When is an online degree worth it?

Distance education is booming, bolstered by the pandemic and the global trend towards skill- and competency-based learning. Online degrees are also increasingly seen as a valuable investment: in 2017, 71% of students in online programs agreed or strongly agreed that their online education was worth the cost; in 2022, that number jumped to 87%.

For obvious reasons, online degrees are popular among students looking for flexible learning options, particularly:

• people over 30
• part-time students
• non-first-time students
• first-generation students

For these “non-traditional” students, online colleges provide a similar return on investment (ROI) as campus programs that attract those same demographics (what we call non-traditional colleges). But not all online degrees are worth your money.

As an emerging market, online colleges are more of a gamble than traditional higher education. This makes it even more important to look into the ROI and other performance indicators of the specific online school you are interested in.

Online vs campus degrees: a straight comparison

We analyzed the 69 degree-granting online colleges in our database that receive Title IV funds and are 100% remote. We compared these to the 1,554 on-campus colleges that meet the same criteria, excluding community colleges and special-focus schools.

As a recent high school graduate planning on studying full time, you’re probably better off going to a traditional on-campus school, especially a public university or college.

Though online degrees are, on average, $7,316 cheaper and have a slightly faster completion time (4.3 versus 4.5 years), their graduates see lower earnings compared to those who studied on-campus. It also takes an online student 4.6 years to see a return on their investment in college, compared to 4.2 years for campus graduates. Course offerings tend to be more limited at online schools, and online colleges notoriously struggle with graduation rates – about 46% of online students graduate, compared to 59% at traditional colleges.

Campus vs online excluding for-profit schools

One factor skewing the ROI of online degrees is the large proportion of for-profit schools. While there are some exceptional online for-profits (like Columbia Southern and Capella), many have poor economic outcomes.

When looking only at non-profit private and public schools, online colleges do better than their on-campus counterparts. Their impressive ROI is due to a much lower cost – these online schools are, on average, $31,574 cheaper than on-campus colleges.

Are online colleges better for non-traditional students?

If you’re deciding between an online education and a flexible on-campus experience at a non-traditional college, you may want to favor the online route.

Narrowing our comparison to online colleges and on-campus schools that attract non-traditional students, we find online schools are:

• a lot better for part-time students
• better for older students
• somewhat better for those seeking open admissions
• not as good for first-generation students
• somewhat worse for returning students

Part-time students

Part-time students are those taking fewer than 4 classes per semester. At online colleges, 48% of students are part-time, compared to just 13% at traditional colleges.

As a part-time student, you are likely better off doing a degree online than at a non-traditional in-person campus.

When we compare online colleges to campuses with more than 30% part-timers, online schools come out on top, with $3,845 higher graduate earnings and a significantly better economic score. Online schools are also 33% cheaper.

Students over 30

Age is one of the key factors distinguishing online and on campus students. The average online student is 31, while the average on-campus student is 22, though 139 on-campus colleges in our data set have an average age of 30.

For students aged 30 and above, online colleges are a better choice than campuses with an older student population. Along with paying an average of $8,447 less for their degree, online students go on to earn 13% more. However, students are somewhat more likely to graduate from a campus program (these schools have a 52% graduation rate compared to 46% at online schools).

Students looking for open admissions

Open admissions/open enrollment colleges accept all applicants who meet minimal admission requirements (usually a high school diploma or GED). While 72% of online colleges offer open enrollment, just 10% of traditional colleges do.

Overall, online colleges are better than open admissions in-person schools for all types of students, including traditionally aged, full-time students.

Compared to open admissions campuses, students from online schools earn 14% more 3 years after graduation. Although they pay slightly more for their education, they see a faster return on investment.

» Read: Are selective colleges better?

First-generation students

First-generation students are those whose parents or primary caregivers did not complete a 4-year degree. While 32% of students at traditional colleges are first generation, 48% of online students are.

First-generation students can expect similar ROI from online schools and on-campus colleges with over 40% first-generation students. However, they may be slightly more likely to graduate from online programs, which have a 46% overall graduation rate, compared to just 38% at these nontraditional campuses. Given that first-generation students are, in general, about 16% less likely to graduate, this may be an important consideration.

Returning students

Returning or non-first-time students are those who’ve gone back to college after at least a year away. Most online students (71%) fall into this category, while about half as many (36%) on-campus students do.

Campuses with more than 50% returning students do slightly better than online schools according to our economic score. However, this category captures students who may have just taken a brief break from college as well as those who’ve been away for many years (the average age at these schools is 25). As a returning student who is also over 30 and looking for part-time programs, online schools may still be the better choice. On the other hand, if you’ve just taken a year or two off school and plan on going back full time, an on-campus program is likely a safer bet.

Online colleges and low-income students

Although online colleges attract slightly more Pell Grant students (41% versus 37%), low-income students will likely see more success studying on campus, as long as they avoid open admissions and for-profit colleges.

We determine how well schools serve low-income student using our economic mobility score (EMS), which takes into account both how many low-income students a school has and those students’ economic outcomes. Unlike our economic score, a higher EMS is better.

Reasons why low-income students may wish to avoid online schools include:

• Only open admissions and for-profit campuses have a worse economic mobility score than online colleges.
• The graduation rate for Pell students at online schools is quite low, at 40% (compared to 54% on campus).
• Students receive an average Pell tuition discount of just $8,550 at online schools, compared to $20,529 on campus. (see our list of the best online schools that accept FAFSA).
• Low-income students may have limited enrollment options at FAFSA-eligible online institutions – for example, Columbia Southern’s LifePace enrollment, which is open 365 days a year, is not available to students receiving federal student aid.

What are the best degrees to get online?

The majority of online college students opt for business or computing/IT programs, which account for 50% of all online degrees conferred. Health, nursing, and medicine programs follow in third place, while social sciences, criminal justice, and counseling programs are the least favored options for online students.

We examined popular online programs that are 100% virtual, available at both fully online institutions – the schools examined so far in this article – and colleges that offer a combination of online and on-campus programs.

On-campus vs online business administration degree

Students completing a bachelor’s degree in business online have almost identical economic outcomes as on-campus students. You’ll also probably have a lot of choice – with 45% of B.B.A. and B.S.B.A. programs available in either online or hybrid format.

Computer science degree online vs on campus

Of all computer/IT online programs, computer science graduates have the highest earnings, but just 19 out of 306 computer science programs are available in either online or hybrid format. Conversely, 25% of computer and information sciences programs are online/hybrid, but graduates have lower earnings, at $65,377.

Online computer science students have impressive earnings, but do not fare as well as on-campus students, who earn, on average, 17% more.

Nursing degree online vs on campus

Due to healthcare personnel shortages and the impact of the pandemic, numerous nursing programs transitioned to hybrid or fully online formats, with 52% of BSN programs now available with some distance elements.

Students from campus and online nursing programs can expect similar ROI but note that programs with clinical requirements outsource their rotations to teaching hospitals. When opting for an online BSN program, you should take into account that you may be required to arrange your own rotations, supervisors, and proctors.

What about earning a master’s degree online?

Computers & IT is the most popular field of study at the graduate level for online college students, with business being a close second.

Master’s in computer science online vs on campus

Nearly 40% of master’s programs in computer science are offered in hybrid or online formats, with the top fully online program coming in 7th overall. Graduates of online or hybrid computer science programs have slightly better economic outcomes compared to their on-campus counterparts.

MBA online vs on campus

MBAs are the pioneers of online degrees. Aspen University in Denver was the first institution to offer a digitally delivered degree (on CD-ROM) with the launch of their remote MBA way back in 1987. Today, on-campus and online programs and neck and neck in terms of student outcomes, and 70% of MBAs are available in online/hybrid format. The top online program (UPenn) is tied with the top on-campus MBA (Dartmouth College) in terms of ROI.

Final thoughts

Distance education has come a long way since the days of correspondence courses over snail mail. But as part of an emerging higher education landscape, online colleges have had less opportunity to prove their worth, and fewer than half of all Americans consider online education as being on par with in-person instruction in terms of quality.

At Degreechoices, we evaluate educational “quality” by looking at graduates’ economic outcomes. High-ranking online degrees are a sound economic choice for nontraditional students who need flexible learning options – and in most cases, a better choice than campuses that offer that kind of flexibility. They are particularly suitable for business, IT, and certain healthcare degrees. However, for younger students who plan on studying full time, traditional in-person colleges remain the safest bet.