


































Global Research in Higher Education 
ISSN 2576-196X (Print) ISSN 2576-1951 (Online) 

Vol. 7, No. 2, 2024 

www.scholink.org/ojs/index.php/grhe 

39 

 

Original Paper 

The Economic Impact of Online Education 

Gregory Kaplan
1
 

1
 Department of World Languages and Cultures, University of Tennessee, Knoxville, TN, USA 

 

Received: May 17, 2024         Accepted: May 28, 2024        Online Published: June 3, 2024 

doi:10.22158/grhe.v7n2p39                     URL:http://dx.doi.org/10.22158/grhe.v7n2p39 

 

Abstract 

During the past fifteen years, the increase in enrollment in online courses at institutions of higher 

education worldwide, which has accelerated since the COVID-19 pandemic, invites an analysis of the 

factors that have fueled this growth. The present study considers evidence of the economic and 

pedagogical advantages of online courses over face-to-face courses taught in classrooms. It concludes 

that creating and expanding online programs will provide a significant return on investment to 

institutions and students for the foreseeable future. 

Keywords 

online education, asynchronous online courses, higher education, economic impact of online education, 

online pedagogy 

 

1. Introduction 

In the early days of what was then a potential pandemic, a study (Learning on Demand: Online 

Education in the United States, 2009) was published to assess the state of online education at institutions 

of higher education in the United States. One issue considered was the economic impact of online 

education, which was found to be ―mixed‖ for institutional budgets: ―50 percent have seen their budgets 

decrease as a result [of a greater demand for online courses], but 25 percent have experienced an 

increase‖ (Allen, 2010, p. 1). At the same time, the authors of the study concluded: ―Academic leaders at 

all types of institutions report…[that] demand for online offerings is greater than that for the 

corresponding face-to-face offerings‖ (Allen, 2010, p. 1). Moreover, well before the potential pandemic, 

the authors found that contingency plans were already in place in many institutions, and that 

―[s]ubstituting online for face-to-face classes is a component of 67 percent [of these plans]‖ (Allen, 2010, 

p. 2). Fortunately, the contingency plans were unnecessary because a pandemic did not occur in 2009 

when fear of an outbreak of H1N1 was pervasive. During the following decade, factors unrelated to the 

potential outbreak of a pandemic contributed to growth in online education, and this fact provides a point 

of departure for reaching conclusions concerning the economic impact of online education in the wake of 



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the COVID-19 pandemic of the early 2020s. 

The definition of an online course has changed somewhat since the publication of Learning on Demand: 

Online Education in the United States, 2009: 

Online courses… are those in which at least 80 percent of the course content 

is delivered online. Face-to-face instruction includes courses in which zero 

to 29 percent of the content is delivered online; this category includes both 

traditional and web facilitated courses. The remaining alternative, blended 

(sometimes called hybrid) instruction is defined as having between 30 

percent and 80 percent of the course content delivered online. (Allen, 2010, 

p. 4) 

More than a decade later, the term ―blended‖ has been completely replaced by ―hybrid‖, a modality that 

continues to describe courses with both online and classroom meetings. However, at today’s institutions 

of higher education, online courses are typically delivered 100% online according to one of two 

modalities. These courses are delivered either as asynchronous courses, in which students learn on their 

own time without interacting with the instructor, or as synchronous courses, in which the instructor 

interacts with students online at scheduled times. The conclusions advanced in the present study concern 

asynchronous and synchronous courses because of the main difference between them and face-to-face or 

hybrid courses, namely, because asynchronous and synchronous courses function without the need for 

classrooms. 

 

2. Method 

2.1 The Advantages of Online Education for a Mobile Workforce 

In his study, ―How the Online Education Market Can Save the Economy‖, A. Skonnard draws a parallel 

between online education and the current needs of employers worldwide: 

The global economy has transitioned into a mobile workforce enabling 

business to be conducted no matter the location or the device being used. 

Why isn’t education conducted in the same way? How can students be 

prepared to join the global, mobile economy if they don’t have global, 

mobile education? In addition to how individuals are learning, there is a 

growing gap between what businesses need from their employees and what 

the education industry is teaching students and professionals. Online 

education can solve these problems and we’re now beginning to see the 

possibilities more clearly. (Skonnard, 2013) 

 

 

 



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Studies of online education outside of the United States have confirmed its positive influence on the 

workforce. For example, greater access to online education in the six countries that form the Cooperation 

Council for the Arab States of the Gulf, as B. K. A. Omari observes, ―help[s] students in making proper 

evidence-based decisions which is critical in the management of modern organizations‖ (Omari, 2017, p. 

15). During the decade before the COVID-19 pandemic, access to courses fueled the growth of the global 

online education market. For example, the market size of online language learning increased globally 

from 3.5 billion euros in 2015 to more than five billion euros in 2020 (Statista Research Department, 

2022). 

The positive influence on the workforce of online education can be attributed to the advantages of online 

courses, which ―provide students with greater flexibility in terms of time and location, [and] which can 

enable them to balance their studies with work or other obligations‖ (Altindag, 2023, p. 4). I. Koskal 

underscores several economic advantages of online education for working students: ―Online courses 

prove a more affordable option than traditional ones and there are no commuting costs, and sometimes 

required course materials, such as textbooks, are available online at no cost‖ (Koskal, 2020). Considering 

the affordability of online education and its appeal to a mobile workforce, it is instructive to highlight 

some pedagogical benefits of online courses for students. 

2.1.1 The Pedagogical Value of Online Learning 

The growth in online education has continued after the COVID-19 pandemic. For example, the global 

market size of online language learning is projected to reach 7.5 billion euros in 2025 (Statista Research 

Department, 2022). This growth comes at a time when ―the post-pandemic differences in student 

performance between FtF [face-to-face] and online instruction are much smaller in the post-pandemic 

period [than they were in the pre-pandemic period]‖ (Altindag, 2023, p. 31). This is a conclusion drawn 

from evidence collected over twelve semesters (from 2016 to 2022) in a study involving thousands of 

undergraduate and graduate students at a medium-sized public R1 university in the U.S. with face-to-face 

classes and ―a longstanding, well-established online education program‖ (Altindag, 2023, p. 3). Other 

success stories at U.S. universities with recently established programs testify to an expanding U.S. 

market in online education. One example is the development of an online education program at Syracuse 

University (Syracuse, NY) that offers ―flexible formats‖ and ―academic and personal support‖ to help 

students ―follow the same curriculum as on-campus students‖ (Note 1). Kansas State University 

(Manhattan, KS) has established an online program with courses that employ ―easy-to-use platforms‖ 

and provide students with ―the same support and resources as on-campus students‖ (Note 2).  

Another recent success story is the creation of an online course, asynchronous Spanish 331, at the 

University of Tennessee (Knoxville, TN). Spanish 331 is an upper-level course taught entirely in Spanish 

that is required for majors and minors in Hispanic Studies at the University of Tennessee. Spanish 331 

was taught exclusively in a classroom format until the COVID-19 pandemic, which caused the need for 

an online offering that was designed as an asynchronous course. After offerings during the pandemic 



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from 2020 to 2023, asynchronous Spanish 331 continues to be offered along with face-to-face classroom 

sections of Spanish 331. 

Anecdotal evidence of the pedagogical success of asynchronous Spanish 331, including student 

comments on course evaluations and increased enrollment, is corroborated by data collected from 

version histories of assignments submitted via Google Docs, the platform used by groups of 5-8 students 

to submit 31 assignments in asynchronous Spanish 331. The version history of a group Google Doc, 

visible only to the instructor (as the ―owner‖ of the Google Doc), records the entries made by students to 

the document and the times of day when they are made. As portrayed in Figures 1, 2, and 3, the different 

colored highlighted text corresponds to the dots on the right of each image, which are entries made by 

individual students to the documents. The unhighlighted text was present before the students who entered 

the highlighted text began working on the document together. The students’ names (hidden in the Figures) 

are listed to the right of the dots, which enables an instructor to know when they work on the assignment. 

Figures 1, 2, and 3 are screenshots of the same Google Docs assignment conducted in asynchronous 

Spanish 331 during offerings of the course in 2022, 2023, and 2024. The assignment first required each 

student to view a video online about the University of Salamanca (Salamanca, Spain) and take a graded 

quiz on the video. Students then collaborated online in groups using Google Docs to compose an essay in 

Spanish of 375-400 words comparing Salamanca, Spain, and Knoxville, TN, USA (the location of the 

University of Tennessee) as ―university towns‖. 

In 2022, students had the entire day of April 20 (12:01 AM to 11:59 PM) to complete the essay, which 

they accomplished between 4:27 AM and 5:45 PM. Figure 1 reveals this period, which is couched 

between entries from April 19 and April 21 that correspond to other assignments due on those days. The 

time of 4:03 PM is highlighted in a dark gray color to indicate a particular moment in the Google Docs 

version history, namely, when the five students whose names are hidden to the right of the different 

colored dots were collaborating on the assignment and contributing or correcting the different colored 

text. During the times not highlighted in dark gray, students had been (4:27 AM, 8:29 AM, 11:49 AM, 

12:59 PM) or would be (5:45 PM) collaborating or working individually. 

The time range from 4:27 AM to 5:45 PM during which the assignment was completed is significant 

because it extends beyond peak teaching hours (10 AM to 2 PM) when university classrooms are at their 

highest capacity. The fact that several entries were made by students at non-peak times (4:27 AM, 8:29 

AM, 4:03 PM, 5:45 PM) speaks to the flexibility of online courses and the lack of flexibility in the case of 

a face-to-face classroom course. This flexibility may have allowed some students who made non-peak 

entries in Figure 1 to be involved in something other than an academic course, such as work, athletics, or 

family matters, during peak hours. 

 



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Figure 1. Collaboration at 4:03 PM on a Google Docs Group Essay in the Spring of 2022 

 

In 2023, students had the entire day of April 19 to complete the same assignment, which they 

accomplished during the non-peak hours of 4:15 PM and 10:28 PM as revealed in Figure 2. The fact that 

groups of two to five students collaborated at non-peak times (4:15 PM, 5:47 PM, 6:44 PM, 9:20 PM, 

10:28 PM) suggests, as in the case of Figure 1, that students were able to engage in activities unrelated to 

asynchronous Spanish 331 during peak hours. 

 



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Figure 2. Collaboration at 9:20 PM on a Google Docs Group Essay in the Spring of 2023 

 

In 2024, students had the entire day of April 17 to complete the assignment, which they accomplished 

between 12:28 AM and 10:48 PM as revealed in Figure 3. In Figure 3, two entries were made during peak 

hours (10:42 AM and 12:32 PM), while seven entries were made during non-peak hours (12:28 AM, 8: 

49 AM, 4:02 PM, 6:21 PM, 7:35 PM, 7:52 PM, 10:48 PM). As in Figures 1 and 2, the flexibility of the 

asynchronous modality that is not possible in the case of a face-to-face classroom course is revealed in 

Figure 3 by the wide range of times that the entries were made. 



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Figure 3. Collaboration at 7:35 PM on a Google Docs Group Essay in the Spring of 2024 

 

3. Result 

The fact that students in asynchronous and synchronous online courses do not occupy classrooms is 

something that institutions should consider when scheduling courses. A solution typically implemented 

at colleges and universities to find classrooms for face-to-face courses is to schedule them at non-peak 

times. However, this solution may not be beneficial economically. Non-peak courses may not reach 

capacity if students have work or family obligations at non-peak hours, which can result in classrooms 

with empty seats.  

It is instructive to envision seats in a classroom economically as if they were seats on an airplane. 

According to a survey conducted more than a decade before the COVID-19 pandemic forced airlines to 

leave middle seats empty, ―Eighty percent of travelers say they try to avoid the middle seat and only 1% 

say they prefer it‖ (―Do You Really Hate the Middle Seat That Much‖, 2009). However, the reverse of 

the 2009 survey has always been true from the perspective of U.S. airlines, which ―need to sell about 75 

per cent of a plane’s seating capacity. That is 8 percentage points higher than an aeroplane where every 

third seat is empty‖ (Bushey, 2020). In other words, a plane full of empty middle seats translates into a 



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maximum of 67% of seats being sold, which is not enough to generate a profit. This became a stark 

reality during the COVID-19 pandemic when, as an airline official declared, ―If you leave the middle seat 

empty… you’re not going to make money‖ (Bushey, 2020). 

Empty classroom seats in a face-to-face course are unprofitable, like empty middle airline seats, because 

they are unoccupied physical spaces. A classroom with low enrollment needs electric lighting, like the jet 

fuel needed by an airplane full of empty seats. The same electric lighting and the same jet fuel would be 

used if the classroom and the airplane were at full capacity, which would produce a greater return on 

investment from the resources used. However, empty seats in an online course are not as unprofitable as 

empty seats in a face-to-face classroom course. The reason is that participation in an online course has no 

impact on the expenditure of resources needed by students who attend class face-to-face in a classroom. 

Moreover, course materials, such as textbooks, are ―another expensive reality of traditional college 

education that online education alleviates… [because they are often] included in the curriculum‖ (Piletic, 

2018). 

 

4. Discussion 

Considering the economic advantages of online education, colleges and universities should make greater 

investments in developing new programs. One example inspired by the success of courses such as 

asynchronous Spanish 331 is an initiative developed at the University of Tennessee in four academic 

disciplines: Business, Technology/Data, Liberal Arts, and Social and Human Sciences (Note 3). In 

addition to growing existing graduate programs, the initiative will involve launching twenty to thirty new 

undergraduate online programs by the fall of 2026. The primary aim of this initiative is to attract new 

students to the university who cannot attend class on campus, including part-time students and former 

students who left the university before completing their degrees. 

The ability of such students to complete their degrees by taking online courses offered by the University 

of Tennessee will address a nationwide problem in the areas of retention and degree completion. 

According to a recent study: ―At four-year [U.S.] colleges, the first-to-second-year retention rate for 

students 24 and younger is 72% for full-time students vs. only 40% for those attending part-time. For 

older students, the first-year retention gap is 56% (for full-timers) vs. 43% (part-timers)‖ (Nietzel, 2022). 

As the same study also explains: ―Only 21% of part-time students at four-year colleges and 19% at 

two-year schools were able to complete a credential in six years‖ (Nietzel, 2022). The benefit of online 

courses to part-time students who are unable to complete their degrees in the classroom is both 

academically and economically beneficial insofar as those who possess a college degree earn salaries that 

are ―86 percent higher than those whose highest degree is a high school diploma‖ (―How Does a College 

Degree… Earnings Potential‖, 2024). Throughout a lifetime, this amount can be close to $1,000,000 

according to the U.S. Social Security Administration (―Research, Statistics & Policy Analysis‖, 2015). 

Of course, the number of students enrolled in a course, whether the course is taught online or face-to-face 



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in the classroom, is usually a significant number to instructors and administrators. Online or classroom 

courses that are under-enrolled may not produce sufficient revenue to cover the costs of instruction. 

However, because online courses use no classroom space, they can be populated simultaneously by 

residential and off-campus students and thus increase the chances that minimum enrollment requirements 

will be met, which is how the University of Tennessee initiative will operate. 

Because the online courses will be available to residential students who are also enrolled in face-to-face 

courses on campus, the University of Tennessee initiative may also produce an economic benefit, namely, 

that technology, operations, and overhead expenditures may not need to be increased as residential 

programs grow. This is exactly the opposite of programs that depend on the availability of classroom 

space to grow. Since no classroom space is required for online courses, investments in technology, 

operations, and overhead–including course sites such as Canvas (which is used at the University of 

Tennessee)–may increase minimally, or not at all, as more students enroll. 

It is logical to speculate that consistent or increased enrollments in online courses that recycle technology 

will be profitable for institutions of higher education in the way that privately held businesses profit from 

their investments in technology. This situation may, in turn, encourage institutions of higher education to 

more closely scrutinize the manners by which they reinvest surpluses gained from revenue-producing 

online programs. The profitability of these programs may resonate differently among public, private, and 

for-profit institutions of higher education, which operate according to different business models. One 

current view is that this distinction should be eliminated and that not-for-profit institutions should adopt a 

for-profit business model. This is the view advocated by a recent study, Using ROI for Strategic Planning 

of Online Education, in which the contributors argue that by becoming for-profit today’s non-profit 

institutions will be able to combat rising tuition costs and declining enrollments (Ives, 2022). Students, in 

turn, might also be able to limit student loan debt by taking less expensive courses. The evidence 

considered in the present study suggests that the same benefits might be gained by investing more 

resources in online education, which would not only be pedagogically profitable for students but also 

profitable economically for both for-profit and non-profit institutions of higher education. 

 

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Notes 

Note 1. Information on online education at Syracuse University can be found at: 

https://www.syracuse.edu/admissions-aid/application-process/online/. 

Note 2. Information on online education at Kansas State University can be found at: 

https://online.k-state.edu/. 

Note 3. Information on online education at the University of Tennessee can be found at: 

https://volsonline.utk.edu/. 

 


