Kein Folientitel

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Costing and learner support
The analysis of costs and its implications for
supporting the learner Thomas Hülsmann
Workshop at the Central Chinese Radio and
Television University (CCRTVU), 11-14 Beijing,
China.
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Overview
Costing and learner support

• Part I Basic concepts- This part introduces
  the core concepts of cost-analysis by walking you
  through a case study of traditional distance
  education.- It summarizes the traditional
  cost-effectiveness argument in favor of distance
  education
• Part II Impact of ICT- This part discusses the
  impact of the information and communication
  technologies on distance education - It picks
  up the case of this morning walking you for a
  second time through the development of a case
  study
• Part III Application to learner support- This
  part draws together observations form cost
  analysis relevant for learner support- It
  develops the economic case for learner support

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Costing and learner support Part I back to the
basics
What is distance education? Back to the basics
A minimalist definition Distance education is
education at a distance, i.e. a form of education
where the teacher and the learner are
geographically separated for most of the time of
the teaching and learning process.

• Peters industrialization formula (1967) 1.
  Distance Education is the most industrialized
  mode of Teaching and Learning Characterized by
• Rationalization and division of labor
• Mass production through mechanization and
  automation
• Systematic planning and organization
• Formalization and product standardization.
• 2. Distance education is a form of education sui
  generis

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Costing and learner support Part I back to the
basics
What is teaching? Constitutive elements
For conventional education it holds that in
teaching- content presentation (p) and -
interaction with the teacher (i) are intricately
interrelated In distance education it holds
that for teaching - content presentation (p)
and interaction with the tutor (i) had to be
separated and - level of interaction with the
tutor (i) had to be reduced.
The reason was that, at the time, there
responsive real interaction at a distance was not
available as a technology!
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Costing and learner support Part I back to the
basics
In (1st and 2nd generation) distance education
the two modes of presentation (p) and (real)
interaction (i) have to be separated.
In conventional education the modes of
presentation (p) and (real) interaction (i) are
'interleafed'. The teacher can seamlessly move
from presentation to interaction.
Due to the lack of responsive real interaction at
a distance 1st and 2nd generation had to shift
the focus of teaching from real interaction to
simulated interaction. Interaction was designed
into the content.
Terminology following Holmberg we distinguish
real and simulated interaction real interaction
can be mediated or non-mediated (f2f) 1st and
2nd generation DE knows no responsive real
interaction at a distance.
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Costing and learner support Part I back to the
basics
Simulated interaction e.g. COL/PREST
Interactivity is designed into the text as, for
example, - in-text question or - in-text
activity New forms of simulated interactions are
available in digital learning environments !!
Simulated interaction works. We know that. But
can it compensate for real interaction? Most
educators think it cannot.
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Costing and learner support Part I back to the
basics
Distance education as a system
There are two main subsystems in distance
education - the materials subsystem - the
student support subsystem
The teaching function was unbundled. In a break
with mainstream understanding teaching was seen
as course development rather than frontline
interaction with students!
"To be absolutely clear, where learning materials
are produced for numbers of student ..., this is
regarded as the academic teaching and is
considered to be outside the framework of learner
support." (Mills, 2003, p. 104)
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Basic parameters of the scenario
Costing and learner support Part I cost
analysis

• Try to get some information of the basic
  parameters such as
• Credit points
• Course duration
• Student workload
• Shelf life of the course
• Expected number of students
• Class size (if applicable)
• Use of media/technologies
• The credit transfer point systems and
  modularization make course offerings more
  comparable!

OUUK case studyA second level undergraduate
course offered by the School of Health and Social
Welfare of the Open University/United Kingdom
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Listing ingredients and specifying their
quantities
Costing and learner support Part I cost
analysis

• In principle you need to look at all sorts of
  cost drivers such as
• Human resources
• Premises and accommodation
• Equipment and furniture
• Stocks supplies consumables and expenses
• In practice it depends on the purpose of the
  costing exercise what you will include and the
  level of detail.
• It is most important to be aware of the main cost
  drivers !

OUUK case study (continued)
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Categorization of costs
Costing and learner support Part I cost
analysis
Capital costs value lasts beyond financial year under consideration Operating costsvalue consumed during financial year under consideration operating costs can be - recurrent- non recurrent)
Fixed cost server development of study guide Recurrent - salary of project manager Non-recurrent - consumables (paper, office stocks) - expenses (conference visits)
Variable cost per student printing cost of study guide software license experimental kits Recurrent - marking of assignment Non-recurrent - survey interviews
Among the most important cost drivers are the
recurrent costs, such as salaries of academic
staff!
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Costing and learner support Part I cost
analysis
The total cost equation
Fixed costs (F) are those costs which do not
change with 'volume of activities'. The main
activity of a distance education institution is
teaching students. Hence fixed costs are
invariant against student numbers. Variable
costs (VxN) vary with student numbers (as their
definition VxN already implies). V stands for
variable cost per student!

• What contributes to fixed costs?
• - development costs of teaching material (e.g.
  writing a study guide) substantial amounts of
  costs that arise in the materials subsystem are
  fixed.
• What contributes to variable cost per student?
• - production costs (e.g. printing the study
  guide)
• tutoring an assessment costs (most costs in the
  student support system are contributing to
  variable cost per student)
• many if not most of the costs related to student
  support (including teaching and counseling)
  contribute to the variable cost per student

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Costing and learner support Part I cost
analysis
The average cost equation
Average costs are total costs divided by numbers
of students. Unlike the total cost function the
resultant function is not a linear (straight)
function. Expanding student numbers raises total
costs but diminishes average costs. Note that
for bigger N the contribution of the term F/N
diminishes and the value of AC approaches V. This
effect we refer to as economies of scale.
Remember what cost items contribute to the
variable cost per student production of study
guide, tutor marked assessments. The aggregate
variable cost per student we call unit costs. To
the extent the cost functions are complete V
represents the unit costs. A quick test for
cost-efficiency consists of estimating the unit
costs of various strategies.If VDE gt VCE scale
economies can do nothing. The lesson for the
manager Keep an eye on unit costs! And since
especially costs related to student support
contribute to V keep an eye on the student
support costs!
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Costing and learner support Part I cost
analysis
Economies of scale total costs
TCDE(N) FDE VDE x N
FDE
TC(N) F V x N
F
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Costing and learner support Part I cost
analysis
Economies of scale Average costs
V
VDE
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Costing and learner support Part I cost
analysis

• listing the ingredients and their costs and
• classifying them according to the appropriate
  cost categories allows
• modeling the cost functions and
• depicting the correspondent graphs

From listing ingredients to modeling costs
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Costing and learner support Part I cost
analysis
From modeling costs to graphing the cost
functions

• The break even pointbp F/(V-I)
• is the point beyond which revenue is bigger than
  cost
• it is calculated by dividing the fixed costs by
  the difference of unit cost and student fee

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Perratons Cost-Effectiveness Cube
Costing and learner support Part I first
conclusions
The cube and the formula

• The formula TC(N) F VN can be related to
  Perratons cube
• Media sophistication tends to increase fixed
  costs (F)
• Student-teacher interactivity contributes to
  raising variable cost per student (V)
• Number of students (N) allow to distribute fixed
  costs over many shoulders (scale economies)

Caveats (i) though average costs fall total
costs rise i.e. the most cost-efficient system
might not be affordable (ii) While the planner
can influence F and V, he cannot determine N
since enrollment levels depend on the market
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Costing and learner support Part I cost
analysis
Daniels Triangles

• Ideally, Distance Education could be regarded as
  a major strategy to
• expanding access
• raising quality
• while lowering (average) costs
• But these expectations depend to a large extent
  on the use of mass media. This often comes
  together with
• lack of responsive teacher learner (and peer)
  interactivity
• lack of scope in course offerings

Historically responsive interaction at a distance
became only possible with the emerging
Information and Communication technologies (ICT)
and the Internet. They allow new educational
scenarios but have a fundamental impact on the
organization of distance education.
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Costing and learner support Part II impact of
ICT
The Impact of ICT on Distance Education
ICT stands for Information AND Communication
Technologies. This means that ICT opens two
distinct lines of development for distance
education

• Type-i systems exploit the information
  processing aspect of ICT programming
  simulation, processing, storing, searching,
  retrieving data bases etc. New levels of
  sophistication for simulated interaction!!
• Type-c online systems sustain communication at
  a distance either in - synchronous mode (e.g.
  videoconferencing) or - asynchronous mode (CMC,
  Virtual Seminars).In type-c systems there is
  little potential for scale economies. Possible
  economies of scope.This type drives horses
  through traditional distance education !! Main
  cost drivers not technology but teaching costs
  !!

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Costing and learner support Part II impact of
ICT
The challenges of ICT
- Type-i applications are compatible with the
cost-structure of traditional distance education.
But the enhanced options of simulated interaction
in digitized learning environments can enhance
simulated interaction albeit at high upfront
fixed costs - Type-i applications allow for the
first time responsive interaction at a distance
albeit at increased variable cost per
student The core issue is the trade-off between
responsive real interaction at a distance and
cost-effectiveness. Responsive real interaction
at a distance sacrifices scale economies. The
cost-effectiveness argument for distance
education as such did depend on scale economies.

• We need to regain the lost efficiencies!
• Learning objects facilitate course adaptation and
  repurposing of developed materials. They allow
  depreciating development costs not only over the
  shelf-life of a course but also across different
  courses. (Issues tagging metadata levels of
  granularization context)
• Cooperation allows efficiency gains through
  creating synergies. Though distance education
  requires a number of functions to work, they need
  not all be housed at the same institution. Often
  it is more appropriate to outsource functions or
  seek alliances with partners.
• A combination of both. Governments and private
  donors can encourage the development of open
  educational resources (OER) and sharing them.

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Annual budget of a niche market program the top
athletes
Costing and learner support Part II back to
costing

• Recurrent costs such as
• the project coordinator and
• teaching / tutoring costs
• are the main cost drivers NOT
• course development or
• technical infrastructure

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c
Costing and learner support Part II back to
costing
back to the top athletes

• Recurrent costs such as
• the project coordinator and
• teaching / tutoring costs
• are the main cost drivers NOT
• course development or
• technical infrastructure

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Costing and learner support Part III
conclusions revisited
Learner support and the efficiency chase
There are efficiency reasons to keep V (variable
cost per students) low - V determines the
gradient of the total cost function (the lockstep
relation between cost and volume)- determine the
limit for any economies of scale
Most student support costs contribute to variable
costs per student.
Is the Perraton cube the pave to smash the
greenhouse of student support?
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Costing and learner support Part III
conclusions revisited
Types of learner support, costs, and what you can
do about it

• teaching and tutoring (content related)
• course developmentincl. the production,
  distribution, dissemination of content counseling
  and advising (non-content related)
• tutoringcommunication between learner and
  teacher
• counseling and advising (non-content related)
• administrative and technical support

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Efficiency gained effectiveness lost?
Costing and learner support Part III economic
case for learner support
Downsizing student support may help in terms of
cost per student (at least at short term) but
may be contra-productive in terms of demanding
performance measures. The very measures which
make you do better in cost per students may
produce inferior outcomes in terms of cost per
graduates. The question is to which extent
performance measures do have economic
consequences (e.g. in terms of funding, fee
generated revenues)?
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An economic argument for retention
Costing and learner support Part III economic
case for learner support

• Loosing a student means incurring costs
• opportunity costs of lost income in terms of
  fees and grants
• (institutions want to be open to the charge to
  live on drop out money hence they have a refund
  policy grants are often tied to competed course
  rather than enrollments)
• additional recruitment costs for a new student

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Measures for retention varying costs varying
benefits
Costing and learner support Part III economic
case for learner support

• Some measures seem to be
• employer support and
• monitoring assignment submission
• Others seem costly but less effective, notably
• Pre-start online discussion

Source Based on Simpson (2003, p. 137)
Institutional research is required to identify
the most cost-effective measures in your own
context.
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Costs, outcomes and ethics
Costing and learner support Part III economic
case for learner support

• We have seen that
• Costs will depend on socially agreed outcome /
  performance measures - government funding
  policy can lead to cost/benefit implications of
  student support - the market may play a role
  learners will migrate to
• Costs will depend on institutional ethicsyou
  may know from research the students probability
  to succeed (pts) what consequences you will draw
  depend on the mission of your institution-
  provide extra support for students in danger?
  or- to counsel away students?

It depends on policies, institutional and
government policies to assure that the efficiency
pave is not used to break the learner support
greenhouse. Thank you!