I. Money

Does online schooling save money?

One attraction of online schooling is the opportunity to save money. But does it? It depends on who you ask–and what you expect of schools. “The answer to the question, experts say, depends on what curriculum is used, whether it is a full-time or part-time program, what state you are in, and how many students you need to serve, among other factors.” — Katie Ash, Education Week, March 18, 2009, Experts Debate Cost Savings Of Virtual Ed.


Cheryl Vedoe, president and chief executive officer of Apex Learning.

“One of the areas in which online learning can be extremely cost-effective is in filling in courses where the opportunity would otherwise not exist for a student,” such as when only a few students are gong to sign up for a class. The students can instead scale-up with an online program that enrolls students from other schools. [As quoted by Ash]

Bryan H. Setser, the executive director of the North Carolina Virtual Public School.

“Most superintendents will tell you they just need more space,” he said. But instead of sinking millions of dollars into school construction, districts could save money by investing in online courses, which allow schools to provide instruction before, during, and after school less expensively, he said. [As quoted by Ash]

Dan Lips, an education policy analyst with The Heritage Foundation

Lips offers qualified support for the idea that online schooling saves money, saying, “online learning has the potential to improve productivity and lower the cost of education, reducing the burden on taxpayers.” He offers as evidence the following:

For example, Florida Tax Watch analyzed the fiscal impact of the Florida Virtual School, a model statewide virtual school, and reported that an enrolled student received $1,048 less in government funding than a student attending a traditional public school. This savings estimate does not include the costs for school facilities and maintenance if the student had enrolled in public school. Florida Tax Watch, Center for Educational Performance and Accountability, “Final Report: A Comprehensive Assessment of Florida Virtual School,” November 5, 2007, p. 77, at http://www.floridataxwatch.org/resources/pdf/110507FinalReportFLVS.pdf (November 23, 2009).

The Ethan Allen Institute, in its comprehensive report on school financing in Vermont, gives one example of how an online school can save a significant amount of money.

It points to the Oak Meadow school, an independent, non-sectarian school based in the state. Oak Meadow sells curricular materials for home-schooling parents. It also offers distance learning to families who wish to have the assistance of a teacher. Even with a teacher, the cost difference between Oak Meadow and regular public schools is significant:  “For high-schoolers, the Oak Meadow package comes in at roughly $8000 below the price of a conventional public high school.”

One difference, of course, is that the family is responsible for making sure that someone (a parent, most likely) supervise the child, and provide a physical plant (a place for the child to study). Then again, traditional home-schooling families have long developed ways of sharing resources. This model might be applied anew to an approach to public financing of education.

Better Value, Fewer Taxpayer Dollars, December 2009, available in PDF.


Richard S. Kaestner, project director of the Consortium for School Networking’s Calculating the Cost of Investment.

“I think it is a mistake for schools to look at online learning to save money, at least in the K-12 environment. [Quoted by Ash]

William R. Thomas, director of educational technology for the Southern Regional Education Board:

“One category in which virtual education could be more expensive, said  is course development, partly because of all the different parties that should be at the table during the development phase. Even so, if a high-quality course is the result, he said, it could be used in multiple states and classrooms, potentially leading to overall savings.” [Quoted by Ash]

Cathy Cavanaugh, professor at the University of Florida

“Part of the problem … is the lack of hard data on how much it actually costs to educate students online. There is no standardized way of calculating the per-pupil cost of taking online courses, she said.” [Quoted by Ash]

In her report for the Center of American Progress, entitled Getting Students More Learning Time Online, Cavanaugh has this to say about costs:

The costs associated with incorporating a distance education program are considerable but not insurmountable. Many of the costs of online programs parallel those of on-ground programs: instructors, administrators, staff, professional development, curriculum and materials, assessment and evaluation, and data systems. Online programs have little to no cost for instructional facilities, transportation, and related staff. However, they must fund a substantial technology infrastructure including a course management system and support staff, as well as course design. A school that develops its own distance courses takes on all of these functions. A school that provides distance courses developed and taught by a virtual school takes responsibility for students’ access to the site-based technology devices, infrastructure, and learning facilitators needed for student success.

Yet the value of adding distance courses increases when considering the extensive range of distance courses that are available. A survey of the directors of 20 virtual schools in 14 states found that the average annual cost for a full-time online student was $4,310 in 2008, while the U.S. average per-pupil expenditure in public schools was $9,138, as of 2006. Only one of the virtual schools had a cost exceeding its state average. Other estimates place online programs as high as $8,300 per student per year. These costs reflect an online student-teacher ratio similar to that found in classrooms, although some schools pay teacher bonuses for more than the typical number of students in a course or for exceeding a target number of students who successfully complete a course.

Virtual school costs and funding models vary widely. Some virtual schools do not fund course development in-house, electing to purchase courses from other providers, thus benefiting from economy of scale. Many virtual schools function as course providers rather than as full-service schools. These schools fund teachers and other staff to manage the administrative and technical aspects of course delivery, but may not provide exceptional education teachers, school counselors, media specialists and resources, clubs and activities, and professional development services. Expanded learning time schools should weigh their need for support services in addition to courses when considering the costs of partnering with an online provider to offer online courses.

Thirty percent of school leaders in a 2008 national survey stated that online and blended courses are financially beneficial in their schools—a number that grew from 25 percent in 2007.34 The same survey found that nearly 50 percent of schools had concerns over course development costs and the funding basis for online and blended courses.

Schools can realize a portion of the costs of adding online courses to the school day by eliminating the textbooks students take home for homework. The specifics of the flow of funding depend in part on whether schools and districts develop and deliver their own online courses, use online courses from a public virtual school, or franchise with a for-profit provider. Other methods of shifting costs will emerge, as we continue to rethink what schooling means.

That amount, she said, represents “all the cost involved in creating and teaching, but not all the costs that would be there if it were a full-time school” that included special education and counseling services.” – Ash’s summation of a report by Cathy Cavanaugh, “Getting Students More Learning Time Online.”


Andy Zucker of the Concord Consortium says that estimates of cost savings neglect important other forms of spending that schools engage in:

Consider the economic advantages. The largest online high school in the nation is the Florida Virtual School (FLVS). Like other online high schools, FLVS hires human teachers who are trained to provide online courses, which must be delivered and taught in very different ways than face-to-face courses. By statute, the Florida Virtual School is given 11% more per course enrollment than a face-to-face school to pay for instruction and administration,7 with the money transferred from the brick-and-mortar school’s allotment to FLVS. Additionally, a publication of the North American Council for Online Learning (NACOL) states that indications are “the cost of online courses is about the same as traditional classroom classes.” Disrupting Class ought to explain that it is not instruction that costs less in online high schools. Instead, online schools do not pay for buildings, meals, transportation, libraries, theaters, art rooms, science labs, and other features of brick-and-mortar schools. Are the authors recommending we give up those features in order to gain an economic advantage? — Lost in Cyberspace: A Review of Disrupting Class”  (PDF) December 2008, The Concord Consortium.

Choice of developer affects costs

“Some states run their own virtual education programs out of their departments of education, which districts can tap in to for little or no cost” — attributed to Bill Tucker, chief operating officer of Education Sector

You can always use outside providers — William R. Thomas, director of educational technology for the Southern Regional Education Board

Richard S. Kaestner, project director of the Consortium for School Networking’s Calculating the Cost of Investment.[qoted by A

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