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As more colleges stay online, students demand tuition cuts

The article talks about students demanding tuition cuts because online classes are less effective, and because lots of things they pay for are no longer relevant (such as campus transport). It notably doesn't say if it is actually cheaper for the university to teach online. If it isn't cheaper, then if the university cuts tuition fees it would have to make up the shortfall from somewhere.

Is it cheaper for universities to teach online than in-person?

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    Only on a long term, when they can sell the lecture halls. What they save now on heating and cleaning and postponing renovations, they spend on digital infrastructure and licenses. – Karl Aug 23 at 9:45
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    Yes, when they can get rid of all the faculty and use AI to create, control and grade all assessments. Unless they don’t have any assessments so once you pay the fee you get the qualification. – Solar Mike Aug 23 at 10:41
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    Research anyone? What happened to my cyclotron? My chem lab? – Buffy Aug 23 at 12:08
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    I am not sure it is clear what is the actual cost of teaching as universities have many more functions than just giving lectures. Also, since the pandemic is a temporary situation, most of the cost is still there: they will not sell or rent out the buildings, libraries are still there even if they not open, people have to cut the grass on campus, administration will not be automatically fired just because originally they were assigned task related to physical presence of students. These are costs directly related to teaching at the university – Greg Aug 23 at 16:36
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    The student's arguments seem to focus on the lesser quality of education, not what it costs. From their point-of-view: "students want a 25% tuition cut. Is on-line learning 25% less effective?" – Owen Reynolds Aug 23 at 19:20
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There are two possible interpretation of your question, which lead to different answers.

  1. Consider a University, which made a strategic choice to teach all/most of their courses fully/mostly online. Assuming they had a good team to properly consider the administrative and academic issues and to prepare high quality courses. A prominent example in the UK is Open University. There are no/small costs for Estates. The costs for salaries is roughly the same or slightly smaller (staff still benefits from saving commute costs and opportunity to live in cheaper more distant areas). As a consequence, their bills are smaller and they can charge less for their courses. Today, a BSc in Maths at the Open University costs £6k per full-time year while a similar course at U Essex costs £9k. The answer is yes.
  2. Now, suppose a normal University like the University of Essex is suddenly forced to move teaching online. Their Estates bill remains more or less the same (Estates remain on the balance and require maintenance). The salaries remain the same. Additional funds are required to develop the necessary IT infrastructure for online delivery, equip academics with all they need for teaching from home, train staff and/or recruit extra specialists to re-develop courses for online delivery (e.g. develop substitutions for labs, etc). In this situation, the urgent switch to online teaching actually costs more, so the answer is no.
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    I think you have left out many of the costs at OU. For example, they use BBC to produce materials and that is unlikely to be free, though it might be subsidized. Also, they provide a robust distributed system of TA/tutors for students. There may be differences in government subsidies between OU and Essex as the whole UK system is still heavily subsidized though no longer free to students. – Buffy Aug 23 at 10:32
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    According to our University administration, the subsidies from government are mostly negligible. However, with or without subsidies, I believe my main point still stands -- urgent switch to online delivery is much more expensive than a planned development. – Dmitry Savostyanov Aug 23 at 11:10
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    It might also be worth adding that most providers of remote tuition will tell you that preparing high quality, effective, remote tuition take more time than in person delivery because more effort and creativity needs to be spend on encouraging and assessing engagement. – Ian Sudbery Aug 23 at 13:02
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    @IanSudbery and the institutions don’t pay for one to rewrite the material so it works online - they just say get it done... then hammer you when the students are not happy. – Solar Mike Aug 23 at 13:36
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    Indeed. In recognition of the extra work associated with rewriting materials, we are getting some recognition in our work load monitoring system for the extra effort, but given that we already average 120% workload, and no work is being taken away from us, it doesn't seem very helpful. – Ian Sudbery Aug 23 at 14:24
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Consider the University of California system as an example: of its core funds expenditures, three quarters goes to employees, and most of the rest is student financial aid. Only 6% of the costs go to equipment, utilities, and similar.

Now, some portion of those employees would also become unnecessary if they did away with a physical campus entirely, but most are still needed to operate the organization. In the case of an institution like the UC system, remember also that much of the physical campus is also not devoted to instruction, but to research and other non-instructional activities, and these have continued in many cases (albeit with reduced capacity) through the pandemic.

In short: in the near term, most universities' costs are almost entirely identical while teaching online. In the long term, even if they shed every physical aspect of instruction, the costs would not go down all that much unless the institution was radically restructured to greatly increase the numbers of students per instructor.

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    "Only 6% of the costs go to equipment, utilities, and similar." That's super misleadling because it does not include the $193,000,000 for debt service (p. 17), which mostly pays for buildings. – Anonymous Physicist Aug 23 at 10:55
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    You've also neglected the additional software, computer hardware, and technical support costs for online teaching (one university threw out a number in the millions). In addition, UC is a very privileged university, not a typical one. – Anonymous Physicist Aug 23 at 10:58
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    @Solar Mike I think it's implicit that the example is meant to be somewhat typical. What's the point of discussing a general question using a complete outlier? – henning -- reinstate Monica Aug 23 at 11:47
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    @Buffy Many high energy experimental physicists would not notice a difference in their research if their campuses ceased to exist. Many have not had on campus labs for over a decade. Plenty of other experimental physicists would have issues. – Anonymous Physicist Aug 23 at 13:25
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    @AnonymousPhysicist Yes, university accounting is complex. For example, buildings typically get tied to capital campaigns, which decrease their effective cost, and universities incorporating medical school generally have the medical campus in its own entirely separate budget system. But the dominant cost remains the people: that $193B of debt service is less than 3% of the core funds, and the per-professor additional IT resources necessary for teaching online are likewise trivial compared to the cost of that professor. – jakebeal Aug 23 at 18:01
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It probably depends on the course

A major cost of offering an undergraduate Biology course (and presumably other science and engineering courses I have less experience of) is practicals. These consume expensive materials, and require substantial additional support in the form of PhD students who are paid to assist in the laboratory, as well as taking multiple technicians and academic staff to deliver the classes.

There is no online equivalent to these practical elements, and so their absence likely represents a substantial saving to the university, and their loss is a significant deficit in the education such students are receiving.

For other courses, such as Mathematics, teaching is likely no cheaper and probably actually requires additional time from the teaching staff compared to in-person teaching. Since these staff are salaried they probably aren't being paid by the hour anyway, I leave debating whether this is really a "cost" to other people who are fond of arguing.

But any analysis of the cost of teaching is missing the point

The amount universities charge for a degree is down either to government regulation (as in the UK) or the market value of a degree to the student but either way the university is not totting up a value for the education delivered and charging the student an itemised bill for that; it is deciding what income it need, or can get, and is charging accordingly.

(Note: since these seems directed at the current situation rather than Online in general, I am considering only the costs of a traditional university providing temporary online teaching not the comparison to full distance learning as a long term decision.)

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    I was at a university that cancelled the physics department completely as it was so expensive compared to offering a management degree course - cost of labs, hi-tech equipment and space. Students that can be crammed into a 400 seat lecture theatre for 2 hours and then left with reading until the lecture next week are a cheaper source of money compared to 20 physics or engineering students that spend 23 or 24 hours per week in lectures, labs and supervised project work. – Solar Mike Aug 23 at 19:00
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    Can you support the claim that consumables for labs are a “major cost” in a biology department? It certainly is a cost but I’ll bet this is dwarfed by faculty salary. – ZeroTheHero Aug 23 at 20:42
  • @SolarMike presumably the funding formula from government to universities should reflect this difference in costs.. – ZeroTheHero Aug 24 at 2:14
  • In my biology department at least, the biggest two costs of teaching practicals is 1) The rent we pay to the university for the lab space. This nominally covers not just the cost of maintinance, but also the cost of replacement at end-of-life 2) The salaries of the full-time, permanent, teaching-lab technicians 3) The depreciation on the equipment. All these costs continue whether you are using them or not. The cost of consumables is actaully only a very small part. – Ian Sudbery Aug 24 at 8:49
  • I believe that strictly speaking, the UK government only sets a maximum tuition fee (for England and Wales), and universities are free to ask less if they want. – gerrit Aug 24 at 15:09
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Of course it is cheaper. You don't have to pay for facilities, you don't have to pay for staff to service those facilities, you don't have to pay for utilities and maintenance on the same. You can pay some instructors less because they work from home. Students don't need to live on campus so you don't need to build dorms and offer scholarships for them. Generally cost of living is cheaper for students, so even off-campus students require less financial support.

But this stuff only applies if you are a remote university to begin with. If you already have facilities and staff geared towards on-campus learning, you're not going to magically save money because nobody is using them. Instead you'll be wasting money on expensive facilities nobody can use. Sure you can turn off power and save a few dollars there, but the bank will still come to collect interest on the loan. And generally there's all the money you invested before, with the expectation that you will be able to get use out of it, which now becomes a sunk cost.

As far as lowering tuition though, this is an indirect factor at best. Elite universities are not the kind of industry where the market efficiently competes for a few percentage points of profit above cost. Many students do not consider elite universities a commodity, and would not switch simply to save a few dollars, in the same way way people won't stop buying Apple product just because there are cheaper competitors. There is tremendous brand value. This isn't true for all students, and some surely will rethink their education path, but elite universities have highly competitive admissions with many more times people applying than get in. So you could say there is a huge artificial shortage of spots at elite universities, and slightly shrinking the market will not reduce demand much.

On the contrary, no-name universities are usually treated as generic commodities, and we may see prices come down. These universities have already had cheaper tuition before Covid, as their students shop around more and even consider (gasp) not going to university altogether. Their admissions are also not that competitive. But many of these universities already have been doing distance learning, and others might not find it easy to switch over just for a year only to switch back again after.

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