This project examines consumer perceptions of and their differential responses to traditional vs. online education through the lens of service separation. Service separation implies that the production and consumption of the service do not take place simultaneously. Thus, online course offerings, which are posted on the internet and accessed remotely by students, represent a separation service. In contrast, traditional education represents an unseparated service, as the teaching and learning occur simultaniously in the classroom. We explain student preference for one mode of education delivery over the other in terms of their psychological motivation. The outcomes of our research are expected to influence the provision of higher education.