College offering online bachelor degree

This year University of Massachusetts in Lowell enrolled 5,000 students in CyberEd, its online distance education program, a 100 percent increase from last year. Online IT courses were filled early, while some openings remained in the same courses offered on campus.

Having an online course fill before a traditional course is a huge turnaround, says Jacqueline Moloney, chief of academic affairs and dean of continuing studies and corporate education. When CyberEd was launched four years ago, students were hesitant to take online IT courses.

Moloney believes that, as technology improves, online learning will be the choice of many, especially adults seeking professional certification.

"There's no way they'll drive an hour in traffic to get to a 7 p.m. class on a Wednesday if they don't have to," she says. "They are exhausted when they sit down, and they have to keep their eyes open with a toothpick. Then after three hours, they have to crawl back home. Is this a good way to learn?"

As the popularity of distance education continues to grow, schools that rush to bring programs online without considering the many costs involved can fail.

"Everyone is feeling pressure to go online now, but if they haven't invested in technology and training along the way, it will be expensive," Moloney says. "And if they do it poorly the first time, they will fail. Once students have a bad experience, they won't return for a long time."

Jon Rickman, VP for information systems at Northwest Missouri State University, agrees that "everyone's jumped into the pool, but they don't know how deep the water is." He believes the most interesting thing about the topic is that not only do administrators not know what it costs to produce online courses, they often don't know what the traditional classroom is costing them.

"They don't know what they are comparing it to," he says.

At NMSU, he estimated that construction costs are $100,000 a classroom, at $90 per square foot. Academic building maintenance and replacement costs come in at $11 a year per square foot, $1,757 per student, $61 per credit hour and $4,054 per course.

He also originally estimated that the cost per student credit hour of traditional courses is $239, versus $252 for online courses. However, since Rickman compiled those figures, he has identified additional costs associated with the traditional classroom course, making it slightly higher than online courses.

"There is potential for the Web to be less expensive than the traditional classroom," he says. "It can be driven down even further depending upon the number of times the course is offered between refresh cycles."

Web-based Distance Learning Costs

UMass has generated some $3 million in online gross revenues so far this year, says Moloney, without creating a separate for-profit division.

"Some schools spun off for-profit arms because they didn't think traditional academia could deliver [online classes] in a way that could make big money. Now they are going down in flames," Moloney says.

"Maybe it's like the tortoise and the hare: We're plodding along but we are growing 100 percent each year and delivering a service that students need. Being non-profit lets me look at the best interest of the students first."

Starting in 1997, UMass invested heavily in the implementation of its online Bachelor of Liberal Arts and the Bachelor of Information Technology programs. The costs associated with offering online courses include course development, program development and marketing, technical services, student services, faculty/instructor development and administrative overhead, says Steven Tello, associate director of distance learning.

Moloney estimates it costs $15,000 to $30,000 to develop a course at UMass. Tello adds that a program similar to the one at UMass, with 5,000 enrollments annually, will likely face operation costs of $500,0.00 to $1 million a year.

"This university invested a lot of money in faculty development and training," says Moloney. "I can choose 10 people to put their courses online, and they are ready to do it. We had already put three-quarters of our faculty through technical training. We're lucky to have a chancellor who saw this coming many years ago."

Do Your Homework

But what is the most cost-effective approach for a school that didn't have that vision years ago? Analyze the market, particularly in areas where a school excels in its classroom courses, and use that as a basis for going forward, says Richard Hezel, president of consulting firm Hezel Associates.

George Whitaker, director of Online College at Florence-Darlington Technical College in South Carolina, spent three months compiling the market research he presented to the board. "It's not quite as intense as preparing for a visit from an accrediting agency, but it's hard work," he says. "You have to continually analyze because things change so quickly."

The University of Maryland's continuing education department took on the e-learning effort, choosing to target unique programs that captured a certain market, or came from an already highly ranked program. "That allows us to get more buy-in from the colleges," says Ellen Borkowski, director, technology enhanced learning. "They are making decisions about what programs to put online."

Currently the college has budgeted $40,000 to create each course for the online version of its Masters of Life Sciences for Teachers program.

"Our experience shows that $40,000 is a generous amount; we are doing course conversion and adapting for $20,000 per course," says Bill Clutter, associate dean and director summer programs and distributed learning. "Typically our online master's degrees programs will have 30 or 36 credits, equaling 10 or 13 courses, so the cost is approximately $200,000 minimum and $500,000 maximum."

Besides spending a sizeable amount of money on market research and competitive analysis, UM now employs a full fledged marketing effort to brand the program and to capture a nationwide audience of secondary science teachers.

Branding is Key

One cost that colleges are ill-prepared for is marketing their distance education program, says Hezel. He suggests that at least 40 percent of the distance education budget should be devoted to marketing.

"I think as academics, college and university administrators never took marketing seriously," Moloney says. "We went on our reputation, and everyone `pooh-poohed' the notion of marketing. In continuing ed we did more marketing than the traditional school, but I think everyone is beginning to understand now: It's about creating a clear picture of what you stand for--some people call it branding. Students who come to our programs know what we are about."

The University of Washington has 12 marketing agents worldwide and works with international agencies and professional organizations such as the World Organization of Web Masters and The Institute of Electrical and Electronics Engineers, says David Szatmary, vice provost of educational research. The university's agreement with IEEE allows its 350,000 members a 10 percent discount on online technical courses.

UW has also formed an alliance with Penn State, the University of Wisconsin and Berkeley to cross-sell some of their courses.

"The `alliance of four' is an important marketing tool," says Szatmary. "We are the largest online providers of education among research institutions. We are pooling resources to achieve an economy of scale beyond what we could achieve individually."

The school now offers free, short versions of some online courses as part of its marketing strategy.

"The free course initiative allows individuals to sample a piece of one of our courses and, we hope, take a larger course if they become interested," says Szatmary. "It also provides the university some revenue from the sale of books and CD-ROMs and other course materials for the free courses. We can use the money to develop more free courses."

Florence-Darlington's Whitaker has targeted ads to four-year-college newspapers, increased a direct mail campaign, and has created special programs with law enforcement agencies to market his school's online associate in criminal justice degree program. "Marketing will be important, particularly because there are so many players in the game," he says.

Moloney of UMass has doubled the marketing staff and increased the marketing budget by 10 percent to 20 percent. "Some staff members have really stepped up to the plate with Web marketing," she says. "Web navigation is important. The benefit of hooking our programs onto effective search engines is huge."

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