Published Online: January 27, 2014
Published in Print: January 29, 2014, as Savings Tied to Blended Programs No Sure Thing

Districts Weigh Blended Costs, Savings

One of the earliest hopes for blended learning—along with the promise that it would nurture students' technology skills and foster personalized instruction—is that it would help schools and districts save money.

But those who have studied strategies for combining online and in-person instruction say that there is no simple recipe for producing savings and that the potential for cost-cutting, or added expenses, linked to blended approaches depends on myriad factors at play in individual schools and districts.

As the economy has faltered in recent years and school budgets have shrunk, the pressure on districts to keep costs in check has grown. And in some cases, blended learning strategies have shown the ability to reduce expenses, by allowing, for instance, school leaders to share resources, redesign instruction, increase class sizes, and replace textbooks with free or low-cost online curricula and materials.

In other situations, however, districts moving into blended learning have absorbed new costs, not only associated with purchases of computing devices and technology infrastructure but also linked to professional-development and other expenses.

"My sense is that for some districts saving money is one of the reasons [blended learning] comes up on the radar screen," said Michael B. Horn, the co-founder and executive director of the Clayton Christensen Institute for Disruptive Innovation, a San Mateo, Calif.-based think tank that studies blended learning. "It's not hard to make it cost-neutral, but it's hard to make it a savings."

Others, however, say districts are getting creative about using blended learning in innovative and cost-effective ways and the initial spending required to ramp up technology is worth it.

"There are some costs upfront, but in the long run, it will make it easier for teachers to personalize learning," said Carmen Coleman, the superintendent of the 1,800-student Danville, Ky., school system, which slowly began phasing in a blended learning initiative three years ago.

"We're trying to help our teachers think about blended learning as a way to tame the turbulence: Let the software do what it can do, so you as the teacher can spend your time working with kids on very rich and meaningful project-based learning."

Relatively little research exists that can help traditional public school districts predict the costs, or savings, that will result from blended learning.

A study released in 2012 by the Thomas B. Fordham Institute concluded that more established blended learning programs tend to spend less per student, between $7,600 and $10,200, than many regular, brick-and-mortar public schools, which spend about $10,000. (Fully virtual schools spent less per student than either of those models, between $5,100 and $7,700, according to the study.) Yet the blended learning schools cited in the report were charter, not regular public schools, according to Fordham, a Washington-based think tank.

Spending Comparisons

Most of the studies on that question have focused on charter schools or fully virtual programs. Lawrence J. Miller, a senior research fellow at the Center on Reinventing Public Education, based in Seattle, is studying the sustainability and funding models of 10 blended charter schools, most of which launched such programs in 2012.

His preliminary findings show that technology doesn't necessarily reduce spending, but it allows for more personalized teacher-to-student interaction, regardless of class size.

In fact, those blended charter schools are currently spending about the same per pupil as traditional public schools, about $10,000. Over the next three to five years, however, the charter schools Mr. Miller is studying intend to increase student-teacher ratios to save money by "hiring teachers at a slower rate as they continue to grow their enrollment," he said.

Price Estimate Per Student

The Thomas B. Fordham Institute recently sought to calculate the per-student cost of traditional, blended, and fully virtual public school models. The traditional public school estimate is for all grade levels, the blended model is only for middle schools, and the virtual model represents full-time high school students.

Some say the potential savings from blended learning for school districts depends largely on the size of those systems.

Anthony Kim, the chief executive officer for Education Elements, a Palo Alto, Calif.-based for-profit company that provides blended learning services to districts, said he finds that larger districts are able to repurpose existing funds, reorganize staff members and other resources, and use high-volume purchasing power to make blended learning programs work financially.

Less-populous systems, with fewer resources, often find that blended learning adds to their bottom line, he said.

"The challenge for smaller districts is that they often don't have the resources to make some of the technology implementation happen," Mr. Kim said. "It's hard to squeeze more out of an operations budget by implementing blended learning because those districts are often already very lean."

Free Content

That's been the case for the Danville district, which relied on $150,000 in funding from the Next Generation Learning Challenges grant program, an initiative focused on using technology to boost college readiness and completion. The school system used that support to help launch its more intensive blended learning program in 2012, Superintendent Coleman said.

The high-poverty school system is struggling to find and buy enough devices for students. The district is considering technology that ranges from $200 Chromebooks to $1,000 MacBook laptops, though those potential purchases don't currently fit into the school system's $19 million general fund budget. Danville is currently encouraging a bring-your-own-device model, Ms. Coleman said. But there have also been opportunities to save money. For example, the district is using videos provided by Khan Academy, a major source of free, online educational content, to help with mathematics instruction.

As it has moved to incorporate more technology into instruction, Danville has not eliminated teacher positions or made a conscious decision to raise class sizes. But the district is taking steps to deliver instruction in different ways. In high school world-language labs, for instance, the district's online offerings allow students to study an array of languages, from German to Chinese, at the same time. Instead of staffing each of those classes with teachers, the district is using its version of a college "teaching assistant" model. An adult with a college degree helps the class rather than a more costly, certified teacher.

"It's not as expensive as hiring another teacher," Ms. Coleman said. "That's a big cost-savings, and it provides more opportunities to students."

In the 6,500-student Reynoldsburg, Ohio, district, officials did not deliberately scrap teaching positions. However, a sour economy limited the school system's ability to hire teachers, and class sizes rose, said Tricia Moore, the district's director of partnerships and shared services.

But while class sizes have grown, particularly at the high school level, there is a benefit: Blended learning programs there allow teachers to personalize learning for a larger number of students, Ms. Moore said.

"We were going to have larger class sizes anyway, but this brings more resources to the table for the kids," she said.

Across the country, teachers' unions have raised concerns that blended learning programs could be a way to cut teaching positions and increase class sizes, said Mr. Horn of the Christensen Institute. However, a study he conducted of charter schools in California—where education budgets have been slashed for economic reasons—found that charter school management organizations said the number-one reason they pursued blended learning programs was for educational benefits, while the number-two reason was financial savings.

Mr. Horn said he believes those findings may translate to the more traditional school district arena.

"You see those concerns from unions [about blended learning], but my sense is that when people look at the models and realize the technology allows for much more personal interaction, effectively reducing the student-teacher ratio, those fears often subside," he said. "A lot of unions and teacher groups will see that that's what they want education to look like."

Cost Trade-offs

Even with the introduction of blended learning, the Reynoldsburg district's overall budget of about $54 million has not risen since 2005, Ms. Moore said. That's partly because the school system has only gradually increased its computer hardware and software, and it has significantly reduced copying and paper costs.

During the past school year at the middle school level, with only one grade going blended, the school saw those costs fall by 30 percent, she said. With the blended program expanding this year, Ms. Moore said she expects to see greater savings in copying and paper costs.

Reynoldsburg is working with The Learning Accelerator, a Cupertino, Calif.-based a nonprofit organization trying to boost blended programs, to help create a business model that works, Ms. Moore said.

Related Blog

One of the organization's cost-cutting strategies is to bring several districts together to create purchasing power around blended learning projects, said Scott Ellis, the CEO of The Learning Accelerator.

District expenses tend to jump in blended learning—often requiring them to take out bonds to cover those costs—in cases when they need to overhaul their infrastructure to upgrade their technology, Mr. Ellis said.But that expense can be avoided.

"We really believe that every district in the country can do this," he said.

Adopting blended learning also may require heavier investment in professional development, said Lisa Andrejko, the superintendent of the 5,500-student Quakertown, Pa., district, which has had a 1-to-1 device and blended learning program at the high school level. The district has a nearly $93 million general fund budget.

"The professional development is costly," she said. "We didn't realize how much was necessary, the first shot at it."

Cyber Partners

To offset some of those costs, her district is getting creative about reallocating existing resources.

It has partnered with a neighboring school system that has an online learning program at the elementary level. When schedules conflict, or an elementary student in Quakertown needs to take an online class, the neighboring district will allow the student to tap into its cyber offerings. In return, Quakertown will allow a student from that district to take an online course there.

The biggest savings for Quakertown, however, have come from the district persuading parents to keep their children enrolled in the school system.

The district was losing students to the many cyber charter schools that have popped up across Pennsylvania. When a student leaves, state funding follows, and the district loses $12,000.

Having a blended program, in addition to the district's own cyber school, gives students some of the things they might be attracted to in a cyber-charter setting, while also giving them the benefits of a face-to-face experience, Ms. Andrejko said. She estimates that the district has reaped a savings of $138,000 to $275,000 annually for the last four years, through what she calls "cost avoidance," meaning the loss of students to cyber charters.

To offset other costs, she's taken a hard look at reducing expenses by moving instruction online. For example, she's considering lower-cost online social studies curricula and thinking of "dumping social studies textbooks."

Ms. Andrejko is also getting innovative with her budget. In the second year of the Quakertown 1-to-1 initiative, there were so many observers who wanted to visit the school and investigate the program that the technology director was spending all his time conducting tours and providing information.

The district approached the Bucks County Regional Unit, which provides educational support to 14 local districts, and proposed that the unit add a job to teach other schools how to create blended learning programs. The regional unit agreed, and Quakertown now has a technology director who can concentrate on his own district.

"Am I saving a couple of million?" Ms. Andrejko said of her district's experience with blended learning. "No, but there are efficiencies in cost avoidance and using your infrastructure wisely."

Vol. 33, Issue 19, Pages s20,s23

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