In "Seven lessons of survival in an online world" (The Australian Higher Education Supplement, 9 April 2014), Dr. Jim Barber, former VC of UNE, notes that Georgia Institute of Technology is offering a Master of Computer Science through MOOCs (Massive Open Online Courses). The MOOCs are provided by Udacity at a cost of about US $7,000.
As Dr. Barber points out, this on-line Masters is much cheaper than conventional face-to-face university courses. It is also much cheaper than current on-line university courses. The online Masters I am currently enrolled in costs about $35,000. Dr. Barber attributes part of the lower cost to course fees not subsidising research at universities and the cost of buildings.
Dr. Barber claims that "academics are paid to spend about 40 per cent of their time on research" and that "funding for this work derives largely from teaching revenue". So assuming that 40% of my course fees were eliminated by not finding research, that would reduce them to about $21,000.
As I am undertaking an online course, hopefully my fees are not paying for classrooms (as I don't need them). But there are still costs in administration of the course. But that can't account for the bulk of the cost. What else might be in course costs?
There is is the cost of designing and maintaining the course. However, with a large number of students on-line the cost of course design and maintenance should not be more than $1,000 per student per year. MOOCs typically provide no tutor assistance to individual students: unless you can get another student to help (or you pay for your own tutor), then you are on your own. Partly for this reason, MOOCs typically have a completion rate of about 5%, about one tenth the rate for more conventional courses.
The low completion rate is a large hidden cost for MOOCs: they may be on tenth the cost of conventional courses, but if the completion rate is also one tenth, then MOOCs are no cheaper than conventional courses.
The cost for courses which Dr. Barber does not mention is tutoring. The courses I study and teach online at universities have human tutor to help the students. The ANU's casual tutor rates are around $100 per hour.
It would be possible to drastically lower the cost of Australian university degrees by providing them online with no human assistance and using academic staff at universities which undertake no research. However, the reputation of Australia's university sector would suffer as a result.
I agree with Dr. Barber that Australian universities need to embrace on-line courses if they are to avoid the fate of the car industry. But just as the Australian car industry found it could not compete on price with low value cars, Australian universities should avoid trying to compete on price with low quality degrees. Instead Australia should address the premium on-line and blended education market, providing a quality product for a reasonable price, from a country known for its research.