Can eLearning Address Institutional Revenue Shortfalls?

According to the U.S. Department of Education, demand for college education grew by 33 percent from 2000 to 2010. This growth in student enrollment at American universities has been met with tighter education budgets at the state and national levels. Research from 2003 predicted these financial hardships would exasperate already-tight fiscal situations at universities. The percentage changes in state education budgets from 2008 to 2012 have shown tremendous fluctuation. The data can be misleading. For example, Alaska, Montana, North Dakota and Wyoming all used oil and gas revenues to offset revenue shortfalls. Most states that increased school funding did so by reducing spending on other programs. While this approach is defendable, several proponents of online education have pointed to e-learning, especially for universities, as a possible solution to these budgetary constraints.

The National Center for Education Statistics projects enrollment from 2009 to 2020 of students under 25 to increase by 9 percent, students aged 24 to 34 to increase by 21 percent and students over the age of 34 to increase by 16 percent. As fewer students meet the definition of a traditional student, the models of higher education finance will, by necessity, transform into a new economic model. In order to accomplish this transformation, universities have created a two-business model approach to university management.

Many universities have already shown a change in the financial management of their business model. For example,Troy University, in central Alabama, has a traditional brick-and-mortar campus where students take lecture-based classes. However, it also has a significant presence in e-learning. The management of the traditional brick-and-mortar classes is similar to all U.S.universities where the state government provides a large portion of revenue and working capital. Its online education (eTroy), on the other hand, is managed as a profit-maximizing enterprise more than as a traditional university. While Troy University is subject to state education oversight, the lack of state financial control over eTroy has provided the university freedom to pursue programs unavailable under traditional finance models.

Specifically, e-learning classes tend to: be shorter in duration (eight weeks instead of 16), be taught by adjunct faculty (thereby minimizing cost) and have fixed student-teacher ratio set to minimize the server loads (again minimizing cost). This model of education creates a strong incentive to front-end course development. This saves costs, by allowing schools to can a course and reuse the exact same material numerous times.

This canning of a course is a critique of the profit-maximizing model of education. Students respond that the course allows for little to no interaction with their professor and/or classmates. Professors complain of the lack of academic freedom with the extreme restriction on changing the ‘proven’ course. Administrators at universities have countered this argument by narrowing the definition of academic freedom to cover only where and what professor can publish; this change has arguably affected the quality of education a student receives. A student in a canned course does not get the full experience of the professor knowledge of the subject; they only receive the textbook knowledge approved by a university’s administration. Given this critique, universities, departments and professors must exercise extreme caution when developing this new business model.

For example, if a canned course is utilized, the following steps should be taken to increase the likelihood of quality outcomes:

1. The choice of a textbook must be faculty driven;
2. The use of prerecorded lectures should be encouraged;
3. Faculty should be encouraged/required to have input into course design and development, at least at a minimal level;
4. University administrators should evaluate the purpose of the online education program to ensure education is the first priority.

Online students deserve the same educational experience as their traditional counterparts.

If a university can manage to meet the above requirements, the new business model provides university administrators the autonomy to manage their finances without the challenge of spending tax revenues with political pressures involved. It allows universities to hire more faculty members without budgetary meetings with legislators. It reduces the time required to lobby for funding. In general, autonomy allows a university to operate as an institute of higher learning. Moreover, monies spent by universities do lead to states sacrificing other budget priorities. In the case of Troy University, the ability to say, “It will not cost the state anything” has allowed for the creation of many programs with no objections from the state legislature.