A few years ago, a major survey asked university leaders if their online programs were profitable – 45% of respondents said they didn’t know.

This is both odd and predictable. Odd because online education is not the type of initiative in which cost and revenue are less important – quite the opposite. Institutions typically pursue online learning for “business-like” reasons, such as increasing access, market reach, campus capacity issues, and cost management. At the same time, it’s predictable because defining costs in higher education is a murky process; full of ambiguity. “Profit” is calculated with social responsibility in mind. Most units are budget-based, rather than “cost recovery” or profit centers. University managers are often one step removed from major financial discussions. Many positions don’t require advanced financial literacy.

Another factor is that there is simply a remarkable shortage of information about costs in online higher education.

Over the next two months we will prepare a set of blog posts, white papers and articles that address costs in online higher education. We recognize that this is not a small undertaking; the issue of costs in online education is surprisingly complex and can be approached from a number of angles. Issues pertaining to costs include:

  • Productivity
  • Economies of scale
  • The role of new business models that offer new cost structures
  • Institutional differentiation and specialization
  • Class size and instructional value
  • The role of courseware and its capacity to reduce faculty workload
  • Intellectual property
  • University consortia
  • Freemium and MOOCs
  • Sharing courses to reduce duplication
  •  . . . and more.

As a first step, we’re sharing a list of articles and reports that address one or more aspects of the cost issue. The collection includes reports, opinion pieces, articles and news. They come from very different perspectives, from inside and outside of the academy.

Please share other resources you’ve come across in the comments section below.

Resources: A Starter List

How Online Learning Affects Productivity, Cost and Quality in Higher Education: An Environmental Scan and Review of the Literature. 2013.

Massive Open Online Forces. The Rise of Online Instruction will Upend the Economics of Higher Education. Economist. February 6, 2014.

New Players, Different Game: Understanding the Rise of For-Profit Colleges and Universities by William G. Tierney and Guilbert C. Hentschke. 2007.

One Business School is Itself a Case Study in the Economics of Online Education. Goldie Blumenstyk. Chronicle of Higher Education. October 1 2012.

MOOCs and Economic Reality. Clay Shirky. Chronicle of HIgher Education. July 8 2013.

The Online Evolution: When Technology Meets Tradition in Higher Education. Andrew Norton for Gratton Institute. 2013.

The Coming Higher Ed Revolution. Stuart Butler. National Affairs. Winter 2012. 

The Scary Economics of Higher Education. William Baldwin. Forbes. January 15 2013. 

How Universities are becoming more labour intensive. Alex Usher. Higher Education Strategy. January 7 2014. 

UC Strives to Compete in an Era of Free Courses. Alisha Azevedo. October 1 2012.

Technology and the Broken Higher Education Cost Model: Insights from the Delta Cost Project. Rita Kirshstein and Jane Wellman. September 5 2012.

Twelve Inconvenient Truths About Costs in American Higher Education. Richard Vedder. Center for College Affordability and Productivity. March 2012. 

Managing Online Education. Campus Computing Project, 2010.


Keith Hampson, PhD is the founder of digital / edu / strategy, a research and consulting service that helps colleges, universities and education businesses develop better strategies for maximizing value. 

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