Why is tuition so high for graduate distance Ed?

Discussion in 'General Distance Learning Discussions' started by Sam, Feb 17, 2001.

  1. Sam

    Sam New Member

    What is the basis for schools such as Walden, Union and others to charge such astronomical sums of money for either online or self-directed studies? There are no classrooms, lecturers, airconditioning etc, etc.

    A review of the costs for a doctoral degree at any one of these institutions can range from forty-fifty thousand icluding residency, travel and book expenses over the course of three years.

    What is the justification for these inflated tuition rates other than incredible profit margins?
  2. Guest

    Guest Guest


    This is one of the main reasons that non-US graduate degrees are so appealing to US distance learners. A legitmate and credible doctorate (GAAP) can be earned from some UK, South African, Australian, etc., schools at a fraction of the cost of a RA US program. Quite a few for less than $10,000.00.

    While the GAAP route may not work for everyone, it is certainly a viable option for many US distance learners. Bears' Guide (14th Ed.) details several of these programs.

  3. Andy Borchers

    Andy Borchers New Member

    Sam - I suspect part of the issue has to do with the economics of supply and demand. There still aren't very many options for a distance based PhD that is regionally accredited. Hence, schools can charge what the market will bear. Also note that some of the players - Walden, Sarasota, UoP and Capella are "for profit" players. Hence, they want to do more than cover their costs.

    Also, doctoral education is normally quite expensive as it is highly personalized and requires faculty that are active researchers. Traditional schools give students free tuition - in return for servitude as teaching or research assistants. Once you make folks pay the full freight of such education (not to mention profit for the school) it adds up.

    On a related topic, a recent report in the Chronicle of Higher Ed raises the point that few schools have actually figured the cost of providing on-line education. It may in fact be quite a bit higher than traditional on-ground instruction.

    Thanks -Andy Borchers

    Andy Borchers, DBA
    NSU (1996)
  4. Sam

    Sam New Member

    The issue of these schools, such as Walden, charging over one thousand dollars a month, is quite a business feat. Multiply that by several thousand students and you get some several million dollars per school each month. What a business!

    I know that these schools offer regionally accredited degrees but you would think that there would be some form of regulation of their tuition even though they are proprietary schools.

  5. Alex

    Alex New Member

    There are different ways of paying. In "traditional" graduate studies students pay little or no tuition, but they also earn just barely enough to survive. The University covers all or most of the tuition fee and pays a very small stipend, in return for the graduate student working as a teaching assistant or research assistant. This means that traditional graduate students delay earning money for many years. In many disciplines and schools, it is standard procedure for students to spend 5-8 years (often even more) to earn a PhD. This is a long time to live without building up much in savings or retirement.

    Most students studying by distance education are also working at least part time (if not full time). They have typically been working and earning money for some years. Usually they are not in a position to give up relatively good-paying jobs and go to school full time, where they would earn next to nothing as a TA or RA. Financially, they will probably be better off keeping their jobs and shelling out the extra money to cover the full cost of their education.

    Some schools providing distance education attract large numbers of students who are subsidized by their employers, so there may be little pressure to contain costs.

    On the bright side, there are some relatively good deals in distance ed. Shop around, and you will probably be able to find a public university in the US or a university abroad that offers a suitable program for your needs at a more reasonable cost.

    Good luck.
  6. John Bear

    John Bear Senior Member

    Sam asks, What is the justification for these inflated tuition rates other than incredible profit margins?.

    And why does a tiny bottle of Chanel #5 that costs a dollar to produce sell for $200?

    During the seven years I was involved in marketing the Edinburgh Business School distance MBA (1991-1998), I learned a lot from that bastion of free market economics. When we sold a course for $800 (nine were required), about roughly a third went for advertising and marketing, a third to the course author and publisher, and a third to the university.

    When we were required to raise prices, sales were off. When we offered specials, sales improved. Just the way the marketing course suggested. I would assume that school's recent significant reduction in course prices (about 20%) reflects the need to remain competitive.

    Will some "McUniversity" come along with the regionally-accredited thousand-dollar Bachelor's in a Box: 30 CDs, huge interactive website, all exam-based, few humans. Millions in development costs, but almost nothing to keep the wheels turning. Wouldn't surprise me a bit. And there will be lots of wringing of hands and rending of robes in academia, and the perpetrator will laugh all the way to the bank, just like Apollo (Phoenix) with about 100,000 students and the former ICS, now Harcourt, with half a million.
  7. BillDayson

    BillDayson New Member

    HW's MBA program has always seemed like a money-engine to me. No physical plant. No professors. No elaborate interactive web-presence. Costs pushed about as low as it is possible to get them, and prices set by the market.

    I think that is why so many university faculty are so deathly afraid of distance education. My suspicion is that a lot of the skepticism out there that is stated in academic quality terms is really driven by labor-issues.

    Examination based programs like HW have already demonstrated the viability of programs that do away with faculty *entirely*. And there are other models, like CSUDH-HUX, that reduce faculty from classroom performers to paper graders and office hour holders.

    I guess that some universities will market their distance education programs on the basis of quality and service. Lots of live interaction with noted faculty names and with other students. User-friendly interfaces. High quality and prices to match. They will be the prestige programs, claiming to give a better education and turn out a better graduate.

    And other programs will attempt to cut costs as much as possible. Professors will be the first thing to go. Probably in these "McUniversities" cases, the initial attempt will be to charge prices like those of the more costly prestige programs, and pocket the difference. But market pressures will probably bring down prices as low-end competition develops. That will prompt even more cost-cutting in order to maintain margins. Resulting in a self-reinforcing destructive dynamic, giving us a sort of minimalist education model.

    Ultimately I think that the result will be the splitting away of the instructional function from the assessment function entirely. As the degree mills have demonstrated so well, education isn't even necessary for a profitable university. We will have institutions that don't offer instruction at all, just examinations, portfolio assessment and degrees. If that assessment process is credible, and if it is underwritten by the regional accreditors, it could work. And we will also have all kinds of tutoring deals, individual courses and entire programs intended to prepare people for those assessments.

    I guess that some of the London external programme subjects already resemble that. You can study on your own and just take the exams, or else take a commercial preparation course. Western Governor's University has that kind of organization, as do TESC, COSC and Excelsior. As time goes on, I think those kind of things will grow increasingly common.
  8. humbug101

    humbug101 New Member

    Your comment on Cost is one of the main reasons I chose the DE doctorate the Aussie way. Total tuition for degree and books will be under 11k US with current exchange rates over four years. It may require a trip or two down under but for a quarter or a third the cost and meeting GAAP, Why would I choose otherwise? My advice explore the alternatives.

  9. John Bear

    John Bear Senior Member

    Bill Dayson wrote, in part, HW's MBA program has always seemed like a money-engine to me. No physical plant. No professors.
    No elaborate interactive web-presence. Costs pushed about as low as it is possible to get them, and prices set by the market.

    But they spent a great deal up front, commissioning large new textbooks, newly written for the distance learner, from prominent professors in the US and Europe. Truly risk capital, since they had no idea how well it would work.

    Also, setting up more than 300 exam centers worldwide, twice a year, is no mean feat, not to mention the conscientous marking of tens of thousands of exams, using the British external examiner protocols in which senior faculty at other universities are engaged to score the exams, to ensure a uniform national standard.

    Yes it is profitable -- the new £3 million business school building on the Edinburgh campus is a testament to that -- but you can't just multiply 10,000 students by $10,000 and say, "Gee whiz (or Hoot mon), and pass the Glayva*, please."
    *Ah, Glayva. For this non-whiskey-drinking, non-golfing, non-salmon-fishing wannabe Scotsman, that used to be one of the best reasons to visit Edinburgh. Now it is available at the local Safeway, even if MBAs are not (yet).
  10. mattie

    mattie New Member


    I know I am diverting a little from the original question of "why do distance PhD programs cost so much in the USA?" On the other side of the coin, I read an article about a University in Utah that was considering including a distance learning program along with their existing campus based program, and the pro's were: They didn't have to build new buildings with classrooms (and AC etc), hire as much additional staff and faculty involved with on-site work, because they could use their exisitng facilities and staff, and it was a positive solution to increasing their student numbers without increasing the physical site. BTW to date, they have not created a DL branch but it was intersting to see an established university look at DL and see positive options. My experiecne has been from many, that its an us or them attitude or are either a DL institution or a "real" university. Just my 2 cents.

  11. brunetmj

    brunetmj New Member

    As a person about to make the leap into distance learning and consequently the cost involved , i can greatly appreciate this question.

    But on the other hand... have you checked out the price of a Toyota land rover lately?
    More than the cost of a Ph.D. What i mean is that this is also a investment in yourself. With a masters degree i have already doubled (probably tripled) the amount of money i could have made without one.

    If money is the only issue the question that i would ask (at least for myself) is not what they are doing with the money but what i can do with what I'm buying .

  12. Bruce

    Bruce Moderator Staff Member

    There is an interesting article in this month's "Chronicle of Higher Education" about the cost of providing distance education. It broke down institution costs in providing DL courses, and the costs were surprising. I don't have the article handy, but if I recall, the main expenses were faculty salary, and technology costs (which I assume are more for online classes than traditional paper & pen correspondence courses).

  13. Bill Huffman

    Bill Huffman Active Member

    From a pure financial perspective I didn't think advanced degrees were that good of an investment, at least from a general overall point of view. Maybe I'm just remembering computer science only?

    Anyway, if you have to choose between school and work, what is the real net? Is the student better off financially staying in school or going after that advanced degree?
  14. brunetmj

    brunetmj New Member


    I guess when i posted my reply i was thinking more about potential new students
    who may be considering whether to spend this amount of money on education. Say for example on a Masters degree .
    Really trying to make two points.
    1. i know the money i have spent on education has come back to me several times over.
    2. just about everything in the US is
    expensive. I would rather have a
    Ph.D. than a Toyota
    (except for off road)

    True, from an economic viewpoint there can be diminishing returns (as in my case-Masters to Ph.D.).
    And of course it is important to explore alternatives to distance learning that may be less expensive.

  15. brunetmj

    brunetmj New Member

    I was curious about this question and researched the tuition of local colleges
    which are privatley owned (for a fair comparision)
    Syracuse Univerisity
    Lemonye College ( my b.s. psych degree)

    All of these schools were more expensive for equivalent degrees than Capella or Walden
    with the exception of Lemoyne which was about the same.
  16. Neil Hynd

    Neil Hynd New Member


    That's why a lot of people are interested to see if North Central U. (www.ncu.edu) get their accreditation.

    At $120 a credit for graduate studies including doctorate that would show up lots of others ... or magically the NCU rate may "fall into line" ....

    After all, if an "accredited" program can be run from a downtown or business area office suite at such $$$ rates, what next ????

    Anarchy, indeed ....


    Neil Hynd

  17. brunetmj

    brunetmj New Member

    When I spoke to an admission couselor from North Central U. (who by the way had the same name as the admission couselor from
    a Calf. base distance learning college)
    told me that admission was likely to climb when they became accredited. It was suppose to be some kind of selling point to get me to act immediately. Not a chance......
  18. Neil Hynd

    Neil Hynd New Member

    FYI - only a 50% hike on the basic rates ....

    Northcentral University (NCU) takes a major step toward accreditation!
    NCU has been recommended for Initial Candidacy for Accreditation by the Site
    Visit Evaluation Team for North Central Association of Colleges and Schools.
    Please visit our web site for full details: www.ncu.edu
    Earn your Bachelor's, Master's or Ph.D. in business & Technology or
    Psychology entirely through Distance Learning (no residency).
    Effective March 15, 2001, tuition will increase to $165.00 per unit. Please
    contact Admissions for more information.
    Call Today: (800)903-9381 ext. 8228

    Lorrie Weiland
    Northcentral University
    [email protected]


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