Excerpts from Califonia Legislative Analyst’s Office Report Regarding Distance Education in The 2013-14 Budget

February 13, 2013

Executive Summary


California’s public higher education system consists of the University of California (UC), California State University (CSU), California Community Colleges (CCC), Hastings College of the Law (Hastings), and the California Student Aid Commission (CSAC). The Governor’s budget provides $11.9 billion in General Fund support for higher education in 2013–14. This is $1.4 billion (13 percent) more than the revised current–year level. After making adjustments for enrollment and accounting changes that otherwise would distort year–to–year comparisons, programmatic per–student funding increases 4 percent at UC, 7 percent at CSU, and 10 percent at CCC.

Higher Education System in Review

Governor Has Major Concerns About Higher Education in California. Most notably, the Governor is concerned about a higher education cost structure that “continually increases without necessarily adding productivity or value.” He contends that neither the state’s taxpayers nor students can continue to sustain the current system. The Governor also notes that current funding approaches—historically based solely on enrollment—reinforce the high–cost delivery model and do not focus attention on student success and efficiency. Additionally, he asserts that many students cannot get into the high–demand courses they need to meet graduation requirements, resulting in their taking unnecessary units to remain enrolled and longer to graduate. The Governor further calls attention to low graduation and transfer rates.

Data Generally Support Governor’s Claims. The traditional higher education delivery model— based on a faculty member with an advanced degree teaching a relatively small number of students in a physical setting—is high cost relative to other potential higher education and industry models. These high labor and facility costs are even greater at institutions that focus heavily on research. Costs in California are particularly high given a greater share of its public university students attend institutions with very high research activity. Moreover, average spending per student at UC is more than 20 percent higher than other universities with very high research activity. Data also suggest excess unit–taking is an issue at CCC and CSU. For example, in 2011–12, CCC provided instruction to nearly 95,000 students who already had earned 90 or more degree–applicable units—one academic year beyond that typically required for an associate degree or transfer. Graduation rates also are low at CCC and CSU, with only 23 percent of full–time CCC students graduating or transferring within three years and fewer than half of CSU students graduating within six years.

Delivery Model Could Be Improved At Lower Cost Than Governor

In an effort to expand access to instruction at a lower cost, the Governor’s budget includes several related technology and efficiency proposals. We think these proposals can help place even greater attention on how best to open up new college opportunities. However, as discussed in more detail below, we believe many of the improvements sought by the Governor through these proposals could be accomplished largely within existing resources.

Online Education

Online Education Can Promote Access, Efficiency, and Student Learning. Online education has been found to have numerous benefits, including making coursework more accessible to students who otherwise might not be able to enroll due to restrictive personal or professional obligations and allowing campuses to serve more students without a commensurate need for additional physical infrastructure. Moreover, research suggests that, on average, postsecondary students who complete online courses learn at least as much as those taking the same courses solely through in–person instruction (though students tend to drop online courses at higher rates than face–to–face courses). Recently, massive open online courses (MOOCs) also appear to be paving the way for open–access instruction—often taught by the country’s most distinguished professors—at minimal or no cost to students.

Need for New Funding to Create More Courses Is Questionable. We do not see a justification, however, for earmarking $10 million each for UC and CSU and up to $16.9 million at CCC for the development of additional online courses. Each year the state provides funds to UC, CSU, and CCC to support their operational costs. The segments use these monies to pay faculty to develop and deliver instructional content, and campuses generally decide on their own whether that content is offered through face–to–face or online courses. The segments have chosen to use their general–purpose monies to fund a considerable amount of online education. In 2011–12, the CCC system spent approximately $500 million serving over 100,000 FTE students through online education (about 10 percent of total instruction provided that year). Though CSU does not separate out costs by instructional type, online education is commonly used, with each of the segment’s 23 campuses providing such instruction (primarily to undergraduate students). And, while historically UC has offered very little state–supported online instruction, over the past couple of years UC has expanded its online program—with plans to continue adding courses in the near future. Among the three segments, we estimate that more than 20,000 undergraduate courses (and more than 30,000 course sections) were offered online in 2011–12. It is unclear to us, then, why the segments require ongoing augmentations to develop more online courses.

Need Does Exist for Segments to Share Existing Online Curriculum With Each Other. While we do not believe additional monies are warranted as proposed by the Governor, we do believe significant opportunities exist for the segments to share more of their current inventory of online courses. Traditionally, faculty that develop curriculum for face–to–face courses do not share it with faculty at other campuses (either within their segment or across the segments). Generally, we find this practice has carried over to online courses at the segments—despite the relative ease with which such coursework can be made available to colleagues. Notably, while CSU and CCC are partners in administering Multimedia Educational Resource for Learning and Online Teaching (MERLOT)—a repository of free online course curricula developed by faculty and researchers throughout the world—faculty from these two segments generally borrow from (rather than contribute to) the collection of online presentations, assignments, tests, and other learning material. This lack of sharing across campuses and segments has several disadvantages, including duplicative spending of state resources (courses can cost tens of thousands of dollars each to develop) and forgone opportunities to share thoughtful coursework with other educators.

Recommend Using Competitive Grants to Build Repository of Online Courses. A more cost–effective approach than the Governor’s would be for faculty to make their content available to colleagues for reuse. To facilitate sharing, we recommend the Legislature provide one of the segments with a small portion of one–time funding to administer a competitive grant program that would provide grants to faculty (from any of the segments) to modify, as needed, their existing online curricula (or, to the extent a need is identified by the Academic Senates of the three segments, to create a new online course). To assure quality, courses would be reviewed by other faculty in the field. As a condition of receiving the grant monies, faculty would agree to make the learning materials available on MERLOT. (The intellectual property rights would remain with the original developer.) These online materials would be available to all of the state’s educational segments—including K–12 teachers who may wish to adapt the coursework for their Advanced Placement or precollegiate courses. Assuming an average grant amount of $20,000, a $1 million augmentation would fund the modification or development of 50 open online courses. Such an approach would result in a large number of online courses becoming available to students and faculty throughout the state.

Opportunities Exist to Create Streamlined Online Student Pathways. As part of his online initiative, the Governor also has expressed an interest in increasing opportunities for students to enroll in online courses offered at other campuses, though he does not provide the segments with specific direction as to how to achieve this goal. We agree with the Governor that the state should address this issue, as the current cross–campus enrollment process is disjointed and overly cumbersome for students. For years, the state has funded California Virtual Campus (CVC), a website featuring a catalog of online courses offered by CCC, CSU, and UC, as well as by various private colleges and universities. While CVC can be helpful, its utility is limited. For example, CCC students who identify a course of interest at another college in the system have to apply for admission at that college, receive a new student identification number and password, and register for the class. Students also are responsible for transferring credits earned from the course back to the home campus (typically by petitioning an academic counselor). Community college students interested in transferring to CSU can face even more difficulties, as they must navigate among CSU’s degree requirements, CVC’s online catalog, and potentially numerous campus registration websites.

Recommend the Segments Report on Cross–Campus Enrollment Projects. A more convenient system would allow students to plan their education using a single website, enroll directly in online classes they need, and immediately determine whether the course is accepted for credit at the home campus. Currently, all three segments are investigating new systems to facilitate a more streamlined process of cross–campus enrollment in online courses. A joint project involving CSU East Bay, CVC, and several community colleges in the San Francisco Bay Area is seeking to improve this process for students who are attending college online. This project—the California Online Program Planner—would allow transfer–seeking CCC students to select an online program at CSU East Bay and identify (1) what courses they will need to earn the degree (lower–division courses at CCC and upper–division courses at CSU) as well as (2) participating pilot campuses where transferable courses are offered (and whether a seat is available). Students then would be able to register for these courses from one website (using the same identification number and password) and “check off” their academic progress against degree requirements as they successfully complete their courses. The intent is to eventually expand beyond the handful of participants in the pilot project and include other CCC and CSU campuses throughout the state. The UC also is studying the possibility of a “cross–campus hub” that could include UC as well as non–UC students. To better assess the potential of these projects for streamlining online pathways, we recommend the Legislature request CVC and the three segments to provide updates at spring budget hearings on their implementation plans and estimated costs.

Common Learning Management System (LMS)

Proposes to Fund Common LMS for All Colleges to Use. As part of his CCC technology initiative, the Governor proposes using some of the new $16.9 million to purchase a common LMS for the entire CCC system. Though a precise amount had not been provided by the administration at the time this report was being prepared, the CCC Chancellor’s Office estimates the annual cost would be about $10 million, with an additional one–time up–front cost of about $2 million. A LMS allows faculty to post information about a course (such as the syllabus), instructional content (such as video presentations), assignments, and other material. Students use the LMS to perform functions such as submitting their assignments, taking tests, and participating in online discussions with classmates. Several vendors create and sell these systems and community colleges currently decide on their own which LMS to use. Colleges typically use apportionments (general–purpose monies) to acquire the software. By purchasing centrally and making the LMS available to community colleges at no cost, the Governor anticipates that colleges would discontinue use of their current LMS format (assuming it is different from the LMS that is selected) and use their freed–up monies for other purposes. To the extent colleges adopted the same LMS, students across the CCC system would no longer have to spend time learning to navigate different LMSs.

Recommend CCC Adopt Common LMS Using Existing Funding. We agree that a common LMS would have some benefit to students who take courses at more than one college. A common LMS also could make sharing digital instructional content among colleges easier. We do not believe however that a funding augmentation for this purpose is necessary. By purchasing their LMS on an individual basis, colleges pay much more than they would if they were to buy “in bulk” from one vendor and divide the total cost of the LMS among themselves. In fact, the Chancellor’s Office estimates that colleges could save on average roughly $100,000 each per year if they were to leverage economies of scale in this way. We recommend the Legislature direct the Chancellor’s Office to report this spring at budget hearings on opportunities for community colleges to collaborate in such a manner, including the role the Chancellor’s Office might play in facilitating the procurement of a common systemwide LMS using community colleges’ existing funding.

Credit by Examination

“Challenge Tests” Provide an Alternative Way for Students to Earn CCC Credit. In an attempt to create greater efficiencies, the Governor also seeks to increase the number of students who can earn CCC credit for prior learning. Typically, students earn CCC credit by enrolling in courses, completing required coursework, and receiving a passing grade. Community college regulations, however, allow for students to obtain course credit using an alternative method. Specifically, districts may grant course credit to students who—despite never taking the course—pass a challenge test. (The resulting CCC credit is known as credit by examination.) By allowing students to earn credit for material they learned through self–study or other experiences, colleges can help students accelerate their time to a degree.

Credit by Examination Accounts for Small Amount of Overall Credit Granted. Little statewide data are available on the prevalence of credit by examination at the community colleges. Based on the limited information that is available, we estimate that only a very small percentage (less than 1 percent annually) of CCC students request to take a challenge test. (Of those students who do take a challenge test, less than half pass the examination and earn course credit.)

Campus Policies Can Limit Credit–by–Examination Opportunities for Students. Based on our review of various CCC catalogs, a number of potential limitations to students seeking to obtain credit by examination appear to exist. For example, not every course a college offers typically is available for students to earn credit in this manner. Rather, departments generally designate which courses, if any, may be challenged. Colleges also often limit the total number of units a student may earn by examination (typically about 12 units). While many colleges allow new students to take a credit by examination, others require students to wait until they successfully complete at least 12 units of regular coursework at the college before being permitted to take a challenge test. (Still others allow new students to take a challenge test but do not post any credit earned on students’ academic record until they successfully complete 12 units of regular coursework.)

Important Issue to Raise but Legislature Needs More Details on Governor’s Proposal. Like the Governor, we believe opportunities exist to expand the usage of credit by examination and improve certain students’ time to degree. This is particularly true given the many opportunities today for individuals to acquire knowledge and skills outside the traditional collegiate environment, including students who enroll in MOOCs and veterans returning to civilian life having learned material that is comparable to the content in CCC courses (such as in electronics, computer programming, and various health care fields). To date, however, the Governor had not provided any detail on his proposal to expand credit–by–examination options and what he is requesting the Legislature specifically to do remains unclear. We thus withhold recommendation pending additional information from the administration.