916.25$ $273 per semester
Purdue West Lafayette Education M.S. Learning Design & Technology per credit hour (Resident) Resident 347.85$ 336.10$ N/A
Purdue West Lafayette Education M.S. Learning Design & Technology per credit hour (Non‐Resident)
Non‐Resident 668.15$ 916.25$ N/A
* Online rates include Technology, R & R and differential fees.
** Engineering Professional Education Degrees include
Masters of Science in Engineering ‐ Interdisciplinary Engineering Concentrations:
Engineering Management & Leadership
Biomedical Engineering
Computational Engineering
Integrated Vehicle Systems
Masters of Science in Aeronautics and Astronautics
Masters of Science in Electrical and Computer Engineering
Institution/Campus Level and Program Status Online Rate * On‐campus rate DifferentialPurdue North Central Undergraduate Distance Education, Resident Resident 209.40$ 209.40$ Purdue North Central Undergraduate Distance Education, Nonresident (for students from
states participating in the Midwest Student Exchange Program)Nonresident 261.75$ 261.75$
Purdue North Central Undergraduate Distance Education, Nonresident Nonresident 525.65$ 525.65$ Purdue North Central Graduate Distance Education, Resident Resident 263.65$ 263.65$ Purdue North Central Graduate Distance Education, Nonresident (for students from states
participating in the Midwest Student Exchange Program)Nonresident 329.56$ 329.56$
Purdue North Central Graduate Distance Education, Nonresident Nonresident 611.80$ 611.80$
* In addition to paying the online tuition fee, IPFW students are assessed the following per credit hour fees: Technology fee ($8.35/credit hour); Student Service fee ($11.90/credit hour); Parking fee ($6.10/credit hour); Facility fee/Repair & Rehab fee/Facility Repair & Exp.fee ($6.25/credit hour). for a total of $313.65/credit hour, which is equal to the Statewide Education Fee.Purdue Calumet HTM Certificate ‐ Undergrad Both 200.00$ no equivalentPurdue Calumet Nursing BHS RN to BSN ‐ pre‐ requisites ‐ Undergrad Both 323.15$ no equivalentPurdue Calumet Nursing BHS RN to BSN ‐ Undergrad both 276.61$ no equivalentPurdue Calumet CET ‐ Undergrad Resident 204.00$ $204.00 /cr hrPurdue Calumet CET ‐ Undergrad Non‐Resident 488.90$ $488.90/cr hrPurdue Calumet ICN English ‐ Undergrad Resident 204.00$ $204.00 /cr hrPurdue Calumet ICN English Non‐Resident 488.90$ $488.90/cr hrPurdue Calumet EDCI ‐ Graduate Both 399.95$ no equivalentPurdue Calumet Educ Admin ‐ Graduate both 399.95$ no equivalentPurdue Calumet IPFW Nursing ‐ Graduate Both 399.95$ no equivalentPurdue Calumet Nursing Online Masters ‐ Graduate Both 399.95$ no equivalent
Note: non‐discounted Nursing Academic partners tuition rates are listed.
Instructional Fee Rates (Tuition) for Online Education Offerings
* The default rate for online instruction is the same as the Trustee-approved on-campus rate. Exceptions are noted in the table.Online
Instructional Fee Rates (Tuition)* Residency 2011-12Institution/Campus Level and Program Status Rate On-campus rate Justification/Explanation/Circumstances
IU Bloomington Business Kelley Blended Program MBA Both 1,500.00$ no equivalent Market- and demand-driven rateIU Bloomington Business Kelley Direct MS/MBA (Public) Both 1,145.00 no equivalent Market- and demand-driven rateIU Bloomington Business Kelley Direct Thunderbird (per term) Both 11,714.00 No equivalent. Market- and demand-driven rateIU Bloomington Business Global Executive MBA Both 1,665.00 Market- and demand-driven rateIU Bloomington Education M.S. in Instructional Systems Technology Both 377.66 377.66 Approved long ago at in-state rates for perceived reasons of access.IU Bloomington Education M.S. in Language Education Both 377.66 377.66 Approved long ago at in-state rates for perceived reasons of access.IU Bloomington HPER Undergraduate, Resident Resident 263.45 263.45 Same as on-campus rate.IU Bloomington HPER Undergraduate, Nonresident Nonresident 316.14 889.03 Lower non-resident rate for marketability/competition.IU Bloomington HPER Graduate, Resident Resident 331.60 331.60 Same as on-campus rate.IU Bloomington HPER Graduate, Nonresident Nonresident 397.92 965.70 Lower non-resident rate for marketability/competition.IU Bloomington HPER M.S. in Therapeutic Recreation Both 331.60 331.60 Approved long ago at in-state rates for perceived reasons of access.IU Bloomington SPEA Master of Public Affairs, Resident Resident 498.00 415.00 Market- and demand-driven rateIU Bloomington SPEA Master of Public Affairs, Nonresident Nonresident 902.00 902.00 Same as on-campus rate.IUPUI Business Kelley Direct MS/MBA (Public) Both 1,145.00 No equivalent. Market- and demand-driven rateIUPUI Business Kelley Direct Thunderbird (per term) Both 11,714.00 No equivalent. Market- and demand-driven rateIUPUI Computer Information Leadership Technology program Both 89.25 $341.90/$977.70 Lower rate set to attract students to certificate programIUPUI E&T Undergraduate Certificate in Computer Technology Both 311.40 $247.90/$860.00 Undifferentiated-by-residency rate set slightly higher than on-campus residentIUPUI E&T Master's in Facilities Management, Resident Resident 414.50 341.90 Market- and demand-driven rateIUPUI E&T Master's in Facilities Management, Nonresident Nonresident 545.00 977.70 Lower non-resident rate for marketability/competition.IUPUI Medicine Undergraduate Histotechnology Both 195.46 $247.90/$860.00 Program originally approved at NW transferred to IUPUI with lower rateIUPUI Nutrition & Dietetics Graduate Certificate, Resident Resident 495.00 303.00 Market- and demand-driven rateIUPUI Nutrition & Dietetics Graduate Certificate, Nonresident Nonresident 610.00 912.10 Lower non-resident rate for marketability/competition.IUPUI Master of Social Work, Resident, On-line Resident 500.00 371.00 Market- and demand-driven rateIUPUI Master of Social Work, Nonresident, On-line Nonresident 600.00 855.00 Lower non-resident rate for marketability/competition.IU East Undergraduate Distance Education, Resident Resident 193.94 193.94 Same as on-campus rate.IU East Undergraduate Distance Education, Nonresident Nonresident 275.07 546.76 Lower non-resident rate for marketability/competition.IU East Graduate Distance Education, Resident Resident 238.06 238.06 Same as on-campus rate.IU East Graduate Distance Education, Nonresident Nonresident 332.63 581.49 Lower non-resident rate for marketability/competition.IU Kokomo Undergraduate Distance Education, Resident Resident 193.47 193.47 Same as on-campus rate.IU Kokomo Undergraduate Distance Education, Nonresident Nonresident 275.08 530.36 Lower non-resident rate for marketability/competition.IU Kokomo Graduate Distance Education, Resident Resident 237.76 237.76 Same as on-campus rate.IU Kokomo Graduate Distance Education, Nonresident Nonresident 332.20 554.95 Lower non-resident rate for marketability/competition.IU School of Continuing Studies Undergraduate Independent Study, Resident Resident 183.07 247.90 Correspondence rate historically lower IU School of Continuing Studies Undergraduate Independent Study, Nonresident Nonresident 212.82 860.00 Correspondence rate historically lower IU School of Continuing Studies M.S. in Adult Education, Resident Resident 297.40 377.66 Lower resident rate for marketability/competition.IU School of Continuing Studies M.S. in Adult Education, Nonresident Nonresident 416.30 1,099.87 Lower non-resident rate for marketability/competition.
Online delivery course fees: Several programs assess a course fee in addition to tuition rates. This fee covers additional costs associated with the course and ranges from $30 at East and Kokomo to $39 to $50 at IUPUI and Bloomington.
EXPLANATION OF RATE DIFFERENCES:* For online rates equal to on-campus, the explanation is this has been the standard policy for IU,* For online rates lower than on-campus, the explanation is to address competition and to attract students/increase demand,* For online rates higher than on-campus, the explanation is that for high-demand programs, we set a market-driven rate to appropriately differentiate ourprogram from competitors.
11/28/2011
For students taking at least one on-campus course, the tuition and fees are charged at the same rate for on-campus and on-line courses
Students taking no on-campus courses are not charged certain mandatory fees, including Health, Recreation, Graduate Course & Student Service Fees (all students pay a technology fee)
Certain programs and courses have additional special fees, but fees are identical for on-campus and on-line offerings
resident non-resident on-campus rate
For UG students enrolled in no on-campus courses $257 $454 same (1) for students in 12-18 hour bracket: $3,341 resident and resident fee + $197 per hour for non-resident
For Grad students all hours charged identical to on-campus except no $52/hr. grad fee $284 $481 same (1) no bracket for grad students - all courses charged per credit hour
MBA Online program $370 $721 $284/$481 On-campus MBA courses charged the same as all Grad programs
Ball State UniversityTuition rates for On-Line Education 2011-12