Online learning flourishes as residential colleges face rising costs

College degrees cost more than ever, but education insiders note that online programs could erase the need for students to rack up six figures of loan debt for tuition and room and board on campuses.

Before the COVID-19 pandemic, “there was a belief among some that an online education was somehow inferior or substandard to the traditional in-person classroom setting,” said Jason Altmire, who leads Career Education Colleges and Universities, a network of for-profit campuses.

“Much of that has changed, as we have all become familiar with online settings in education, as well as in business meetings and our personal interactions,” said Mr. Altmire, a former Democratic congressman from Pennsylvania.

“There has been an acceleration [in online enrollment] since before the pandemic,” said Doug Shapiro, executive director of the National Student Clearinghouse Research Center. “I think the pandemic just forced everything online. There [also] seems to be a sense that students are concerned about the costs of college.”

The clearinghouse counted 808,000 undergraduates enrolled in four-year programs at online universities this fall out of 15.2 million students nationwide. That was up 4% from fall 2022 and 22% since 2018.

The nonprofit research center said more than half of those students majored in five subjects: business, health professions, computer science, information security and psychology. They were more likely than residential students to be women, Black or Hispanic and older than 25.

Data from the Department of Education’s National Center for Education Statistics shows that 53.4% of all college students took at least one online course in the 2022-2023 academic year. That increased from 36.6% in 2019-2020 before COVID-19 restrictions shuttered campuses.

Reports show that tuition at the nation’s elite universities has reached an all-time high. Boston University, Brown University, Dartmouth College, Harvard University, the University of Pennsylvania, the University of Southern California, Tufts University and Yale University will charge students more than $90,000 a year starting this fall.

Tuition for online bachelor’s degrees is much lower. Other selling points for distance learning include fewer expenses for food and housing, commuting, course materials and textbooks.

Southern Utah University charges $75 per credit hour for its online bachelor of general studies, compared with $300 per hour after the first credit for residential students. The public school markets the degree to people who have dropped out of college for financial reasons.

Launched during pandemic lockdowns with 79 students in fall 2020, Southern Utah University’s Speedway Bachelor of General Studies program has grown to 528 students this year and has awarded 162 degrees. The university charges up to $9,000 in tuition for the baccalaureate degree, roughly $18,000 less than residential students would pay.

“There are tens of millions of Americans that started college at some point but left without completing their degree,” said Steve Meredith, SUU’s associate vice president of graduate and online. “The Speedway program … is designed especially for those that want to finish what they started and do it in the most affordable and efficient way they can.”

College administrators say remote classes appeal to disadvantaged minorities who have delayed college, dropped out or started a second career while working full time and raising children. They expect online enrollment to climb as inflation prices more students out of residential schools.

At DeVry University, a for-profit career preparation school west of Chicago, officials say the popularity of online learning has allowed them to keep tuition rates flat over the past five years. They report a growing number of women, minorities and working adults studying for technology workforce degrees.

“Our flexible schedule and career-oriented programs cater to a diverse student population, many of whom balance their studies with professional and family commitments,” said Agnam Memeti, DeVry’s chief enrollment and student support officer. “These learners have long been left behind by most of the higher education community, but this untapped pool of talent is only growing.”

Remote learning has also grown at nonprofit colleges.

Western Governors University, a private online school based in Utah, has responded to a nationwide shortage of K-12 teachers by ramping up skills-based degrees designed to match evolving certification requirements in all 50 states. More than 43,000 students are studying for one of 30 education degrees this semester.

“Our students are drawn to WGU’s flexible, online, competency-based education model, which measures skills and subject knowledge rather than seat time, and this approach has proven successful,” said Stacey Ludwig Johnson, executive dean of the WGU School of Education.

The Church of Jesus Christ of Latter-day Saints allows students to complete an online degree from Brigham Young University-Idaho through the BYU-Pathway program, created in 2009.

Courses cost $82 per credit hour, allowing students to earn a four-year bachelor’s degree for less than $7,500. Enrollment in the 90-credit program has grown steadily and reached more than 70,000 students this year.

“Our primary focus was to serve what we call the ‘hidden many’ prospective students who thought that higher education was either too expensive or too difficult and never applied or in some cases applied but dropped out,” said Clark G. Gilbert, an elder in the LDS hierarchy and top official at the Church Educational System, its network of schools.

Across all higher education sectors, Instructure, which makes the Canvas software that many campuses use for hybrid and virtual learning, said it “has grown like gangbusters” since the onset of the pandemic.

Ryan Lufkin, a vice president at Instructure, said Canvas experienced 40% user growth from 2019 to 2020 as campuses shuttered. Roughly 50% of college students nationwide now use the software for some or all of their learning, including in-person classes.

“As we realize not every student needs a two- or four-year degree to secure a well-paying job in the field of their interest, enrollment numbers at traditional colleges and universities will plateau at a level that coincides with market demands and the ability to earn wages aligned with the debt incurred,” Mr. Lufkin said.

Less-selective state university branch campuses, community colleges and private liberal arts schools have struggled with plunging enrollment and revenue since the pandemic began. The State Higher Education Executive Officers Association reported that at least 30 colleges shuttered in the first 10 months of 2023 because of those struggles. The rate of closures has accelerated this year.

Julie Uranis, an official at the university distance learning advocacy group UPCEA, said remote certification programs for in-demand trades have become more popular than degrees among an increasing share of students. She noted that more first-time students have opted to study online in recent years, bringing “their pandemic experiences” and comfort with digital instruction.

“More and more institutions are looking for on- and off-ramps for learners that are workforce aligned,” Ms. Uranis said. “Some have closed or consolidated due to economic conditions, but residential campuses will not cease to exist.”

Although online college classes started in the mid-1990s, she said, they trace their roots to correspondence courses in the late 1800s, when students completed college classes by mail.

Peter Wood, president of the conservative National Association of Scholars and a former associate provost at Boston University, predicted that online education will “mature into a disruption of traditional college education” as more students opt for career-focused classes over political and personal interest coursework.

“The students who want to steer clear of radical ideology and trivial courses now have a ready alternative that didn’t exist a quarter of a century ago,” Mr. Wood said.