The Economics of Online

The promise of online coursework, which has the potential to be cheap, easy to administer, and available to almost anymore, is extending to America’s historically black colleges. While many colleges are reluctant to offer online courses, Eric Kelderman writes in the Chronicle of Higher Education that,

Researcher Roy L. Beasley found that 19 of the nation’s 105 historically black colleges now offer an online-degree program—an increase of seven institutions since 2006.

More than two-thirds of the online programs are found at public black colleges, and a dozen of the 20 largest black institutions offer such programs, Mr. Beasley concluded. And he found that among the 20 black colleges with the highest graduation rates… seven offered online-degree programs.

Why are some black colleges offering online programs now? Well that part is a little unclear. While colleges across the country are slowly offering more and more of their courses online, Beasley offers a specific theory as to why colleges might now want to offer them. As he explains:

The private HBCUs that hitherto have shown little or no interest in meeting the continuing education needs of non-traditional African American students are now giving serious consideration to online programs, not only as a potential source of sorely needed additional revenue, but also as a source of additional enrollments that would help them justify their continued existence.

Interesting. That sounds a lot like rent seeking, the term in economics for what occurs when an organization tries to capture additional income by manipulating the environment in which people buy things, rather than by producing something of greater value.

Read Beasley’s study, for the Digital Learning Laboratory at Howard University, here.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer