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School & District Management

Report Estimates Cost of Virtual Education

By Katie Ash — January 17, 2012 2 min read

The per-pupil cost of educating a student through virtual education is significantly less, on average, than the national average for brick-and-mortar schools, a paper from the Thomas B. Fordham Institute says.

The report also says that fully virtual programs are less expensive, on average, than blended-learning programs, which combine face-to-face and online learning, but the paper does not address whether student outcomes are equal.

The fourth in a series of papers called Creating Sound Policy for Digital Learning, it found that virtual schools spend about $5,100 to $7,700 for each student, compared with $7,600 to $10,200 for blended-learning programs, and $10,000 per student for regular brick-and-mortar schools.

However, the authors of the paper, Tamara Butler Battaglino, Matt Haldeman, and Eleanor Laurens, all of whom work for the Parthenon Group, a Boston-based global strategy advisory firm, caution readers against settling on a price tag for online learning because of how widely the cost of such education varies from program to program. The cost of online learning also does not take into account student outcomes, say the researchers, who gathered data from public documents as well as in interviews with entrepreneurs, policy experts, and school leaders.

Some e-learning experts not involved in the Fordham analysis also expressed notes of caution about drawing conclusions from it.

“A careless reading of the report will lead some policymakers and educators to believe that online and blended should be pursued with cost-savings goals front and center,” said John Watson, the founder of the Evergreen Education Group, a Durango, Colo.-based organization that researches online learning.

“A closer reading reveals that such an approach will overlook the need for an initial investment of time and resources, leading to poor outcomes,” he said. “I’m concerned that policymakers will focus on what appear to be the bottom-line numbers, ... without acknowledging the numerous caveats that appear throughout.”

The paper identifies five cost drivers that outline the way different types of schools allocate resources: labor, content acquisition and development, technology and infrastructure, school operations, and student-support services.

While more than half of regular schools’ financial resources typically go toward labor costs, virtual schools can often reduce those costs by increasing the pupil-teacher ratio or by reducing teacher salaries by hiring only part-time teachers or paraprofessionals, says the report.

A version of this article appeared in the January 18, 2012 edition of Education Week as What Is the Cost of Virtual Ed.?

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