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Impact on Cost Savings

University of Southern Maine

Were costs reduced as planned?

Although the substance of USM’s redesign plan was successfully implemented, a significant aspect of the cost savings plan was not. Despite the fact that the faculty believed they could easily accommodate the planned 125 students, the administration failed to reduce the number of sections offered. In the traditional model, section size averaged about 75 students. In 2000–2001, about 100 seats per section were made available. That number increased to about 115 seats per section in 2001–2002. However, because the number of sections offered was never decreased, the final average section size was 83, and the cost-per-student was not reduced as much as expected. The cost-per-student declined from $113 in the traditional format to $88 in the redesign, a 22% savings.

A new, completely asynchronous section of the redesigned course was offered using a combination of videotapes and Web-based materials. It produced a larger-than-expected enrollment: more than 130 students have been involved in the course to date. Calculating the actual revenue increase attributable to this course is difficult; students taking the course this way may have taken the course on campus if the asynchronous format had not been offered. Costs associated with this course are considerably less than those associated with other courses. Specifically, the instructor is paid $3,500 per semester, and administrative costs are approximately $1,000 per semester. Tuition is $354 per student, resulting in revenues of $46,000. Less costs, this has resulted in a net gain to the institution of approximately $28,000 since the creation of the course.

Because the anticipated reduction in the number of sections of Introductory Psychology did not occur, USM was unable to realize the expected increase in the number of upper-level psychology courses.

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