Curriculum
Calculating the ROI on virtual schooling
6/25/2009 By:
When calculating the Return
on Investment (ROI) for VHS schools it is important to consider more than just
training costs. Also to be considered is the cost to schools to relieve the
teacher from teaching one period per day.
The National Education
Association (2008) reported that in 2007 – 2008 a teacher’s average salary in
the United States was $52,308. In a typical high school, teachers are expected
to teach 5 periods a day. This equates in a cost per course in terms of teacher
salary of $10,461.60 per year, or $5,230.80 per semester.
Table 1 shows the total
start-up costs for both a standard membership for a large urban school or
suburban school and a small school membership for a small rural school for year
one.
|
Costs – First
year of Implementation
|
Standard Membership
|
Small School Membership
|
|
Tuition to train teacher
(first year only)
|
$3,500.00
|
$3,500.00
|
|
Tuition to train site
coordinator (first year only)
|
$1,500.00
|
$1,500.00
|
|
Annual Membership (1/2 year
membership)
|
$3,250.00
|
$2,375.00
|
|
Average cost per course per
semester to free up a teacher (based on average teacher salary)
|
$5,230.80
|
$5,230.80
|
|
Total Costs
|
$13,480.80
|
$12,605.80
|
Table 1 – Total start-up
costs to schools: Year One
In addition to being able to
offer over 225 courses to students, schools also benefit by being relieved from
the expense of teaching these students one period per day.
The average student
expenditure in the United States for 2007 – 2008 was $9,963 (National Education
Association, 2008). A typical high school student takes five classes per day.
This equates to $1,992.60 per student per class per year or $996.30 per
semester. A school district is entitled to 25 seats as a result of its
membership for the standard membership or 15 seats for a small school member.
Table 2 shows the total
tangible school system student benefits from enrolling in VHS.
|
Benefits –
First year of Implementation
|
Standard Membership
(25 x $996.30)
|
Small School Membership
(15 x $996.30)
|
|
Educational savings having
students taught online
|
$24,907.50
|
$14,944.50
|
|
Total Benefit
|
$24,907.50
|
$14,944.50
|
Table 2 – Total Benefit: Year
One
To calculate the return on
investment, the benefit of an investment is divided by the cost of the
investment. The results are then expressed as a ratio or a percentage.
Return on Investment Calculation (based on 2007 – 08
figures)
Year 1 – Standard Membership:
$24,907.50 - $13,480.80
$13,480.80
=
.848(100%) = 84.8%
Return on Investment Calculation (based on 2007 – 08
figures)
Year 1 – Small School Membership
$14,944.00 - $12,605.80
$12,605.80
=
.185(100%) = 18.5%
For years two and beyond, the
cost to provide online experiences through Virtual High School is reduced by
the teacher and site coordinator training fees.
Table 3 provides the total cost
data for Year 2 and beyond.
|
Costs – Year
2 and beyond
|
Standard Membership
|
Small School Membership
|
|
Annual Membership
|
$6,500.00
|
$4,750.00
|
|
Average cost per course per
semester to free up a teacher (based on average teacher salary)
|
$10,461.60
|
$10,461.60
|
|
Total Costs
|
$16,961.60
|
$15,211.00
|
Table 3 – Total costs: Years
2 and beyond
Once the first year of
training is complete, schools enroll students in VHS classes for the entire
year.
Table 4 lists the benefits
for years 2 and beyond.
|
Benefits – Years
2 and Beyond
|
Standard Membership
(25 x $1,992.60)
|
Small School Membership
(15 x $1,992.60)
|
|
Educational savings having
students taught online
|
$49,815.00
|
$29,889.00
|
|
Total Benefit
|
$49,815.00
|
$29,889.00
|
Table 2 – Total Benefit: Years
2 and beyond
Return on Investment Calculation (based on 2007 – 08
figures)
Years 2 and beyond – Standard Membership:
$49,815.00 - $16,961.60
$16,961.60
(100)
=
193.7%
Return on Investment Calculation (based on 2007 – 08
figures)
Years 2 and beyond – Small School Membership
$29,889.00 - $15,211.00
$15,211.00
=
.965(100%) = 96.5%
Courtesy of the Virtual High School Global Consortium