Calculate the cost of online degrees

Choosing between online and on-campus education and then selecting a specific program can be tricky if you don’t first determine all of the costs.

Many prospective students only consider tuition and fees, what are usually referred to as “direct costs,” or those that college will bill directly to you. But they usually overlook the hidden costs of getting an education – like having to give up a job or moving elsewhere. These are “opportunity costs,” and they can be a major factor when deciding between an online and traditional degree or certificate.

[Learn more about paying for online education.]

Opportunity costs include whatever a student gives up to pursue a degree. If you enroll in an on-campus program, you may have to pass up a promotion or cut down your work hours. Thus, the opportunity costs of a full-time traditional program, especially one requiring you to relocate, can be quite significant – larger than just tuition and fees.

Let’s say you quit a job paying $35,000 a year to pursue a traditional bachelor’s degree at $10,000 in tuition and fees a year. Usually, we would only talk about those direct costs, but a more accurate estimate would include the opportunity cost of lost income. If we assume living costs are going to be the same whether you enroll or not, that means a more accurate cost to you is:

• Tuition and fees: $10,000 per year
• Lost income: $35,000 per year
• Total: $45,000 per year

So, if you take two years to complete your degree – assuming you have about two years of transfer credit – then the total cost of the degree would be $90,000 in real and opportunity costs compared with just the $20,000 in total tuition and fees. That’s a big difference, and to some, it’s simply impossible to undertake.

Beyond lost income, opportunity costs can include time with family, quality of life, moving closer to campus, a lack of flexibility and mobility, and time devoted to commuting. While these may be hard to quantify, they do affect your satisfaction and even your willingness to earn a certificate or degree that could help boost your resume. These intangibles can be a deal-breaker for many students to complete a degree.


A significant benefit of online education is that opportunity costs can often be reduced or eliminated. Students may not have to give up a good career or lose significant time with family due to the flexibility of online education. There’s no moving required for most online degree programs.

Staying at a job may also keep you eligible for employer-based tuition reimbursement programs. You’ll also take out fewer loans, which also means less accumulated interest that you have to pay, making the online option even less expensive.

Online education may actually provide immediate benefits to your career. What you learn in class can be instantly applied to your job. That project for a management course could be the basis of a report for work, which could then set you up for a promotion. Several of my students work on projects tied directly to their jobs, turning them into a direct positive opportunity for their current career.

Don’t get me wrong, committing to an online program will require you to make time for your studies, even if that means taking time off from work or choosing between class and family. But the opportunity costs for an online degree can be significantly lower than one earned on campus.

The takeaway: Prospective online students should include opportunity costs when calculating the true cost of an online degree to understand how much money they really save.