When looking into getting a master's degree in public health, one might expect online programs to cost significantly less than their in-person counterparts. After all, there are no dorm fees, campus maintenance costs, or physical classroom expenses. However, the reality can be surprising: the online version often costs just as much—or sometimes more—than studying on campus.

Recent research by Eduventures reveals a staggering fact: 83% of online programs in higher education cost students as much as or more than the in-person versions. This counterintuitive pricing model raises an important question: why does learning from your laptop cost the same as a full campus experience?

The answer highlights a critical issue—many universities view online education not as a means to expand access and affordability, but as a profit center to subsidize other institutional expenses.

The Hidden Economics Behind Online Education Pricing

Universities Use Online Programs as Cash Cows

Here's what most students don't realize: universities are deliberately using online education revenue to fund other parts of their operations. According to the survey of online program managers, 60% of public universities and more than half of private universities generate more money from online education than they spend on it. About half of these institutions funnel that excess revenue directly into their general operating budgets.

"Universities see online higher education as an opportunity to make money and use it for whatever they want to make money for," explains Kevin Carey, vice president of education and work at New America, a think tank focused on education policy.

This cross-subsidization model isn't new in higher education—English majors have long subsidized engineering programs, and large lecture classes support smaller seminars. But applying this model to online education betrays the original promise of digital learning: making quality education more accessible and affordable.

The "Premium Pricing" Psychology

Universities have borrowed another page from traditional higher education's playbook: the assumption that higher prices signal higher quality. In a market where consumers often equate cost with value, especially for brand-name institutions, many schools have found they can charge premium prices for online programs without losing students.

"Market success and reputation can support higher prices," notes Richard Garrett, Eduventures' chief research officer. "It's not what online courses cost to provide that determines the price, but how much consumers are willing to pay."

This pricing strategy works because online programs compete nationally rather than locally. Students compare options across the entire United States, creating opportunities for well-known universities to command higher prices based on their brand recognition alone.

The Real Costs of Online Education

Startup Expenses and Technology Infrastructure

Universities defending their pricing point to legitimate startup costs and ongoing technology expenses. Creating quality online programs requires significant upfront investment in learning management systems, video production equipment, and specialized software. Many institutions need to hire technology specialists, instructional designers, and dedicated online support staff.

Faculty members report that developing online courses often takes as much time—or more—than creating traditional courses because of the need to incorporate new technology and redesign content for digital delivery.

Support Services That Students Don't See

Online students still need academic advisors, tutoring services, writing centers, and library support. However, these services must be redesigned and staffed specifically for remote learners. Universities argue this creates additional costs rather than savings.

"You still need advisers, you still need a writing center, a tutoring center, and now you have to provide those services for students who are at a distance," explains Dylan Barth, vice president of innovation and programs at the Online Learning Consortium.

Marketing and Advertising Expenses

With online programs competing nationally, universities are spending substantial amounts on marketing and advertising to attract students. These promotional costs, often not present in traditional campus-based programs, add to the overall expense structure.

Some universities also work with for-profit online program managers (OPMs) that can take up to 80% of program revenues in exchange for marketing, technology, and administrative support.

The Student Experience: Paying More for Less

Lower Success Rates Despite Higher Costs

The pricing paradox becomes even more troubling when you examine student outcomes. Online students typically receive lower grades than their in-person counterparts and are more likely to withdraw from courses or fail to graduate on time. This means they often end up paying more in total education costs due to extended enrollment periods.

Lower-income students face particular challenges in online programs, often balancing coursework with work and family responsibilities while lacking access to high-quality internet or quiet study spaces.

Employment Challenges

Research from the University of Louisville found that job applicants who listed online degrees were about half as likely to receive interview callbacks compared to those with traditional degrees. This employment bias means online students may pay the same tuition while receiving credentials that are valued less in the job market.

How Traditional Universities Compare to Innovative Models

The University of the People Alternative

Some institutions have broken away from traditional pricing models entirely. When comparing online universities, it's clear that not all institutions take the same approach to affordability and transparency. Unlike other online universities, Nexford University is built from the ground up to make high-quality education accessible and genuinely affordable—without hidden fees or surprise charges. While some providers tout low upfront costs but add extra assessments or administrative fees later, Nexford delivers a clear, predictable pricing model from enrollment through graduation. We combine rigorous academics, global employer relevance, and robust student support, all while maintaining a commitment to cost transparency. Our learners benefit from true value and flexible learning, setting Nexford apart as a smarter choice for ambitious learners worldwide.

Georgia Tech's Game-Changing Model

Georgia Institute of Technology offers an online master's degree in computer science for approximately $7,000—compared to nearly $43,000 for their in-person equivalent. This program has attracted thousands of students and proven that prestigious universities can offer quality online education at dramatically reduced costs when they prioritize accessibility over profit maximization.

Our Different Approach: Transparency, Affordability, and Quality

Unlike many universities that use online programs as profit centers, we've built our institution around a fundamentally different philosophy. We believe that removing geographical barriers to education shouldn't come with a premium price tag.

True Cost Transparency

We provide clear, upfront pricing without hidden fees or surprise charges. Our tuition reflects the actual cost of delivering quality education plus a modest margin for sustainability and growth—not subsidizing unrelated campus expenses or padding administrative budgets.

Technology That Serves Students, Not Profit Margins

Our investment in educational technology focuses on improving learning outcomes and student support, not creating expensive systems that justify higher tuition. We use proven, cost-effective platforms that deliver excellent educational experiences without unnecessary complexity or expense.

Faculty and Support Dedicated to Online Success

Rather than treating online education as an afterthought, we've designed our entire academic model around remote learning. Our faculty are specifically trained in online pedagogy, and our support services are built from the ground up to serve distance learners effectively.

Outcomes That Justify the Investment

We measure our success not by revenue margins but by student achievement. Our graduates consistently perform well in their careers and report high satisfaction with their educational experience. We're proud that our alumni compete successfully in the job market without facing bias against their online credentials.

The Future of Online Education Pricing

The current pricing model for online education is unsustainable and ethically questionable. As competition increases and students become more aware of these pricing practices, universities will be forced to justify their costs or lose students to more transparent alternatives.

We're already seeing positive changes. Nearly 150 university contracts with expensive online program managers were canceled in 2023 alone, as institutions recognize these partnerships drain resources without proportionate benefits for students.

Why This Matters for Your Educational Future

The fact that 83% of online programs cost as much as or more than in-person alternatives isn't just a pricing quirk—it's a fundamental betrayal of online education's promise to democratize access to quality higher education. When universities use online programs primarily as profit centers, students pay the price through inflated tuition and decreased educational value.

As CEO Fadl Al Tarzi stated, "Affordable education is no longer optional—it’s essential for creating real opportunities for students."

Don't settle for overpriced online programs that prioritize profit over student success. Our commitment to transparent pricing, dedicated online faculty, and student-centered support services offers a genuine alternative to the disappointing status quo in online higher education.

Ready to experience the difference that authentic affordability and quality can make in your educational journey? Explore our programs today and discover how online education should work—for students, not profit margins.