Experts Debate Cost Savings Of Virtual Ed.

By Katie Ash — March 16, 2009 6 min read

A group of superintendents and secondary school educators in Massachusetts gathered recently to discuss how online courses might help offset budget cuts. Maryland state officials, meanwhile, say their virtual Advanced Placement classes are a cost-effective way to get high-quality coursework to more students.

And the largest state-sponsored online school in the country, the Florida Virtual School, has long argued that online courses cost less than face-to-face classes—an especially attractive pitch when budgets are tight.

But is e-learning really more cost-effective than traditional, brick-and-mortar schooling?

The debate on that question has acquired new urgency, as schools look for ways to keep or expand their course offerings while also controlling or cutting costs during a recession.

The answer to the question, experts say, depends on what curriculum is used, whether it is a full-time or part-time program, what state you are in, and how many students you need to serve, among other factors.

In the current economic environment, “most districts are not adding a bunch of new services, but thinking about how to preserve services,” said Bill Tucker, the chief operating officer of the Washington-based think tank Education Sector, which has conducted research on the costs of online learning.

Cost Categories: Brick-and-Mortar School vs. Online School

Brick-and-Mortar School Only

• Buildings and grounds maintenance
• Security
• Transportation
• Energy
• Computer and internet access for every teacher
• Substitute-teacher costs (for sick days or professional development)
• Athletics
• Music program (e.g., band)
• Nursing services

Online School Only

• Space for offices and computer lab for students
• Course-management system
• Course content
• Computer and Internet access for every teacher and student
• Mobile-communication device for teachers (e.g., cellphone) and network
• Technology support (e.g., help desk, course updating, server maintenance)
• Marketing and advertising


• Administration
• Teachers
• Students
• Professional development
• Student-information system
• State testing system
• Textbooks
• Courses and course outlines approved by governing board
• Access to computers
• Special education services
• Student support (counseling, library)
• Network infrastructure
• Telephones and network

Source: Rob Darrow (2008), doctoral student at California State University-Fresno.

One way to do that, he said, is to take advantage of the resources and opportunities already available rather than trying to start an e-learning program from scratch. For example, some states run their own virtual education programs out of their departments of education, which districts can tap in to for little or no cost, he said.

William R. Thomas, the director of educational technology for the Atlanta-based Southern Regional Education Board, or SREB, echoed Mr. Tucker’s advice, but rejected the argument that starting an online program in either a school district or a state requires a significant investment in infrastructure.

“You don’t need any infrastructure to be making online courses available to your students in your state,” he said. “When even some of the sreb state virtual schools started, they did not have [a learning-management system] or online courses. They outsourced to third-party providers.”

Financially Feasible?

There are some areas in which it clearly makes financial sense for districts to look into online learning, providers of such services and other proponents say.

“One of the areas in which online learning can be extremely cost-effective is in filling in courses where the opportunity would otherwise not exist for a student,” said Cheryl Vedoe, the president and chief executive officer of Apex Learning, a Seattle-based for-profit provider of online courses.

Instead of hiring a full-time teacher for just a handful of students, which is unlikely in today’s budget climate, it’s more financially feasible, Ms. Vedoe said, for districts to contract out those courses to online providers. Such companies, she said, can provide that service at a lower cost because they are serving larger populations.

Still, some experts caution schools not to see e-learning simply or primarily as a cost-saving tool.

“I think it is a mistake for schools to look at online learning to save money, at least in the K-12 environment,” said Richard S. Kaestner, the project director of the Washington-based Consortium for School Networking’s Calculating the Cost of Investment initiative and the author of a 2007 case study on the value of opening an online school.

In the district that Mr. Kaestner investigated for his case study—the 5,000-student Hudson school district in Wisconsin—officials decided that although establishing an online program would likely not yield the district monetary savings, it was worth it to provide that experience for students.

School officials also hoped that providing an opportunity for students to take classes online would cut back on the number of students at school every day, since overcrowding is an issue in the rapidly growing district.

And although the program may not provide direct financial savings, Nancy L. Toll, the technology coordinator for the Hudson district, believes that allowing students to have the online experience is worth the cost.

Part of the problem, said Cathy Cavanaugh, a researcher and an associate professor of educational technology at the University of Florida in Gainesville, is the lack of hard data on how much it actually costs to educate students online.

There is no standardized way of calculating the per-pupil cost of taking online courses, she said—a challenge she faced while collecting data on the cost of online schools vs. regular schools for a report slated for release in April by the Washington-based Center for American Progress.

Comparing Costs

See Also

Read a web-only article, “Online Professional Development Weighed as Cost-Saving Tactic,” that examines the cost of online vs. on-site professional development.

Based on responses from 20 virtual schools in 14 states, Ms. Cavanaugh concluded that the average per-pupil cost of online learning was $4,300, from data gathered in the fall of 2008, compared with an average per-pupil cost of about $9,100 for a traditional public school, from data gathered in 2006. (The latter year was the most recent for which such data were available.)

The per-pupil cost for online learning that Ms. Cavanaugh determined includes administrative, technical, and course design and development costs. That amount, she said, represents “all the cost involved in creating and teaching, but not all the costs that would be there if it were a full-time school” that included special education and counseling services.

The focus of her research, said Ms. Cavanaugh, is the role that virtual courses could play in expanding learning time—an area that Bryan H. Setser, the executive director of the 25,000-student North Carolina Virtual Public School, believes could lead to cost savings for schools.

“Most superintendents will tell you they just need more space,” he said. But instead of sinking millions of dollars into school construction, districts could save money by investing in online courses, which allow schools to provide instruction before, during, and after school less expensively, he said.

He contends that when lining up the costs between traditional and virtual schools in categories such as personnel, professional development, and operating costs, virtual schooling comes up as the cheaper option.

But one category in which virtual education could be more expensive, said Mr. Thomas of the SREB, is course development, partly because of all the different parties that should be at the table during the development phase.

Even so, if a high-quality course is the result, he said, it could be used in multiple states and classrooms, potentially leading to overall savings.

At the meeting of about 50 Massachusetts school administrators, hosted by the Maynard, Mass.-based Virtual High School Global Consortium, superintendents were eager to find out more about how to use virtual education to preserve the programs threatened by budget constraints, said Elizabeth R. Pape, the chief executive officer of the organization.

“They were coming up to us and practically signing up on the spot, which has never happened before,” she said.

Eric Conti, the superintendent of the 3,700-student Burlington, Mass., school district, attended the meeting. “To me, the question is not why [use this program], it’s why not?” he said.

A version of this article appeared in the March 18, 2009 edition of Education Week as Experts Debate Cost Savings Of Virtual Ed.


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