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How Have Online Colleges Affected Tuition Costs for Traditional Schools?

Online Colleges Fight Tuition Bubble

Online collegesIf you’ve attended a four-year university within the past decade, you have firsthand experience with the coming college tuition bubble. Although the trend has received surprisingly little press, it’s no longer debatable that the incessant rise in tuition costs at traditional colleges is sustainable. Even in the current low-inflation macroeconomic environment, annual tuition increases at both private and state universities average between 7 and 10 percent. The situation is such that lower-cost online and non-traditional colleges that have rapidly gained market share in the past decade are beginning to challenge the stuffy institutions that represent status quo. See Education Inflation

The Problem of Ever-Rising College Tuition

You probably grew up unquestioning the notion that a bachelor’s degree from a traditional four-year university is the single greatest predictor of career success and, it follows, personal happiness. For most of the 20th century, your conclusion would have been well-founded. In the past few years, however, a poor economy coupled with a growing cadre of college graduates have conspired to rob the college degree of its power to confer success upon its bearers.

If your college education was paid for primarily through loans and hard work during college, you’re not alone. These days, a disturbing Economic Trend has developed. Most students leverage themselves to the gills with loans: the average student graduates with over $20,000 in debt, a figure that continues to increase with tuition. Many graduates are unemployed (or underemployed), and between 4% and 18% are either unable or unwilling to pay off their debts. See: Choosing an Online College for more info.

 Online Colleges: Turning Back the Tide

As any serious policy maker will tell you, this situation is untenable. Fortunately, the groundwork for a solution is already in place.

For-profit universities with robust online presences and physical campuses in select locations have been cropping up across the country in the past decade. Some  have a national reach and enroll tens of thousands of students each semester. Others, like Liberty University, offer classes at one or more regional hubs and provide distance-learning students with select courses online. Regardless of their size and reach, their efficient means of delivering knowledge and limited legacy costs keep tuition prices in check.

Cost Pressure

Tuition fees at four-year universities are under pressure from other sources as well. As the economy suffers and more students are forced to juggle school and work obligations, a growing number of all-online education providers have emerged to fill a gaping need for general-education college credits. You can now take prerequisites like statistics and calculus for as little as $100 per course with online providers like StraighterLine. Those credits transfer easily to an online or non-traditional brick-and-mortar university.

The trend of ever-rising traditional-college tuition costs may be nearing an end. In addition to the online and non-traditional schools that offer hundreds of degree programs at a fraction of the cost of traditional universities, there’s a host of online general-education credit programs that offer the same breadth of experience without the cost. Taken together, it’s only a matter of time before traditional universities catch on and begin reducing their tuition fees, offering more online-only classes in practical courses of study that appeal to everyday folks looking to get ahead.

The key to checking out an online college is transferability of credits,  job placement rate and loan default rate of graduates. See: Choosing an Online College for more information.

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Also see:

Online Degree More Affordable Than on Campus

College Savings Accounts

Kids Going to College? Ease the Financial Burden

Cutting the Cost of College

The Difference a Degree Makes in Unemployment Levels

Stay Ahead of Your Competition With Online Continuing Education Courses

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About Tim McMahon

Work by editor and author, Tim McMahon, has been featured in Bloomberg, CBS News, Wall Street Journal, Christian Science Monitor, Forbes, Washington Post, Drudge Report, The Atlantic, Business Insider, American Thinker, Lew Rockwell, Huffington Post, Rolling Stone, Oakland Press, Free Republic, Education World, Realty Trac, Reason, Coin News, and Council for Economic Education. Connect with Tim on Google+

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