Saba’s Corner –Connecting the Dots: Cost of Higher Education, Reduced Resources and Distance Education

January 21, 2002

San Diego, CA – January 2002. In the next few weeks governors throughout

the country will review the state of the affairs for their constituencies


of the States from the National Governors Association). Preliminary

indications point to most governors announcing reduced budget allocations

for higher education, or at least asking for fiscal belt-tightening. A story by Louie Meizlish (January18, 2002) published in The Michigan

Daily, the student newspaper of the University of Michigan typifies the

situation across the country. It stated: "With the state facing an

estimated deficit of $900 million, funding for Michigan public universities

for the next academic year is expected to remain low and could even be


These measures are in response to the current recession, which has reduced

tax revenues of most states. History will tell if the current recession

will be as wide and deep as the one we experienced in the early 1990’s.

However, as far as higher education is concerned, this recession looks

very similar to the one almost a decade ago. At the time, states were

also faced with reduced tax revenues, which in turn compelled them to

make drastic reductions in budgets allocated to institutions of higher


Higher education is one of the rare institutions

in which adoption of technology has not reduced the cost per people


Back then, corporate America was also experiencing the realities of a

recession. Their response was to adopt new information technologies which

were emerging at the time. This was to reduce costs, and increase productivity.

These measures were very effective and led to the prosperity of the second half of the 90’s.

Higher education institutions also decided to adopt such technologies

to reduce their costs, and curb the effects of the massive budget cuts

on their operations. Implementing technological solutions in higher education,

in part, resulted in an unprecedented growth of distance education. In

the past five years, many institutions have established new courses online,

or expanded their previous offerings. Well over 90% of institutions of

higher education, at this time, have some form of distance or distributed

technology-based education.

In contrast to business and industry; however, higher education has not

been able to reduce its cost. Despite massive infusion of computer power,

and telecommunication solutions into higher education costs to students

have been steadily increasing at a rate of 5 to 15% in various institutions.

Again, the story of the University of Michigan is typical. "Last

summer, Engler and the Legislature approved a 1.5 percent increase in

funding for the University of Michigan, but with that funding, the Board

of Regents approved a tuition increase of 6.5 percent for most students."

(Meizlish 2002).

Higher education is one of the rare institutions in which adoption of

technology has not reduced the cost per people served. There is a good

reason for business and industry reaping the benefits of information technology,

and for higher education not to be so blessed by it. This has to do with

the organizational changes that corporate America went through in the

early 1990’s. The buzz word in corridors and hall-ways of corporations

back then was re-engineering. Many corporations took a hard look at their

organizational structures, and the roles people played in them. They reviewed

the tasks of top executives, to mid-level managers, and the front line

workers. In many cases, front-line workers were brought into the decision

making process by appropriate use of information technology, further reducing

delays, and improving productivity and quality.

Simply put,

the organizational structure of most of the institutions

of higher education is prohibiting them to benefit from information


This did not happen in higher education. The basic organizational structure

of the university remained the same. Adoption of information technology

in this case, actuallyincreased the cost of higher education. Simply put,

the organizational structure of most of the institutions of higher education

is prohibiting them to benefit from information technology. Nowhere this

lack of organizational change is more apparent than the workload of the

university faculty. By adopting technology for teaching they, in most

cases, have added to their burden. In technology-based organizations division

of labor allows the entire institution to benefit from what technology

has to offer. In the case of faculty, such division of labor is usually

not available. Faculty who would like to teach at a distance have to perform

tasks that ought to be carried out by a team of specialists. This would

include instructional designers, programmers, graphic artists, videographers,

and others.

This organizational underdevelopment in distance education at the course

level results in increased cost of instruction per student. Without adequate

staffing the instructor is only capable of teaching a few students per

course. Usually courses taught at a distance have the same number of students

as their on-campus sections. Since distance education involves computer,

telecommunication, video and other technologies it is much more expensive

than the comparable on-campus course. To use a crude analogy, this is

similar to installing a bullet train between Philadelphia and New York

but mandating that it should only carry as many passengers as a sedan

could accommodate. Furthermore, it should not move beyond 65 miles per


Inevitably, this is setting the stage for failure of teaching students

at a distance. To

  • benefit from information technology,
  • personalize courses for students,
  • provide quality faculty support to each student, and
  • decrease the cost per student

a new organizational structure is badly needed. Staffing a course with

only one faculty (and if s/he is lucky with a teacher assistant), is not

adequate to increase the number of participants in courses in order to

reduce the cost of instruction per student. More importantly, it denies

students the benefits of personalized learning that new technologies could

offer if they are used in organizational structures that adequately support

information technology.

Farhad Saba,

CEO, Distance, Inc.

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How to reference this article:

Saba, F., (2002). Connecting the dots: Cost of education, reduced resources and distance education. Retrieved January 20, 2002 from