The reason college is so expensive is because colleges, like any other businesses, charge what the market will bear. If the government is willing to let kids who don't even have jobs yet borrow $100,000, the colleges will just raise tuition in order to suck up all that guaranteed student loan money.
I agree that this is a major factor. It's interesting to note that there are a few DEAC-accredited schools that don't participate in Title IV and are very, very inexpensive. That could mean that the undistorted price for accreditable distance learning is much lower than we usually see.
The University of Management and Technology cost, I believe $750 per graduate course with the military/veteran discount. So, after credit transfers, I came away from the program with a bill for about $5k (which, incidentally, was the balance of my GI Bill account that I had to use or lose). Awesome for me. However, UMT is holed up in an office building in Arlington, VA. Faculty is composed of mainly adjuncts who have "day" jobs in federal service, the military, other schools or are retired. If UMT had to maintain an actual campus, classroom technology, a staff of full-time professors, a large support staff for all of those professors, campus security etc then there is no way they could charge $750 per class. Maintaining DEAC accreditation also does not appear to be a cheap affair but it seems to be decidedly cheaper than trying to obtain and maintain RA. So, part of it is keeping expenses as low as possible. Another part is that schools like UMT rely pretty heavily on federal and military TA and the GI Bill. If I have to choose between two schools (accreditation aside); one is going to charge me more than what the GI Bill provides (thus, I go into debt) and another happens to levy a monthly charge that is equal to the monthly payout from the GI Bill (or, alternatively, is just shy of the per semester max for military and federal TA) which is going to be more appealing? Last major consideration would be scalability. UMT uses canned lessons. The adjuncts have to read and grade but they have a whole bunch of them. The structure is in place. The fixed costs are low. If 25 people sign up in a month the cost doesn't increase significantly if 200 sign up the following month. Thing is, UMT would likely never be accredited by a regional accreditor with that sort of delivery method. So it's a business model that works best within the framework of DEAC. The typical RA school has quite a number of expenses just from the accreditation. And it's highly unlikely that the RA evaluators are going to accredit a small full time staff working out of an office building. I'm unaware of an RA school that doesn't have an actual campus presence (or if such a thing could even exist). And, again, with campuses come lots more expenses. That's before you even get into the economics of offering government money to private entities.
There are RA schools that work similarly. Ask people who adjunct in a lot of places whether they're handed canned courses to facilitate, most will say yes. Charter Oak doesn't. WGU doesn't. APUS doesn't. Jones didn't. Schools like Fielding, Saybrook, Northcentral, Walden, etc., must have space for doctoral seminars, but I don't know whether those facilities are actually attached to their office spaces or whether they just rent conference space at need. I don't think the regional accreditors have shown unwillingness to accredit a distance-only institution.
There are obviously exceptions. TESC, Charter Oaks and Exclesior also accept an incredibly large number of transfer credits and award a significant number of credits based upon portfolio review. This isn't really the norm. And I don't think it a coincidence that those three schools are (or were) public institutions. WGU, though not technically public, has pretty heavy public backing and introduced us to a learning method that was largely experimental. So I'd say that the regional accreditors have shown that they are willing to consider something that looks and feels "different" when it can be shown to be effective. Realistically, what would happen if you and I incorporated Neuhaus Foerster University and asked a regional accreditor to approve our programs which can be completed using a combination of transfer credits, exams and portfolio evaluation with the possibility that no actual instruction would take place? Could it happen? Maybe. But I think a new player trying to replicate what TESC does would not go over very well. Not to mention how NFU would be able to operate in its pre-accreditation days as an unaccredited school essentially offering programs through, what might be referred to as, "life experience." Walden University started out brick and mortar and had received regional accreditation well before they went fully online. Again, I'm not saying that a school couldn't ever become regionally accredited without having any sort of physical space but I'm saying that it isn't likely particularly in the current climate. Exceptions will always exist. But many of the ones you cited had accreditation before going fully online was even an option. Still others were brick and mortar schools that were purchased by for-profit operators and then turned to a fully online model. There are also RA schools that have fully self-paced courses. But they are relatively few in the grand scheme of RA schools. But, no matter how you cut it, RA is expensive. Very expensive. And if your method of instruction is a little less traditional, your university looks a little less like a "typical" university or you simply can't afford to hire the high power accreditation consultants that many schools hire to obtain/keep accreditation, it's a world that you really can't play in. I looked at DEAC (then DETC) accreditation once as a thought experiment. Business class airline tickets for all of the evaluators for your site visit is a requirement. That's an expense that gets passed on to students.
Funny how universities in other countries where tuition is much cheaper don't have to comply with a ton of government regulations...oh wait, they do!
U.S. schools don't spend tons of money complying with a ton of government regulations. Accreditors are not the government. They are private non-profits. The only presently active institutional accreditor that is a government entity, that I'm aware of, is the New York State Board of Regents (USDOE recognized). They run an accreditation program which is separate from the Regents' registration (state approval) program. While I haven't done a full side-by-side comparison, obtaining BOR accreditation looks like it would be much cheaper than any other accreditor. There are a few reasons for this: 1. The BOR accreditation office is part of a larger government agency. They share resources with the broader Dept of Education, but the office itself is fairly small compared to the accreditation operation of National and Regional accreditors. 2. They only accredit schools in New York. So you don't have to fly people across the country for your site visits. 3. They accredit relatively few schools compared to other accreditors (and even fewer of those schools have BOR as their sole institutional accreditor). 4. Registering a degree program is no easy feat in New York. So, by the time you get degree authority here you are likely well on your way to being ready for accreditation. We have no religious exemption. 5. NYSBOR is completely government run. It isn't made up of member institutions who run the show. So, yeah, there are a boatload of government regulations to overcome. And yet, some relatively small (and low budget) schools managed to get accredited by NYSBOR. They would likely bankrupt themselves trying to pursue DEAC or ACICS. Meeting government regulations doesn't have to be expensive. But when the government farms that responsibility out to private entities and lets them charge whatever they want the price is going to increase substantially. On the one hand, you can't fault accreditors. They aren't government subsidized. They need to pay staff, maintain offices and keep the wheels moving. And I'm generally anti-expanding the government's role in everything. But, approving universities (and determining which universities are "legitimate") is, in pretty much every civilized country, a function of the government not a private club run by its members.
Not so many years ago, I observed that the Union Institute was charging its doctoral students $18,000 in tuition and the guaranteed student loan limit for graduate students was also $18,000. I expressed the idea that maybe there was a causal connection there. Rich got really mad at me.
I had this economics professor who made an interesting point. He said: "Imagine that every year every person in the U.S. got a $25 gift certificate to the Olive Garden. And you can't transfer it to another person and you can't redeem it for cash. You either use it or lose it. At first, it will be great. People will go to the Olive Garden and get a free meal. For two people, $50 could absolutely cover two entrees, that endless salad, maybe even a drink or two and some dessert. How long will it be before Olive Garden adjusts their prices? They know that they can count on this money coming in. The first year it would be an infusion of cash that they maybe didn't anticipate. But after that, it will just be money that they count on. And, of course, they will need to build more restaurants and expand existing ones to keep up with demand. And people will go there because they don't want to 'lose' money. So, Olive Garden can now charge $25 for an appetizer. People will still go. They'll want their 'free' appetizer even though they have to come out of pocket for entrees, drinks and desserts. In the beginning of that program, the people would benefit greatly. But it wouldn't be too long before only Olive Garden was benefiting from the program."
