State policy

Calling the 'Inertia Busters'

Education Secretary Arne Duncan delivered a tough message to state colleges last month: Despite the cascading effects of the recession falling hardest on state governments, states should not expect the federal government to provide stopgap money to maintain business as usual. Duncan advised states to get creative.

Lumina Foundation for Education agrees. To increase the percentage of Americans with high-quality degrees and credentials to 60 percent by 2025, as President Obama aims to do, the nation needs quantum improvements in productivity.

We believe states must lead the way. In our experience working in and with state government, the first and hardest step toward productive creativity is penetrating inertia. When the going gets tough, there is comfort in the status quo. Working with HCM Strategists, a public policy consulting firm, we have made $9 million in grants to states as a testament to creative, courageous state leaders, and a talented, fresh team of “inertia busters.”

The “inertia busters” embody the skill set we believe is necessary to promote and deliver on the state higher education policy changes this nation needs.

This means assembling a team that included a former chief of staff to a governor, Jimmy Clarke, who knows how to run interference for politicians; a grass-roots advocate for change Ellyn Artis; a higher education faculty member Mario Martinez; and a director of a federal regional education lab, Rob Muller.

Their role was to promote and advance innovative ideas and strong leadership. As constructive critics and fierce advocates, the inertia busters helped open the door for elected officials to seize the incredible moment for change posed by the confluence of a deep recession and ambitious national degree attainment goals. By simply focusing on the change that is needed now, this team busted inertia in several ways.

1. Maintaining momentum in the face of leadership change. If the economy weren’t enough bad news, Arizona reeled after the White House took Gov. Janet Napolitano and the two education committee chairs left office. Enter an inertia buster, Darcy Renfro, who used her strong policy reputation in Arizona and legal skills to lift up the Board of Regents’ leadership while energizing a new crop of leaders. Arizona’s ambitious agenda promises a new funding model and an array of innovative ways to get Arizonans bachelor’s degrees at much lower costs.

2. Asking states the critical questions so new policies engage institutions. Maryland and Wisconsin are states where policy solutions start with institutions. Greg Nichols, a former state higher education exec, encouraged Maryland’s review of 40,000 student transcripts to understand at which colleges and in which courses productivity was most affected. Now, the community and independent colleges will join with the University System of Maryland to redesign the top 24 introductory courses and turn these courses into money-saving, student-excelling models for the entire state.

In Wisconsin, Rob Muller encouraged the institutions to identify the state policies that stand in the way of their efforts to promote swifter student progress toward a degree.

Advisers Nate Johnson, Jeff Stanley and Amy Sebring have campus level and state government experience that helped their state teams in Tennessee, Ohio and Texas, respectively, grapple with how to design and use powerful new funding incentives for course and degree completion. All three states are now poised to be national models for how campuses and legislators learn and work together to align spending with completion goals.

3. Pushing states to take the hard steps now, when resources are down, versus waiting for a sunnier day. Like most states, budget straits left Montana and Indiana struggling to maintain the most basic services. Inertia busters Judy Heiman and Jeff Stanley saw opportunity in this crisis.

Judy’s experience in the governor’s office and legislature in states on both coasts and Jeff’s career on Indiana’s campuses and state higher education commission afforded them a unique perspective to affirm the importance of a potentially unpopular change.

Both states used funds from the federal American Recovery and Reinvestment Act to make higher education more cost-effective now. For example, Montana halted all new construction and used federal stimulus dollars to develop a university portal and online infrastructure that will serve far more students with high-quality courses that are available more hours and in more places. Indiana used stimulus funds to expand its share of total state funding dedicated to completion incentives.

The contribution of the inertia busters and seed grants are small in proportion to that of elected leaders who deserve the ultimate credit for the work to date. Governors and state legislators will continue to take the heat and muster the courage to change deeply embedded policy and practice.

But the “inertia buster” difference maker is so important that we are commending this role to others looking to promote state policy change.

Author/s: 
Kristin D. Conklin and Suzanne Walsh
Author's email: 
info@insidehighered.com

Suzanne Walsh is a senior program director at Lumina Foundation for Education where she leads the foundation’s productivity work. Kristin Conklin, a founding partner of HCM Strategists and principal lead for Lumina's state productivity grants, has spent 15 years working on college readiness and success with state and federal policy makers.

The Politics of Disappointment

Recent headlines have been full of disappointment for Americans, particularly regarding institutions that affect their daily lives. First it was the banks who argued that they were “too big to fail” in asking for a federal bailout and then proceeded to award obscene bonuses to their executives. Then it was the automakers, who made a mockery of the maxim “what’s good for General Motors is good for the country” when CEOs of the “big three” took corporate jets to Washington to plead for their own rescue package.

Now, it seems, higher education is joining the list. As colleges and universities hike tuition and cap enrollments while pleading for billions of federal dollars, we have new evidence that public disappointment and disillusionment with higher education are building rapidly. Through new opinion research conducted by our organization, the National Center for Public Policy and Higher Education, and Public Agenda, the American public is sending messages that colleges and universities and state and federal policymakers cannot afford to ignore. These messages include:

Alma mater has become Higher Ed, Inc. While most academics bristle at the admonition for higher education to run more like a business, that is exactly what’s happening in the public’s view, and they’re not sure they like it. We were surprised enough when more than half of Americans voiced the belief three years ago that colleges and universities are more interested in their bottom lines than in providing a good education for students. We have been even more surprised -- and dismayed -- to see that figure jump almost 10 percentage points in just three years.

Let’s be clear. The public is not saying that they do not want higher education institutions to focus on efficiency and effectiveness. In fact, they believe colleges and universities could educate more students with the resources they have. When they see tuition rates outpacing the average family’s paycheck even in times of economic distress, or read stories about excessive compensation of college presidents or about universities bailing out athletic programs while furloughing faculty, it isn’t hard to see how people might be just a bit skeptical about higher education’s priorities.

We can walk and chew gum when it comes to balancing access, quality and cost. In some of our earlier research, we uncovered a pervasive belief among college presidents that cost, access, and quality are locked in a zero-sum game, one that we dubbed “the iron triangle.” Expanding access means either increasing costs or sacrificing quality, containing costs requires limited access or skimping on quality, and so on. As in previous recessions, we are seeing this belief in action in the states, as some of our largest public college and university systems are freezing or rolling back enrollment and/or hiking tuition in the name of preserving quality.

The problem is that a growing majority of Americans just don’t buy that line of argument. More than half of those surveyed agree with the statements that colleges could spend less and still provide a quality education and that colleges could serve more students without hiking prices or damaging quality. These numbers have held steady over the past three years, which is not surprising, given that most people are experiencing significant changes in the workplace due to the recession, international competition, and technological change. They have not seen evidence of parallel innovations in higher education, and they’re wondering why.

We can’t live without higher education, but can we live with it? Simply put, people are feeling trapped. The “squeeze play” -- the combination of beliefs that higher education is essential but that many qualified students are being shut out -- continues and the majority agreeing with both of these statements has reached record highs. This trend is likely to continue as the economy continues to punish the undereducated most severely, and the fiscal slump prompts more tuition hikes and enrollment caps in the face of severe national economic distress. As the squeeze on students and families intensifies and confidence in the altruistic mission of colleges erodes, higher education’s position in the competition for public resources when the economy recovers may be seriously undermined.

So what does this mean?

For colleges and universities and their advocates in Washington, the message being sent by the public is clear. Spending time and money explaining why higher education is essential to the nation’s future is not the answer. Our data show very plainly that the American people get it when it comes to the need for higher education. But those same data also depict a public that is quickly becoming increasingly skeptical of the leadership and management of colleges and universities.

Rather than acknowledging the public’s concerns, some higher education lobbyists and advocates instead criticize the public as uninformed. While the average American may not understand the details of the higher education enterprise, the point is that the American people are anxious, frustrated, and not convinced that colleges and universities are being managed in ways that are consistent with their values. A PR campaign will not fix that. In this case, actions truly will speak louder than words.

For policy makers at the state and federal levels, these numbers represent a signal that voters are increasingly interested in what they are doing and will do to keep higher education affordable and accessible. The answers will not be easy in this campaign season, with the federal stimulus tapering off and many states facing severe budget shortfalls.

The inconvenient but unavoidable truth is that the time has come to talk about real changes in how higher education is funded and delivered.

Author/s: 
Patrick M. Callan
Author's email: 
newsroom@insidehighered.com

Patrick M. Callan is president of the nonprofit, non-partisan National Center for Public Policy and Higher Education.

The Real Challenge for Higher Education

America, once the world’s most educated nation, is fast losing ground. Although we are still second in overall education levels, we are much weaker -- 11th -- in the proportion of younger people with a college degree. In a world where knowledge increasingly drives economic competitiveness, this is a very serious problem. The issue is more than abstract economics, it’s also a moral concern: Since 1970, the benefits of higher education have been very unequally apportioned, with the top income quartile profiting hugely and the bottom hardly moving at all (despite starting from a very low level).

America’s education problem has been apparent for 30 years or so, and there have been a lot of suggestions for making us competitive again. Ideas on the K-12 side include: better trained and motivated teachers, more and better early childhood programs, better prepared school leaders, improved curriculums, higher standards, financial incentives, better data systems, and more rigorous and frequent assessments. On the higher education side, proposals include: motivating professors and administrators with formulas that reward success rather than enrollment, more use of technology, more data, improved administration, and (at least for general education) more testing. And, of course, better funding is relentlessly advocated for the entire educational spectrum.

All of these approaches have at least some potential to foster improvement. Some have already demonstrated benefits while some are being seriously oversold (more on that in a separate essay).

My fundamental belief, though, is that even if one takes a very optimistic view of the achievable potential of each of these strategies and adds them together, the net result will be significant but insufficient improvement to allow us to catch up in educational levels. If our scope of action is limited to the ideas advanced so far, we will actually continue to fall behind.

What makes it so difficult for us to catch up in education? Our lack of a pervasive education culture.

A large part of American society understands and appreciates the importance of education. But a large part doesn’t really see the value proposition. I can illustrate this lack of a pervasive education culture with personal experience. I taught undergraduates for 17 years at Ohio State, mostly at the introductory level. The university at the time was open admissions. My practice was to interview students individually at the beginning of each quarter, using 15-20 minutes to learn about their preparation; my goal was to gauge their experience with essay examinations and, if they had little or none, to help them prepare. But I also inquired about their interests.

One question I always asked was, “Why are you at the university?” The most frequent answer was, “Because my parents wanted me to go,” followed closely by statements like, “Because my girlfriend is here.” Most of these unmotivated students were first generation, although I recall that similar expressions of indifference came from a significant percentage of those with parents who had gone to college. Over all, at best a very small proportion of the young people I talked to in my various roles at the university were convinced from their own beliefs that graduation was really important. My experiment would yield different results today at Ohio State, which has become selective, but I believe you would find the same pervasively weak indicators of motivation at most public access universities.

You might think that young people are typically uncertain about goals and that these examples aren’t shocking. But if that’s what you think you are almost certainly an American. If we consider the nations that rank ahead of the U.S. in science and math test scores and in graduation rates -- e.g., Korea, Japan, Norway, Finland -- you’ll find very different attitudes about graduation in both young and old. I’ve lived and worked abroad, and I’m confident that, if you went into a classroom equivalent to our sixth grade in any of these countries and asked the students if they thought a higher education credential was essential to economic success, you would get a consistent "yes" answer of around 100 percent. By contrast, the percent answering "yes" in American schools would vary considerably, with many ranging much lower that our Asian and European competitors.

An alert reader will note that so far I’ve cited only anecdotal information laced with speculation, and point out that in the U.S. today the percentages even of low-SES and historically disadvantaged minority Americans telling pollsters that college is important are quite high and rising. They are right; students (and parents) do reply positively when asked about college. But do they believe it? Agreeing that you want to go to college or want your child to attend has become the socially correct answer (a good thing, of course).

But there are many reasons to suspect that the percentages are artificially high. First, there are the hard numbers, especially the poor rates of high school completion and the low proportion of those going on to college. Nationally, only about 42 percent of 9th graders enter college by age 19. Although the stated goals are slightly different, this is a significant mismatch with the 91 percent saying they expect to get some post-high school credential. Second, a single question on a topic such as this isn’t likely statistically valid, a point reinforced by a study that showed the percentage of African-Americans who thought people needed to go to college to prosper in the workforce was the same as whites, but in a follow-up question the proportion that thought it actually feasible was dramatically lower, with only 16 percent of black parents saying the opportunity was there vs. 43 percent of white parents.

I’ve not been able to find good comparative data on the U.S. vs. other nations on attitudes toward the value of education. But what I’ve been able to find for the U.S. reinforces the point made by the study just cited: when asked if higher education is important, the answers are very positive. But follow-up questions reveal significant worries (or lack of conviction).

American Perceptions of Educated People

To better understand America’s lack of a pervasive education culture, consider the fact that as a nation we generally don’t greatly value educated people and don’t seem to believe that being educated contributes to quality of life beyond that offered by greater economic success. If you asked the 6th grade students described above a second question, something like, “Do you think it’s important to be an educated person in order to have a satisfying life?” I think the "yes" answers in Europe and Asia would be very high, and in the U.S. very low.

Our view of education is different from most of the rest of the world and certainly from those nations that rank ahead of us in education levels. A Nobel laureate in science visiting a school in Korea or Japan would occasion a high level of genuine student excitement. But in the U.S., even at our better schools, you’d have to invite an athlete or entertainer to get the kids turned on.

There are many examples of Americans rating education poorly. One is certainly the low status of teachers here by contrast with the rest of the world. Another is popular culture.

By far the longest-running television show in America, “The Simpsons,” features a boy who is a dreadful student and hostile to education but highly popular with his classmates, together with a girl who is smart and interested in learning but very unpopular. A fascinating episode is one where the father, the doltish Homer, has an operation that makes him smart -- and the result is a disaster for the family and even the community. Yes, I know that the Simpsons is satire. But the fact is Americans are very comfortable with these stereotypes. And, if you look across the entertainment landscape, you’ll see smart, educated people consistently played as seriously flawed, while those with “emotional intelligence” are the heroes.

Why is America Different?

Why is America so different in attitudes toward education? It’s an issue that deserves more thorough research than I’ve been able to give it at this point, but my study of history suggests several reasons.

One issue is that America was a leader in making education free and widely available. The objective was to support our revolutionary experiment in democracy. The experiment was a success and the diffusion of education obviously had an important role. But, apart from the civic aspect, schooling appeared to many as sort of a frill, since there was a very small market for educated people in the first century and a half or so of U.S. history (an important exception is agriculture, where the role of higher education has transformed productivity).

Another difference between the U.S. and Europe (and I think also much of Asia) is that many countries in these regions conflated education and nationalism: Schooling meant learning the national language and literature, and being highly educated meant being a standard bearer for your people. The U.S. experience with nationalism has been very different from most other nations (too complicated to discuss here), with the result that we’ve not made the education/nationalism connection in the same way (the U.S. response to Sputnik would be an exception, though a short-lived one).

But the most important factor in my view is that, unlike Europe and Asia, much of the U.S. long had plenty of reasonably stable and well-paying jobs in industry (and before that in agriculture). With good jobs to be had for all (with the notable exception of slaves and many of their descendants), most Americans believed that the key to success in life was simply a willingness to work hard, and that’s what our culture valued. The American situation was in sharp contrast to that in most European and Asian countries. Compensation in those nations’ labor-intensive jobs was comparatively much lower, as was the status of these occupations. People in other parts of the world worked as hard as Americans, but their effort was at best sufficient to keep them out of poverty rather than move them into a new kind of middle class, as happened in the U.S.

American workers’ good fortune in securing a high standard of living -- especially evident in the manufacturing areas -- seems to have resulted in education having a very different role in our national culture. The advent of compulsory schooling around the world was closely associated with the effort to end child labor. In most of Europe and Asia the newly added years of school were principally devoted to vocational study; only a small minority of students moved through the highly competitive system that prepared them for the kind of jobs where high levels of knowledge and associated intellectual skills were needed.

In the U.S., by contrast, study in the additional years was usually “general” in the sense that the traditional subjects of mathematics, science, literature, composition, and history were required. This curriculum wasn’t intended to prepare students for factory or similar work (mostly because no preparation was needed). It could prepare young people for college, but in many areas that was the goal of only a handful of students -- a group small enough to be ignored and often derided. The result? In many communities school became primarily a social place, a holding tank for the years before work. Students went through the motions of education -- doing enough to get to the next grade -- but the expectations for real learning were minimal. In many parts of the U.S., we effectively separated the concepts of school and learning.

The U.S. approach in curriculum did have benefits in the sense that it allowed more students to move on to college. But we shouldn’t give ourselves too much credit for this. Our success in sending students to college appears to have been more of an unintended consequence than a deliberate objective. For example, consider the surging college participation rates of the baby boom generation: As the children of factory workers started to join others in going to college, the U.S. was entering a period of sustained surplus of unskilled labor. Many of the young people I talked to at Ohio State in the 1970s were there not because they thought education was important but because neither they nor their parents could think of anything else for them to do (Vietnam was a factor also). Equally damning, one of our greatest achievements, the G.I. Bill, had as a clearly stated purpose keeping returning veterans out of the work force, while improving education levels was secondary.

Manufacturing and the Two Cultures Problem

The United States doesn’t have social classes in the same way as many other nations, but we are of two cultures when it comes to education. Our first culture, smaller but growing swiftly since the end of World War II, understands the importance of education and imparts at least some level of learning-related values to its young. The second culture, shrinking but still very large, has begun to hear the message of education but is slow to assimilate it, not surprising because economic change has occurred in fits and starts. There was no single, unambiguous day in history when everyone should have realized that good-paying jobs at mills and factories for unskilled labor weren’t coming back. Here and there, a few good jobs did resurface, so it’s hardly surprising that many communities are still waiting for some company, nowadays probably foreign, to take over one of their excellent vacant sites and flood the region with jobs.

The problem for the second culture is greater because it requires two new ways of thinking. The first is understanding the economy’s shift to knowledge. The second, viewing school in a new way, is perhaps a more difficult change. It is extremely hard for parents who thought of high school in social terms to act on a radically different set of expectations for their children. Unfortunately, Americans’ high level of mobility has exacerbated the cultural schism because parents who recognize the value of education can physically move and put their children in different schools; those who remain are in an homogenous culture, never to hear the leavers’ voices pushing for change.

As it became important to have a more educated workforce, other countries gradually opened the control gates and allowed more students to move forward in higher education. Since school had always had a purpose in these countries, and since educational success had always held high cultural value, the speedup has been faster than in the U.S. This, I believe, is why others are catching up and even moving ahead in overall education levels, not to mention in mathematics and science learning.

Recent studies have pointed out a growing spread in salary among those in the U.S. with college degrees. It shouldn’t be surprising, though, that some college graduates are earning a lot more than others: it’s a consequence of our separation of school and learning. Once, you came in with a business degree and the company re-educated you. Now, they expect you to be an effective analyst and critical thinker from day one. The folks who sleepwalked through college in the same way they did high school are suddenly experiencing turbulence; the fact is, the value of a simple credential is slipping in comparison to the actual knowledge it is supposed to represent.

Are There Solutions to the Education Culture Problem?

The answer in my view is an unqualified “yes.” We know that culture can change because we’ve seen it happen in perceptions of education for a large part of our society; there’s no basis for saying progress is impossible and walking away from the problem. Certainly, though, making this change pervasive is a difficult task and won’t be accomplished quickly (which is perhaps why so many prefer to focus on things like formulas, longitudinal tracking systems, and attacking college and university management). That’s the bad news.

The good news is that much significant change can be accomplished with modest increases in funding. I’m a strenuous advocate of stronger support for both K-12 and higher education, but I don’t think money alone will get us where we need to be.

Here are seven ideas for changing culture.

First, we need to improve the aspirational focus of our schools. One good way to do this is to help students understand that education really matters, that it’s needed for jobs that are there and that they will want to have. South Carolina’s Personal Pathways to Success is an excellent new effort in this area. Beginning in the eighth grade, students create Individual Graduation Plans that focus on their chosen career cluster (for example, “Information Technology”). Some of their curriculum is then geared toward the cluster area and they have the opportunity of work experiences and the like.

Second, we must modify the biggest barrier to student success in K-12: mathematics. We teach math as an abstract exercise that excites only a few, and, especially in schools lacking an education culture, math forces a disastrously large proportion to drop out or fall behind. Pairing math with science, or better yet replacing it as a separate subject with computational science, could change kids’ perception of its value and make them far more interested in learning. Widespread anguish over mathematics is a major problem in building a positive education culture.

Third, we should support locally-led college access programs that emphasize total community educational change -- not just implementing a few programs or raising spending -- creating total community educational change. The reality is that, even if an economically disadvantaged community were to have well-prepared teachers, perfect curriculums, and state-of-the-art facilities, it wouldn’t get much return on investment if the kids went home to an environment of parents and other adults who believed that education doesn’t really matter.

The best example of community change I’ve seen is Kingsport, Tennessee. In 2001 leaders there created “Educate and Grow,” which offered financial assistance to help ensure that all students in local schools could complete at least two years of college. The public investment was modest but the impact was profound. I’m most struck by the 23% increase in high school graduation rates -- something that was accomplished with no new funding. What mattered, from my understanding of the process, was that business leaders got involved, persistently going into the schools and other locales to tell students, parents, and others that education was really important and that it couldn’t end with high school. As a result, in homes throughout the community, conversations about the future began to have a different goal, one that had an immediate effect on the schools. To follow an earlier analogy, changing culture is like decreasing a vehicle’s weight; it makes the existing engine more powerful.

A key point about community change is that it can’t be imposed. Outsiders can help with advice and some funding, but local people have to be convinced and then take the initiative on their own if real progress is to be made -- it’s the difference between what you believe and what someone else tells you to believe. The good news here is that, as more communities embrace education and demonstrate success, others will perceive the competitive disadvantage and have even greater incentive to undertake their own structural improvement as well.

Fourth, higher education should shift its approach in some areas of instruction -- particularly developmental education -- away from competing against time and toward academic assistance. Instead of a high-stakes (to these students) “pass in a given amount of time or be labeled a failure” approach to developmental math and English, we should offer self-paced, competency-based, and (at least at the module level) no-fail options. Especially for returning adults, a more positive strategy can offset a pervasive lack of confidence in their ability to learn and thereby make them more optimistic about the value of education in their lives.

Fifth, consistent with the principles noted above with respect to developmental education, we need to design a “New Front Door” for adults to enter higher education. If we want them to have an opportunity to change their lives, higher education will have to change how it operates. Because so many of these adults are also parents, bringing them back into the educational stream with positive experiences will encourage them to set better goals for their children. This process of creating a “New Front Door” is well underway in South Carolina.

Sixth, and surprisingly, we can help create an education culture by improving general education. The goals of general education are superb, but the way we teach now doesn’t get us there. Serious change is needed. One idea is to use technology to thread instruction throughout all four years, allowing for a reinforcement of skills and abilities not possible now. For example, business majors would complete second, third, and fourth year online modules on environmental issues that draw on and reinforce knowledge and skills gained from their first year biology course.

Challenging faculty -- instead of threatening them with budget penalties -- is the only way to make such a major revision happen. And how does improved general education foster an education culture? Simple. Students who have a better experience outside their major will have a stronger appreciation of education’s ability to expand the mind, something that should pay dividends in many ways and at many levels. Making general education more positive will also be of enormous value with opinion leaders -- after more than thirty years of talking with business and political leaders on a regular basis, I can tell you that a distressingly high proportion has a negative view of general education.

Seventh, and finally, we should build a serious R&D effort on education culture. One idea is to create carefully structured community-based pilots to find out what works best in changing attitudes about the value of being highly educated -- effectively R&D on the total community change idea described above. We’re implementing pilots of this kind in South Carolina and will very much welcome partners. We also hope to look hard at success: some students excel even in the worst schools in the most disadvantaged communities. Why? Anecdotal evidence suggests that the motivators are parents or relatives. But this begs the question of why and how those people are different. Through careful study, we hope to learn how to replicate their supportive and motivating behaviors. There are many other possible research topics of this kind that would be a great project for teams of educators and social scientists. And it needn’t be hugely expensive. We could ask that existing publicly-funded time (“departmental research”) as well as the topics of doctoral dissertations be directed to this task. Grant monies could then be used for coordination and summary analysis.

Concluding Thoughts

As we pursue the kinds of specific actions described above, I believe Americans need to remember three things.

First, we should avoid complacency about the competitiveness of our entire educational structure. Tom Friedman’s The World is Flat gave us a much-needed slap in the face for our overall educational competitiveness, and there’s been a great deal of angst about K-12 for some time now. But few among our political leaders appear to be thinking about education as a K to graduate system, and far too few appreciate the changing levels of knowledge needed to function effectively in today’s society. Once, Americans thought everyone should have around a fourth grade education, then the line gradually moved up to the eighth grade and finally to the end of high school. But the line of minimum necessity has long since crossed into higher education; now, if all you have is a high school diploma, you’re a knowledge economy dropout.

Second, if we want to think of our problems in management terms -- a very American thing to do -- we have to dispense with our enthusiasm for the hard, mechanical side of the concept and engage in the soft side. The U.S. automobile industry provides an excellent example of failure and success in the two dimensions of management.

Confronted by popular, higher quality vehicles from Japan, the Big Three responded with workforce quality campaigns that mixed threats and exhortation, then followed with a massive investment in technology (mainly robotics), all the while mixing in the inevitable reorganizations and incentives to executives. When all these failed to make a sufficient difference, the companies finally gave up and resorted to the complicated, messy, and slow business of creating positive relationships with their workers. After about thirty years, J.D. Power reports that Ford is on a par with its Japanese competitors and G.M. is closing in as well. That’s encouraging, but it’s hard to avoid the conclusion that the gap could have been closed much faster if Detroit’s titans had been willing at the outset to think more holistically about the management challenge they faced.

In a recent essay on the origins of the Great Recession, the columnist David Brooks observes that economists’ practice has been to create elaborate mathematical models that make simple-minded assumptions about the manner in which people function in a complex economy. The utter failure of these formulas, he observes, is that they are “based on a stick figure view of humanity.” The lesson here is simple: the technical side of management is seductive (and has a role) but data and formula-focused approaches are at the periphery of the problem.

Finally, we -- especially those of us with a more positive view of higher education’s current effectiveness -- should be aware that significant additional investment in our public systems is unlikely. That isn’t to say that we should stop calling for appropriate funding levels -- as the economist Paul Romer points out, “Support for higher education is the lever by which the government can move the entire economy.” Rather it means we should acknowledge and accept the simple fact that there will never be sufficient resources to allow schools, colleges, and universities to take a great leap in effectiveness on their own. Instead, we’ll have to change the way an important proportion of our citizens think about the value of education. Having a much higher share of students fully understand and appreciate the importance of education will greatly enhance the productivity of our existing K-12 and higher education investment and help offset the size of future funding increases.

Culture change is the only real path to competitiveness for our nation, and time is short. I have some ideas; others will have better ones. Let’s get moving.

Author/s: 
Garrison Walters
Author's email: 
newsroom@insidehighered.com

Garrison Walters is executive director of the South Carolina Commission on Higher Education.

Fixing the Broken Financing Model

In the title of a recent paper, David Breneman, a regarded higher education economist, asks: “Is the Business Model of Higher Education Broken?” While he objectively weighs the pros and cons of his question, we answer emphatically, yes!

Put simply, the way in which America finances public colleges and universities, which serve over 70 percent of college students nationally, is severely and irreparably broken and needs to be changed. Without a new model, public higher education will fail its principal purpose of providing broad college opportunity, especially to low- and middle-income students and an emerging population of new Americans. Moreover, without a new funding rationale that has transparency and predictability for all funding partners, these colleges will lose the public trust – a critical element in sustaining the American democratic experience through education.

Public colleges can achieve the dual goals of public and private benefits only by demonstrating equity and fairness regarding who goes to college; legitimacy for who pays and how; and responsibility for how colleges account for educational outcomes and sustaining the public trust.

The solution as we see it should include a new public service corporation model that creates private partnerships; produces new revenue to replace lost public financing; protects and enhances the core educational enterprise; and, thereby, generates greater transparency, accountability and public trust that will support a sustained investment in public colleges.

The Problem

There is widespread evidence, in addition to opinion, that the longstanding model for financing public colleges that has seemed to work so well in many states for decades, now seems, even with an expected economic recovery, to need radical change. (See the soon-to-be-published “A New Model of Financing Public Colleges and Universities,” in On the Horizon.) Comprehensive regional public colleges and universities have been financed principally by state governments and tuition revenue, with a significant amount of funding supplementing these two main revenue sources through state and federal student financial aid.

But it is no longer a viable policy to assume that many states can sustain being the principal funding source for public colleges and universities. Neither can we expect to sustain public colleges by continuing to shift the cost of the enterprise to students and families, thereby pricing many out of college, or alternatively leaving citizens with loan repayment burdens far into the future. While state appropriations as a share of total government spending have decreased steadily for nearly two decades, tuition at public colleges has increased by over 300 percent during the same period. In New Jersey, for example, state funding accounts for only about 30 percent of total public college spending in 2010, down from 60 percent nearly 20 years ago.

National studies project that state revenues are not likely to recover until 2014 or 2015, largely because of entrenched unemployment. Few states are as bad off as California, Illinois, New Jersey, and New York, ranked among states in the worst financial position for many years, with their long-term debt commitments outpacing new revenue. Moreover, states’ structural budget problems virtually guarantee disinvestment in higher education as this is likely to remain a discretionary budget item for the long term. Those who desperately want to find a new model for shared responsibility for public college finance will be poorly served by the continuing misperception by others that higher education can be fixed as a whole or fixed by first changing traditional “academic culture.”

We must recognize that there are many different types of higher education enterprises, that student and service markets are mature and well-defined, and are local and regional, not national in scope. Accordingly, seeking a unified theory for financing public higher education will be unproductive. Instead, different models for financing these enterprises and their accountability which fit different types of institutions serving different types of students, will lead to more effective policy and educational outcomes.

A Possible Answer: Public Service Corporations

We propose, as a long-term strategy to remedy the problems of diminishing state financial support, that comprehensive public colleges and universities should create public service corporations as a new important means of realigning shared financial responsibility. This will help address the thorny matter of continuing ineffective regulatory intrusion, and help to increase incentives to create new revenue streams to reduce the burden on tuition to replace lost state funds.

“Public service corporations” — that is, corporations created to perform a civic function — are familiar to readers of Reinventing Government, which referred to them as “quasi-public or private corporations.” Applying this concept to public higher education might sound like a daring new idea, but institutions based on this model already exist and are succeeding in some states; for examples, note Oregon Health Sciences University and charter colleges such as St. Mary’s College of Maryland. They are publicly owned organizations that are independently governed by their own boards of directors. While they are free from most state controls, as a rule they are evaluated by the state and must meet certain state-set audit performance goals.

The new public service corporations, foreseen by practitioners such as the former Maine Chancellor Terrence MacTaggart and Dave Frohnmayer, former president of the University of Oregon, would complement traditional institutional governance structures (boards of trustees). Allowing institutions to create autonomous public-private service corporations would help colleges acquire, lease, sell, and manage goods and services and real property; provide means of entering into agreements with private corporations by pledging college assets; and receive services related to purchasing, construction, risk management and other required financial services.

While freeing public colleges from arcane state “command and control” mechanisms for purchasing, contracts and construction, the new corporations can provide an appropriate level of public accountability. New Jersey’s comprehensive public colleges and universities are well on their way to achieving these objectives independently and through several pieces of legislation recently implemented and others currently under consideration.

Public service corporations affiliated with the institutions should not be confused with current auxiliary corporations or university foundations, or seen as simply the next step in “privatization” of public colleges. Generally, they are formed for the public purpose of promoting the public welfare of the people of their state by enhancing excellent, affordable, accessible, and accountable public higher education — although not necessarily delivering that education.

Characteristics

We propose a new conception — and a new level of autonomy — for public service corporations that support public higher education. We suggest that public service corporations can stand alongside public colleges and universities and their boards of trustees. Rather than confusing or adding on top of traditional academic governance structures, public service corporations would provide greater transparency, and focus on non-education-related business. Traditional governance structures would remain in control of the institution’s academic operations. These new organizations need to be created to achieve, in short order, a new financial model, instead of doing so incrementally.

The public service corporation should have the following powers and protections:

  • the authority to enter contracts for goods and services;
  • the authority to enter contracts for construction, and to finance and oversee capital projects to allow it to maintain the institution’s physical plant;
  • the authority to raise revenue for the institution, including through grants, appropriations, rents, income, profits from investments, securitization of assets, and proceeds from the sale of revenue bonds, which it must have the authority to issue;
  • exemption from federal and state taxes, and from antitrust law. Both of these exemptions are important for the public service corporation to be able to enter joint ventures or other business alliances or partnerships with private businesses; and
  • entitlement of its directors to representation and indemnification from a state’s tort claims fund for judgments entered against them for actions taken in the course of performance of their statutory responsibilities.

Under our reconceptualized notion of the public service corporation, accountability can be achieved within or outside of a traditional higher education system or centralized coordinating body. Instead, the board of trustees of the institution itself can devise and measure the performance goals for public service corporations entrusted with helping the institution achieve its mission and serve the citizens of its state.

The purpose of the public service corporation that we envision is to supplement, not supplant, the role of traditional trustee governing boards. Beyond enhancing administrative flexibility and new revenue possibilities, the public service corporation should provide even greater transparency for new unrelated business income, thereby helping to protect and enhance the core educational enterprise.

The public service corporation should not only provide for greater flexibility and financial accountability, by helping to free institutions from government regulation that inhibits progress, but also provide the impetus for greater institutional accountability regarding the educational product. Public service corporations can make clearer where revenue comes from, and what it pays for. Forms of successful public service corporation entities abound at public and private research universities, for example, those related to research institutes and health science centers, which explicitly bifurcate education from research and health care functions. However, such enterprises are less well-developed at comprehensive public colleges, still largely controlled by state regulation, or system offices.

The public service corporation, in itself, cannot guarantee financial or educational success of public colleges. But it is emerging as a solution as public institutions face growing pressure to achieve, simultaneously, the goals of access, affordability and service. If such new organizations are created to play a larger role in shared responsibilities for financing public colleges, it will be critically important for the publics that they serve to understand their function, and support the value that they add.

In summary, the benefits of a new model for financing public colleges, one that adds public service corporations, include the ability to:

  • Focus squarely on the core business of public institutions – that is, serving the public good and the educational needs of 21st century students.
  • Promote institutional support that is student- and mission-focused, based on recognition that different types of institutions serve different types of students, in different parts of the country, given the unique role of public colleges in America.
  • Create new, explicit and viable public-private partnerships that help to replace the failing existing model to sustain the core educational business.
  • Focus creatively on operating non-educational business-related functions as stand-alone revenue-generating enterprises, not only to enhance revenue, service innovation and entrepreneurialism, but to build new partnerships that promote educational mission, educational productivity, quality and public service.
  • Provide predictability and equity for all partners, while engaging and promoting accountability, transparency, and public trust as an important outcome measure for the investment.
  • Provide for continuous assessment and strategic alignment of resources and educational priorities within the context of mission and broader regional, state, and national needs in an environment of global providers, thereby helping to keep American public colleges global leaders.

This relationship between the institutional governing board, our citizens, and the public service corporation is essential to ensure that public colleges are accountable for serving the public interest of 21st-century public higher education.

Author/s: 
Darryl G. Greer and Michael W. Klein
Author's email: 
info@insidehighered.com

Darryl G. Greer is the chief executive officer and Michael W. Klein the director of government and legal affairs for the New Jersey Association of State Colleges and Universities, a nonprofit higher education policy advocacy organization to advance and support public higher education in New Jersey.

21st Century Snake Oil?

Texas is the latest state to jump on the higher education “performance funding” bandwagon, joining a group of other states that see this shiny technocratic strategy as the solution to the many problems surrounding higher education.

Despite the title of this article, I’m not opposed to the core idea: it obviously makes more sense to fund universities (the issues for two-year colleges are often quite different, so I’m leaving them out of this discussion) on the basis of course completions than on the traditional one of enrollments. Adding additional focus to outcomes by counting graduates in some way could also make sense, though the inputs and assessments would have to be fairly weighted -- not easy to do.

The problem with performance funding isn’t in the formulas; it’s in the unreasonably exaggerated expectations for results.

The promoters of performance funding — let’s call them the resultari to save space — are good and capable people with laudable goals whose belief that performance funding will effect major change in higher education appears to stem from two basic assumptions: 1) university leaders are inept managers; 2) both university leaders and faculty care too little about quality and success in undergraduate education.

Examining the Assumptions Behind the Push for Performance Funding

At their core, the assumptions of the resultari stem from a belief that universities suffer from internal contradictions, ones that inevitably flow from the self-interest of both faculty and administrators. Their view is that faculty are too focused on their research and that faculty and administrators are too often intent on enhancing institutional prestige through such things as unneeded programs (principally in the graduate and professional areas). These self-interested emphases, the resultari argue, distract from the real business of the university — graduating as many students as possible with the highest levels of learning and at the lowest possible cost.

Specific manifestations of this alleged administrator-faculty malfeasance include: a general unwillingness to make use of data on productivity and learning, innocence of where money is actually spent, lack of accountability for attrition, a resistance to using technology, and a failure to measure student learning. Performance funding, we are told, will change all this because it will force priorities back to where they should be. And then, when the death grip of administrator-faculty self-interest is wrested from the helm, the ship of higher education will steer a new and better course.

A History of Recent Times

If we accept the resultari’s assumptions, then they are certainly right about the profound impact that performance funding will bring. But are their beliefs about the state of the university correct? Let’s look at what’s happened in public higher education in the past few decades.

First, the resultari often cite as an illustration of inept university management the fact that tuition — even after declining state support — is increasing faster than inflation. There are many flaws in this argument, not least the point, recently cited in these pages, that it ignores basic economics: in a knowledge economy, the cost of all services that rely on highly educated individuals has been going up relative to that of the manufactured goods and other fruits of unskilled labor that comprise so much of the CPI market basket. And, compared to many businesses, higher education has less ability to improve productivity through outsourcing and automation.

Second, the problem of misplaced faculty and administrative priorities is mostly in the past, especially the 1970s and to some extent the 1980s. But universities have undergone radical internal changes in the last 30 years. I saw fine scholars turned down for promotion because of ineffective teaching at the university where I worked (Ohio State) as early as the late 1970s. I know from conferences, etc., that we weren’t atypical. The professoriate’s sense of entitlement, largely generated by the faculty shortages of the 1960s, has long since worked its way through the system. Today’s younger group of faculty is highly attuned to the importance of student learning, and even at major research-focused universities, this aspect of the job garners a significant proportion of their energy and creativity.

I’ve worked with several dozen presidents in both Ohio and South Carolina, and haven’t met one in the last 15 years who didn’t have student success as his or her highest priority — this statement most specifically includes leaders at large public research universities. And it isn’t just talk: these presidents have and are following up with incentives, programs, and rigorously balanced promotion and tenure criteria.

While the big and small universities changed early, it’s true that some mid-sized institutions continued to be a problem well into the 1980s, and in a few cases into the 1990s. Far too many of these institutions suffered the reign of what I call Louis XIV presidents (l’université, c’est moi), who focused on building prestige in the form of doctoral and professional programs that were typically of indifferent quality. But my observation is that this plague of academic locusts has passed and now shows up as just the occasional grasshopper.

There are several reasons why the Louis XIV presidents have met the fate of Louis XVI: state systems have woken up to issues of quality and duplication and cracked down — in many cases drawing public attention to the weak success of the doctoral and professional graduates in the job market; and trustees, often benefiting from the good advice of the Association of Governing Boards of Universities and Colleges, have learned to be vigilant. There was a time when the chairman of the English department could look around the table at a faculty meeting and say, “Damn! There are more than 20 of us now! Let’s offer the Ph.D.!” and see the dream quickly and easily realized. No more (though the unfortunate consequences of many of these earlier decisions linger).

Like generals whose philosophy is shaped by the last war, the resultari appear to be busy preparing to do battle with the universities of the 1970s and ‘80s. Unfortunately, once we’ve constructed the computer-derived version of the Maginot Line, with its walls of data and turrets of formulas, we’ll peek over the top and see there’s no one there.

Measuring

Another dimension of the misplaced priorities category, according to many critics, is that universities show their lack of appreciation for undergraduate learning by failing to measure it, particularly in general education.

I certainly agree that colleges and universities have been terribly deficient in assessment. We’ve operated on the “infectious disease” principle — the faculty are critical thinkers, the students are in contact with them, so…

No matter how you view the issue, higher education’s “take our word for it” approach as an answer to questions about student learning is unconscionable. That being said, I strongly believe that standardized testing isn’t a solution but a new problem. It’s an approach that creates powerful contradictions and also flies in the face of experience — notably, we know from the history of quality management that the “inspect the product at the end of the line” approach is certain to fail. I won’t attempt to recap the extensive literature in this area. My bottom line is that rigorous, improvement-focused, campus-level, non-standardized assessment (and reporting) is critical — and sufficient.

Ever More Data?

A core part of the performance funding push, and one that I find especially alarming, is the relentless, almost ritualistic, advocacy for more and better data. It seems that American education bureaucrats generally suffer from OCD (Obsessive Computational Disorder). A part of the problem in the higher education world is that the “more data” argument is being pushed by folks — I call them the datarati — who have spent their lives with numbers and, like the man whose only tool is a hammer and who therefore thinks everything looks like a nail, they naturally see data as a primary solution. But getting human-based data down to the decimal point is not necessarily a good investment, and this leads us to another problem of expectations.

Education datarati purport to draw their inspiration from business. One source is the late Harold Geneen, CEO of ITT, who is famous for saying that it didn’t matter the kind of business, if you knew the numbers inside out, you knew the company inside out. Geneen may have made other contributions to business, but this observation is on its face nonsense.

If you had applied Geneen’s thinking to IBM in the mid-‘80s (as its leaders did) you’d have seen an incredibly strong business numbers-wise but failed to notice that a major shift in technology was soon to bring the company to the brink of bankruptcy. There are lots of other business examples of this data-centric blindness. A modern government illustration is the recent federal Race to the Top competition, where data systems count for 9% of the total score but “turning around the lowest-achieving schools” gets only 10%.

Based on extensive personal experience, I find the allegation that universities don’t use data amazing. In the fat years of the ‘60s and to a certain extent the ‘70s, there were certainly gross inefficiencies resulting from lack of attention. But, after waves of budget cuts in recent decades, my observation is that presidents and senior staff are very knowledgeable about where the money goes and about where efficiencies can be found, and they do care deeply about attrition and do assign responsibility for it.

How about those longitudinal data systems, ones that will allow for the tracking of students from K-12 through college? I agree these are likely to have some value. But I strongly suspect the probable impact of these systems is seriously (albeit unintentionally) oversold. Why?

The longitudinal data approach anticipates a system that will be able to tell us, for example, that Mme. Maron’s 11th-grade advanced algebra class at Hogwarts High is turning out students who are weak at college algebra. So far so good, but I suspect that in most cases when the Datarati Swat Team arrives at the school they’ll find that leaders were already well aware that Mme. Maron was a concern. Thus, the second issue, which is that it will be much easier to find the sources of problems than to resolve them. An automobile manufacturer detecting faulty parts can force suppliers to revise their practices and, if that doesn’t work, go to another firm. But, as we are reminded nearly every day in the papers, it’s not so simple with teachers (quite often because it’s not really their fault).

I also believe we are seriously underestimating the cost of these new data palaces. Projects to connect disparate information systems have an amazing ability to always cost more than initially projected — usually a lot more. And that’s just putting them in place. I’ve not seen evidence that people are thinking carefully about the long-term costs of maintenance and analysis. There’s no denying there can be value in the systems, but balancing that against true costs isn’t being done.

Like the resultari, the datarati are winning. My office is now making its first hires in two years and they will all be for a federally funded longitudinal data system. After years of bleeding vital staff positions, this project is not anywhere near the top of our priority list. Worse, when the federal dollars are gone, the first of any new state monies will likely have to go to maintaining the effort. In short, the new data system will be the devourer of rational priorities; I’m thinking we’ll call it Grendel.

Failure to Use Technology

Another issue to consider is whether more use of technology will sharply lower the cost of instruction and in consequence, as a great many reformers argue, contain costs and make higher education much more affordable. The idea of transformational change through technology is certainly an appealing one, but is it based on solid fact or does it contain an important amount of wishful thinking? Unfortunately, I think it’s the latter. I’ll cite three reasons.

First, instructional technology buffs have a habit of using “new” as an explicit or implicit modifier. But the reality is that the technology that’s around today has been there for quite a while. Faculty were using computers to offload drill from the classroom 35 years ago and such use has been pervasive for at least a decade and a half (remember that the Web and HTML have been around for this long). Given the history, and the fact that today’s technology is better but not dramatically different, we don’t have evidence to support the idea that breakthroughs in transforming learning and productivity through technology are on the horizon.

Carol Twigg, head of the excellent Course Redesign effort at the National Center for Academic Transformation, argues that the potential is there with existing technology, but laments that faculty want to keep technology as an adjunct to instruction and will not take the major steps needed to allow it to lower costs. Twigg knows the topic better than anyone else, so I won’t dispute her conclusion about faculty reluctance. On the other hand, I really don’t buy the idea that their recalcitrance simply reflects a desire to preserve their own jobs. Instead, I think the faculty are generally right in seeing limits on replacing people with machines.

This leads to the second point about technology — the human side. Talk to people who deal with students and they’ll tell you there’s a psychological breaking point — most people like to work directly with other people and don’t want to do everything on the computer. Highly motivated adults are certainly an exception (and I’m helping to develop programs based on that belief). But it’s not the same for undergraduates. For example, a recent study showed that three-quarters of those surveyed believed that “online courses are not as appropriate for traditional-age college students, who they believe are better served by classroom courses.”

A third dimension of the potential of technology can be seen in the evidence about staffing. All of the college and university leaders I’ve talked to say that, with few exceptions, online courses are more expensive than the classroom equivalent because they require more instructor time, therefore cutting section size. This also appears to be the case in the for-profit sector, where institutions typically charge more for online education than for the classroom equivalent — about 30% more, in the case of the University of Phoenix. Leaders at this university told me the same thing as their public peers — in consequence of the large number of one-to-one vs. one-to-many communications that occur online, instructors can handle fewer students per section and costs therefore go up.

If you add these three things — 1) the already existing proliferation of technology in instruction; 2) the natural limits to human-computer interactions (in this vein I encourage people to read E.M. Forster’s powerful short story "The Machine Stops"); and 3) the fact that experience so far does not suggest technology will lower costs (indeed much of the evidence is in the opposite direction) — then it’s hard to be as sanguine as the resultari about more technology leading to sharply lowered costs.

Put another way: Will technology give us further improvements in learning while also helping to reduce costs? Sure. Will the change be transformational and make college notably more affordable for traditional undergraduates? No.

What Do Proprietary Colleges Tell Us?

Critics and supporters of higher education alike tend to forget that public and private colleges and universities aren’t the only game in town. There’s a growing for-profit sector. In considering the management/efficiency issue, what can we learn from them?

Let’s begin with an important question: Why don’t the for-profits compete on price?

The easy answer is that the public has an accepted price of what it is willing to pay for education, so the proprietaries are able to use savings from greater efficiencies to add to their profit rather than to lower their prices. It’s true that in luxury markets “low price” doesn’t compete well, or not totally (BMW and Lexus do advertise discounts). So, if higher education is presumed to be this kind of market, a low-price alternative probably wouldn’t work — even if you could show comparable learning outcomes (“Learn-A-Lot U — Just as Good as Harvard at Half the Price”).

But this argument has several flaws. First, while the for-profit sector has long been doing well for investors (with the usual market hiccups in stock prices), I haven’t seen evidence that they are making the kind of profits that, if applied to cost reduction at public institutions, would equate to significantly lower tuition — even in the face of lower state support. Again, remember this kind of change is what some are saying we would get if only public universities would operate efficiently.

Second, the for-profits compete against each other to a significant extent, and it would be natural for someone to lower prices at least temporarily to grab market share (as the luxury vehicle makers do). At least that would be true if someone did in fact have much lower costs.

Third, you really ought to see price competition in the lower part of the market — technical programs — where luxury effects don’t apply. But it’s not there. Indeed, after several decades of working with the technically focused for-profit institutions, my observation is that a major part of their marketing sell is that they are “hands-on,” and that students will be able to work closely with accomplished practitioners. Emphasizing personal instruction by highly qualified individuals in a knowledge economy is not how you lower costs.

Conclusion

Here are some suggestions for resultari, datarati, et al.

Do go ahead and, over time and with appropriate care for balance, implement formulas that primarily reflect outcomes — especially course completions and, to the extent reasonable and practicable, graduation. This only makes sense; funding formulas should always have been constructed on outcomes. But…

Do not describe the change to outcomes as a major structural improvement in higher education that will bring great benefits to students and the public. If the formulas are carefully weighted to reflect the varying inputs — principally in terms of student preparation and background in education culture — we’ll find that, with few exceptions, differences between institutions will be very small and not statistically significant. Those using crude data to support winner-loser formulas point out that right now some universities are doing better than others in, for example, graduation rates. Of course. In part that’s a function of different inputs. If we have just a few simple measures to compare disparate entities, we’re going to get simpleminded results that won’t convince anyone — garbage in, garbage out.

Also, even after you control for inputs, variation will exist. In any environment with a lot of players it’s always the case that at any given time some are doing better than others. That’s not a reason to conclude, as resultari seem to do, that the ones doing less well are lagging because they really don’t care and aren’t trying hard. The punitive spirit of formulas designed to create winners and losers serves no one well, not least in the gratuitous damage to students at the allegedly “underperforming” institutions.

Do invest to improve performance. Universities are more deprived of spare funds than at any time in recent history, with the result that start-up monies for new faculty-led initiatives, such as rethinking strategies in general education, are almost impossible to find. State-level incentive programs, ideally ones that are peer-reviewed, could be used to further encourage faculty creativity in both improved learning and improved productivity (Lumina’s Tuning USA project appears to be a great example of what should be done). Investments of this kind will have the added benefit of setting a positive tone.

Do not add more data unless state and campus leaders agree they meet two key criteria: 1) Will the new information lead to better decisions in the real world?; 2) What is the opportunity cost — are there other things we could do with the money that would have greater impact? It’s curious that the “culture of evidence” crowd seems to think there’s little requirement to provide evidence for the value of new data before it’s gathered. A better approach for the datarati would be to shift gears, focus only on what can be shown to matter, and help us avoid creating a voracious new consumer of educational resources without any clear evidence of proportional benefit.

Finally, do change the tone. I agree that there are actions we can take to suppress the cost spiral — among the things that appeal to me are dropping uncompetitive doctoral programs, more shared and/or outsourced instructional and operating services, and in some cases even merging of institutions — but I don’t believe the best way to advocate for change is by implying that only the self-interested will disagree with me. We need fewer leaders of numerical lynch mobs and more people who are willing to offer a truly thoughtful challenge along the lines of, “We recognize these are good and capable people leading our universities and our faculties, and that they are going against some really tough problems. But, as with any organization, there’s more we can do and we have some suggestions.”

I can’t quantify the difference this change in tone would make, but I think it would be huge.

Author/s: 
Garrison Walters
Author's email: 
newsroom@insidehighered.com

Garrison Walters is executive director of the South Carolina Commission on Higher Education.

Mend, Don't End, State Systems

In this very chaotic and difficult budget year, where funding cuts in the neighborhood of 20 percent are becoming commonplace for higher education, another troubling movement is under way: to use the funding crisis to further dilute the public responsibilities of some of the country’s leading universities.

In the name of deregulation, a number of flagship institutions are seeking to be exempted from complying with state funding and personnel regulations, as well as to be allowed to live outside of the higher education governance systems in their states. They argue that they need this autonomy to compete in the national and international markets, and that their special status is justified because of the reductions in state appropriations.

They’ve got half of this right. Relief from obsolete and ineffective state controls is appropriate for all of higher education, not just a few of the research universities, and not just because of funding reductions. The myriad rules and regulations still operating in many states were developed in another time and place, before the universities grew into multi-billion dollar enterprises with hundreds of thousands of students and tens of thousands of employees.

Yet to this day, many states still require prior approval for purchasing, dictate line-item funding in silos, and maintain fund management requirements that perpetuate bad habits such as year-end spending sprees rather than building prudent contingency reserves. There is no question that these bureaucratic mandates hurt rather than help the institutions to be accountable for efficiency and effectiveness.

But this is no time to weaken the public responsibilities of the flagship institutions, to allow them to opt out of obligations to meet state needs. It’s true that state funds are now the minority of resources in research universities, and in some cases a very small fraction. But the disinvestment of state revenues hasn’t happened to the research universities alone; it has also hurt the regional institutions and the community colleges.

More to the point, the flagship institutions got to where they are through the state investments of billions of dollars over the last century and more, giving them a funding advantage over the other publics, in total revenues, in assets and often in state funding per student, an advantage they certainly aren’t offering to give up as part of the new privatized state they envision.

While system boards work imperfectly, their core purpose is more important now than ever before: to balance institutional aspirations with broader public needs, through planning, differentiation of missions, program review, and attention to student flow across institutions. Weakening the authority of higher education system boards will only serve to advantage the already privileged. The institutions will inevitably gravitate even more away from public needs, and toward institutional self-interest: selective admissions, merit rather than need-based aid, more research, and greater academic specialization. The teaching function and service to poor and working students and to underserved geographic areas lose out in this equation. This will accelerate the declines in educational attainment our country is already experiencing.

We have to increase college access and degree production for all students. To do that the relationship between state government and public institutions needs to be reestablished on a different basis. States need to mend their budgeting systems, to put greater responsibility for fiscal management in the hands of the institutions, and to focus their own attention on how to stabilize state subsidies to meet public priorities. Institutions need to do more to improve efficiency and effectiveness, and to generate savings to build investment pools for things that won’t be coming from "new money" any more.

Both sides need to get away from the year-at-a-time focus that is killing public institutions, toward more of a multi-year investment approach that recognizes that state funds are just one of the many sources of revenue that will be needed to accomplish public purposes. And everyone needs to do more to remove barriers between institutions that keep them from serving students well, not to find ways to drive them apart.

The regulatory and funding model for higher education needs to be mended, not ended.

Author/s: 
Jane Wellman and Charles B. Reed
Author's email: 
info@insidehighered.com

Jane Wellman is executive director of the National Association of System Heads and executive director of the Delta Project on Postsecondary Costs, Productivity, and Accountability. Charles B. Reed is chancellor of the California State University System and president of NASH.

The Equity Gap in State Funding

In 1971, a lawsuit was filed in Los Angeles County Superior Court that would have a profound impact on the way American schools are funded. Serrano v. Priest was the first in a wave of elementary and secondary school finance cases that would touch nearly every state in the nation and continues to this day. Existing funding regimes have been torn down, constitutional crises provoked, and billions of dollars spent in the name of achieving financial equity between school districts that serve the rich and the poor.

Nothing similar has ever happened in higher education. Desegregation lawsuits have brought some increased equity, but states have never had to defend the fairness of their higher education financing systems in court -- at least not on grounds of economic discrimination as opposed to racial bias.

Why not?

It's certainly not because no inequities exist. Nationally, public four-year universities whose students arrive with an average SAT score (or ACT equivalent) greater than 1050 spend roughly $3,725, or 45 percent, more per student than universities where student scores fall below that cutoff. These numbers only include spending on instruction, academic support, and student services -- not research.

Because SAT scores track closely with family income, first-generation status, and the quality of high school preparation, they're a good proxy for how states choose to allocate resources between advantaged and disadvantaged students.

And as the table below shows, some states disparities are far above the national average. (My methodology is available here.)

***

Per Student Funding Gap
at Institutions With Lower SAT Averages

California -$10,421 Oklahoma -$4,042 Idaho -$1,689
Minnesota -$9,046 Kansas -$3,931 Indiana -$1,589
South Dakota -$8,822 North Dakota -$3,893 Maryland -$1,579
Vermont -$8,001 Tennessee -$3,844 Maine -$1,457
Connecticut -$7,515 Arizona -$3,755 Alaska -$1,165
Washington -$7,139 New Hampshire -$3,220 Mississippi -$706
Nevada -$6,971 Nebraska -$3,111 Illinois -$417
Colorado -$6,301 Virginia -$3,073 Arkansas -$404
Utah -$5,968 Texas -$2,786 New York -$281
Kentucky -$5,914 Wisconsin -$2,727 Florida -$236
North Carolina -$5,467 Oregon -$2,594 Montana +$145
Alabama -$5,387 Rhode Island -$2,563 Pennsylvania +216
Hawaii -$5,243 West Virginia -$2,465 Delaware n/a
Massachusetts -$5,003 Louisiana -$2,440 D.C. n/a
New Jersey -$4,370 Missouri -$2,382 New Mexico n/a
Ohio -$4,251 South Carolina -$2,286 Iowa n/a
Michigan -$4,150 Georgia -$2,002 Wyoming n/a

This kind of analysis works better in some states than others. In Iowa, all three institutions are above the threshold. In Washington, D.C., the one public university is well below. (Overall, the ratio of students attending public four-year institutions where median student SAT scores above 1050 to those attending institutions at or below that threshold is about 3 to 2).

But some states have a lot of both kinds of university, and spending on students is almost uniformly higher in the institutions with higher SATs. And no state has a larger disparity than in California, the home of Serrano v. Priest, where the elite public universities spend over $10,000 more per student than the rest. That's more than the total amount of student spending at most public four-year institutions. This analysis, moreover, doesn't include the community colleges that enroll nearly half of all new freshmen every year. If it did, the disparities would be larger still, particularly in states like California where the majority of students begin in low-spending two-year institutions. Yet nobody is agitating for a higher education spending lawsuit in the Golden State.

This is partly because the legal hurdles are lower for elementary and secondary students seeking redress. While all state constitutions have an "education clause" mandating the provision of free K–12 schools, they don’t offer similar guarantees of postsecondary education. Serrano, however, was based on the California constitution's equal protection clause. States might contend that college students, unlike their K–12 counterparts, aren't bound to under-funded local schools. But it's hard to argue that disadvantaged undergraduates have equal access to high-spending public universities that limit admission to the "top" 10 percent of high school graduates -- students who are disproportionately well-off -- and routinely cite the number of applicants they reject as a measure of their success.

But the true causes of complacency run deeper. Money and opportunity are distributed this way because many people believe it is right and just to do so. Indeed, the California system has served as a model since it was developed by Clark Kerr and others 50 years ago. It reflects the ideals of meritocracy, of great universities open to all who are willing to work hard enough to merit admission. There's truth in this, of course, as first-generation college students enrolled at Berkeley, UCLA, and other University of California campuses can surely attest. People also believe that the best and brightest represent a wise place to invest resources, to ensure that the nation's future political, economic, and cultural leaders are properly educated and trained.

But in the long run, the great pyramid of American higher education, which gives more to those who arrive with more and less to those with less, represents an ethos and theory of resource allocation whose time is passing. There are few -- if any -- opportunities today for students who stop learning once they reach adulthood. Higher education is for everyone now. That's why nearly 70 percent of high school graduates are going directly to college -- a record high. If the wise men who enshrined education into state constitutions as an inalienable right in the 19th century confronted the same task today, they might well conclude that those guarantees should extend beyond the secondary years.

And everything we know from educational research -- at both the K–12 and higher education level -- suggests that academically at-risk students are more sensitive than their higher-achieving peers to differences in the quality of education they receive. Elite institutions packed to the gills with valedictorians are showering resources on students whose abundance of economic, academic, and social capital all but guarantee success, regardless of where they go to college.

Low-wealth, less-selective institutions, by contrast, serve many students with only a tenuous grasp on the ladder of opportunity. Many of those students got a lousy high school education, struggle to pay for college, and contend with multiple demands of employment and family. These are people for whom higher education is everything, the difference between one kind of life and another. And while there are surely countless professors at their colleges who are giving them a fantastic education, they do so in spite of our current financial priorities, not because of them.

These inequities are partly an artifact of history. The K–12 schools developed from the ground up, with tens of thousands of local districts serving all classes of students. The higher education sector, by contrast, was built from the top down, starting with the most well-off students and expanding to include the masses only in the last 60 years or so. Long-established institutions like Berkeley have had many decades to accumulate resources, and in some ways it's hard to blame universities for striving to be bigger, richer, and better.

But the leading institutions are failing to meet their obligation to the greater public good. Instead, the flagship universities routinely throw their weight around in statehouses, seducing politicians with promises of the next Silicon Valley or Research Triangle while gobbling up a disproportionate share of public dollars and leaving crumbs for the community colleges, regional campuses, and former normal schools that actually educate most undergraduates. Their lobbyists in Washington pursue a similar agenda at the national level.

And instead of working to make the higher education pyramid a little less steep, many less-elite institutions are trying to climb it, funneling money to marketing campaigns and enrollment management consultants in an effort to attract "better" students -- even as more and more students (who are by that way of thinking, "worse") are arriving at the front door of the academy, desperately needing to learn. These institutions are responding to the reigning system of values and institutional incentives, driven by popular college rankings and a sense that institutional quality is a function of how smart students are when they arrive, not how much they learn before they leave. As F. King Alexander, president of California State Long Beach, recently said in explaining why he wants to buck this trend, "all of the pressure flows in one way -- to do a good job with the best prepared students."

Last year, the state of New York settled a contentious, decade-long school finance lawsuit, a direct descendent of the original Serrano litigation. Despite millions spent on expensive lawyers, attorneys for the state couldn't convince New York's highest court that routinely providing thousands of dollars less per student to the mostly-poor, mostly-minority students in New York City was constitutionally permissible. The resulting billion-dollar settlement will provide smaller class sizes, better early education, and competitive teacher salaries in schools serving disadvantaged students. Advocates and civil rights groups praised the ruling as justice, delayed but certainly deserved.

In many states, students who have benefited from similar efforts at the K-12 level will enter a higher education system with a very different attitude toward economic fairness. Nobody is standing at the courthouse door waiting to petition on their behalf. At least, not yet.

Author/s: 
Kevin Carey
Author's email: 
info@insidehighered.com

Kevin Carey is research and policy manager at Education Sector.

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