As many of you know, Bob Dickeson retired from Lumina Foundation last December. It was Bob who envisioned creating this space to discuss college costs—especially as we approached our November 2005 summit in Washington, D.C. Since we launched this site last September, more than 120 of you have subscribed to this blog, indicating your interest in this discussion, and many others have offered comments to Bob and guest bloggers. So, I’m going to pick up where Bob left off, and I hope that you’ll join me.

If you want to learn more about me, you can read my submission to Course Corrections: Experts offer solutions to the college cost crisis or click here.

Early in Lumina’s grantmaking, Bob championed efforts to expand online learning courses, recognizing the power, promise and potential cost-savings of new technology for thousands of U.S. students and institutions. Today, an increasing number of institutions are offering a large number of online courses. A recent report from The Sloan Consortium reports that 63 percent of schools offering undergraduate face-to-face courses also offer undergraduate courses online.

One of the nation’s leading providers of distance education, Regis University, recently announced the formation of a consortium to share online courses. The consortium already has 33 members, most of which are small, liberal arts colleges—including two outside the United States. The consortium will allow these colleges a quick way to offer online courses and programs at relatively low risk and is interesting for a number of reasons.

One of the lesser noticed implications of the growth of online education, and information technology more generally, is that it makes cross-institutional collaboration both increasingly possible and increasingly necessary. The good news to institutions is that collaboration of the type sponsored by Regis will lower costs to institutions to develop and offer programs. This is especially important because online courses have a different cost basis than traditional programs—the up-front costs are much higher, but the delivery costs can be significantly lower. The bad news to these same institutions is that online courses also open up markets to new competition for place-bound students that many colleges and universities have taken for granted.

Regis’ consortium also shows that collaboration allows institutions to share the revenues of new programs, as well as their costs. This can open up significant new revenue streams for higher education. In Regis’ consortium, the college that provides the program and the one that delivers it share the revenue 50-50, and they still make enough money to make the program viable. Small liberal arts colleges that don’t have the luxury of big endowments have relied for years on distance education and accelerated degree programs to generate the revenue they need to maintain loss-leading on-campus programs for a declining base of full-time traditional students. These colleges need the revenue that Regis’ consortium can produce.

Regis is to be congratulated for this innovative approach to collaboration in online learning, and potentially thousands of students will benefit from this initiative. But why does this type of innovation need to be limited to a set of small, struggling institutions that need the revenue? If institutions can make money receiving only half of the tuition from these programs, imagine what could be done if the cost savings went back to the students. Look between the lines, and it is clear that online education has a huge potential to expand access to higher education at a significantly lower cost.

This entry was posted on Friday, February 3rd, 2006 at 9:37 am and is filed under Expanding capacity, Time to degree. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.