Hello there,
If you are new to the cost and analysis of distance education, then have no fear because this discussion will break down their major issue in very simple terms. Let’s get into it!
Institutions of higher education incur a great deal of costs to develop, deliver, manage, maintain, and provide online education. These costs may vary from institution to institution and may also be determined using business models that suit their context. In fact, Rumble (2001) noted that the analysis done by countless analysts are limited to their own budget. He added that generally “cost analysis tends to be bounded by the institutional budget” (Rumble, 2001, p. 82). In this case, budgets will most likely vary from institution to institution, which also suggests that different costs will be reflected and considered. Meanwhile, Rumble (2001) pointed out that different analysts use very different terms when describing what exactly they are costing. It is therefore safe to infer that it is simply not a one size fit all situation where costs and analysis are concerned.
With that said, it is imperative to note some of the major costs that online higher education institutions incur. They include but are not limited to resources or materials production and revision, labor (staffing), staff equipment, the delivery of materials or resources, quality assurance expenses, website development and maintenance costs, marketing costs, building (main offices) costs, network costs, equipment costs, and replacement costs. Interestingly, these costs can be attributed to three major categories, namely development costs, delivery costs, and overhead costs. Notwithstanding, it is pertinent to keep in mind that there is an array of costs, some of which are not even considered by online institutions of higher education. This is essentially the major problem with costing and analysis.
I like to think of the issue as an inclusion vs exclusion conundrum. Precisely, on one hand, online higher education institutions consider certain costs. For instance, some costs have been found to be an integral part of distance education. Rumble (2001) specifically pinpointed the costs that are crucial to the costs system. In particular, he identified the development and maintenance of an online institution's website as an integral part of the cost system. He also stated that “the costs of access/reception are an integral part of the system as a whole, and need to be taken into account, if not for budgeting purposes, then at least for purposes of cost analysis” (Rumble, 2001, p. 78). For the most part, all the relevant costs are typically taken into consideration by DE institutions. On the other hand, there are costs that are excluded in the budgets and analysis of several DE colleges. In fact, Rumble (2001) noted that “different analysts lack agreement on the costs that should be taken into account” (p. 79). Furthermore, different kinds of costs such as student costs or costs that students incur, and higher-level management costs are rarely considered and are often excluded.
Meanwhile, some costs like replacement costs are underestimated, and full costs to maintain networks are often not reflected in budgets. Altogether, although this can be a controversial issue, the inclusion and exclusion of the vast array of costs depends tremendously on a range of factors. As such, it is very unlikely that a higher ed institution will consider all costs. Instead, several DE schools may account for the costs that are integral and relevant to their context. Needless to say, the inclusion vs exclusion conundrum is a major cost and analysis issue. What say you on this matter? I look forward to seeing your comments on this issue!
Ps. I found this interesting news report that came out this week on schools incurring costs to provide meals to students. Many schools are currently in a lot of debt as it is costing them a great deal to provide free meals or at least at a low cost.
Considering these debts being incurred, the question is should student meal costs continue to be considered and included in budgets? What are your thoughts?
Krista
MDE student
University of Maryland Global Campus
University of Maryland Global Campus | UMGC
References
Rumble, G. (2001). The costs and costing of networked learning. Online Learning, 5(2).