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May 10, 2018

Growth in Online Higher Education

MHT Partners  | Education Investment Bank

College graduates can all relate to classes taught in lecture halls with sometimes up to several hundred other students. Today, it is not uncommon to take at least one college course without ever meeting another classmate. The ubiquity of technology in education is transforming the way students learn but also the way that courses are taught. Particularly in higher education, the once non-traditional method of online learning is now part of a new norm.

From 2002 to 2016, the number of students enrolled in at least one distance education course increased from 1.6 to 6.3 million students. Recent growth rates in students taking courses online are impressive, as they come at a time when overall higher education enrollments have declined. A number of factors have influenced the growth in online post-secondary learning. Increases in tuition and living expenses have positively impacted online enrollments, as students seek affordable methods to earn degree credits. Online enrollments are also driven by students seeking flexible schedules and formats for courses and degrees. Increasingly, students enrolled in on-campus programs are also registering for hybrid to fully online courses throughout their academic career.

External factors, such as decreased funding combined with internal pressures to reduce costs and increase revenue, have caused many higher education institutions to turn to hybrid or fully online courses as a way to boost enrollment beyond their on-campus student bases. Currently, nearly 70% of distance learning courses are offered by public institutions, and the vast majority of enrollments, approximately 82%, are in undergraduate courses. While it is clear that leaders at these institutions foresee online education a critical part of their long-term strategy, these classes do not come without implementation and expansion challenges. A tension exists between academic leaders and faculty in the acceptance of online education and its effectiveness. Concerns exist whether online courses allow teachers to adequately motivate, discipline and retain students to help influence their success. Collectively, these concerns represent meaningful barriers to a fully digital post-secondary experience.

Distance learning, whether blended or fully online, is no longer a trend; it is here to stay. Over 31% of students in 2016 took at least one course online. To put this figure into context, the proportion of students taking at least one online course fifteen years ago was under 10%. With the value proposition of higher education in question, students will naturally look for ways to save on their degree. Distance learning courses, particularly for lower division courses which are the most transferrable credits, will remain the most easily accepted way to do so.

Data Source: Grade Increase: Tracking Distance Education in the United States, Babson Survey Research Group, 2018.

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  1. Rebecca Bell, thank you for this post. Its very inspiring.