Inside Higher Ed, A College Prices Its Online Programs 60% Less:
Most institutions charge students the same or more for online programs than for face-to-face. Berklee has found success with a pricing model that favors online students.
Berklee College of Music’s online program, priced at just over a third of tuition for the Massachusetts institution’s face-to-face degree offerings, raised eyebrows when it got off the ground in 2013. Conventional wisdom that online programs require more resources to produce had taken hold, and pricing models that favor online students were few and far between.
Five years later, Berklee remains an anomaly in higher ed, as most institutions continue to charge the same or more for online programs as for their face-to-face equivalents. Some arguments hinge on a philosophical belief that online education should be valued equivalently to face-to-face programs, while others emphasize the significant financial burden of designing and launching online courses from scratch.
In the face of a shifting landscape, Berklee has held firm. Online tuition for a bachelor's degree will go up half a percentage point this fall, from $1,479 per course ($59,160 for a 40-course degree program) to $1,497 per course ($59,880 total), but it still remains more than 60 percent less than face-to-face tuition — $171,520. In the last few years, on-ground tuition has increased by a few thousand dollars while online tuition has stayed the same, widening the gap between the two even farther, according to Debbie Cavalier, Berklee’s senior vice president of online learning and continuing education.
As of fall 2017, Berklee Online's undergraduate enrollment stood at 1,138 students, up from 244 just two academic years earlier. Though Cavalier’s team had worried early on that the online program would cannibalize existing offerings, campus enrollment has instead increased from 4,490 undergraduates in 2013 to 4,532 in 2017, even as online has grown more popular. ...
Jeff Seaman, co-director of the Babson Survey Research Group, thinks the institution has based its pricing model on marginal costs of the program (adding a certain number of online students to its existing operations) rather than average cost, which would add up all of the resources used by students and divide by the number of students. "I expect the cost would be much higher if they were not able to piggyback on their existing infrastructure," Seaman said.