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, 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.

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.

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.”

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 widely 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.

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 students.” 

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

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.

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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