Advertiser Disclosure
Advertiser Disclosure: The credit card and banking offers that appear on this site are from credit card companies and banks from which receives compensation. This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. does not include all banks, credit card companies or all available credit card offers, although best efforts are made to include a comprehensive list of offers regardless of compensation. Advertiser partners include American Express, Chase, U.S. Bank, and Barclaycard, among others.

Are Online Degrees Worth It? – Cost, Perception & Downsides

In the fall of 2017, the most recent semester for which statistics are available, 15.7% of all U.S. higher education students (about 3.1 million) were enrolled in institutions that exclusively offer distance education courses, according to data from the National Center for Education Statistics. More than one-third were enrolled in institutions that offer a mix of distance education and in-person instruction.

These days, distance education is synonymous with online education. Institutions that exclusively offer online education are popularly known as online universities, and their degree programs are known as online degree programs.

But the higher education industry isn’t cleaved by some stark digital divide. Many colleges and universities, including prestigious private institutions like Harvard and Yale, offer a hybrid model that mixes classroom and online instruction. Selective traditional institutions — the aforementioned Ivy League schools and many private four-year colleges and universities — continue to emphasize classroom-based learning over online degree programs. But some universities with physical campuses have gone all-in on digital degrees. Southern New Hampshire University enrolls about 20 distance learning students for every student that studies on its campus in suburban Manchester.

Millions of campus-based or commuter students now enroll in some combination of classroom-based and online-first classes. Indeed, the abrupt, pandemic-induced shift to distance learning at traditional colleges and universities is likely one of the many long-lasting changes precipitated by the pandemic. Therefore, it makes more sense to define true “online degree programs” as those that do not require students to set foot inside a classroom or lab at any point.

Online degrees offer some clear advantages, including enhanced flexibility for students with full-time jobs or kids (or both) and lower average costs (especially compared to four-year residential programs) that can help enrollees avoid overwhelming student loan debt.

On the other hand, while most employers acknowledge the growing prevalence of online-only degrees and won’t reflexively shut the door on applicants with digital credentials, employer acceptance of online-only degrees is far from total. Students hoping for the greatest possible choice of employment opportunities might prefer traditional education if it’s at all workable.

Deciding whether to pursue an online-only degree or stick with the traditional higher education model is a big choice with significant implications for your career, finances, and lifestyle. What follows is an unbiased look at the benefits and drawbacks of choosing the online-only route.

Pros of Pursuing an Online Degree

Pursuing an online degree has loads of potential advantages: the likelihood (if not the guarantee) of lower cost, more flexibility, less travel time, and the possibility of access to vast alumni networks.

1. It Could Be Less Expensive Than a Residential Alternative

At degree-granting institutions that offer distinct online and on-campus degree tracks, the average online degree program is actually marginally more expensive than its on-campus equivalent, according to data compiled by U.S. News & World Report. Despite the theoretical scalability of online degree programs — they’re not limited by classroom space, for example — they carry unique costs that on-campus programs avoid.

However, the typical online degree program at a major mostly- or only-online institution like Southern New Hampshire or the University of Phoenix is significantly less expensive than the typical on-campus degree program at selective residential institutions. If you’re not overly concerned with the name on your degree, you’re more likely (though far from guaranteed) to avoid crippling student loan debt by forgoing the residential experience in favor of an online program.

2. It Could Be Easier to Accomplish While Working Full-Time or Raising Kids (or Both)

Though classroom participation and other quantifiable measures of student engagement can sometimes factor into grading or post-course evaluations, traditional degree programs generally don’t mandate in-person attendance, with notable exceptions for exams and lab work. For example, lectures are likelier than not to be recorded and available online for viewing at students’ leisure.

Still, traditional degree programs do place demands on students’ time, especially those heavy on lab work or small-team projects that require close collaboration. Traditional degree programs, or at least individual instructors, are also more likely to hew to traditional expectations of in-person lecture attendance, even when not compulsory.

3. Many Online Degree Programs Are Reputable (Even Prestigious)

Though program quality varies wildly and some online degree programs are sorely lacking, stubborn public perceptions of online-only degree programs as uniformly second-rate are outmoded. Many selective public and private institutions with decades-long or centuries-long records of excellence now offer online degree programs that meet the same standards of instruction and rigor as their traditional, campus-based offerings. Their number includes well-regarded public research universities like Pennsylvania State University (through its World Campus division) and the University of Washington, private STEM (science, technology, engineering, and math) schools like the Rochester Institute of Technology, and private liberal arts colleges like Simpson College.

4. You Don’t Have to Leave Your House

Studying from home is an inherent advantage for homebodies and introverts, but it’s also a financial boon for students who’d otherwise face long commutes to campus. The benefit inures to those on the other side of the trade too. When his campus transitioned to distance learning amid the COVID-19 pandemic, a California-based community college professor friend of mine positively rejoiced at the prospect of ditching — perhaps permanently — his 90-minute commute across San Francisco Bay.

5. Larger Online Degree Programs & Institutions Have Vast Alumni Networks

Vast alumni networks are an equal boon for online graduates of fully or mostly online institutions, such as Southern New Hampshire and the University of Phoenix, and of larger institutions that rely more heavily on physical campus networks, such as Arizona State University and Penn State. With access to a massive alumni network, you’re far more likely to make connections that result in lucrative job offers or contracts.

6. Your Employer Might Not Realize You Got Your Degree Online

Because so many traditional institutions now offer online-only degrees that aren’t readily distinguishable from their on-campus equivalents, it’s far from certain your employer will learn how you got your degree — assuming they don’t ask. In practice, employers that care to do so can figure out the provenance of an applicant’s degree, often with a cursory overview of their resume or curriculum vitae. A lifelong Californian with a Southern New Hampshire University degree probably didn’t attend classes in person, for example.

7. It Could Earn You Respect for Your Time Management Skills & Focus

The ability to juggle the demands of a distance learning degree and your myriad other obligations is a sign of superior time management skills and task orientation. It’s no secret employers prize candidates with these skills.

Keyboard Cap Button Key Graduation Online

Cons of Pursuing an Online Degree

Pursuing an online degree isn’t right for everyone, including those seeking extremely high-quality or individualized instruction, those seeking employment in industries or with specific employers that remain resistant to credentials earned through distance learning, and those more likely to thrive in collaborative environments.

1. Some Employers Remain Resistant to Online Degrees

Over two decades after the Internet brought distance learning to the masses, a 2019 study published in the Journal of Employment Counseling by two scholars from Texas A&M University Corpus Christi found that many employers remain skeptical of online degrees. The study’s key finding: “A perception of lesser value for online degrees may lead employers to discount educational background based upon delivery mode,” with the effect “considerably more pronounced for employers making new hire decisions than for those making promotion decisions.”

In other words, while your future employer might not know you got your degree through an online-only program, they might care if and when they find out.

2. Some Employers Are Justifiably Skeptical of For-Profit Degree Programs

For-profit higher education institutions in general tend to be viewed less favorably by employers. Their skepticism is justified, according to a 2017 Brookings report that found far higher student loan default rates among for-profit college graduates (and particularly among for-profit college graduates of color). The causes of this crisis are complex, but predatory admissions and financial aid practices and questionable quality of instruction certainly contribute.

That’s a problem for students inclined to pursue their degrees online. Online-only institutions are much more likely than traditional and hybrid institutions to be for-profit. As of 2017, more than half meet that definition, according to the National Center for Education Statistics. Graduates of for-profit online-only programs frequently find themselves stuck in a vicious cycle: struggling to find work commensurate with their credentials, then struggling to pay off predatory student loans backed by institutions that don’t really care about their success.

3. Unaccredited Programs Offer Little Value

While the prospective student should not overestimate the risks associated with borrowing to cover the cost of a for-profit degree program or decline to pursue a postsecondary credential due solely to concern over the future possibility of default, they should absolutely be clear-eyed about the financial risks of a degree that doesn’t serve them well. The Brookings study found that nearly half (46.5%) of students graduating from for-profit institutions in 2004 subsequently defaulted on their loans.

This sky-high default rate is partially attributable to the fact that some for-profit institutions are unaccredited “diploma mills” that offer only the thinnest pretense of quality education. They exist to confer degrees for the sake of conferring degrees — degrees worth little more than the paper they’re printed on.

Many employers simply won’t consider job applicants wielding degrees from unaccredited institutions. Before enrolling in any online degree program, for-profit or otherwise, confirm that it’s accredited by a reputable organization vetted by the U.S. Department of Education.

4. Online Degree-Seekers Drop Out at Higher Rates Than Campus-Bound Counterparts

Precise dropout rate statistics for online-only learners are difficult to come by. According to a 2017 monograph by two Brigham Young University scholars, online degree-seekers drop out anywhere from 10% to 700% more frequently than their campus-bound counterparts. Still, even assuming a true dropout rate toward the lower end of that range, the consensus seems to be that online learners are more likely to drop out than those who live on or commute to campus.

That has obvious implications for online learners’ career paths and debt loads, as college students who borrow to finance their education and subsequently don’t graduate are much likelier to default on their loans than those that find and keep well-compensated employment after graduation.

5. It Could Call Your Teamwork Skills Into Question

Internal motivation is a must for successful online degree program participants. If you’re not motivated to find time every day to do the work asked of you without external motivation from peers or instructors, you’re probably not going to make it to graduation.

On the other hand, online degree programs are often designed with solitary learners in mind. That means fewer group projects, team exercises, and real-world learning opportunities like internships and externships. If you plan to pursue a career or role that requires close collaboration with others, this could be a weak spot in your CV.

Final Word

With tuition increases outpacing the inflation rate and student debt loads less sustainable by the year, every would-be degree program applicant should at least consider whether it’s worth applying to college at all. A surprising number of high-paying jobs don’t require a college degree. Others require little or no work experience. Forgoing college is not a death sentence for your career.

On the other hand, completing a two- or four-year degree program, to say nothing of postgraduate or doctoral work, is very likely to increase your lifetime income potential. If you’re concerned about the cost or inflexibility of a traditional two- or four-year degree program but can’t see a path to achieving your career dreams without a postsecondary degree of some kind, an online program could be in your future — even if it’s only an accredited two-year program that prepares you to finish a four-year (or longer) degree at a more traditional institution. Just be sure to vet each candidate carefully and avoid unfavorable financing arrangements that could do more harm than good.

Are you considering an online degree program? What’s holding you back, if anything?

Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

31 Ways to Reduce or Avoid Overwhelming College Student Loan Debt

Roughly 7 in 10 college students graduate with student loan debt averaging around $30,000. If you want to dodge that bullet, follow these education strategies before you enroll, during your college years, and after earning your college degree to reduce or avoid student loan debt entirely.

Read Now