How Money Rated the Best Colleges for Online Bachelor’s Degree Programs

More colleges are developing online degrees in an effort to reach new populations of students. While these virtual programs can be less expensive than traditional, in-person degrees, they are by no means cheap. A four-year degree earned online will still cost tens of thousands of dollars — and outcomes for students still vary dramatically from one school to another.

To help prospective students make an informed decision about where to enroll, Money partnered with College Factual to create our inaugural ranking of online bachelor’s degree programs. We weighed affordability alongside quality metrics including graduation rates and employment outcomes to highlight the best-value colleges. Here's a breakdown of the process.

Table of contents:

• Ranking methodology overview
• General methodology notes
• Quality score factors

Ranking methodology overview

We started our analysis with a list of all schools in the United States offering an undergraduate bachelor's degree program as reported in the federal government’s Integrated Postsecondary Education Data System (IPEDS).

From there, we filtered the list to include only the following:

• Must be a public or private, not-for-profit school (for-profit schools excluded).
• Must be a regionally accredited school.
• Must have at least 500 students in undergraduate programs who are enrolled exclusively online.
• Must offer at least 20% of their programs at least partially online.
• Must have sufficient, reliable data to generate a score in key factors.

Ranking factors summary

We defined a good value as a program where you will receive a quality education for a low cost, relative to what you are getting. Broadly, that means our ratings look at the quality of a program against its affordability.

Quality score

For our assessment of the quality of a program, we grouped our data into seven high-level categories. These category scores were then combined to calculate an overall quality score.

The following table lists the categories, their relative importance to the overall ranking and the question they aimed to answer. (You can find more details on these in the in-depth methodology below.)

Affordability score

In an effort to highlight where your money will go farthest, our rankings seek to identify quality programs that cost less than their similar quality peers. We calculated the cost of attending the school, including tuition and fees, books and supplies, and any other miscellaneous costs the school reports.

For tuition and fees, we used the out-of-state tuition figure reported by the school since online degree students could be enrolling from anywhere. This means for public institutions on our list, in-state students may see even more return on their investment, since their costs are likely to be lower.

We did not include room and board costs reported by the school. Any costs a student might pay for such living expenses will be entirely dependent on where they choose to live while taking online classes and not a relevant metric to assess the school by.

These costs were then totaled and scored based on their affordability.

Value score

Since value is a mix of quality and affordability, we multiplied those scores to create a new value score. We put double the weight on quality to ensure quality schools are favored over simply inexpensive ones.

As an added precaution, we also excluded colleges that landed in the bottom 25% on the quality score. A low quality school is not a value at any price.

The colleges were then grouped into half-star ratings from 0 to 5 to form the star rating you see. Our final lists feature all schools with a 3 or higher, indicating that they are among the best values.

General methodology notes

Factor scoring

Every factor is scored by converting the raw data into a normalized number on a scale of 0 to 1. This allows us to compare data in different forms, like dollars and percentages, on a single scale.

To transform a score into a star indicator, we use k-means clustering to group the scores into half star increments from 0 to 5.

Program-level data

When possible we considered program-specific measures that are reported by either IPEDS or the Department of Education’s College Scorecard, arranged by CIP code. This Classification of Instructional Programs is organized in a three-level hierarchy to categorize educational programs (i.e. majors and broad groupings of related majors) at a school.

For every college, each program for which we have data is compared to all other colleges’ data for that same major and then scored. This allows for a more apples-to-apples comparison of colleges and helps minimize unfair comparisons between schools that may offer significantly different academic programs.

A weighted average of these scores is then used for each school based on the number of completions that program has at the school in the most recently reported year.

Only programs that had completions and that offered at least partially online were considered.

Multi-cohort averages by year

Much of our data, including student loan default rates, debt repayment rates and typical earnings, is reported for multiple cohorts of students in a single year’s data release. In these cases we leveraged all the years’ worth of data and created a weighted average of the combined cohorts as our final measure. This creates a robust measure that is not subject to fluctuations by individual year.

To do this we first calculated a normalized score for each cohort so we can assess how each school did relative to other schools for that cohort. We then took a weighted average of those scores. This has the benefit of isolating each school’s relative performance within a given year so external events (ie. COVID-19) don’t have an outsized impact across years.

Broader school- and program-related factors

For each of our quality factors, we look first to any program-specific data we have and give that the most weight as that offers the fairest comparison between schools.

We do also look at performance for the school as a whole across all majors as this data is more readily available and offers a broad picture of the institution as a whole. These school-wide factors are typically given a lower weight relative to the other major-specific factors.

Missing data

Each of the seven high-level factors in the quality score generally has several sub-factors that go into it, each with its own weighting.

When it comes to calculating the individual data points that go into the high-level factors, we only score data we have. If a school is missing data, then we effectively ignore that piece when calculating the score for the related high-level factor. If a school were to be missing all of the sub-factors for a particular high-level score, it would score zero for that factor, which would hurt its rankings.

We make an exception for certain critical scores — specifically: the wage, employment, graduation and debt score — that make up the most significant portions of the ranking. If we do have enough data to get a score in those sections, we exclude the school from the ranking.

Data limitations

Aside from missing data, one significant limitation to our analysis is the lack of available college-level data about outcomes for online students.

While there are colleges whose student body is enrolled entirely or predominantly online, there are also many high-quality online programs offered by colleges that enroll a mix of online and in-person students. Unfortunately, at institutions that offer both in-person and online degrees, the government does not separate data between the two. For our purposes, that means the data we use, like graduation rates and earnings, measure all enrolled students, not just online students.

We addressed this by setting cutoffs for the number of students enrolled exclusively online and the number of programs offered online in an attempt to ensure that online students would represent at least a significant minority at the colleges included in our list. That said, we recognize this is not a perfect solution.

For prospective students, we suggest paying attention to the share of students who are enrolled online when reviewing colleges. If a college’s enrollment is predominantly online, then the data will be more representative of online students. For colleges with a small online enrollment relative to their overall size, you should ask schools you’re considering for more specific details about how online students fare.

Quality score factors in detail

Each of the seven high-level factor scores previously noted are themselves a combination of multiple data points, which we cover in more detail below. Educational quality is difficult to measure on a large scale, as even nationally used entrance exams measure where a student begins, not what they learn while enrolled. Plus, they are often not available for online-focused schools that don’t have physical limits on the number of students they can admit. While they are imperfect, we feel the factors below are the best available data to get an idea of a program’s quality.

We’ve noted the importance of each broad section in parentheses below, based on the relative weight that factor carries in our scoring.

Graduation score (8x)

Most students are seeking a degree when they decide to enroll in school. Unfortunately, many students do not achieve that goal, and when you don’t graduate, it’s hard to get the earnings boost that a degree often brings.

Many online-degree seekers are non-traditional students that don’t fit the mold of first-time, full-time students, so we include measures for several additional cohorts here as well.

For each measure, we typically have numbers that represent the percentage of students that finish their bachelor's degree “on-time”, which typically means 4-years, as well as those that take longer to finish. We give higher importance to those who finish on-time as any additional semesters enrolled typically means higher costs and lower earnings due to delays entering the job market.

Retention rate

This measures the percentage of students who return after their first year.

Graduation rates within 6 years

IPEDS reports the percentage of bachelor’s degree students who have finished their degree within 4, 5, and 6 years of starting. These factors therefore measure the cohort of students that began 6 years prior to the reporting date of the data and thus represents a more recent cohort of students.

Graduation rates within 8 years

IPEDS also reports on the percentage of bachelor’s degree students who have finished their degree within 100%, 150% and 200% of the expected time to a degree. These factors therefore measure the cohort of students that began 8 years prior to the reporting date of the data.

Outcome measures

The above graduation rates focus on first-time, full-time degree-seeking bachelor’s degree students. The factors below allow us to see part-time and/or non-first-time student cohorts (aka students who enrolled after earning college credits elsewhere). These types of non-traditional students are common among those considering an online degree and are thus important to consider.

The table below represents the different graduation percentages that are used and which cohort of students they represent. Together they offer a comprehensive view of the student body at the school for undergraduate degree-seeking students.

Employment score (8x)

With our employment score, we seek to get an estimate of your likelihood of getting a job after graduation. We used the Department of Education’s College Scorecard data for this.

The employment rate is calculated using two figures: the number of graduates reported to be working and not enrolled, and the number of graduates reported to be not working, nor enrolled elsewhere.

The employment score is calculated using Scorecard data that is reported by field of study, including only those numbers reported for bachelor’s degrees. Each field of study with sufficient data is then combined into a weighted average score based on the number of students included in each field of study’s cohort.

Earnings score (8x)

Our earnings score measures how much you are likely to make once you do get a job. A higher earnings score indicates a degree that is in demand by employers and results in a greater return on your investment. We recognize that, particularly in some fields, not everyone earns a college degree with a high-paying job as their primary goal, but we believe a bachelor’s degree, at a minimum, should lead to a job with liveable wages so we also look at how likely students are to go on to earn low salaries.

The earnings and poverty rate data we use are obtained from the Education Department’s College Scorecard data, and both represent a weighted average of the two cohort years provided. The earnings data indicates the overall median earnings, while the poverty rate is a measure of the number of graduates whose earnings are less than 150% of the poverty line for that year.

College-level earnings factors

For the college-level earnings, we included the median and mean earnings for students in various cohorts, ranging from 6 years after enrollment to 10 years after enrollment. While each one has a low individual weight, when combined they have a high importance collectively.

Other wage factors

We also include the following additional factors in our wage score calculator.

Online score (6x)

More traditional schools have been growing their online program offerings. Many of these schools may still have the majority of their students enrolled in-person. However, the number of online students, while sometimes in the minority at a large public or private school, can still be sizable and actually be larger than smaller schools that focus entirely online.

Therefore, we did not limit our list strictly to those schools that are entirely, or even mostly online. If a school has at least 500 undergraduates enrolled exclusively online and offers at least 20% of its programs at least somewhat online, we considered it for inclusion.

That said, we did then include a host of factors that reward a school based on the size, focus and breadth of its online offerings, based on the assumption that schools with robust online offerings will have more resources for and more experience serving online students. These factors include:

Debt score (4x)

Student loans are a critical resource that open up access to higher education for students who otherwise may not be able to attend. But while taking on debt is often necessary, we believe quality programs should not burden students with an unaffordable amount of debt, as measured by typical debt loads, default rates and repayment rates.

The overall default rate data by college is obtained from the Department of Education’s Federal Student Aid (FSA) Cohort Default Rate (CDR) data. The figure we use is the weighted average of three different annual cohorts, based on the most recently available default rate data.

The rest of the data for this factor comes from the Department of Education’s College Scorecard.

Education score (2x)

Receiving a degree online doesn’t remove the need for instructors to teach the classes and answer questions. To the extent you don’t have access to qualified teachers to guide you through the material, you may as well save your money and watch YouTube videos or sign up for a massive open online course (MOOC).

Therefore, this factor seeks to measure the teaching resources the school deploys relative to the number of students it has. This is done via the student-faculty ratio that is reported by the school in their IPEDS data.

Services score (1x)

While not as important as objective outcome measures like completing a degree, getting a job, and repaying your school loans, there are some services at a school that are likely of importance to students seeking an online degree.

Among those services are ones that help students to achieve the above mentioned critical outcome measures. While these are common, some do not offer them, and so we wanted to give some credit to those that do.

Questions about our methodology? Email us at college@money.com