I received my bachelor’s degree from an institution with around 1,400 students. During my three years at the school, the average size of the classes I took was around eight to 10 people. I was more than satisfied with the amount of student-teacher interaction that those classes afforded me, and I believe it was a very productive time in my academic career because of that. However, it was an extremely expensive institution, and I have to believe that at least some of that cost was due to the fact that the student-faculty ratios (in most every program at the institution) were so low. The quality of the program in which I participated was high but so, too, was the cost. One would think that simply including more students in the program would boost productivity and, in turn, lower costs; but, it is not nearly that cut-and-dried as course and program quality would undoubtedly be affected by the addition of more students. Paulsen (2001) tells us that this is precisely the reason that “institutions resist increases in student-faculty ratios and class sizes, even though they would tend to reduce educational costs per student” (p. 219). This is true of most any college or university. This conundrum creates in higher education what Baumol called “cost disease.” This is the inability of many service-based industries to keep pace with others.
With the current economy in such an unstable condition, the attention of the various stakeholders in higher education (i.e. students, parents, and lawmakers) has turned to cost and productivity. As subsidies go down and tuition goes up, many want to know why a college education is slowly moving out of reach of most Americans and what can be done about it. According to Archibald and Feldman (2011) the answer is technology. The authors state that “even in artisan-like personal services, technological changes do have the potential to raise labor productivity and hold down costs” (p. 67). What kind of technological changes? Most obvious is the growing emphasis being placed on online or distance education. The idea being (if I understand the argument correctly) that access to higher education is broadened by offering programs online which brings in more revenue to the institutions offering the programs. Other benefits of online education which have been discussed are the money saved on space needed for classes and, potentially, faculty time. Hjeltnes and Hansson (2005) explain that some research has shown that online learning can actually save time for faculty members allowing them to dedicate more time to research. So, theoretically an instructor can teach more students in less time while maintaining quality.
We cannot dismiss the costs of technology though. The more common online education becomes, the more money will have to be spent on maintaining such programs. Graves (2005) describes the necessity of a well-supported technological infrastructure in preserving and improving quality and customer satisfaction in online endeavors. After all, it is expensive for any institution to keep up with the constant advances in technology. How can colleges and universities prevent these from diminishing the quality and efficiency of online programs? New developments in “cloud computing” may help in answering that question. According to Katz, Goldstein, and Yanosky (2009) cloud computing is a new IT capability that could greatly diminish the total costs of technology in higher education. While it is still a new concept that will probably take some time to make its way through the entire field of higher education, cloud computing has the potential to reduce the presence of cost disease by further improving access to college students while lowering IT costs and improving the quality of online course offerings at colleges and universities.
References
Graves, W.H. (2005). Improving institutional performance through IT-enabled innovation. Educause Review. Retrieved from http://net.educause.edu/ir/library/pdf/ERM0564.pdf
Hjeltnes, T.A., & Hansson, B. (2005). Cost effectiveness and cost efficiency in e-learning (Report No. 2004-3538/001-001). Retrieved from http://www2.tisip.no/quis/ public_files/wp7-cost-effectiveness-efficiency.pdf
Katz, R., Goldstein, P., & Yanosky, R. (2009). Demystifying cloud computing for higher education. ECAR Research Bulletin, 2009(19). Retrieved from http://net.educause.edu/ section_params/conf/CCW10/highered.pdf
Paulsen, M.B. (2001). Economic perspectives on rising college tuition: A theoretical and empirical exploration. In M.B. Paulsen & J.C. Smart (Eds.), The Finance of Higher Education: Theory, Research Policy & Practice (pp. 193-263). New York: Agathon Press.
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