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The Cost of an Online College Degree

Suzanne Shaffer


According to the National Center for Education Statistics, over the past four decades from 1963–2013, tuition rates at traditional four-year colleges and universities have increased from an average of $1,286 for tuition and fees in today’s dollars to $23,083 for the same education — an increase of over 200 percent. In its 2019 report, Trends in College Pricing, the College Board reports that a moderate college budget for a four-year, in-state public institution averaged $26,590 for the 2019–2020 academic year. A moderate budget at a private college averaged $53,980.

Before the current pandemic, most colleges and universities were not offering an online education with the quality of a traditional education. Some colleges have offered courses online, but the most prestigious and popular degrees were rarely offered remotely.

However, in recent years a few schools have begun leading the way into affordable, quality online education:

  • Georgia Tech, a top engineering school, launched an online masters in computer science in 2014. The degree costs only $7,000 (one-sixth the cost of the traditional in-person degree) with nearly 10,000 students enrolled.
  • In 2015, the University of Illinois launched an online MBA for $22,000, a fraction of the cost of most business schools, supplemented with micro-immersions, where students connect and work on projects with other students and at companies.
  • Since 1995, Southern New Hampshire University has been a leader in online education offering some of the lowest online tuition that hasn’t increased in a decade.

As traditional college tuition rises and colleges recognize the need for competitive online education, students will begin to embrace this option. Examining the cost of an online education vs. a traditional education can help you and your student evaluate its benefits. A closer look at the overall costs of each may surprise you.

Evaluating the Cost of an Online Education

Experts in the field of online education advise parents and students to be cautious when comparing the price of online and traditional college courses and degree programs. In a recent interview with U.S. News, Lynette M. O’Keefe, director of the Online Learning Consortium’s Research Center for Digital Learning and Leadership, said:

Students should really be cautious about how tuition and fees are structured. Are they paying by the credit hour, by the course, are they paying for the whole semester at a time, a flat rate? ... Sometimes when you see a by-the-program 'sticker price,' that can be a sign that that institution might not be as legitimate as they present themselves to be, though that's not a blanket statement by any means. The best thing [students] can do is look up universities in the same area, both face-to-face and online, and see what's being charged and consider the degree program length and number of hours they need when adding those costs up.

In some cases, an online degree may be more expensive than a traditional degree.

U.S. News and Education, a well-known college ranking service, reports that of the 170 ranked public colleges that reported tuition and fees information, the average tuition price of an online bachelor’s degree for in-state, in-district students is $316 per credit for the 2019–20 academic year. The tuition price for in-state students studying on campus is an average of $311 per credit, among the 93 ranked colleges that provided this information.

Looking at private colleges, the average per credit price for online programs at the 168 ranked colleges that reported information is $488 —much lower than the average tuition price for on-campus programs at $1240 per credit hour.

As you can see, prices and costs can vary among colleges and also among specific programs. It can also vary based on location as some colleges have varying amounts based on districts, in-state vs. out-of-state, and distance from campus.

Before deciding, consider the pros and cons, but also examine these financial factors:

  1. Tuition: Many online courses charge by credit hour which makes it important to map out your degree track to determine total cost. Some programs offer tiered tuition where students pay less per credit if they take more classes at once. Also make a note of in-state and out-of-state tuition charges.
  2. Fees: Most online programs have a technology fee, which will vary by institution. Other payments like assessment fees, graduation fees and capital improvement fees may be tacked on to the cost of your tuition. Compare these fees to the fees charged by a traditional college.
  3. Employer reimbursement: Employers often reimburse employees for online degrees. For instance, Starbucks promises employees full tuition reimbursement for an online degree from ASU. This could be a substantial savings.
  4. Travel: Some programs, especially at the graduate level, require occasional travel to attend classes on campus or work with other students on projects. This adds to your cost.
  5. Federal grants: Always complete the FAFSA (Free Application for Federal Student Aid) because online colleges accept federal Pell grant money.
  6. Scholarships: Some scholarships are available from online colleges, but outside scholarships are hard to find since many private scholarships are hesitant about disbursing money for an online degree.
  7. Loans: Students have the same borrowing options as traditional students: federal loans and private loans. However, always remember to be cautious about incurring too much student debt.

Is an Online Education More Affordable?

When comparing costs beyond tuition, it’s important to note that on-campus programs have costs associated with them that aren’t reflected in the tuition and fees — textbooks, meal plans, room and board, etc. Online programs may involve certain technology expenses, but students won’t be paying fees related to on-campus living.

You should also consider the delivery of the education. Will the online education you are considering be comparable to the traditional experience? Is the delivery of the content of good quality and does it meet the standards of accreditation?

Finally, remember to price both products in the same way. The fairest way to compare costs is to use the same set of requirements when evaluating each institution. Examine the number of required credits and the cost per credit hour at each institution as a basis for making a decision.

Examining Surveys to Determine Online Costs

After much research, Inside Higher Education concluded, “so far online learning has failed to make American higher education more affordable.” They noted that, according to one industry report, "the average per credit in-state cost for an online bachelor’s program is 14 percent higher than for the same on-ground programs." One survey they evaluated found that "54 percent of institutions are charging online students more. In a different survey, 23 percent reported charging more, and 74 percent the same.”

U.S. News and World Report recently discussed the relative costs of online and campus education based on data from 300 programs. Some of their results point to statistics that might surprise parents and students as they confirm that credits are sometimes more expensive at an online college than at a traditional residential college.

Bottom line: Do your research! Compare degree costs before assuming an online degree costs less than a traditional degree, and then evaluate programs based on cost and the quality of the education provided.

Suzanne Shaffer counsels students and families through her blog, Parenting for College. Her advice has been highlighted on Huffington Post, Yahoo Finance, U.S. News College and TeenLife online and she has written for Smart College Visit, College Focus, Noodle Education and Road2College. Her articles have also been featured in print in TeenLife, UniversityParent and CollegiateParent publications.
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