Online students typically pay less than their in-person peers
It's a common belief that online degrees are more affordable, which draws many students to distance learning. This is partly fueling the push for lowered costs from campus-based institutions teaching remotely during COVID-19.
But do schools typically charge less for online classes? We checked tuition rates at 100 universities that offer online and campus-based programs to determine overall trends.
We found that, overall, most schools do charge less for online than in-person programs – 80% of public schools offer lower rates for online out-of-state students, and 96% of private schools have cheaper online programs. For in-state students, more than one in three public schools charge students less to enroll online.
As the majority of schools we checked offer lower online tuition, most students at colleges with in-person and online programs make a fair point in asking for tuition cuts. These students would also benefit from enrolling online instead of enrolling as they regularly would for in-person classes, especially at out-of-state or private schools.
To examine how much cheaper these programs are, we took a deep dive into tuition prices at 30 popular colleges that offer both online and on-campus degree options.*
*In our research, all tuition rates were sourced directly from official school websites. Tuition costs reflect annual rates, assuming a total of 30 credits, unless the school states otherwise. If tuition differed by major, a representative major was compared for online and on-campus tuition rates.
In-state students at public schools
Cheaper online programs may be less common in-state, but about half of the colleges we investigated offered lower rates for in-state online students. Differences ranged from $11,000 lower for online students at Pennsylvania State University to $5,600 higher for online at Arizona State University.
Online degrees are usually cheaper overall, but they aren't always a better deal for in-state students. This is partly because many schools offer flat rates for online students regardless of where they live, appealing to those who would otherwise pay much more for out-of-state tuition. However, it sometimes results in the same or higher rates for students who live in-state.
There are at least 200 established online programs offering in-state tuition regardless of where students live. This list includes many state schools, such as Pittsburg State University and the University of Central Arkansas, allowing them to draw in students from out-of-state.
These universities also provide a key public service by expanding the options available for affordable education with accredited, established programs.
Before the pandemic, students who prefer in-person instruction may not have considered these schools. As more and more people shift to online learning, however, students now have a wide array of affordable options available online at state schools throughout the U.S.
Overall, most schools do charge less for online than in-person programs – 80% of public schools offer lower rates for online out-of-state students, and 96% of private schools have cheaper online programs.
Public schools for out-of-state students
Students who plan on attending an out-of-state university can cut costs significantly by enrolling online. Tuition was consistently more affordable for online out-of-state students at the schools we looked at.
Pennsylvania State University offered their online learners the most substantial discount at $28,435 per year. Students at Ohio State University can also save substantially – their online undergraduate health sciences program is $23,386 cheaper than campus tuition.
Private colleges and universities
Tuition at private schools is generally the same regardless of where a student lives. We found that online rates at private schools were consistently lower for online programs than on campus.
While price differences varied from school to school, students at the institutions we examined could save $2,900 to $40,100 per year by enrolling online.
Out of the schools we looked at, George Washington University offers the biggest discounts for online programs. The school's online undergraduate health sciences programs are $40,100 cheaper than on-campus equivalents. George Washington University also came in first on our 2020 Best Online Colleges rankings list, based on the impressive return on investment for their online programs.
Students at Pace University can save significantly by opting for online as well, with undergraduate students paying $29,182 less per year.
These cost differences make online programs a much more affordable option, especially now, when classes are largely remote due to the pandemic. Out-of-state students could save an average of $14,500 per year, and students at private institutions stand to save an average of nearly $18,000 by opting for online courses this year.
How have tuition rates changed over the past several years?
Higher education institutions have struggled in recent years to compensate for public funding cuts and declining enrollment. The financial burden has been shifted to students and their families, resulting in steady tuition increases over the last decade.
According to the National Center for Education Statistics, undergraduate tuition, fees, room, and board rose 31% at public institutions and 23% at private nonprofit institutions from 2007 to 2017.
Tuition has continued to increase since then, although the rate of increase has slowed somewhat. According to the College Board, tuition costs rose by less than 4% from 2018-2020.
As campus tuition and fees have steadily risen, average online program costs have dropped by almost 8% since 2017. According to internal data from OnlineU, public online programs lowered rates by 23.18%, costing $10,537 for the 2020-21 school year on average. Private online schools have slightly increased rates by 5.22% over the last three years, increasing median tuition costs to $14,740 in 2020.
Online programs are in part able to offer lower rates because, although implementing a solid online curriculum may be an investment, schools can use their online platform to increase enrollment and reduce overhead costs.
Providing access to a convenient, affordable education inherently allows schools to reach prospective students who don't have the time or money available to attend campus-based programs.
Most campus-based programs can't afford to lower tuition
While some colleges and universities have agreed to offer lower rates for the upcoming school year, most institutions have held firm, saying the quality of education remains the same, in person or online.
Vassar College President Elizabeth Bradley explained why the school is not lowering tuition costs for the upcoming year in a recent interview with The Wall Street Journal. "The Vassar degree is as valuable as it's ever been in the marketplace," she said. "Both the cost of production and the value of what we are providing has really not changed."
Tuition at Vassar was $60,030, not including room and board, for the 2020-2021 school year. The school, which serves 2,500 students per year, is planning to open for optional in-person classes with strict guidelines to protect students and faculty.
In reality, few institutions can afford to lower tuition rates. Schools with limited experience in online programs are investing millions of dollars in education technology and faculty training to roll out online curriculums.
They also have the same infrastructure and administrative costs to uphold and are losing revenue from things like student housing, sports, and study abroad programs. All of these issues make it difficult for many to cut tuition costs without laying off faculty.
Out-of-state students could save an average of $14,500 per year, and students at private institutions stand to save an average of nearly $18,000 by opting for online courses this year.
While a growing number of campuses are offering tuition discounts, including 10% reductions from Georgetown University and Whitman College, most are maintaining pre-pandemic costs, and some are going ahead with planned tuition increases.
Schools with well-established online programs may be able to draw in students this fall who don't want to pay high tuition costs for new online curriculums at traditional schools. Institutions with experience in online learning already have the infrastructure and technology for effective instruction in place, and can charge lower rates and even offer free tuition.
For example, Southern New Hampshire University, which launched its distance education program in 1996, will cover the first year of tuition for all incoming campus-based students this year. Students will be living on campus, but will be taking all classes online. They're likely able to do this in part because they aren't unexpectedly investing in online learning for the first time.
Are online programs a better option during the pandemic?
With little guidance from federal and state governments and a rapidly-changing COVID-19 landscape, schools across the country have scrambled to establish piecemeal plans to move forward with remote learning. This has left students dissatisfied with what they see as a less valuable college experience than what they would receive for their tuition dollars on-campus.
Creating high-quality, engaging online programs requires specific training, technology, infrastructure, and a curriculum designed for the format. Schools new to teaching in the online space have had to use spring and fall quarter as their trial runs, and are unable or unwilling to drop tuition rates for their newly-online curriculums.
Established online options are a better, more affordable choice for students learning remotely during the pandemic. They have the infrastructure, specialized curriculums, and targeted resources to help students succeed in online learning.
While students considering private or out-of-state public schools stand to benefit the most from online programs, even students who plan to attend an in-state public school can save money by seeking out one of the 200 schools that offer in-state tuition rates for their pre-existing online programs.
Sources:
Pace University
George Washington University
Pennsylvania State University
Arizona State University
Ohio State University
