Letter from Australia: the online avalanche?

Online education has, for the past thirty years, been the next big thing yet the promised revolution has never been fully realised.

MOOCs didn’t turn out to be the great disrupter as their early promise suggested, although they have certainly contributed to the emerging online education landscape.

New research revealed at the Tertiary Education Quality and Standards Agency (TEQSA) conference in Melbourne last week challenges some of the assumptions that we have about online education.

Richard Garrett, who presented the research, knows a thing or two about online education. Garrett is the chief research officer for Eduventures and the National Research Centre for College and University Admissions, as well as being the director of the Observatory for Borderless Higher Education (I’m breathless just typing all that).

At the conference, Garrett used US data to present a highly nuanced picture. He says US statistics, while having its own quirks and idiosyncrasies due to the peculiarities of the American market, likely have equivalence for similar markets such as the UK, Australia and Canada.

Background produces mixed results

Here we go: in 2017 15% of all undergraduate enrolments and 30% of all postgraduate enrolments in the US were fully online. No real surprises there.

His research confirms, unsurprisingly, that fully-online degrees are popular among students aged over 25 and that these students are increasingly attracted to colleges that predominantly offer online courses. And that the proportion of mature age students being attracted to those colleges is growing over time. In 2007 it was 12% of the post-25 market, by 2017 it was 30%.

However, in terms of social groups, the picture is more complex. While women and black students are more likely to enrol in fully-online institutions, Asians, Hispanics, whites and disabled students are much less likely to.

It seems counter-intuitive that disabled students prefer on-campus learning over online. The explanation is unclear but likely relates to support services and the like, which can only be properly accessed on a traditional campus.

Geography lessons

And when it comes to geography, early predictions of an education sector unshackled by borders have not been realised. As Garrett told the conference: “Back in the late 1990s and during the MOOC boom, people kept saying that online was going to break down traditional geographical barriers. People wouldn’t have to be content any more with the institution that happened to be in their locality, and could attend institutions based anywhere in the world. At the same time, academics would break free from traditional institutional confines and students would be able to access the best faculty members in aggregate somehow from their home computer. Has that played out?”

Well no. If we look at the huge increase in international students since 2009, very little growth has been in fully-online degrees. In 2016, just 23,500 international students – or 7% – study an Australian degree from their home country, a figure that hasn’t grown since 2009. In the UK, the proportion was 15%, with growth of just 2% since 2009. And in the US it was just 3% (43,000 students) but had grown by 23% since 2009.

“Online wins the bronze when it comes to cross-border delivery,” said Garrett. “It just doesn’t match real and perceived status, the networking, the migration and employment opportunities, that in-country and to some extent transnational education embodies.”

The price factor

So why haven’t consumers embraced it?

In terms of cost, undergraduate tuition fees in the US – which are not regulated – have gone up dramatically in recent years. The only part of the sector for which this is not true is online with prices down 5% since 2009 (although they have started to creep up again since 2014). However, the same does not hold for online postgraduate degrees which, while still being by far the cheapest, increased in price by 9% since 2009.

So while cheaper prices should, according to basic economic theory, attract more students, that is simply not the case. In economics, it’s called the Veblen factor – people are attracted to perceived status and are willing to pay more to be part of it.

As Garrett said: “Are we finally seeing the fruits of optimisation, efficiency, economies of scale, through online and is that going to break the cost problem that is acute in the US or is it just individual institutions playing in response to market forces and will ratchet up price when they can get away with it.”

Outcomes

Garrett told the audience that 57% of all first-time full-time students in the US emerge with a degree within eight years (not a great benchmark). More traditional campuses, unsurprisingly, do better but first-time, part-time online students have just a 13% chance of graduating from their course. Even for people returning to online study, the chances of graduating are less than one in three. What we can see is that people are making rational, if expensive, choices to enrol in more traditional schools.

In conclusion, Garrett said that while online delivery has improved access for some, it has created barriers for others. But he’s not willing to give it up quite yet. He said the consensus among academics is that good online costs more but there is counter-evidence that through careful redesign of teaching in learning you “actually can have the magical combination of quality and lower cost … In my mind, if the education sector can’t produce lower underlying costs and a high-quality product, what can?”

In the meantime, there are a number of disruptors that just might be able to break through – companies that are less focused on mass enrolments (like the University of Phoenix) and more clearly engaged with learning design and delivering new and niche credentials.

Among them are Minerva, Foundry College, Georgia Tech, MicroMasters, Modern Campus, Udacity and Techtonic.

All said and done, the great online revolution still appears to be some way off.