University of Maryland University College
Graduate School of Management and Technology

in cooperation with

Carl von Ossietzky University of Oldenburg
Center for Research in Distance Education

COURSE INTRODUCTION

Why is this so? It is due to the central importance of such a course to the Distance Education professional in decision making positions. Especially in the private sector (but increasingly also in public institutions) any suggestions for change and innovation have to be costed. Both, the request to make efficiency gains as well as the request  to raise quality,  have cost implications.

The Management of Distance Education 1 course equips students with the central concepts of cost-analysis. Though in complex organizations this is no substitute for an accountant specialist, it is intended to turn the Distance Education professional into a competent partner in the process of costing. This is a central competence given that each suggestion for change is most certainly accompanied by the question “And how much will it cost?”

Costing is about numbers. Often this is sufficient to make people shy away from a course like this, though they are ready to admit its relevance. However, given available  spreadsheet tools, the mechanics of costing can be kept to a minimum. We therefore have decided to make the availability of Excel a course requirement. We do not require mastery of Excel. On the contrary, we will assist participants with little prior knowledge of Excel to acquire the necessary skills to use Excel not only as a calculation but also as a modeling tool. This adds an interactive and explorative dimension to the dry tables of a textbook.

The course consists of four modules. All modules extend over three weeks each.

The 1st module: "The Expansion of Education and the Emergence of the Economics of Education" gives an introduction into the economics of education in general (most importantly the ‘human capital theory’) and links it to distance education: While economics of education uses the analytical tools of economics to analyze education theoretically, distance education translates some management and production methods, which have proved successful in economics (e.g. manufacturing), to education.

The 2nd module: "The Techniques of Cost Analysis" introduces the instruments of cost-analysis. After an introductory analysis of distance education as a system, the student identifies resources, classifies them into the main cost categories and handles the basic costing model. Special attention is given to the treatment of capital costs and overheads.

The 3rd module: "The Cost-effectiveness of Distance Education" applies the resulting conceptual framework and  modeling tools to distance education institutions in order to address questions of cost-efficiency and cost-effectiveness. The point of departure remains the model of the distance teaching university which achieves competitive average costs per student together with high quality if it can achieve scale economies. The discussion with Greville Rumble about the vulnerability of this model by dual mode competiters provides a forward link to the fifth module.

The 4th module: "Costing Educational Technologies" addresses the problem of costing educational media. We consider basic conceptual problems of educational technologies/media (how to classify them, how to compare their costs) and identify and simulate their cost structures using spreadsheets.

Turning to net based education (e-education, distributed e-learning) we identify two major avenues of development, one uses the information processing aspect of ICT (type-i), the other the communication aspect (type-c). Though often integrated by Learning management Sytems (LMS) cost structures differ according to where emphasis is placed.

Though this is a substantial program, due consideration has been given to calculate the amount of reading requirements to comply with the overall stipulated learning time.
   

Course Goals/Objectives

  The goals of the course is to enable the student to be a competent partner in the process of setting up and managing economic aspects of distance education, both on institutional level as well as on course level (i.e. with regard to media choice).

At the end of the course students should have achieved the following objectives. The student

1. reviews the expansion of education and the soaring costs of educational provision.
2. understands the conceptual framework of 'Human Capital Theory', a core theory of economics of education.
3. identifies the cost drivers in distance education systems and is able to measure them.
4. understands the role of overheads and the problem of cost attribution.
5. is able to treat capital costs including the annualization of costs.
6. handles the basic cost model and is able to analyze scale economies.
7. analyzes and compares the costs of media and handles a cost model for rapid cost appraisal of a selected media configuration.
8. applies the costing methodology to netbased learning and identifies the cost-drivers specific to netbased learning
9. analyzes the costs of online student support
10. discusses the impact of netbased learning on the cost-structure of distance education

REQUIRED TEXTBOOKS

Bates, A. W. (2000). Managing Technological Change: Strategies for College and University Leaders. San Francisco: Jossey Bass.
Rumble, G. (Ed.). (2004). Papers and debates on the costs and economics of distance education and online learning (Vol. 7). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.
Rumble, G. (1997). The Costs and Economics of Open and Distance Learning. London: Kogan Page.
NOTE:
Rumble (1997) may be out of print. The new edition is not yet available. The most important chapters will be made available online.
Rumble, G. (Ed.). (2004) will be available at Missouri Bookshop

In general, journal articles and papers referenced in this Syllabus will be supplied online.

COURSE REQUIREMENTS

This course is only offered in the online mode. Students must be prepared to:

• ensure technical to access Webtycho
• ensure the availability of Excel
• invest an average12.5 hour workload in each of the twelve weeks of the course.

The 150 hours workload during the course consists of:

• 50 hours of reading,
• 50 hours of active, visible participation in the discussion groups,
• 50 hours for assignments.

GRADING

To the final grade of this course both, assignments, and participation to the conferences will contribute:

• Online participation contributes 25 % to the final grade.
• There is one ungraded group tasks in module one and five respectively. It is not graded though contributing to the grade indirectly since it affects the participation rating.
• The first assignment must be submitted by the end of Module 2. It contributes 25 % to the final grade.
• The second assignment must be submitted by the end of Module 3. It contributes 25 % to the final grade.
• The third assignment consists of a graded group assignment and must be submitted by the end of Module 4. It contributes 25 % to the final grade.

COURSE OUTLINE
 

Module 1 Introduction
The Expansion of Education and the Emergence of the Economics of Education

During the first week a number of issues will have to be addressed: Students will be introduce each other and will be given an outline of the course setup.

However, we  proceed soon to the course content. What is the rationale behind the unprecedented expansion of education? Education can be seen as an investment with very real returns to the individual as well as to society as a whole. Individual demand rises and there seems little reason to discourage it. But trying to satisfy a mass demand for education, giving the scarcity of resources, leads to the question of the most cost-effective provision of education. Distance education seems to fit this bill. Using rational production techniques, including division of labor and the application of media and technologies, distance education may be seen as being capable of emulating the success of industrialized manufacture of high quality consumer goods.

This relation between the core theory of economics of education which suggests to view education as an investment ('Human Capital Theory'), the historically unprecedented worldwide postwar expansion of education, and the emergence of distance education sets the scene for the questions of this course.

In the second week students will be asked to do some group work. Students will collaborate to explore the expansion of education using the GED database. While this group work is not graded, participation is strongly recommended since it will allow students to become acquainted with the use of Excel spreadsheets required in the first assignment.

Management issues and  objectives:

• Students and faculty introduce themselves to each other
• Students are introduced to the Economics of Distance Education course
• Students review the expansion of education using the GED database
• Students are introduced to the main tenets of the economics of education (e.g. Human Capital Theory)
• Students identify the expectations connected with distance education in the context of increased demand for education and soaring costs.

Required reading:

Perraton, H. (2000). Introduction: golden goose and ugly duckling, Open and distance learning in the developing world (pp. 4-9). London: Routledge.
Schultz, T. W. (1961). Investment in human capital. American Economic Review, 51, 1-17.

Additional reading:
Psacharopoulos, G. (1995). The Profitability of Investment in Education: Concepts and Methods: World Bank.
Peters, O. (1994). Distance education and industrial production: a comparative interpretation in outline. In D. Keegan (Ed.), Otto Peters on distance education: the industrialisation of teaching and learning (pp. 107-127). London: Routledge.

Group task
At the end of module 1 students are to complete a group task. The task will not be graded and affects the final grade only through its contribution to the 25% of participation rating (cf. Grading above).

Module 2
The Techniques of Cost Analysis

Special emphasis is given to the issues like capital costs, overheads and cost attribution of joint products.

Objectives:

1. Students analyze distance education as a system and identify the main subsystems.
2. Students classify resources (including human resources, premises, equipment and stocks)
3. Students classify costs into the main cost categories (fixed and variable costs, capital and recurrent costs, opportunity costs).
4. Students handle the basic cost model to explore the effects of the different cost categories on average cost per student.
5. Students describe and apply different options for treating capital costs

Required readings:
Rumble, G. (1997). The Costs and Economics of Open and Distance Learning. London: Kogan Page.

Assignment
At the end of module 2 students are to submit an assignment that contributes 25% to the final grade.

 

Module 3
with Professor Dr. Greville Rumble as visiting expert
The Cost-effectiveness of Distance Education

This module applies cost analysis to distance education institutions. Using 'cost per student' and 'cost per graduate' as an proxy indicator for cost-effectiveness we will examine the method of analyzing institutional cost-effectiveness. We review case study evidence for the claim of distance education being a cost-effective means of educational provision.

Management guidelines to monitor the cost-effectiveness of distance education are suggested.

Objectives

1. Students summarize the methodology of cost-effectiveness analysis of distance education systems.
   Students identify the most important indicators of measuring institutional effectiveness (cost per student and cost per graduate).
   Students identify the different steps in cost analysis of distance education institutions
2. Students summarize the evidence for the cost-effectiveness of distance education
   Students examine the evidence of the cost-effectiveness of open universities
   Students summarize the evidence for the cost-effectiveness of distance teaching for 'school equivalency' (the World Bank/UNESCO case studies).
3. Students identify different institutional forms of distance education. In particular:
   Students distinguish between dedicated mode, dual- and mixed-mode, networks and consortia.
   Students examine the implications of these modes on the cost structures of the respective institutions.
4. Students identify planning guidelines for ascertaining the cost-effectiveness of distance teaching institutions.

Required readings:
Rumble, G. (1997). The Costs and economics of open and distance Learning. London: Kogan Page.
Rumble, G. (2003). The competitive vulnerability of distance teaching Universities (1992). In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 67-88). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Additional reading:
Laidlaw, B., & Layard, R. (1974). Traditional versus Open University teaching method: A cost comparison. Higher Education, 3, 439-468.
Levin, H. M. (1995). Cost-effectiveness Analysis. In M. Carnoy (Ed.), Internation al encyclopedia of economics of education, (pp. 381-386).Oxford: Pergamon.
White, V. (2003). Responses to Greville Rumble's article 'The competitive vulnerability of distance teaching universities'. In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 89-92). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.
Mugridge, I. (2003). Responses to Greville Rumble's article 'The competitive vulnerability of distance teaching universities' (1992). In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 93-96). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.
Keegan, D. (2003). The competitive advantages of distance teaching universities. In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 107-117). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.
Rumble, G. (2003). The competitive vulnerability of distance teaching universities: a reply. In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 103-106). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.
Rumble, G. (2003). Competitive vulnerability: an addentum to the debate (1998). In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 107-117). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Assignment
At the end of module 3 students are to submit an assignment that contributes 25% to the final grade.
 
 

Module 4
Costing Educational Technologies

Module 4 addresses the issue of costing technologies. After some methodological consideration on how to cost educational technologies and the introduction of 'cost per student  learning hour' as a measure to facilitate cost comparison, we classify media in two major categories. In the first category we place 'resource media', which are unidirectional and can be replicated  as objects, e.g. books, cassettes, CD-ROMs. They are more likely to generate economies of scale. Communication media, in the second category, link a student and a teacher/tutor and are less prone to generate scale economies.

Netbased education (e-education, distributed e-learning) integrates the different types of media often by unified Learning Management Systems (LMS). But it makes a big difference in terms of cost structure if digital media emphasize the information processing aspect of ICT (type-i, e.g. CBTs) or the communication aspect (type-c, e.g. asynchronous seminars).

Objectives

1. Students examine Bates' ACTIONS model of evaluating educational media and technologies.
2. Students understand the problems of comparing educational technologies/ media.
   • Students determine 'cost per learning time' as an indicator to compare costs of media.
   • Students understand the cost structure for communication media.
3. Students apply the costing methodology to netbased learning
   • Students identify the cost-drivers specific to netbased learning
   • Students analyzes the costs of online student support
   • Student discuss the impact of netbased learning on the cost-structure of distance education

Required readings:
Bates, A. W. (2000). Managing Technological Change: Strategies for College and University Leaders. San Francisco: Jossey Bass.
Bates, A. W. (2005). Technology, e-learning and distance education. London New York: Routledge.
Rumble, G. (2004). The costs and costing of networked learning. In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (pp. 139-162). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.
Rumble, G. (2004). The costs of providing student support services (2001). In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 163-174). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.
Rumble, G. (2004). E-Education: Whose Benefits, whose costs? In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 119-138). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.
Whalen, T., & Wright, D. (1999). 'Methodology for cost-benefit analysis of Web-based tele-learning'. The American Journal of Distance Education, 13(1), 25-43.

Additional readings:
Bates, A. W. (1999). Calculating the costs of teaching with technology, Managing technological change: strategies for college and university leaders (pp. 122-152). London: Routledge.
Bishop, T., & SchWeber, C. (2001). UMUC's Online MBA Program: A case study of cost-effectiveness and the implications for large-scale Programs': Sloan Foundation.

Assignment:
At the end of module 5 students are to submit an assignment that contributes 25 % to the final grade.

Course Materials

Required Textbooks

Bates, A. W. (2000). Managing Technological Change: Strategies for College and University Leaders. San Francisco: Jossey Bass.

Rumble, G. (Ed.). (2004). Papers and debates on the costs and economics of distance education and online learning (Vol. 7). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Rumble, G. (1997). The Costs and Economics of Open and Distance Learning. London: Kogan Page.
NOTE: Rumble (1997) may be out of print. The new edition is not yet available. The most important chapters will be made available online.

Required Readings

Bates, A. W. (1999). Calculating the costs of teaching with technology, Managing technological change: strategies for college and university leaders (pp. 122-152). London: Routledge.

Bates, A. W. (1995). Technology, open learning and distance education. (pp. 33-60) London: Routledge.

Hülsmann, T. (2000). The costs of open learning: a handbook. Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg. . (Chapter 1, Chapter 2, Case study 1, Case study 3, Case study 9)

Hülsmann, T. (2002). Costs without camouflage: A cost-analysis of Oldenburg University's two Graduate Certificate Programs offered as part of the Online Master of Distance Education (MDE) - A case study. In U. Bernath, Rubin, E. (Ed.), Reflections on teaching and learning in an online master program - a case study (Vol. 6). Oldenburg: Bibliotheks- und Informationssystem der Universität Oldenburg.

Perraton, H. (2000). Introduction: golden goose and ugly duckling, Open and distance learning in the developing world (pp. 4-9). London: Routledge.

Peters, O. (1994). Distance education and industrial production: a comparative interpretation in outline. In D. Keegan (Ed.), Otto Peters on distance education: the industrialisation of teaching and learning (pp. 107-127).

Peters, O. (1993). Distance education in a post-industrial society. In D. Keegan (Ed.), Foundations of Distance Education. London: Routledge.

Rumble, G. (2003). The competitive vulnerability of distance teaching Universities (1992). In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 67-88). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Rumble, G. (2004). The costs and costing of networked learning. In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (pp. 139-162). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Rumble, G. (2004). The costs of providing student support services (2001). In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 163-174). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Rumble, G. (2004). E-Education: Whose Benefits, whose costs? In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 119-138). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Schultz, T. W. (1961). Investment in human capital. American Economic Review, 51, 1-17.

Whalen, T., & Wright, D. (1999). 'Methodology for cost-benefit analysis of Web-based tele-learning'. The American Journal of Distance Education, 13(1), 25-43.

Suggested Additional Readings:

Bates, A. W. (1999). Calculating the costs of teaching with technology, Managing technological change: strategies for college and university leaders (pp. 122-152). London: Routledge.

Bishop, T., & SchWeber, C. (2001). UMUC's Online MBA Program: A case study of cost-effectiveness and the implications for large-scale Programs': Sloan Foundation.

Keegan, D. (2003). The competitive advantages of distance teaching universities. In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 107-117). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Laidlaw, B., & Layard, R. (1974). Traditional versus Open University teaching method: A cost comparison. Higher Education, 3, 439-468.

Levin, H. M. (1995). Cost-effectiveness Analysis. In M. Carnoy (Ed.), Internation al encyclopedia of economics of education, (pp. 381-386).Oxford: Pergamon.

Mugridge, I. (2003). Responses to Greville Rumble's article 'The competitive vulnerability of distance teaching universities' (1992). In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 93-96). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Perraton, H. (2000). Introduction: golden goose and ugly duckling, Open and distance learning in the developing world (pp. 4-9). London: Routledge.
Schultz, T. W. (1961). Investment in human capital. American Economic Review, 51, 1-17.

Psacharopoulos, G. (1995). The Profitability of Investment in Education: Concepts and Methods: World Bank.

Peters, O. (1994). Distance education and industrial production: a comparative interpretation in outline. In D. Keegan (Ed.), Otto Peters on distance education: the industrialisation of teaching and learning (pp. 107-127). London: Routledge.

Rumble, G. (2003). The competitive vulnerability of distance teaching universities: a reply. In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 103-106). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Rumble, G. (2003). Competitive vulnerability: an addentum to the debate (1998). In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 107-117). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

White, V. (2003). Responses to Greville Rumble's article 'The competitive vulnerability of distance teaching universities'. In G. Rumble (Ed.), Papers and debates on the costs and economics of distance education and online learning (Vol. 7, pp. 89-92). Oldenburg: Bibliotheks- und Informationssystem der Carl von Ossietzky Universität Oldenburg.

Grading Information

To the final grade of this course both, assignments, and participation to the conferences will contribute:

• Online participation contributes 25 % to the final grade.
• There is one ungraded group tasks in module one and five respectively. It is not graded though contributing to the grade indirectly since it affects the participation rating.
• The first assignment must be submitted by the end of Module 2. It contributes 25 % to the final grade.
• The second assignment must be submitted by the end of Module 3. It contributes 25 % to the final grade.
• The third assignment consists of a graded group assignment and must be submitted by the end of Module 4. It contributes 25 % to the final grade.

GRADUATE SCHOOL GRADING GUIDELINES

According to the Graduate School's grading policy, the following symbols are used: A -- excellent; B -- good; C -- passing; and F-- failure.

The following scale will be used for the purposes of this course:
A = 90 to 100
B = 80 to 89
C = 70 to 79
F = below 70.

The grade of "B" represents the benchmark for the Graduate School. It indicates that the student has demonstrated competency in the subject matter of the course, i.e., has fulfilled all course requirements on time, has a clear grasp of the full range of course materials and concepts, and is able to present and apply these materials and concepts in clear, reasoned, well-organized and grammatically correct responses, whether written or oral.

Only students who fully meet this standard and, additionally demonstrate exceptional comprehension and application of the course subject matter, merit an "A".

Students who do not meet the benchmark standard of competency fall within the "C" range or lower. They, in effect, have not met graduate level standards. Where this failure is substantial, they earn an "F".

The Grade of "I" (Incomplete): The grade of "I" is exceptional and given only to students whose completed coursework has been qualitatively satisfactory but who have been unable to complete all course requirements because of illness or other extenuating circumstances beyond their control. The grade of "I" may be considered only for students who have completed at least fifty percent (50%) of the total coursework requirements and who have received a passing grade on all the coursework which they have completed. The instructor retains the right to make the final decision on granting a student's request for an "I", even though the student may meet the eligibility requirements for this grade.