The Effect of the Economy on Online Learning

Recently the annual survey of online learning was released by the Sloan Consortium. The report shows continued growth in demand for online offerings despite the expectation of many, including the report’s authors, that demand would slow.

Institutions responding to the survey indicated that they believe current economic challenges will have a positive impact on overall online enrollments.  That remains to be seen.

Since so many online enrollments are by adult and other part-time, working students, I wonder what will happen to these students as the economic impact becomes more obvious.  An economic downturn of the current magnitude can have different impacts at different institutions and not always in the ways expected.  In some cases, when the economy turns down, there are budget cuts at universities and colleges that actually reduce access for adults and part-time, working adults.  It depends on how a college or university is structured and how online or external degrees are funded.  If the revenues go into some type of general fund and are not necessarily available to the program, then expansion or even continuation of programs can be threatened.  On the other hand, if the degree programs are offered by a unit that is able to retain tuition revenues, then there is the possibility that the programs will continue and even expand.  But even in those cases there may be pressure to treat these programs as “cash cows” to help ride out reductions in other funding sources. 

And cuts are certainly on the way, especially in public institutions.  This Inside Higher Ed article has examples from two of our largest states.  Particular attention should be given to the possibility of the California State University System reducing enrollments by 10,000 students.  It would seem to be politically risky for the system to cut 10,000 traditional students and expand programs for “non-traditional” students.  So, it might be assumed that there will be reduced access in that system.  While New York is calling for budget cuts and reductions in aid on an average student basis, it may also see reduced access.   Add to this the recent story out of the University of Iowa that faculty are being limited in the number of online courses they may teach and the pressures on online programs begin to multiply.

There are at least two interesting elements to the Sloan Consortium’s report.  First, they explain that the earliest pioneers in online learning began such offerings little over a decade ago and only 15% of all U.S. colleges and universities had offered online courses prior to 1999.  They go on to say that the growth of online enrollments in 2008 is not because of growth in the number of institutions offering online courses and programs but because of growth at the early pioneer institutions.  These institutions offer the greatest array of offerings and account for most of the growth.  A second issue the Sloan report addresses is the importance of geography.  They report that over 85% of all online enrollments come from within 50 miles of the campus of the college or university offering the online programs.  The author’s conclude that offering online courses does not necessarily expand the geographic reach of a college or university, but speculate that those schools that succeed in widening their reach may grow faster than others.

I suspect that these two issues may be connected, and the growth of those who serve beyond a 50 mile radius is likely to be happening already.  That the pioneer online institutions have long worked to offer their programs nationally and to develop brands that were recognized beyond their immediate region.  That most other schools find it challenging to market and brand themselves nationally.  And that this is why the majority of growth is produced by the pioneers.

But what is troubling to me is that, even when states are cutting support for public colleges and universities, there is a growing demand for workforce education, and there is continually increasing demand for online programs, there are still states with public policies that inhibit that access.  Some of the same states that are facing the most severe economic stress have some of the most restrictive policies for out-of-state institutions that seek to offer online programs within those states.  It is the adult-serving online programs that can help address increasing demand even in times of economic downturn.  We know how to serve adults, today’s workforce, and how to deliver online programs across the country.

There is a need for public policy rationality, for states to figure out how to work with adult, online programs that are offered across state borders.  And, where state policies might include the idea of protecting in-state institution, there is a need to recognize that those very institutions may be facing diminished capacities to meet the increasing demands of adult and other part-time, working students in these states.

Please let me know what you think.

Mike