This project is funded by a grant from the U. S. Department of Education, Office of Educational Research and Improvement. Additional funding is provided by the California State University. The project is an extension of discussions sponsored by the CSU and SHEEO under the auspices of the National Learning Infrastructure Initiative.

If you have questions or need additional information regarding these materials, please contact:

Frank Jewett, Principal Investigator TCM/BRIDGE Project
Advisory Board Member TCM II
814 Lantana Avenue, Brea, CA 92821
(714) 990-9506
e-mail: frnkjewett@aol.com

Introduction

I.     Background and General Information

II.    Description of the Case Study

III.    Identifying and Evaluating Benefits

IV.    Identifying and Evaluating Costs

Appendix to part IV

The purpose of this manual is to provide a conceptual framework and outline for the specific case studies that are to be undertaken for this project. The materials are organized in five sections as follows:

Section I provides background and general information about the project (including personnel, funding, and a time schedule). A summary of the National Learning Infrastructure Initiative discussions on the benefit-cost topic is also included.

Section II discusses the information that is necessary to provide an overall general description of each case study.

Section III addresses the topic of benefits. It provides a list of possible benefits and suggests how these benefits might be measured and summarized. Some of the benefits (relating to student performance and opinion surveys) will be measured during the spring term 1997.

Section IV is a discussion of the types of costs that should be included in the case studies. Data to estimate these costs will be collected during the winter and spring of 1997.

An attempt has been made to define the framework and lists of benefits and costs in a broad and general manner so as to accommodate the several different types of mediated instruction and distributed learning. Because each case is unique, the general framework and lists will have to be uniquely adapted and modified to apply to each case study.

In what follows it is assumed the case study will involve a comparison between delivery of instruction in regular classroom format and delivery using some form of mediated courseware or distributed learning (or both). Most of the case studies will, in fact, be of this nature. It also appears that some cases will involve new programs or courses that have no counterpart in regular classroom instruction. In these latter situations it is still possible to evaluate benefits and estimate costs but it may only be possible to make some very general comparisons with classroom delivery.

The California State University has been awarded $403,000 by U.S. Department of Education, Office of Educational Research and Improvement, for a two year project to conduct a series of case studies and follow-up reports on the benefits and costs of "mediated instruction and distributed learning." The grant proposal was the direct result of a national discussion on benefits and costs of technology mediated environments sponsored by the CSU under the auspices of the National Learning Infrastructure Initiative (NLII). The Department of Education funding represents 84 percent of the total project cost of $483,000, the remaining 16 percent will be provided as matching funds by the CSU Chancellor's Office.

The project will develop estimates of the benefits and costs associated with various types of mediated instruction and distributed learning (MI/DL) [This term is adopted in what follows to refer to instruction that is delivered substantially by means of electronic technology to sites on campus served by a network and to sites remote from the campus] delivery methods in higher education. A set of eight case studies will be used to obtain data on the benefits and costs of specific distributed instructional delivery modes that can be compared to the benefits and costs of regular classroom delivery. Modes to be studied include interactive computer learning labs and networks, compressed two-way live video and one-way video/two-way audio delivered by ITFS, broadcast, satellite, or cable, and materials delivered via the Worldwide Web.

The case studies will be based upon lists of benefits and costs that were identified from discussions with the NLII Benefit Cost Partners group as further refined by application to a case study within the CSU and in discussion about this project with the U. S. Department of Education. Benefit assessments will be based upon: (1) comparisons of the educational outcomes between similar courses delivered by different means (e.g., lecture and two-way compressed video, (2) the potential to improve course completion rates and student retention rates, ), (3) the potential to improve student access to instruction (4) the potential for institutional/curriculum renewal, and (5) other benefits identified relative to specific case studies. Cost comparisons will be based upon estimates of the direct costs (both operating and imputed capital costs) for the delivery of the specific form of instruction in each case study.

Case studies allow comparisons of educational outcomes for a given course at a given institution. This approach substantially reduces the need to define educational outcomes in an absolute sense. Limiting comparisons to specific courses given in both mediated/distributed and conventional mode at the same institution also avoids the problems inherent in comparing costs across institutions. The methodology for the benefit and cost assessments has had some preliminary testing within the CSU. Its application to a larger set of case studies will provide information to guide higher education decision makers regarding the expansion of digital technology to instructional delivery in the next century.

Dr. Frank Jewett, who wrote the grant proposal based upon previous cost work he has done within the CSU and with the NLII in conjunction with the CSU Chancellor's Office Division of Information Resources and Technology, will direct the project. A Steering, Review, and Oversight committee, composed of Jim Mingle, Executive Director of SHEEO, Dennis Jones, President of the National Center for Higher Education Management Systems, Tony Bates, Director of Distance Education, University of British Columbia, and Tom West, Assistant Vice Chancellor for Information Resources and Technology, CSU, will provide overall direction to the project.

Jewett, Jones, and Bates will constitute a project team to work with a "case-study coordinator" for each institution to tailor the study to the specific courses involved. The intent is to undertake the learning outcomes evaluations during the spring term, 1997. This will involve, as appropriate, pre- and post-tests related to the subject matter and attitude surveys of students, faculty, and administrators. Information on other benefits as discussed above and cost data to provide estimates of direct costs for both regular classroom and the mediated instruction will also be developed during this time period.

The project budget includes funds to reimburse case study institutions for out-of-pocket expenses associated with tests, survey instruments, and other data gathering up to $5,000. Another $5,000 is available to reimburse the institution for time provided by the coordinator.

The report for each case study will drafted by Jewett and the case study coordinator during the summer of 1997 for review by the campus and the consultants. The final case study reports will be presented at the EDUCOM meetings in Minneapolis-Saint Paul, October 1997 (the project has budgeted travel funds to pay each coordinator's trip to this meeting). A set of case study scenarios will be developed summarizing the various outcomes in a manner that will be accessible to a broad national audience. The more complete and detailed case study reports will also be published for general distribution.

Schedule

October-December 1996

Develop lists of benefits and costs for the course(s) included in the case studies.

January-May 1997

Obtain data and develop estimates of the benefits and costs of the courses.

April-August 1997

Analyze data and develop models of the alternative delivery modes, draft individual case studies.

July-October 1997

Final case study reports suggesting conclusions about the relative benefits and costs of the alternative delivery modes. Develop scenarios summarizing the results.

October 28-31, 1997

Present case study results and scenarios at EDUCOM meetings.

Summary of the NLII Discussions

The outcome of the NLII Benefit Cost Partners discussions provide the starting point of this project as a set of findings and recommendations about how to best approach the difficult issues of benefits and costs from an operational perspective:

• The discussion of benefits should be separated from the discussion of costs initially.
  
  
• The benefits and costs for (various forms of) mediated instruction should be compared with the benefits and costs of classroom instruction. (Although difficult and potentially controversial, these comparisons go to the very heart of the policy issues related to mediated instruction.)
  
  Note: Although a comparison of the benefits and costs for a specific mode of mediated instruction with the classroom instruction that was displaced is desirable, it is not absolutely essential for every case study that may be of interest, e.g., for a new program that could not have existed with classroom delivery.
  
  
• Benefits are primarily related to the quality of instructional outcomes. Comparisons of instructional outcomes for mediated instruction with classroom instruction avoids the difficulty of measuring the quality of instruction directly.
  
  
• Other benefits of mediated instruction should be identified. These may relate to increased convenience and access for students or reduced traffic congestion and air pollution for society.
  
  
• Costs should be calculated from the perspective of the educational institution. Other cost perspectives exist and should be acknowledged or considered as appropriate, e.g., student costs that reimburse the university for special costs of mediated instruction.
  
  
• Costs of both mediated and classroom instruction should be based upon a comprehensive list of institutional costs directly related to the specific instructional mode. These costs should be based upon activity analysis to the greatest extent possible.
  
  
• In addition to staffing and operating costs, estimates of the annual value of fixed equipment and facilities should be imputed to obtain an estimate of the total direct costs associated with each specific mode of instruction involved.
  
  
• Institutional costs that are not affected by the way instruction is delivered will be essentially the same for either mediated or classroom delivery. Such indirect costs should be ignored in the comparisons.
  
  
• The initial focus of the benefits and costs is upon "courses" because that is the unit of instruction provided whether by means of classroom or mediated mode. The studies might be designed, however, of offer some insight about the effects of mediated instruction upon the costs of entire degree programs and various organizational units up to and including entire campuses.
  
  
• Due to the diverse nature of mediated instruction and the difficulties inherent in making inter-institutional comparisons of benefits or costs, the analytic framework outlined above should be applied to specific case studies. The case studies will usually involve evaluation of one or more courses that have been offered in classroom (lecture, lecture/discussion, or laboratory) formats and that are currently being offered using some form of electronic technology. A primary objective of the case study is to develop a basis for making comparisons of the benefits and costs of delivering the courses via the regular classroom approach and in a specific configuration using electronic technology.

The following list is to aid the case study coordinator in assembling a set of descriptive materials and information about the case study.

1. Provide a brief general description of the instructional activities that are the subject of the case study. What courses are involved, is there a degree program or a certificate involved? How are the courses delivered? What is the target student market? Are there cooperative arrangements among institutions? Are there other important organizational or administrative features of the program? How many years has the program been in operation? Describe other unique features of the program.
   
   
2. A description of the courses that are involved including course titles and unit values (semester or quarter?). Are these or similar courses also offered using a more traditional form of classroom (e.g., lecture) delivery?
   
   
3. How are the mediated courses scheduled? How many hours per week, on average, are students expected to devote to the mediated course? What is the approximate distribution of a student's time across the types of media employed, in class (if any), and studying independently?
   
   
4. How many students are expected to enroll in the mediated courses in spring 1997? How many were enrolled in fall term 1996?
   
   
5. If the mediated course is scheduled to meet at regular times and places on campus or at off-campus sites, how many sections of the mediated course will be scheduled? What is the assumed section size?
   
   
6. Where is the program located within the campus's organization?
   
   
7. Are there any accreditation issues or concerns related to the program?
   
   
8. Please provide copies of any brochures or other descriptive materials that are available to students or the general public.
   
   
9. Has the program necessitated any special administrative procedures or policy changes?
   
   
10. Other materials relevant to providing a complete description of the program.

The purpose of this section is to identify the major benefits associated with the several forms of mediated instruction and distributed learning (MI/DL) [This term is adopted in what follows to refer to instruction that is delivered substantially by means of electronic technology to sites on campus served by a network and to sites remote from the campus] to provide suggestions about how those benefits might be evaluated.

A.The quality of student learning outcomes
Learning outcomes are assumed to be the primary direct benefit of instruction however the instruction is provided. Some important learning outcomes related to a given course are measured by final examination scores. Comparing final examination scores for comparable groups of students taking the course delivered by alternative modes of instruction (e.g., classroom vs. mediated) is a means of determining the learning outcomes advantage (if any) of the mediated course. The ratio of mean exam scores for the mediated course to the mean exam scores for the classroom course is an indicator of mediated course learning outcome benefits. If, for example, the ratio is 1.2, the mediated course exam scores are 20 percent higher. This does not mean learning outcomes are 20 percent better but it is evidence to support the hypothesis that learning outcomes are improved by the mediated course.

Another relative learning outcome benefit is comparative course completion rates (which, in a sense, serve as a proxy for course grades), e.g., if the course completion rate increases from 70 to 80 percent when the mediated instruction is introduced, this is a 14 percent improvement that provides a benefit to the additional students who pass the course and also to the institution that does not have to expend funds to instruct those students who will repeat the course at a later date. Again, one cannot conclude there is a 14 percent increase in learning outcomes but the evidence supports the hypothesis that leaning outcomes have been improved by the mediated course. (Note - The 20 and 14 percent values are not additive, the 14 percent improvement in course completion is contained in the 20 percent improvement in examination scores.)

Improved exam scores and course completion rates ultimately translate into improved performance in other courses, a reduced rate of withdrawal from the university, and higher degree completion rates. Because of the longer time period required to observe these various phenomena, it is unlikely that the case studies will be able to incorporate much evidence regarding these later outcomes.

How do the learning outcomes of the mediated course compare to the outcomes of the regular classroom course?

The issue is whether the mediated course increases the amount of subject matter a student learns. Although such increases may be essentially qualitative, there are also some quantitative aspects. Overall student performance in the course can be expressed in terms of performance on final comprehensive exams, overall class score (final, midterms, projects and homework) or successful course completion.

Note: Final exam scores may be the best indicator of learning in terms of mastery of the material. Course passing rates may be more useful in terms of assessing the impact of the mediated course on student flow through the instructional process (e.g., fewer repeat enrollments) but they are less useful as measures of learning outcomes because they may take account of criteria in addition to learning.

(1) At the course level, benefits can be measured as the relative difference in mean final examination scores (adjusted for incoming student ability) between the lecture course and the mediated course. Improved final exam scores should translate into improved course passing rates (subject to the reservation noted above). Another aspect of learning outcomes that requires more time to track is the performance of students who pass the first (mediated) course in a discipline in later courses in the same discipline. If the first course improves learning, the students who passed the mediated course should do better on average than those who passed the lecture course.

(2) If there is an improvement in learning due to the mediated course, it should result in improved student flow from one year to the next in terms of improved university continuation rates, e.g., for first-time freshman, the fall to fall continuation rate improved from 78 percent to 80 percent.

(3) Improved student flow in turn would eventually lead to improvements in degree completion rates, e.g., an improved five year persistence rate (for students admitted as first-time freshmen) from 58 to 59 percent

Note: Items such as 2 and 3 are sometimes described as "cost savings" or "cost avoidance," i.e., avoiding the cost of putting students through the same course twice or reducing drop-outs after students have taken several courses. Although the monetary value of such savings can be calculated, it must be recognized that this type of "savings" doesn't generate cash flow that can be used to defray other expenses. In general, it is better to treat these "cost savings" as benefits.

(4) Learning about the mediated technology by using it to learn in the disciplines may be an important additional learning benefit. Familiarity with using (and developing) multimedia materials and with using networks to search for and retrieve information are two obvious examples of what all college graduates will need to know in order to compete in the workplace in the next century.

B. Motivation for Institutional Renewal - Faculty and Curriculum
A widely recognized benefit of mediated instruction is its potential to motivate the institution and the faculty to rethink and reform the curriculum and the way courses are offered. If such motivation arises within the faculty, it provides the basis for faculty buy-in to the institutional change and is acknowledged to be a very important aspect of adoption of mediated instruction. Evidence to support the existence of such benefits will be sought in the case studies including opinion surveys and examples of restructuring of courses or degree programs, changes in instructional methods and changed attitudes about teaching and learning.

C. Improved Access for Students
Individual motivation and access may be improved by the mediated course because it either (a) appeals to a broader range of individual learning styles than does classroom instruction or (b) it makes it easier for individuals to participate in learning activities (at more convenient times or places). The case studies will provide a basis for investigating such results by estimating the potential increase in participation rates that might be attributed to adoption of mediated instructional modes. (Extended example based on approximate CSU data: A large system of higher education draws 36,000 students from each million of 18-34 population in the state. Further assume the following about the population base: 2/3 or about 667,000 are not qualified to participate, 120,000 already have degrees. Of the remaining 177,000 approximately 100,000 have jobs and are satisfied with their educational attainment - they are not interested in additional education. The other 77,000 would be interested but because of family or work responsibilities, cannot attend regular courses. Widespread adoption of MI/DL might induce 3 percent (2,310) of this latter group to become students. Although 2,320 is small relative to the one million population base, it is more than 6 percent of the 36,000 current enrollment base.)

Thus, a potential MI/DL benefit is to increase access by increasing the participation rates of the population in higher education relative to what the rates would have been otherwise. Evidence on the potential to increase participation will be sought in the case studies.

D. Other Social Benefits (In addition to the potential social benefit of an increased proportion of the population that is better educated.)
E.g., reduced traffic congestion and air pollution might occur in some localities if there were a substantial increase in the amount of coursework accomplished at home or at work and a consequent reduction in daily commutes to campuses.

E. Other benefits
Yet to be identified.

The two major categories of benefits as listed above relate (1) to individual learning productivity, the quality and quantity of a single individual's learning, represented by items A and B, and (2) to the number of individuals who have access to educational opportunities, primarily item C.

An attempt has been made to make the benefits list as comprehensive as possible to apply to a wide range of MI/DL applications. The list is intentionally open ended to allow other benefits related to particular applications to be included. It is possible that a MI/DL application would show a substantial improvement across all benefits on the list. It is more likely that the improvements will occur in some of the outcomes rather than all, however.

A Benefits Scorecard

Because of the various types of benefits, and the fact that the relative benefits indicators are not additive, a "scorecard" is suggested as the best way of summarizing the findings.   E.g.

Example Scorecard
Indicators of Benefits of MI/DL Relative to Classroom Instruction

A. Learning outcomes	+20% increase in final exam scores +14 % increase in course completion
B. Institutional Renewal	+++ (perceived to be very important by...)
C. Educational Access	+5% potential increase in participation rates
D. Other Social Benefits	...
E. Other Benefits	...

Planning to Obtain Benefit Indicators

A. Learning outcomes can be measured using pre and post-tests, examination scores, or some combination of the two. Pre-tests, placement exams, and grade point averages can be used to adjust for the abilities and background of students that may importantly affect their course performance. The ideal situation is when essentially the same instructional content is offered using both classroom courses and mediated courses. Comparisons of the learning outcomes from the two different "treatments" can be made based upon an experimental design. In this circumstance, it is important to obtain sufficient information about individual students, e.g., pre-test scores, GPA, class level, age, etc., to allow adjustment for different abilities in the control and experimental groups.

If classroom and mediated courses are not being offered simultaneously, other types of evaluations may still be possible. If the course material has "migrated" from a regular classroom delivery mode to a mediated mode, some general assessment of learning may still be possible from interviews or surveys of faculty and administrators who were associated with both the earlier and current versions of the course. If the course or program was originally developed to be delivered in the mediated mode, there is no specific "before" version that can be used for comparison purposes. Under this circumstance, faculty, student, and administrator surveys/interviews may still yield some useful information (assuming that all groups have some familiarity with classroom instruction generally and may still be able to offer some useful opinions about the comparative learning benefits). In all cases full use should be made of any other recent evaluations of the courses or programs involved in the case study.

Attitude and opinion surveys of both students and faculty involved with the course(s) being evaluated will provide additional information about learning outcomes including the benefits of exposure to the technology as a means of learning about using it.

B. Institutional Renewal indicators are primarily related to specific examples related to the use of the technology. The examples can be augmented with both interviews and opinion surveys.

C. Access effects may be deduced from consideration of the demographic and residence characteristics of students enrolled in the mediated course as compared to the classroom course. Such access effects may be very different for mediated courses offered on campus as compared to those offered at remote sites. Programs that offer some or all of the instruction asynchronously should also have a different effect upon access.

The purpose of this section is to define and provide a rationale for the costs that are to be included in the case study.

Assumptions:

1. Based upon the NLII discussions, the course is taken as the basic unit of analysis for both benefits and costs. (Cost estimates for a course can be extended to obtain estimates for a cluster of courses or for an entire major or degree program.)
   
   
2. Cost estimates based upon the cost of providing a course to a specific number of students using various delivery methods can be converted, as appropriate, to the cost per individual student or per unit of credit (one student enrolled for one unit). Such conversions may allow development of a more general cost model that will allow estimates of costs for other enrollment levels of the course(s).
   
   
3. Costs as discussed here have a normative or policy or planning component and should not be understood to be based solely upon reported after-the-fact expenditures. [After-the-fact expenditures are a very important aspect of cost data but in any particular instance such costs may include several types of random variations that are irrelevant from the perspective of this study, e.g., enrollments may exceed or fall short of planned levels, complications regarding the availability of staff, equipment failures, etc. may also cause reported expenditures to deviate from the plan.] Salaries, for example, should be treated as an average for full-time faculty across a campus or system rather than the actual salary of the individual teaching the course. Unless there are specific reasons to do otherwise, the same salary rates should be used in different circumstances where comparisons are to be made, e.g., the salary of a regular faculty member teaching a classroom course should be assumed to be the same as the salary of a faculty member involved in developing a video course.
   

Direct and Indirect Costs

Costs can be treated as two basic types: direct and indirect. Direct costs are those that vary with the level of a certain activity (e.g., faculty costs that vary with the number of courses offered). Indirect costs may either be fixed (e.g., an administrator's salary) or variable but only remotely related to the level of the instructional activity (e.g., accounting and budget planning activities). The various types of costs are more or less relevant depending upon the purpose.

The purpose here is to make cost comparisons among various modes of instructional delivery. The costs that are relevant are those that are affected by the delivery mode, i.e., that are different depending upon the delivery mode.

For example, certain communications or computer equipment costs are direct costs and are dependent upon the number of mediated courses offered. Student admissions costs are direct costs that are dependent upon the number of individuals that apply for admission, the level of screening necessary, etc. Student admissions costs can be ignored, however, for purposes of making these cost comparisons unless it can be shown that the delivery mode affects the cost of the admissions program. Indirect costs associated with, e.g., institutional management can also be ignored on the same rationale.

Operating (Support) and Capital Budget Items

The support budget pays for the annual ongoing operation of the institution including personnel (faculty, staff, and management) and operating expense (utilities, communications, minor equipment items, leasing costs, license costs, etc.). Because support budget expenditures are made annually, at least some of them can be related directly to the annual flow of student enrollments.

The relevant candidates for mediated instruction/distributed learning direct operating costs include instruction, media, communications, and computing. Operating costs that are indirect, e.g., executive, administrative support staff, can be treated separately (or ignored) unless a connection between the cost and the different delivery modes is established. Direct costs unrelated to the mode of instructional delivery, e.g., admissions, can also be ignored.

The capital outlay budget pays for the institution's permanent facilities including buildings, equipment within buildings, and infrastructure (facilities and equipment outside buildings - conduit, cable vaults, cabling, antenna, etc.). Capital outlay expenditures tend to occur in "chunks" to build facilities or acquire equipment that provides services over a period of several years (depending upon the useful life of the asset).

Because capital costs are the costs of buildings and equipment, once the facility is in place, the cost is apparently fixed. It is not appropriate to treat capital costs as fixed, however. Just as the services of individuals are needed in the instruction process, so too are the services of the buildings and equipment. The cost issue arises because educational institutions acquire capital assets by constructing or purchasing a facility that provides services over a period of several years. The solution can be seen most clearly by considering leasing or renting the services of the facilities on an annual basis instead of purchasing the facility outright. Given the possibility of a lease arrangement, it is clear that the costs of the services of some facilities should be treated as direct, e.g., classrooms, in the exact same manner as the costs of the instructor who teaches the course. Other facility lease costs would be indirect, e.g., the costs of the President's office.

Capital costs may be either direct (classrooms, studios, computer lab equipment) or indirect (administrative offices, air conditioning equipment). For classroom mode, direct costs consist primarily of facilities and some furniture and lab equipment. Mediated mode direct costs, in addition to the facilities listed above, also include a larger component of equipment and communications plant/infrastructure.

In principle, at least, annual estimates of direct capital costs can be imputed based upon initial costs, useful life, and utilization rates. These imputed costs should not be much different than the costs of leasing equivalent facilities. Indirect capital costs can generally be ignored in the same way as indirect support costs. Because imputed capital costs are not immediate out-of-pocket expenditures, they are calculated in a separate category so as to be distinguishable from support costs.

Table 1 illustrates the relation between direct and indirect costs for both operating (support) and capital expenditures. Table 2 continues the illustration by providing more detail on the contents of the direct cost column form Table 1. The X and Y entries in Table 2 are additive in the sense both represent annual costs. The X entries are out-of-pocket expenses, however, the Ys are not. The Z entries represent initial start-up costs as distinct from annual operating costs. The Zs are not additive with Xs and Ys.

	Direct Costs	Indirect Costs (if considered, must be imputed or allocated)
Support Budget Items personnel communications license fees leasing costs (for buildings, equipment and infrastructure)	faculty media professional staff clerical course broadcast or line costs instructional materials instructional equipment, satellite transponder	school and campus admin. admin. clerical admin. communications line costs
Capital Budget Items (purchase of buildings, equipment and infrastructure - costs must be imputed or allocated) buildings equipment infrastructure	classrooms, studios instructional newtwork equip., lab. computers, studio equipment intra- and inter-campus network, satellite uplinks	general administrative space, corp. yard admin. computing, admin. communications

-------------------------Course/Program Related Costs------------------------					Enrollment Related Costs
	Design and Development	Production	Maintenance	Distribution
Support Budget Items Personnel Faculty Prof./Tech staff Stud. Asst. Clerical Communications ("line or connect" costs) Equipment lease License costs Other operating expense	X X X	X X X X X	X X X X X X	X X X X X X	X X X X X
Imputed Costs (based on capital costs, see below) Buildings Equipment Infrastructure		Y Y	Y Y	Y Y Y	Y Y
Capital Budget Items Buildings Equipment Infrastructure	Z Z	Z Z	Z Z	Z Z Z	Z

Notes to Table 2:

Start-up or capital costs are closely related to imputed costs. For classroom mode the capital cost is primarily the cost of the building that contains the classroom (imputed cost is derived from the capital cost by distributing the capital cost over the useful life of the facility and then over some assumed number of users). For mediated instruction capital costs include initial production costs and the cost of facilities and equipment.

Leasing costs are most likely to be related to equipment but facilities are also possible. Lease costs may be an alternative to start-up costs especially for equipment.

Licensing costs are paid to vendors for access to specific courseware they have developed. Licensing costs may be an alternative to initial course production costs and annual course maintenance charges.

The Imputed Values for Direct Fixed Costs Depend upon
Assumptions about "Capacity"

A particular problem arises related to the imputation of direct fixed costs. The fixed cost is, by definition, related to some sort of fixed facility (it could be a studio used to originate live courses, a computerized lab, or the lease cost of a communications line). Conversion of the fixed cost to an estimate of cost per student or per course requires information about the use of the fixed capacity. The case is made here that the appropriate way to calculate these imputed costs is based upon estimated "capacity" of the facility derived from an assumed rate of utilization.

This approach is superior to basing the cost upon the number of courses or the number of students who actually enrolled in the course(s) that used the facility last year because such estimates may result in disproportionately high per course or per student costs in years of unusually low enrollments (e.g., a start-up year). This approach is also superior to basing the cost upon the maximum number of courses or students that could be accommodated in the facility because, for a variety of reasons, such a maximum theoretical number cannot be obtained in practice. The estimated capacity approach also has the advantage of requiring that explicit assumptions about capacity and utilization be incorporated as part of the imputation of direct fixed costs.

The application of the estimated capacity approach can be illustrated using two examples: Example 1 Equipment for a 25 station multimedia computer lab dedicated to a remedial math course costs $125,000 and has a useful life of four years. The annual direct fixed cost is $31,250. Further assume the lab is available 8 AM-10 PM Monday through Thursday, 8 AM-5 PM Friday and 8 AM- Noon Saturday for a total of 70 hours per week. Students are expected, on average, to spend 5 hours per week in the lab. The lab has regularly scheduled classes as well as "open" periods when students can drop in to work on their own or in informal groups. At 100 percent use, each station could accommodate 14 students per term (70/14). Such a utilization rate is unrealistic, however, because some sections enroll less than 25 students and the lab is not always fully occupied during open periods. For present purposes, 9 students per station per term (approximately 64 percent utilization) is deemed full usage. This translates into an imputed equipment cost of approximately $70 per student per term [$69.44=31,250/(25X9X2)]. Example 2 A studio classroom set up to broadcast a live course has total equipment costs of $500,000 (including a share of central control room and infrastructure) with an average estimated average life of 8 years. Per year cost is $62,500. Although the studio is available 70 hours a week (assuming a schedule week similar to that described in example 1, above), due to set-up time and other scheduling considerations, 36 hours of on-the-air programming is deemed full capacity. Thus, the studio could accommodate 12 three hour courses at a per course cost of about $5,200 ($5,208=62,500/12).

Costs for Mediated Instruction

The following list is an attempt to be as inclusive as possible. It is not suggested that any particular mediated course would incur costs in every category. The material of the models draws from the work of A. W. Bates, Technology, Open Learning, and Distance Education (Routledge, 1995) and unpublished work undertaken in the CSU in conjunction with the DELTA cost model project.

There are at least five program or functional cost areas, four related to the course itself and one related to the number of students enrolled.

1. Course development and design costs These relate to determination of the specific course content, the learning outcomes and learning strategies, and assessment techniques.
   
   
2. Course production costs The cost of producing the course materials, the lessons, and all related supporting material as appropriate, e.g., video, computer, and print materials.
   
   note 1: If the course is pre-recorded or pre-packaged for delivery at a later time, the production costs occur before delivery occurs. Live courses also incur production costs including studio costs, but in this case the production costs explicitly include faculty costs and occur as the course is delivered.
   
   note 2: Production costs are associated with courses. For any given level of production values, such costs will vary with the number of instruction hours provided (this is probably best interpreted to include both "lesson" hours and examinations and other evaluation materials and exercises - it does not depend upon the number of times an individual student accesses a particular lesson).
   
   
3. Course maintenance costs (apply especially to courses that are produced for multiple distributions over a period of several years) These costs are related to keeping the materials that comprise the course content current. Such costs can be estimated based upon expected useful life of the course materials, e.g., if useful life is five years, provision should be made so that 20 per cent of the materials would be replaced annually. If the course is produced live, its maintenance is provided by the instructor who updates materials as appropriate.
   
   Note: In situations where access to courseware is obtained by purchasing a license, the license cost represents the sum of items 1, 2, and 3 above.
   
   
4. Course distribution costs including: faculty costs, studio costs, network or broadcasting costs, technical personnel related to studio and transmission, the number of hours materials are being transmitted, and the number of receive sites. Studio, network and broadcasting costs, in particular, will very likely include some imputed capital costs as discussed above.
   
   
5. Enrollment related delivery costs including: materials provided to individual students, e. g., printed materials, cassettes, floppy disks, etc. (if the student pays for the materials, the costs and the reimbursements should be included), faculty or other professional costs related to interaction with individual students regarding the course materials, monitoring, and evaluation (including grade assignments). Depending upon the particular circumstances communications costs (e.g., 800 telephone numbers) could also depend upon enrollments.

Note to Case Study Coordinators - This list has had some field testing within the CSU with more emphasis upon the computer lab component than the video studio component. Please help me to modify the list to best describe your particular situation. fij

The data requested below will serve as the basis for costing the mediated course(s) and the lecture or laboratory versions of the same course (if a comparison is to be made).

How many different courses are involved in the case study?

What is the per term and annual enrollment per course?

Are any of the courses offered in multiple sections?

How many times has the mediated version of the course(s) been offered?

What is the approximate average annual salary for faculty teaching these courses?

If student assistants or graduate assistants are involved, what is the approximate average hourly pay rate for these positions?

If technical personnel are involved, what is the approximate average hourly pay rate for these positions?

Costs for Mediated Instruction

1. How are faculty assigned to the mediated course? The course represents approximately what percent of a faculty member's total activities?
   
   
2. If graduate assistants, student assistants, or other technical personnel are assigned to the course, what is the basis for such assignments? Approximately how many hours are they assigned per course section per week or per term?
   
   
3. Does the mediated course involve a computer lab? If so,
   
   (a) How many student workstations are in the lab?
   
   (b) How will the lab be scheduled? How many hours per week will the lab be available?
   
   (c) What is the assumed size of a course section in the lab?
   
   (d) How many course sections will the lab accommodate during the term? How many students per term?
   
   Mediated lab equipment cost (not including costs of furniture and the room itself on the assumption that students will be using furniture and rooms whether the course is in lecture mode or mediated)
   
   (e) Estimated cost of a workstation? (times number of workstations gives cost of workstations in the lab)
   
   (f) Estimated cost of server(s) and related software?
   
   (g) Estimated useful life of equipment? (Lab equipment costs divided by useful life is the annual imputed equipment cost. This is a fixed cost, once the equipment has been acquired.)
   
   (h) Lab monitoring costs (i.e., student assistants available in the lab) How many hours of student assistant coverage is needed in the lab? E.g., if the lab is open seventy hours per week and one student assistant is present at all times, 70 times the student assistant hourly pay rate is the weekly cost of lab monitors. Thirty times the weekly cost is the academic year cost. (This cost can be varied to some extent depending upon total term enrollment, e.g., a campus on a year-round operation calendar might decide to operate the lab half-time, approximately 35 hours per week in the summer if course enrollment is about half the level it is during the academic year. A lab could also be operated half-time during one or more terms of the academic year.)
   
   (j) Other lab costs Please specify.
   E.g., (a) technical support to maintain software or (b) special administrative support - do not include administrative support that is necessary no matter how the course would be offered.
   
   
4. Does the mediated course involve a studio and video transmission? If so,
   
   (a) Live one way or two way video?
   
   (b) Other, please describe.
   
   (c) In addition to the faculty member(s) involved, how is the studio staffed?
   
   (d) How is the transmission, monitoring, maintenance, and appropriate switching of the signal staffed?
   
   (e) What is the approximate cost and useful life of the studio equipment?
   
   (f) Estimates of the main control room and on-site broadcast equipment costs and its useful life (if appropriate and available).
   
   (g) Estimates of the per hour transmission and feed costs (if appropriate).
   
   (h) Other costs related to this specific video application (please identify).
   
   
5. Are there revenues from identified student fees or the sale of course related materials that are available to defray the costs of the course? (If materials are sold through a campus bookstore, this would be the net revenue available to the department.)
   
   
6. Other costs (please identify).

Costs for Regular Classroom Instruction

Depending upon the specific case study, comparisons of the costs of delivering the instruction by classroom (lecture or lab) mode and mediated mode may be appropriate.

Direct costs for lecture mode depend upon faculty salary costs, faculty workload, class size, and lecture facility cost. Direct costs for laboratory mode depend upon faculty salary cost, faculty workload, class size, and class laboratory facility cost

1. Are these courses offered primarily in lecture/discussion format? Are other formats used?
   
   
2. How are the courses scheduled?
   
   
3. How many enroll annually?
   
   
4. What is the enrollment per course section?
   
   
5. Is the course taught by full-time faculty? If so,
   
   (a) A course section constitutes what percent of a full-time faculty workload per term?
   
   
6. Is the course taught by part-time faculty? If so,
   
   (a) What is the approximate pay rate per course unit for part-time faculty?
   
   
7. Are students assistants or graduate assistants used in the course? If so, approximately how many hours are scheduled per course section?
   
   
8. Other costs, please identify.