The cost of online learning and why it matters to Ohio

What does online learning really cost? Can it, in fact, be
both better in terms of improving student achievement and overall less
expensive than traditional bricks and mortar schools? These fundamental
questions are what the Fordham Institute’s new paper, “The
Cost of Online Learning
”, gamely tries to tackle. In short, the paper shows
that online learning has the potential to save education money while also
improving the quality of instruction available to students.

Parthenon Group
(the national research firm that helped craft Ohio’s
winning Race to the Top application) provided the research. They conducted more
than 50 interviews with entrepreneurs, policy experts and school leaders across
the country to come up with “an informed set of estimates regarding the cost of
virtual and blended schools” across five categories – labor (teacher and
administrators), content acquisition, technology and infrastructure, school
operations, and student support.

Using these five categories as the basis of comparison the
researchers compared a “typical” traditional model (brick and mortar school
where instruction is delivered by teachers), a “typical” blended model
(students attend brick and mortar schools where they alternate between online
and in-person instruction) and a “typical” full virtual model (all instruction
takes place online). In blended schools like Carpe Diem, Rocketship, and KIPP
Empower, technology is used as a tool to personalize instruction for students
who spend part of their time in traditional classroom settings and part of
their time learning through varied and personalized forms of digital learning
opportunities. In contrasts, virtual models like Florida Virtual School,
Connections Academy, and K-12 offer online instruction that students usually
take from home via a computer.

The Parthenon researchers show that across the country, on
average, a traditional brick and mortar education costs $10,000 a student, a
blended model approach costs $8,900 a student, while a fully virtual model
costs $6,400 a student. The savings in both blended and fully virtual models
are based on the lower labor costs in each. Both blended and fully virtual
models save money on labor because they replace costly teachers with less costly
technology. This is how industries across America have increased productivity
in recent decades while employing fewer people. But such savings are new to
education where technology has traditionally been seen as an addition and not a
replacement. Or as the researchers note, “From investment banks to grocery
stores to vacation planning, big and small businesses have used technology to
accomplish more with less, while public education reform has remained
frustratingly stagnant.”

But, and this is important, according to the Parthenon
researchers, technology in education does not likely mean the end of teaching
or the teaching profession. This is a fear expressed by some educators and
others in Ohio, but as researchers like Bryan and Emily Hassel document in
their report Teachers
in the Age of Digital Instruction
, technology could very well help make
teaching a far more compelling and rewarding profession. Technology in
education not only has the potential to save money but also – and far more
importantly – improve productivity and increase student achievement by helping
teachers become more effective.

The Parthenon team argue, “traditional classroom teachers
face extraordinary challenges: often a 30:1 student-teacher ratio, and a
classroom full of students with varying educational needs, interests and
learning styles.” They continue, “Teaching is multiple jobs rolled into one;
schools of the future will likely continue to search for ways that can ease
this challenge while boosting instructional effectiveness. Many entrepreneurs
are beginning to break down the various elements of a teacher’s day, and look
for points of opportunity for technology to take over certain elements, freeing
up teacher time to focus in other places, such as more time with

Of course, depending on how much different models – be they
fully virtual or blended – invest in things like content and technology and
infrastructure it is possible to create digital models that are vastly more
expensive than traditional classrooms. Some states and school districts have in
fact invested millions in up front development costs, as have some of the
country’s largest for-profit providers like K-12 and Connections Academy. Such
upfront costs can be amortized over time, but such significant investments
explain why some virtual school courses can cost $800 or more per student per
year.  Further, Paul Hill shows in his
recent Fordham paper, School
Finance in the Digital-Learning Era
, that the cost of entry for high end models
combined with the political uncertainty around education innovation creates an
“innovation-hostile environment.” Hill worries that even if education “were
more open to new ideas, grave uncertainty about whether any K-12 education idea
can ever turn a profit limits venture-capital investments.”

In this unsettled and shifting environment the Parthenon
team breaks important new ground. But, they acknowledge the limitations of
their findings and caution readers “against looking for one simple ‘price tag’
for online learning, or to assume that savings necessarily translates into
lower overall costs per pupil.” Despite such caveats, they do a fantastic job
of creating research parameters and definitions for a critically important and
timely topic. Their contribution is surely going to be the first of many such
analyses we are likely to see as more and more students across the country
enroll in emerging digital learning opportunities and researchers and policy
makers try to better understand what adds value and what doesn’t. Such analysis
will begin to offer insights into those programs that offer the highest and
lowest returns on investment. This is important as it will allow the school
funding conversation to move beyond just talking about how much is spent on
various inputs to actually what impacts student learning and at what cost.

The Parthenon findings are especially important for Ohio
were there are some 33,000 students currently enrolled in the state’s
e-schools, and close to $200 million spent on their education. This sector is
growing fast and policy makers working on the state’s Digital
Learning Task Force
would surely benefit by studying closely the findings
from Parthenon, and ultimately weaving them in their recommendations to the
General Assembly.

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