New study challenges ROI of online learning

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A new study from Stanford University economist Caroline Hoxby suggests that students who pursue degrees through distance learning typically don’t increase their professional earnings by enough to offset the costs of the degree itself. According to the data, students do increase earnings while enrolled and immediately after…

Dive Brief:

  • A new study from Stanford University economist Caroline Hoxby suggests that students who pursue degrees through distance learning typically don't increase their professional earnings by enough to offset the costs of the degree itself.
  • According to the data, students do increase earnings while enrolled and immediately after completing programs which are exclusively or substantially offered online by more than $16,000 annually. But the total costs of loans and grants frequently exceeds $10,000 per student annually, and yields loan default rates in excess of 10% for online learners.
  • The research also shows that online degree programs often do not offer the professional mobility which allows graduates to move into high-earning jobs over the course of a career.

Dive Insight:

The data in this report suggests a common theory advanced by the Obama Administration on the subject of online learning: the majority of schools and programs are seemingly swindling learners out of money and career opportunities. Putting conversations about individual choice and convenience aside, the research doesn't appear to readily separate earnings generated by degrees earned from for-profit and non-profit online programs, and doesn't parse the variety of industries in which these programs may or may not focus.

For college leaders, the question is one of industrial value. Offer degrees in fields that are rapidly producing jobs, and market them in areas where the jobs are being created. This is the way to ensure that continuing learners and new students have access to training and credentialing that matters in the workplace and in social mobility.


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