Financial Management in Distance Education

1. Financial Management
In Distance Education
Cristina D. Mendoza
EDDE 205

2. Module Objective
To discuss why DE is considered to
be more cost-efficient
Describe the cost items that are
unique in DE

3. What does it mean to be cost-efficient?
 Cost-Effectiveness Analysis (CEA)- Compares the relative cost and the effect
of the project. This is in terms of benefits and usage.
 Three ways to conduct a CEA
1. Constant Cost Analysis- ratio of available budget with attainment of
optimum outcome
2. Least Cost Analysis- cheapest means to attain a pre-determined level of
objective
3. Objective Level Analysis- determine the cost in attaining the different
levels of the objective

4. What does it mean when we say that DE is cost efficient?
 Average cost per student is low
The total cost of the institution is
divided by the number of students.
 Educational Experience is high
This includes access to learning materials
and learning interactions
 Accessibility is high
Easy to access the DE system
 Student support is high
Benefits that students can attain from the DE
system
 Quality of the Learning Outcome (GPA) is high
(Image via Studybay)

5. Measuring Cost Efficiency of DE compared to
Traditional Education
CRITERIA TRADITONAL EDUCATION DISTANCE
EDUCATION
Quantitative Access Enrollment limited to the size of the
infrastructure
Increase enrollment due to
accessibility
Quality of the
Educational Experience
Face-to-face communications but
limited in time
Can access teaching materials and
lectures not readily available plus
presence of an electronic conference
system
Cost Benefit
(Total Annual Cost of the
Institution ÷ number of students)
Higher Cost Efficiency Rate
(Increase staffing, infrastructure and utility
cost)
Lower Cost efficiency Rate
Economies of Scale Fixed Cost is divided only to a limited
number of students
Fixed cost are spread to more
students
Benefits to the Students Working students need to fix their
schedule in relation to their class
schedule
Students can earn as they study
Quality of Learning
Outcome
No difference in final exam scores
(Giz.de, 2018)
(Stack, Steven, 2015)

6. What are the resources needed to create a DE system?
 Income from tuition fee of enrolled students
 Income from sales of learning materials
 Grants from government or private institutions
 Advertising
REVENUE BUDGET

7. What are the resources needed to create a DE system?
EXPENDITURE
(Belawati, n.d.)

8. Cost Items that are unique in DE
 Cost of Faculty in Relation to Roles
1. Course Instructor
2. Curriculum Writer
3. Instructional Designer
4. Academic Advisor
 Cost of Course Module
1. Course Development- includes design and production
2. Course Delivery- software cost and website fees
3. Course Maintenance- training and updating
(Neely & Tucker, 2010)

9. Cost Matrix per Course
REVENUE
Tuition Fee
Sales of Learning Material
Grant
Advertisement
TOTAL
EXPENDITURE
Course Design
Course Delivery
Course Maintenance
Course Instructor
Administration
Administration Staff (Dean, HR, Finance, Student Support)
Non- Academic Personnel
Utilities
Facilities Cost
Cost of Equipment Maintenance
Cost of Supplies
TOTAL
REVENUE – EXPENDITURE= COST OF THE COURSE

10. Points of Discussion
Please answer the following questions briefly.
 Why is DE cost-effective for you, personally?
 How can DE be a sustainable and profitable business in the Philippines? How
can you assure quality and standard of learning?

11. Reference
Belawati, T. (n.d.). Financial Management System in Open and Distance Learning: An Example at Universitas Terbuka. Retrieved on
July 2, 2018, from http://cemca.org.in/ckfinder/userfiles/files/leaflet-Tian Belawti 30 june.pdf.
Bartley, S. J., & Golek, J. H. (2004). Evaluating the Cost Effectiveness of Online and Face-to-Face Instruction. Educational
Technology & Society, Vol. 7: No. 4. Retrieved on July 4, 2018 from
https://pdfs.semanticscholar.org/12e9/bf795f70026404c3fa6603e494f8abf77412.pdf
Giz.de. (2018). Analysing Costs/Benefits for Distance Education Programmes Retrieved on July 4, 2018 from
https://www.giz.de/expertise/downloads/Fachexpertise/en-elearning-analysing-costs-benefits.pdf.
Rumble, Greville. (2002). The Management of Distance Learning Systems. Retrieved on July 4, 2018, from
http://unesdoc.unesco.org/images/0009/000947/094701e.pdf
Rumble, Greville. (n.d.). Costing Networked Learning. Retrieved on July 6, 2018 from
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.115.7124&rep=rep1&type=pdf
Stack, Steven Dr. (2015) "Learning Outcomes in an online vs traditional course," International Journal for the Scholarship of Teaching
and Learning: Vol. 9: No. 1, Article 5. Retrieved on July 2, 2018 from
https://digitalcommons.georgiasouthern.edu/cgi/viewcontent.cgi?article=1491&context=ij-sotl
Tucker, J., & Neely, P. (2010). Unbundling faculty roles in online distance education programs. Contemporary Issues in Education
Research; Vol. 3: No. 6. Retrieved on July 2, 2018, from http://www.irrodl.org/index.php/irrodl/article/view/798/1543
UNESCO (2002). Open and Distance Learning: Trends, Policy and Stratefy Consideration, Paris, The UNESCO Press. Retrieved on June
20, 2018 from http://unesdoc.unesco.org/images/0012/001284/128463e.pdf.