One other boundary issue needs to be considered. Generally, institutional budgets coverthe areas of service provided by the organisation. The risk to the main provider can bereduced (as may costs) by outsourcing provision of some services to external suppliers.Distance <strong>and</strong> e-<strong>learning</strong> lends itself to the breakup of the basic service package intoits constituent parts. The PricewaterhouseCoopers’ Report on the proposed (<strong>and</strong> nowfailed) UK e-University not only suggested that the services required to support acourse might be provided through a series of subsidiary operating companies, suchas: (1) SmartForce <strong>and</strong> Tutor.com, which might provide tutorial support for thosenot content with online interactive tutorial support; (2) Questia <strong>and</strong> XanEdu, whichwould provide online library facilities; <strong>and</strong> (3) examining bodies, which would awardqualifications, but that all these services would be bought separately by those studentswho wanted to opt into them (PricewaterhouseCoopers, 2000). Outsourcing, however,raises problems of coordination of service, <strong>and</strong> suggests that the poor, who arguablywill have most need of support services, may lose out because they will be tempted notto pay for “extras”.The issues raised here are really about where the boundary is drawn between costs thatare seen to be of institutional concern, <strong>and</strong> are hence taken into account in consideringwhere the money to pay for them is coming from, <strong>and</strong> those that are regarded as outsidethe boundary, <strong>and</strong> are hence usually ignored when it comes to considering institutionalfunding. Though having, in general, reduced per student costs for the institution, thetechnologisation of <strong>education</strong> has on the whole led to increased costs for learners. Theseadditional costs are usually only considered where access issues impinge on success inrecruitment from the target group.FUNDING TECHNOLOGY-BASED HIGHER EDUCATIONFor many years the funding of non-traditional <strong>higher</strong> <strong>education</strong> has been recognisedas a “nightmare for everyone involved” (Swinerton <strong>and</strong> Hogan, 1981: 1). Speakingof the early development of Athabasca University, Snowden <strong>and</strong> Daniel (1980:76) pointed to “the considerable difficulty we have in describing the institution’soperations <strong>and</strong> its economics to officials in government <strong>and</strong> funding agencies”. Thesedifficulties remain.Early private-sector correspondence collegesHistorically, <strong>distance</strong> <strong>education</strong> – in its earliest guise of correspondence <strong>education</strong> – wasgenerally funded from private sources. Small scale <strong>distance</strong> <strong>education</strong> initiatives couldbe set up reasonably easily: costs could be constrained by limiting the curriculum <strong>and</strong>the quality <strong>and</strong> quantity of materials furnished, by providing little support for students,<strong>and</strong> by paying tutors poorly. Cash flow was managed by getting students to pay feesup front on a non-returnable basis. Some initiatives were philanthropic <strong>and</strong> hence notfor-profit.However, many private correspondence colleges <strong>and</strong> schools were set up tomake a profit. Although there were some excellent providers, private correspondenceschools <strong>and</strong> colleges generally had a poor reputation. Drop-out rates were often high.Since students who dropped out early did not incur costs (because tutors were only paidwhere assignments were submitted), many of these systems relied on drop-out moneyto maximise profits. With significant sums spent on recruitment, the suspicion wasthat many colleges were more interested in recruiting fee-paying students rather thanpotentially-successful learners.39
STATE-FUNDED DUAL-MODE SYSTEMS ATUNIVERSITY LEVELThe costs of setting up a correspondence university offering a broad curriculum madeprivate initiatives much more difficult at the <strong>higher</strong> <strong>education</strong> level. Most of the<strong>distance</strong> <strong>higher</strong> <strong>education</strong> initiatives started in the late 19th century began when existinguniversities broadened their mission to meet the needs of remote students. Generally,the cost of developing materials was low because lecturers restricted themselves topreparing some notes on the material they covered in their lectures for the traditionalstudents. (Later, lectures were videotaped at very little additional cost so that the parttimeoff-campus students could watch the original lecture at a later date.) Few dual-modeuniversities bothered to allocate indirect common costs between their on- <strong>and</strong> off-campusprovision (MacKenzie, Postgate <strong>and</strong> Scupham, 1975: 80) with the result that the overheadcosts of small initiatives tended to be ignored <strong>and</strong> hence subsidised.Funding arrangements varied considerably. Whether courses were subidised by the state,or paid for by student fees, often depended on whether the courses were seen as extending<strong>education</strong>al opportunities to high school graduates who could not get into a traditionaluniversity, or being provided to adults who were wage earners at the same time as theystudied. If no distinction was made between on- <strong>and</strong> off-campus students attending dualmodeinstitutions, then funding of both types of students was usually done on exactlythe same basis. However, in some systems state funding of <strong>higher</strong> <strong>education</strong> tended to berestricted to high-school graduates, so that while traditional students were helped withtheir fees, adults had to meet the full cost of fees from their own pocket. Also, courses incertain professional <strong>and</strong> vocational subjects (for example, law, accountancy, management– but not teacher <strong>education</strong> <strong>and</strong> training) were seen as being particularly appropriate forpeople who were in work <strong>and</strong> who could afford to pay high fees. Where this was the case,fees were either charged at a full-cost-recovery rate, or priced at a market rate (i.e. fullcost-recoveryplus profit).Generally, the trend towards cost-sharing has led to <strong>higher</strong> fees <strong>and</strong> lower subsidies for allstudents, with the result that distinctions between on- <strong>and</strong> off-campus student fees havebeen eroded.PURPOSE-BUILT DISTANCE TEACHING UNIVERSITIESGovernments initially saw the foundation of purpose-built, large-scale <strong>distance</strong> teachinguniversities as a relatively cheap way of funding the expansion of <strong>higher</strong> <strong>education</strong>.Distance teaching universities have generally been funded to a greater or lesser extentby government, with some of their costs being met by student fees. (The idea thatthey would be able to support themselves to a significant degree by marketing their<strong>education</strong>al materials has proven illusory.)The more sophisticated the administrative computer systems, the greater the use ofhigh cost technologies, <strong>and</strong> the more extensive the curriculum <strong>and</strong> the use of <strong>learning</strong>materials, the <strong>higher</strong> the initial start-up costs. The practical issue of meeting a significantproportion of the costs of a <strong>distance</strong> teaching university from fees has proven challenging.The first challenge is to fund the very considerable expenditure on buildings, system, <strong>and</strong>course design <strong>and</strong> development, before a single student could be enrolled. As a rough ruleof thumb, a period of at least two years needs to elapse between the decision to start aninstitution <strong>and</strong> the date when it will begin teaching its first students. During this period,very considerable costs are incurred, with no income coming in from student fees.40
- Page 1 and 2: PERSPECTIVES ONDISTANCE EDUCATIONLi
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- Page 19 and 20: THE CONTRIBUTORChristopher McIntosh
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RELEVANT INTERNET SITESThe Commonwe
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2. QA initiatives or publications b
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assurance of ODL. This DST will be
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Educational Planning has been respo
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A system of weighting of the key qu
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RELEVANT INTERNET SITESHigher Educa
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CHAPTER 9THE FINNISH VIRTUAL UNIVER
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foreign providers. In Finland, the
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to make the best use of new educati
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The foremost task for the Service U
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part of quality management. The aim
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online courses; an educational tech
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polytechnics, research institutions
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CHAPTER 10PROMOTING CROSS-BORDERREC
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The Bologna Declaration was followe
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indicators currently being used for
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the qualification resulting from th
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Table 9.1: Outline of the portfolio
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• Make sure that incoming student
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CHAPTER 11CHARTING THE EVOLUTIONOF
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Another common characteristic was t
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the current capacity of the educati
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conditions for success. Conditions
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Cultural and ethical issues in inte
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the cost and maintenance of learnin
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Research can be a useful tool for c
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REFERENCESBates, A. (1995). Technol
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Twigg, C. (2001). Quality Assurance
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y, for example, entering into partn
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and even greater steps, and the dec