What institution leaders need to know about the online fees debate during COVID-19

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What institution leaders need to know about the online fees debate during COVID-19

While many institutions received positive reviews on their emergency instructional responses in the spring, campus leaders worry that student expectations will be very different going forward. Up to two-thirds of students this fall expect some sort of discount on tuition and fees, according to an Art and Science Group survey. These students anticipate a less-than-ideal experience and are not willing to pay previous tuition rates for it. For institutions worried about hits to fall enrollment, discounting has shown the potential to mitigate some of the yield and retention impacts of an unwanted extension of remote learning.

Numerous institutions have already announced tuition discounts, from Williams College to Hampton University. Campus activity and athletic fees will become easy targets, since students will lack access to campus amenities that those fees subsidize. Some institutions are also considering the elimination of online fees.

Why you should reconsider eliminating online fees

Eliminating online fees holds the potential to cut student expenses by 15% or more at some institutions. These charges can easily eclipse $1,000 per term for some, so it may feel like a just compromise to offer students in trying times. But colleges and universities are discussing elimination of online fees when they fund the exact infrastructure most critical for higher ed in 2020, a strategy that would be penny wise but pound foolish. 

Cuts to online fees would gut the instructional designer teams that made this spring’s largely successful online learning transition feasible. Online fees might support management of the LMS, or fund investment in classroom tech tools necessary for making future HyFlex teaching models possible.

These fees also often fund outbound marketing and recruiting for fully online programs, activity that helps colleges and universities reach the primary population that could enable future revenue and enrollment growth: working adults. In our recent survey of current and prospective adult learners, we found 73% of students were open to completing courses online during COVID-19.

Online fees fund vital infrastructure for serving students and accessing new markets

Business
support

  • Marketing and recruitment
  • Finance and operations
  • Conference center

Online distance learning services

  • Instructional design
  • Program consultation services
  • Testing center

Non-credit professional education

  • Training & development
  • Dual credit
  • Summer and intersession

Consider revenue-sharing as the long-term alternative to online fees

Online fees originated at many public institutions as a response to constraints on tuition and pricing set by legislatures. As the prevalence of online programming grew, institutions needed a way to generate incremental revenue to invest in new infrastructure.

Revenue sharing is the common alternative to dedicated online fees. Under this model, students pay the set tuition rate and a portion of that revenue supports the online infrastructure directly. This is the fairest long-term model for students, who can pay the same price regardless of modality. University leaders should avoid cutting online fees now without first making room in shrinking budgets to support their online infrastructure.

Sample revenue-sharing model for online education

Example of how online program's gross tuition revenue funds instructional costs, academic departments, institutional budget, and online division operations.

For now, university leaders are left with few good options. Students this fall will be more price sensitive than ever, and university budgets have been suffering from years of cuts and declining funding. But for those looking to weather the COVID-19 crisis and find a path to a sustainable future, cutting your online fees won’t get you there.

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