In short, no. And yes. It depends on what kind of knowledge and what kind of degree a student is looking for. Online colleges can offer advantages, but cost is not necessarily one of them.
The television ads for online colleges show students in their pajamas, studying in bed with a laptop. The message is: How easy, how cheap! But in investigating a big online name such as American Intercontinental University, I found that tuition for a bachelor's degree in fashion design is $82,809. (That's just tuition, not books and supplies.) Another school with a large online presence is Ashford University.
There, tuition for an online bachelor of arts in business economics costs $46,800. Keep in mind that many online colleges are for-profit and some are owned by private equity companies.
Those costs are certainly less expensive than Harvard University, Dartmouth College or other famously high-ticket schools, where tuition can be as much as $43,000 per year. The country as a whole has about $1 trillion in student loan debt, so it's no surprise that families are looking for a cheaper alternative.
However, state schools with regular on-campus classes are often much, much less expensive. The State University of New York, for example, quotes its average tuition for an in-state commuter at $5,270 per year. State college systems also often offer online components to their course lists for much less than the typical for-profit online college.
If it's pure knowledge you are searching for, you're in luck. Harvard, MIT and University of California at Berkeley have started to offer free online classes to students around the world. The three are part of the nonprofit EdX, formed in December 2011.
Many more schools have expressed interest and may offer courses in the future. At another startup, Coursera, colleges including Duke University, University of Virginia and University of Illinois at Urbana-Champaign are creating free online classes.
In any college search, watch for accreditation, high dropout rates, low spending per student by the college, average student debt upon graduation, and alumni participation rates. Those data points will give you an idea of the value the school can offer you.