Numerous articles and commentaries from inside and outside of academia are raising the alarm that American public higher education faces an unprecedented financial crisis.
For years, state legislatures have been disinvesting in public colleges and universities, leaving campus administrators to struggle with how to make do with less. The result: rising debt, deferred maintenance for aging facilities, reductions in programs and course offerings, dismissals, elimination of many student and faculty services, and loss of talented faculty — many of whom haven't received pay increases in years — to private universities.
To try to offset some of these challenges, universities are raising tuition and fees to historically high levels. The cost of tuition alone has soared from 23 percent of median annual earnings in 2001 to 38 percent in 2010.
Given the pressing demands on state budgets, it is unlikely that funding for higher education will return to pre-2007 levels any time soon. In fact, analysts predict just the opposite. With the average cost of providing one year of on-campus education at a public university now topping $32,000 and the average tuition covering only 20 percent of that, the problem is real and it isn't going away.
In addition, enrollments are declining for the first time in 15 years, student debt is topping a trillion dollars, parents are questioning why their children are struggling to find jobs, and employers are complaining about the costs of retraining college graduates. Such conditions cannot continue.
Some universities are finding a way out of this morass through online classes. Growth in online education is now outpacing traditional enrollments by a wide margin. Why? Because it is well suited to the needs of an increasing number of learners, extending access and allowing students to both work and study.
In addition, learning measures for online students have matched or exceeded those for on-campus students. Although graduate programs have seen the largest growth in online learning, significant increases in online undergraduate programs are expected over the next decade. Unfortunately, many universities remain averse to such change and hold to tradition and a classical notion of education.
In a recent hearing before state legislators, university officials questioned the value of moving online, testifying that there would be little, if any, savings from such a shift. These conclusions simply don't hold up. For example, traditional university costs and services for students that a quality online education doesn't require include:
• Sports teams, playing fields, gyms and training facilities
• Dormitories, student lounges and food courts
• Building maintenance, personnel and service vehicles
• Utilities including phones, air conditioning and plumbing
• Landscaping and campus beautification projects
• Mail service, supplies and procurement services
Such facilities and services consume as much as half of what it takes to send a student to college. Including such costs for online students in this type of comparison only serves to cloud the huge value proposition that Web-based learning represents. The real numbers tell a drastically different story: Online education holds the promise for universities to not only shrink their deficits but also extend their programs to a vast number of students, all at significantly lower costs.
So what is the true incremental cost of serving an online student at a state university today? A study carried out by the University of Texas, comparing online versus on-campus instruction across 15 institutions serving more than 150,000 students, demonstrated a 30 percent to 50 percent cost savings for the Web-based approach. Given that students are asked to shoulder debt for services and amenities that are, objectively, nonessential to their education, people should take notice.
Online education isn't a solution for all that ails our public universities, but it must be a major component in solving the financial crisis facing higher education.
Jeb Bush was governor of Florida from 1999 to 2007. Randy Best is founder and chairman of Academic Partnerships, a company that designs online courses.
© 2012 Bloomberg News