Traditionally, higher education is a labour-intensive business in which the costs are determined by the average size of classes and the number of contact hours. Technology is changing the cost structure and funding requirements. Whether distance education is paid for by public provision, private not-for-profit provision or private for-profit institutions, key principles must be understood.

A chapter in a book from the Commonwealth of Learning and UNESCO assesses what must be taken into account by planners of lifelong learning and distance education.

Today a typical distance learning course involves a virtual library of materials, a webliography (guide to reputable sources of Internet information), a computer conferencing environment structured around topics and moderated by a lecturer with electronically-submitted and returned assignments, often marked by casual staff.

Earlier assumptions about the number of online students that a teacher could look after have proven over-optimistic. It is generally accepted that the teacher’s workload rises due to the volume of electronic messages, with each message requiring more time to compose than is the case with verbal interactions. Tutors can spend twice as much time tutoring online as they do in face-to-face teaching.

The practical issue of meeting a significant proportion of the costs of a distance teaching university from fees has proven challenging. The first difficulty is to fund the very considerable expenditure on buildings, system and course design and development before a single student is enrolled.

The authors stress the importance of distinguishing between committed costs, flexible costs, and business-sustaining costs.

• Committed costs are any costs that provide the necessary infrastructure to enable one to provide goods or services at a certain capacity: these include most personnel costs, the costs of computing and telecommunications systems and depreciation on buildings and equipment.
• Flexible costs are those paid for the amounts used: examples include the costs of payments to materials’ authors hired on contracts for service, the costs of delivering materials to students and payments to tutors for assignments marked.
• Business-sustaining expenses: such as the costs of top administrative staff. These keep the organisation going and are entirely independent of the decisions to provide capacity.

The trend towards cost-sharing has led to higher fees and lower subsidies for all students, with the result that there are no distinctions between on- and off-campus student fees. Using technology to deliver education services has on the whole led to increased costs for learners.

The authors suggest the need to:

• ensure initial estimates of staff, space and technology requirements are accurate
• explore options for cost recovery through loan repayment schemes
• reduce costs by contracting, whenever possible, part-time workers to produce materials, support students and grade results
• realise that start-up costs cannot be recovered quickly
• ensure that students pay something towards the cost of their courses and home-based technology: students tend to be better motivated if they have made some financial contribution
• be cautious about charging for extra ­services based on students’ ability to pay, for this could discriminate against students of modest means.

Source(s):
‘Approaches to Funding’, by Greville Rumble and Fredric M. Litto, pages 33-50 in ‘Perspectives on Distance Education, Lifelong Learning & Distance Higher Education’, Commonwealth of Learning / UNESCO Publishing, edited by Christopher McIntosh and Zeynep Varoglu, 2005 Full document.

Funded by: Commonwealth of Learning

id21 Research Highlight: 31 March 2006

Further Information:
Greville Rumble
Honeyhurst
Crowborough Road
Nutley
East Sussex
United Kingdom
TN22 3HT

Tel: +44 1825 713291
Contact the contributor: greville.rumble@btinternet.com

Fredric M. Litto
Escola do Futuro
Universidade de São Paulo
Av. Prof. Lúcio Martins Rodrigues, travessa 4- bloco 18
CEP 05508-900
São Paulo, SP, Brazil

Tel: +55 11 3091 6325
Fax: +55 11 3815 3083
Contact the contributor: frmlitto@usp.br

Universidade de São Paulo, Brazil

Commonwealth of Learning
1055 West Hastings Street, Suite 1200
Vancouver, BC
V6E 2E9 Canada

Tel: +1 604 775 8200
Fax: +1 604 775 8210
Contact the contributor: info@col.org

Commonwealth of Learning, Canada

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'Distant future: new developments in open and distance learning'

'Acheiving quality distance learning in Africa'

Teaching teachers: a role for distance education?''

'African distance learning: reaching parts other education systems cannot reach?'

'Can ICTs fight poverty in Africa?'

'Can virtual education travel South?'