The Impact of Online Shopping on Higher Education
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The market is crowded with online programs, as more institutions enter the competition for student enrollment every day. And the stakes are high for students; their resources are under tremendous pressure. A staggering 36% of parents tapped into their child’s college savings funds to get by during the pandemic, and the financial situation of 34% of households was worse than the year prior. People are looking to find programs that prepare them for a rapidly changing job market, with some occupations shrinking dramatically and new ones emerging.
As prospective students cast their votes for the best available online program by way of tuition spending, poorly managed institutions and universities will fall apart. Others will see a boost in popularity due to the excellence of their offerings and proven job placement. Those that are predatory or have gamed the system at students’ expense frankly just won’t survive—nor should they.
Knowing which way is up in the online space is especially important because the marketplace is confusing for higher ed consumers, and sources of information are not easy to access. For-profit programs, brick-and-mortar universities new to the enterprise, non-profits and boot camps in specific fields are all in play now, which is bewildering for prospective students. Then what are the hallmarks of online quality?
Graduation Rates. Understanding the percentage of students who complete their degrees within six to eight years is critical for evaluating institutional quality. But it’s more complex to measure for online universities because the student population is nontraditional and more likely to be part time than traditional-aged students. Graduation rates of 70% over eight years for first-time, full-time students are a good benchmark to apply to students just starting out. For working adults returning to higher education, the returning, part-time graduation rate makes more sense. And there, graduation rates higher than 50% over eight years are a reasonable standard.
Why would online institutions fall short of these benchmarks? Student support services are often overlooked but a significant contributor to student failure when absent. From mental health crises to technological inequities, the burdens facing online students today are as great as those facing on-campus students. Crucially, the best programs make wraparound support services available, often in the form of a one-stop office offering financial aid, transcript assistance, tutoring, counselling and employment services, rather than make students consult multiple bureaucracies. Each of these inputs impacts the output of graduation rates.
Investment in instruction.
High-quality institutions put resources into teaching and supporting students; predatory institutions take the profits and run. While some institutions can hire full-time faculty, many employ part-time instructors. Either model works if the ratios are right, and faculty are routinely evaluated on their performance. Quality institutions insist that their teachers provide clarity, access and feedback to students—all of which is likely to be more robust if they are spending resources on instructional quality (over marketing, for example).
It is normal for students to finance their education through loans; it’s an investment in their future after all. Loan repayment rates are a measure of program quality. Low rates should send prospective students running because they are a classic warning sign of a poorly managed and predatory program. The pathways to default are varied, but shoddier institutions often try to lay the blame on students who are characterized as lacking motivation. The online student population is more economically challenged, but quality colleges don’t engage in predatory behavior like accepting or seeking out students at high risk of default. Instead, they support access and persistence.
Consumer satisfaction scores.
If the hard proof of a program’s value is in the graduation rates, consumer satisfaction scores serve as a softer metric to give insight into the student experience. Sometimes this number is calculated using retention rates after one year of attendance. For example, if 77% of students persist after year one, an institution is likely doing well in consumer satisfaction. This trend may not always mean fall-to-fall retention, but fall of one year to spring of the next is a plausible retention pattern. What one is looking for here is continuity in enrollment, which signals attachment to the institution and the program. Institutional survey measures may also be available, though not generally on a comparative basis. Where they can be accessed, the consumer will learn about how current or recent students perceive their experience.
Transparency in institutional identity.
Recent research[i] has shown that predatory online providers obscure their identity and shield themselves from scandals by operating under multiple brands. Beware of online universities that offer the same degree under three or more brands. Unless those brands reflect very recent acquisitions, they are likely to be weak institutions that under-invest in students and charge high tuition for low-value degrees.
Earning power, rankings and placement rates.
Although there is little data on brand new graduates entering the workforce during this pandemic, the earning power of an institution’s graduates should be considered. Earnings—usually measured six years post graduation—gives prospective students a good sense of the concrete value of an institution’s credential. Placement rates also represent employer views of the institution’s ability to provide quality education and training.
University and employer partnerships.
For many students, especially working adults, online education is an important step along the way to securing a better job. Employers also see online education as an avenue for finding workers with the right skills and motivation. Accordingly, prospective students should try to determine whether major U.S. employers send their own workers to the universities where they are thinking of enrolling. American firms are spending nearly $20 billion a year in tuition assistance, and they pay attention to the quality of the education they are supporting.
A decade ago, online learning was still very much the Wild West of higher education. Many of the outlaws and bandits managed to hang on—but won’t for much longer. More students, especially working adults, are pursuing remote learning as their first choice. The institutions that have duped students into accumulating vast debt in exchange for a lesser experience that offers no segue into the world of work will see the curtain coming down.
Today’s online students must look for and demand programs that align them to workforce needs. Some of this information can be found on the U.S. Department of Education’s College Scorecard (https://collegescorecard.ed.gov/). The scorecard enables potential students to input the name of the university they are interested in attending, and many of the metrics described here are available there. However, these metrics skew toward the traditional four-year university.
Because of the scorecards’ tendency to focus on the four-year degree, it can be helpful to examine IPEDS, the Integrated Postsecondary Education Data Systems, maintained by the National Center for Education Statistics. Its outcome measures for nontraditional students encompass four distinct kinds of students, including part-time students. Comparative shoppers can input the name of the institutions they are considering and learn about many of the benchmarks suggested here, including most importantly the eight-year graduation rate for returning students attending full or part time. These measures represent the most sensible point of comparison for online programs. Bad actors along with strong, high-quality institutions are readily identifiable in the scorecard and IPEDS data on degree completion and default rates, as well as post-graduation earnings.
Although the data is available, it is harder to track multiple-brand providers, though some researchers have done so using IPEDS as their data source.[ii] University and employer partnerships are usually a point of pride and will be displayed on program websites, but they are also noted under human resource department benefit programs for many employers.
This year will no doubt usher in a new era of fewer but better online programs. The best programs will go a long way toward ensuring that graduates leave with crisis-proof skills and credentials to help them weather this storm and whatever lies ahead.
[i] For an excellent account of predatory practices in online education, see Adam Goldstein and Charlie Eaton (2021). “Asymmetry by Design? Identity Obfuscation, Reputational Pressure and Consumer Predation in US For-Profit Higher Education.” American Sociological Review Volume 86 (5): 896-933.
[ii] See Goldstein and Eaton ibid.
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