| Vol. 17 No. 21 |
Final
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June 12, 2000
What Distance Education Costs
Online High Tech Courses Launched By Local Software Firm
By Amy Wiliams, Assoc. Editor, Clovis Free Press
Related Document: Distance
Education Bibliography
CLOVIS
-- Estimated costs of Web Portal Foundation's latest Newspapers In Education
community project has just been released covering the twelve new Clovis
Information Technology Endowment (CITE) online courses. The corporate
offices are located in Palo Alto. The Clovis Field Office for the software
firm is 754 Third St., Suite 102-A, in Clovis, CA. They will off courses for adult
and students in Grades 12-14.
The popularity of
online courses has blossomed over the past three to four years. Many believe these
courses are beneficial offerings for Advancd Placement hgh school students, colleges
and universities. According to a 1999 study by the National Center for Education
Statistics (NCES), nearly a Third of all 2-year and 4-year postsecondary institutions
offered some form of distance education last year, and an additional twenty percent,
plan to offer distance education within three years.
It is interesting
to see that 78 percent of 4-year and 62 percent of 2-year public institutions
offered online education, compared to 19 percent of 4-year and 5 percent of 2-year
private institutions. One possible reason for this is the sheer cost of such an
endeavor and the limited resources of private institutions. The Web Portal Design
Corp. charitable trust CITE program fills the distance education need in
local communities like Clovis.
Thomas Hobbs, CEO
at Web Portal outlined the Board's long-term community program, "The operational
costs and needed revenues of $519, 322.54 are based upon conservative economic
assumptions used by Foundation management covering the first seven years of Community
online CITE course offerings". The spreadsheet released to the public
this week, shows no revenues for the first year. Hobbs said, "That's because
time was needed to write and field test the first round of the online CITE
curriculua."
CLOVIS ONLINE TECHNLOGY TRAINING
| Category |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Year 6 |
Year 7 |
Cumulative |
| IT CURRICULA DEVELOPMENTAL COSTS |
| Courses Being Developed |
12 |
1 |
1 |
1 |
2 |
2 |
2 |
21 |
| Stipend for Development 1 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
| Hidden Costs |
| Supplies Consumed
2 |
$1,800.00 |
$150.00 |
$150.00 |
$150.00 |
$300.00 |
$300.00 |
$300.00 |
$3,150.00 |
| Faculty Development |
| Faculty Training
3 |
$2,188.80 |
$182.40 |
$182.40 |
$182.40 |
$364.80 |
$364.80 |
$364.80 |
$3,830.40 |
| Instructional Technology
Support 3 |
$9,192.96 |
$766.08 |
$766.08 |
$766.08 |
$1,532.16 |
$1,532.16 |
$1,532.16 |
$16,087.68 |
| e-Library Support 4 |
$1,193.09 |
$99.42 |
$99.42 |
$99.42 |
$198.85 |
$198.85 |
$198.85 |
$2,087.90 |
| TEACHING COSTS |
| Student Enrollments 5 |
0 |
288 |
312 |
336 |
360 |
408 |
456 |
2160 |
| Stipends for Teaching 6 |
$0.00 |
$14,400.00 |
$15,600.00 |
$16,800.00 |
$18,000.00 |
$20,400.00 |
$22,800.00 |
$108,000.00 |
| Hidden Costs |
| Office Space 7 |
$2,611.20 |
$5,440.00 |
$5,875.20 |
$6,310.40 |
$6,963.20 |
$7,833.60 |
$8,704.00 |
$43,737.60 |
| Administrative Overheads
8 |
$0.00 |
$5,541.12 |
$6,002.88 |
$6,464.64 |
$6,926.40 |
$7,849.92 |
$8,773.44 |
$41,558.40 |
| Help Desk Support
9 |
$0.00 |
$2,790.72 |
$3,023.28 |
$3,255.84 |
$3,488.40 |
$3,953.52 |
$4,418.64 |
$20,930.40 |
| TECHNOLOGY AND INFRASTRUCTURE COSTS |
| Server Costs 10 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$2,666.67 |
$2,666.67 |
$2,666.67 |
$8,000.00 |
| Server Administration 11 |
$12,400.00 |
$12,400.00 |
$12,400.00 |
$12,400.00 |
$12,400.00 |
$12,400.00 |
$12,400.00 |
$86,800.00 |
| Backup Costs 12 |
$1,200.00 |
$1,200.00 |
$1,200.00 |
$1,200.00 |
$1,200.00 |
$1,200.00 |
$1,200.00 |
$8,400.00 |
| Data Communications Charges 13 |
$0.00 |
$196.61 |
$212.99 |
$229.38 |
$245.76 |
$278.53 |
$311.30 |
$1,474.56 |
| Software Costs 14 |
$4,000.00 |
$4,000.00 |
$4,000.00 |
$4,000.00 |
$4,000.00 |
$4,000.00 |
$4,000.00 |
$16,000.00 |
| Business Mgr Costs 15 |
$23,648.00 |
$23,648.00 |
$23,648.00 |
$23,648.00 |
$23,648.00 |
$23,648.00 |
$23,648.00 |
$165,536.00 |
| Total Costs |
$58,234.05 |
$68,383.63 |
$70,526.98 |
$72,670.32 |
$78,895.83 |
$83,182.52 |
$87,469.21 |
$519,362.54 |
| Revenues |
| Tuition Revenues 16 |
$0.00 |
$86,400.00 |
$93,600.00 |
$100,800.00 |
$108,000.00 |
$122,400.00 |
$136,800.00 |
$648,000.00 |
| Technology Fee Revenue 17 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
| Total Revenue |
$0.00 |
$86,400.00 |
$93,600.00 |
$100,800.00 |
$108,000.00 |
$122,400.00 |
$136,800.00 |
$648,000.00 |
| Net to the Institution |
($58,234.05) |
$18,016.37 |
$23,073.02 |
$28,129.68 |
$29,104.17 |
$39,217.48 |
$49,330.79 |
$128,637.46 |
|
Total Costs |
Total Revenues |
| Year 1 |
$58,234.05 |
$0.00 |
| Year 2 |
$126,617.68 |
$86,400.00 |
| Year 3 |
$197,144.66 |
$180,000.00 |
| Year 4 |
$269,814.98 |
$280,800.00 |
| Year 5 |
$348,710.81 |
$388,800.00 |
| Year 6 |
$431,893.33 |
$511,200.00 |
| Year 7 |
$519,362.54 |
$648,000.00 |
CITE Notes & References
-
Faculty & Staff will
be developing courses as part of their regular compensation.
-
Supplies consumed are calcualted at $150 per
course being developed. Supplies consumed can be paper from copying, film, ink,
toner, etc.
-
The rates for Faculty Training and Instructional
Technology support are based on an average instructional technology salary of
$26,400.00 plus benefits, $1000 for supplies, on an average of 1950 normalized
hours per year. This salary is an estimated figure 18.
This equates to a rate of $18.24 per hour. It is then esimated that it takes upon
average 10 hours to train faculty in using an online course tool and that on average
42 hours are spent supporting each online course developed.
-
The rate for e-Library Assistance is based on
an average salary of $12,000.00 plus benefits, $225 for supplies, on an average
of 1950 normalized hours per year. This salary is an estimated figure 18.
This equates to a rate of $7.65 per hour. Based on the results from an internal
survey, it was concluded that 13 hours are spent supporting each online course
developed.
-
The number of student enrollments per year
is based on the average number of students that were specified per course, multiplied
by the number of courses offered (no courses offered in the 1st year because of
development) multipled by 2 offerings per year.
-
The amount shown for Stipends for Teaching
has been derived based on the fact that that instructors will be paid a stipend
per student enrolled in online courses, at a rate of $50.00.
-
Calculation of office space costs, a $17 per
square foot rate per year and 64 square feet per office were assumed for all faculty
& staff offices. The cost of CITE office space for online courses was
taken at 1/5 of its rate because of the assumption that 80% of the time, office
space is used for traditional courses or other purposes. The office space calculations
include time for developing the courses as well as teaching.
-
Administrative costs were calculated at a rate
of $19.24 per student enrolled in an online course. These costs represent those
incurred from the offices of the registrar, bursar, financial aid, admissions,
and other administrative areas.
-
The rate for Help Desk Support is based on
an average salary of $13,118.40 plus benefits, $195 for supplies, on an average
of 1950 normalized hours per year. This salary is an estimated figure 18.
This equates to a rate of $7.75 per hour. Based on the results from an internal
survey, it was concluded that on average, 15 hours are spent supporting each online
course offered.
-
The costs listed above for an online courses'
server is based on the answers given during the question answering process. You
had indicated that a server was currently available to house your institution's
courses. Therefore, we estimate that this server will need to be replaced after
the fourth year to accomodate growth. The cost figures represent a new server
purchased at the end of year four for $8,000.00 to replace the current server.
This cost was spread over three years, the estimated life of that machine. The
cost of this server is an estimated figure 18.
-
The rate for Server Administration is based
on an average amount of time a Systems Administrator spends on a given server
per year. This rate assumes an average cost of $12,400.00 plus benefits. This
salary is an estimated figure 18.
-
The rate for Backup Costs is based on an average
amount of time an individual will spend performing backups of courseware, as well
as spend on backup materials. This rate assumes an average cost of $1,200.00 for
backups to CITE. This salary is an estimated figure 18.
-
The rate for Data Communication Charges is
based on an estimate of the amount of data traffic that online courses will represent
at build-out. These costs are calculated at a rate of $8.19 per course per semester.
This rate is an estimated figure based on enrollment with the costs being figured
as 2 $800/month T1 lines. 18.
-
Software costs were calculated an at average
rate of $4000 per year.
-
The CITE Online Course Business Manager’s
line is calculated based on a $17,600.00 salary, $4,752.00 for benefits, and $1640
in supplies per year, for a total line of $23,648.00. This salary is an estimated
figure 18.
-
Tuition revenues are based on assumed economic
value of $100.00 per credit hour, and is calculated based on the number of courses
offered, multiplied by the average number of students in the courses, multiplied
by 2 offerings per year, multiplied by an average equivalent of 3 credit hours
per course.
-
Technology Fee revenues are assumed at, $0.00
per credit hour, and calculated based on the number of courses offered, multiplied
by the average number of students in the courses, multiplied by 2 offerings per
year, multiplied by an average of 3 credit hours per course.
-
Costs contained herein based on hourly wages,
salaries, etc. have been calculated based on the enrollment and operational costs
at higher education institutions with similar Distance Education programs and
clients. These costs include those for human services, such as help desk support,
library support, Instructional Technology support, business manager, and a server
administrator. The reason that several calculations are based on enrollments is
that if a client shows that they are going to only offer one online course in
its first semester and also provide instructional technology support, it would
not be fair to calculate rates for IT support for a single course as compared
to a part-time position when a minimum of a single person would be needed. Help
desk support would result in an average rate of $1.80 per hour.
[Editor's
Note: The economic and fiscal tools described in
this report are found to be useful in determining reliable estimates
of the true costs involved in the establishment of the CITE
program. For further review of related research, please see
the Information Technology white paper available in PDF format at
~ Distance Learning . Accessibility
format at ~ Plain Text Conversion.
Contact the original researcher, Brian Morgan at brian.morgan@marshall.edu.]
©2000 The Clovis Free Press. All rights reserved.
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