Traditional face-to-face university education has shifted its course to combine the advantages of both online and offline education in a blended-learning approach. However, there is still much that is unknown about the actual effect of blended learning, particularly it's learning outcomes in terms of cost effectiveness. This study qualitatively examines the costs and the learning outcomes of blended learning at an on-line college and off-line university. Online college level English pedagogy courses and blended with offline operations at an online university were studied across two semesters in terms of the quality of education, and both direct and indirect cost savings. Other causes for various learning outcomes and cost implications are proposed and validated.