institutionalfinance

Ivy Tech Consolidates Administration to Cut Costs

After struggling with financial problems largely attributable to declines in state funding, officials at Indiana's Ivy Tech Community College said Tuesday that they're cutting the number of regional chancellors from 14 to 11 as part of a larger consolidation effort. The combinations of Ivy Tech's East Central and Richmond regions and Columbus and Southeast regions will save Ivy Tech between $2.5 to $3 million total, said a college representative. While the number of chancellors will drop to 11, the number of regional boards of trustees will remain at 14.

Ivy Tech has wanted to bring on more advisers and full-time faculty since early last year, when officials said they might eliminate as many as 20 of the 76 campus locations, and system leaders hope these changes will help them achieve that goal.

Ivy Tech is Indiana's primary community college system and serves almost 200,000 students each year, through 31 campuses and 75 educational sites.

 

Why Some Colleges Get More Million-Dollar Gifts

Veteran college presidents, highly ranked colleges and urban institutions have a better chance of luring big donations, according to a recent study by Johnson, Grossnickle and Associates, a consulting firm, and the Indiana University Lilly Family School of Philanthropy.

The study, released in December and presented Monday to a gathering of presidents convened by the Council of Independent Colleges, examines reported donations of $1 million or more from 2000 to 2012.

The researchers found some of the expected things. For instance, an institution that can better articulate its mission was more likely to get large donations. It also found how the haves benefit from large donations in ways that would be hard for the have-nots to do so: older colleges with higher rankings from U.S. News & World Report, more students and larger endowments tended to get larger donations.

But the study also found, to the surprise of some, that colleges in the South and the West fared better than those in the Northeast at attracting large donations. The study also highlighted some disparities. Rural institutions, for instance, received 11 percent fewer multimillion-dollar gifts than non-rural colleges.

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Court Backs U. of California in Records Dispute

A California appeals court has ruled that the University of California System does not need to obtain and release investment return records, Bloomberg reported. A lower court ruled that that the university had to do so under the state's open records laws. But the appeals court ruled that those laws apply only to records the university has, not those that it could obtain. Reuters sought the records.

 

Catholic U. Rejects Criticism of Koch Foundation Gift

The Catholic University of America is defending a $1 million gift from the Charles Koch Foundation to hire visiting professors in the business school. A group of Roman Catholic theologians and teachers sent an open letter to the university this month questioning the gift.  "Given the troubling track record the foundation has in making gifts to universities that in some cases include unacceptable meddling in academic content and the hiring process of faculty, we urge you to be more transparent about the details of this grant. Charles and David Koch have an ideological agenda when it comes to shaping the national debate over economics and politics that is not simply academic in nature," the letter says. "The Koch brothers are billionaire industrialists who fund organizations that advance public policies that directly contradict Catholic teaching on a range of moral issues from economic justice to environmental stewardship. As you well know, Catholic social teaching articulates a positive role for government, an indispensable role for unions, just tax policies, and the need for prudent regulation of financial markets in service of the common good. We are concerned that by accepting such a donation you send a confusing message to Catholic students and other faithful Catholics that the Koch brothers’ anti-government, Tea Party ideology has the blessing of a university sanctioned by Catholic bishops."

The university issued a statement noting that it has full control over the hiring process for the visiting professors. And a spokesman said via email that there is no Koch role identified at all in seeking candidates for the posts. The university's statement went on to question the appropriateness of the letter. "The  letter is presumptuous on two counts. First, its authors cast themselves as arbiters of political correctness regarding Charles Koch Foundation grants. They judge the foundation’s support of the arts and culture to be 'noble philanthropic work'; its underwriting of grants to universities elicits their 'serious concerns.' Second they seek to instruct the Catholic University of America’s leaders about Catholic social teaching, and do so in a manner that redefines the Church’s teaching to suit their own political preferences. We are confident that our faculty and academic leadership are well versed in Catholic social teaching and well equipped to apply it. We created a school of business and economics for the express purpose of promoting respect for the human person in economic life, based on the principles of solidarity, subsidiarity, human dignity, and the common good. The aim of the Charles Koch Foundation grant — to support research into principled entrepreneurship — is fully consonant with Catholic social teaching. On that point the letter’s authors are strangely silent."

 

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Essay arguing that major changes are coming to higher education

That college you have your eye on for your teenager? It may be going out of business. Your alma mater, too.

Here’s why: we keep seeing reports that the financial model undergirding much of higher education is weak and getting weaker. The way colleges are financed is out of date with the demands of a much larger student population. Few people outside higher education are aware of this, but college and university leaders are deeply concerned.

As director of the Postsecondary Success Strategy at the Bill & Melinda Gates Foundation, I have spent the last year talking with chancellors, provosts, faculty, policy makers, and education technologists. Pretty much all of them recognize that higher education is at a tipping point, and that it will soon look nothing like it does today, except perhaps at a few ivy-covered, well-endowed institutions.

This is not hyperbole.

Bain & Co. looked at hundreds of colleges and universities and found that about one in three is on an unsustainable financial track. “A growing percentage of our colleges and universities are in real financial trouble. And if the current trends continue, we will see a higher education system that will no longer be able to meet the diverse needs of the U.S. student population in 20 years.”

The report found that, at a time when college revenues and cash reserves are down, too many institutions face bigger debt service bills and ever-increasing expenses. Colleges were once able to make ends meet with annual tuition hikes, new fees and by securing more government support. Those days, though, are gone. Too many students now must borrow heavily just to keep pace with tuition increases, and government coffers are bare.

Last summer Inside Higher Ed and Gallup surveyed campus chief financial officers on their thoughts on the sustainability of their higher education institutions. Only 27 percent of them expressed strong confidence in their institution's financial model over the next five years. When asked to consider a 10-year window, the number expressing strong confidence in the financial health of their institutions dropped to 13 percent.

Improvement is needed on the academic side, as well. Data shows that our higher education system currently serves only about a third of students well, any most of those come from generally well-off families. Institutions of all types–two-year, four-year, public, private and online–need to adapt to the realities of today’s students even as they grapple with shrinking resources and increasing demand.

Only one student in four graduates from high school ready to succeed in a postsecondary program. Too many of the rest end up stuck in remedial programs that drain their resources and don’t prepare them to successfully complete postsecondary coursework.

Many of these students are from low-income families, or they are older, juggling life, jobs, and family as they pursue their educations. They are often first-generation college-goers who lack the support and guidance crucial to navigating the thicket that is higher education. As a result, too many students end up leaving college with a lot of debt but no degree.

We used to call these students “nontraditional.” Now they are the “new majority.” And their struggles were highlighted recently in data released by the Organization for Economic Cooperation and Development that showed U.S. adults have below average literacy, math and problem solving skills when compared to their peers in the world’s richest countries. We have to make the system better for these students — but how?

Technology is often looked at as an answer. Yet, it has to be more than just bolting new technology on an antiquated platform. Technology-driven innovation has the potential to help colleges and universities address some of these challenges while helping faculty do their jobs by helping them offer students more personalized instruction and academic support. Done thoughtfully and well, technology can help faculty provide a more personalized learning experience for their students and ease some of the financial pressure on colleges and universities.

Today’s students need highly personalized coaching, mentoring, and other supports tailored to their individual needs and goals. Technology holds huge promise for making this kind of personalization possible by enabling colleges to effectively target the most costly and most important aspect of any education – the interactions with instructors and advisors.

Too often, we are debating the wrong things about technology and higher education. For example, we can’t just compare online or in-person classes. We need new business models that include technology and allow colleges and universities to put scarce dollars where they matter most. For today’s student, what can make a big, positive difference is access to an education tailored to their needs, their learning styles, and their goals, with appropriate coaching and advising.

Look at the State University of New York, which plans to add 100,000 new students over the next three years through its Open SUNY initiative. It will make online classes at each of its 64 campuses available to all of the system’s 468,000 students. Personalization will be an important part of the initiative, combining on-site and online academic support. Arizona State University, for its part, combines face-to-face learning, hybrid classes, and online instruction to increase enrollments, even as it faces severe physical space limits.

The cause is urgent. For higher education to fulfill its historic role as an engine of social mobility and economic growth, we must continue to seek big technology breakthroughs. This means thinking creatively about how to serve students as individuals, while also ensuring that many more students get the learning opportunities they deserve.

This might sound paradoxical, but investments in education technology will be increasingly crucial to humanizing and improving the student experience. And it might just keep your alma mater – or your child’s future alma mater – in business, and more purposeful and student-centered than ever.

Dan Greenstein is the director of postsecondary success at the Bill & Melinda Gates Foundation. Follow him on Twitter: @dan_greenstein.

Enrollments Dip for 2nd Year; For-Profits Drop Sharply

Overall enrollment in higher education fell by 1.5 percent in fall 2013, marking the second consecutive year of decline, the National Student Clearinghouse estimated Thursday in a report. Enrollments edged up over fall 2012 at four-year private and public institutions, by 1.3 and 0.3 percent, respectively, but dropped by 3.1 and 9.7 percent at community colleges and four-year for-profit institutions, the clearinghouse report said. No region gained students in year-over-year numbers, but the Midwest (-2.6 percent) suffered most with the other regions dipping by less than a percentage point. 

The report also provides data on enrollments by state and gender, among other counts.

Yeshiva U. Plans Deep Budget Cuts

Yeshiva University this week announced plans for deep budget cuts, the continuation of cuts to faculty retirement accounts and the sale of some buildings owned by the university, The Jewish Daily Forward reported. Like many universities, Yeshiva lost a considerable share of its endowment after the economic downturn started in 2008. But Yeshiva also lost about $100 million due to investments with Bernard Madoff. And the university has been sued for millions by men who say that, as boys, they were abused at the university's high school -- and that officials ignored the problem. In October, Moody's Investors Service Moody's Investors Service downgraded the university's bond rating to Baa2 from Baa1, citing "the university's weak liquidity with a full draw on operating lines of credit, expected covenant breach on lines of credit, deep operating deficits driving negative cash flow, and uncertainty regarding the outcome of litigation."

Colleges Spent Millions on Bowl Travel, But Made More

Colleges in the National Collegiate Athletic Association’s Football Bowl Subdivision spent $90.3 million traveling to and from 35 bowl games last year, but they still made money thanks to the $300.8 million that was returned to the conferences and in turn their member campuses, according to an NCAA audit. In the Southeastern Conference, where colleges both made and spent the most money, campuses got $52,278,677 in bowl payouts, but accumulated $14,762,565 in expenses. However, this was the first year the NCAA did not count bowl bonuses that institutions awarded to coaches as expenses.

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Arkansas Baptist Faculty Unpaid Since November 1

Arkansas Baptist College faculty members have not been paid since Nov. 1, KTHV News reported. The Faculty Senate also released a letter calling for the removal of President Fitz Hill, questioning his financial decisions and saying that he was not supporting the principles of shared governance. The college responded with a statement saying that the faculty accusations were inaccurate.

Essay defends study questioning merits of performance funding

Policy making is difficult and complex; evaluating the effects of policy can also be quite difficult. Nevertheless, it is important that researchers and policy analysts undertake the hard work of asking difficult questions and doing their best to answer those questions.

This is what we attempted to do when we undertook a yearlong effort to evaluate the effects of performance funding on degree completions. This effort has culminated in two peer-reviewed papers and one policy brief which summarizes the results of those papers. Our policy brief was widely distributed and the results were discussed in a recent Inside Higher Ed article.

Recently, Nancy Shulock (of California State University at Sacramento) and Martha Snyder (of HCM Strategists, a consulting firm) responded to our policy brief with some sharp criticism in these pages. As academics, we are no strangers to criticism; in fact, we welcome it. While they rightly noted the need for stronger evidence to guide the performance funding debate, they also argued that we produced “a flawed piece of research,” that our work was “simplistic,” and that it merely “compares outcomes of states where the policy was in force to those where it was not.”

This is not only an inaccurate representation of our study, but it shows an unfortunate misunderstanding of the latest innovations in social science research. We see this as an opportunity to share some insights into the analytical technique Shulock and Snyder are skeptical of.

The most fail-proof method of determining whether a policy intervention had an impact on an outcome is an experimental design. In this instance, it would require that we randomly assign states to adopt performance funding while others retain the traditional financing model. But because this is impossible, “quasi-experimental” research designs can be used to simulate experiments. The U.S. Department of Education sees experimental and quasi-experimental research as “the most rigorous methods to address the question of project effectiveness”, and the American Educational Research Association actively encourages scholars to use these techniques when experiments are not possible to undertake.

We chose the quasi-experimental design called “differences-in-differences,” where we compared performance-funding states with non-performance funding states (one difference) in the years before and after the policy intervention (the other difference).  The difference in these differences told us much more about the policy’s impact than could traditional regression analysis or descriptive statistics. Unfortunately most of the quantitative research on performance funding is just that – traditional regression or descriptive analysis – and neither strategy can provide rigorous or convincing evidence of the policy’s impacts. For an introduction to the method, see here and here.

Every study has its limitations and ours is no different. On page 3 of the brief (and in more detail in our full papers) we explain some of these issues and the steps we took to test the robustness of our findings. This includes controlling for multiple factors (e.g., state population, economic conditions, tuition, enrollment patterns, etc.) that might have affected degree completions in both the performance funding states and the non-performance funding states. Further, Shulock and Snyder claim that we “failed to differentiate among states in terms of when performance funding was implemented,” when in fact we do control for this as explained in our full papers.

We do not believe that introducing empirical evidence into the debates about performance funding is dangerous. Rather, we believe it is sorely missing. We also understand that performance funding is a political issue and one that is hotly debated. Because of this, it can be dangerous to promote expensive policies without strong empirical evidence of positive impacts. We wish this debate occurred with more transparency to these politics, as well as with a better understanding of the latest developments in social science research design.

The authors take issue with a second point that requires a response – their argument that we selected the wrong performance funding states. We disagree. The process of identifying these states required painstaking attention to detail and member-checks from experts in the field, especially when examining a 20-year period of time (1990-2010). In our full studies, we provide additional information beyond what is included in our brief (see endnote 8) about how we selected our states.

The authors suggested that we misclassified Texas and Washington. With Texas, our documents show that in 2009, SB 1 approved “Performance Incentive” funding for the biennium. Perhaps something changed after that year that we missed, and this would be a valid critique, but we have no evidence of that. The authors rightly noticed that our map incorrectly coded Washington state as having performance funding for four-year and two-year colleges when in fact it is only for two-year colleges. We correctly identified Washington in our analysis and this is displayed correctly in the brief (see Table 2).

All of these details are important, and we welcome critiques from our colleagues. After all, no single study can explain a single phenomenon; it is only through the accumulation of knowledge from multiple sources that allows us to see the full picture. Policy briefs are smaller fragments of this picture than are full studies, so we encourage readers to look at both the brief and the full studies to form their opinions about this research.  

We agree with the authors that there is much that our brief does not tell us and that there are any number of other outcomes one could choose to evaluate performance funding. Clearly, performance funding policies deserve more attention and we intend to conduct more studies in the years to come. So far, all we can say with much confidence is that, on average and in the vast majority of cases, performance funding either had no effect on degree completions or it had a negative effect.

We feel that this is an important finding and that it does “serve as a cautionary tale.” Policy makers would be wise to acknowledge our findings in the context of other information and considerations when they consider whether to implement performance funding in their states, and if so, what form it might take.

Designing and implementing performance funding is a costly endeavor. It is costly in terms of the political capital expended by state law makers; the time devoted by lawmakers, state agency staff, and institutional leaders; and in the amount of money devoted to these programs. Therefore, inserting rigorous empirical analysis to the discussion and debate is important and worthwhile.

But just as the authors say performance funding “should not be dismissed in one fell swoop,” it should not be embraced in one fell swoop either. This is especially true given the mounting evidence (for example here, here, here, and here) that these efforts may not actually work in the same way the authors believe they should.

Claiming that there is “indisputable evidence that incentives matter in higher education” is a bold proposition to make in light of these studies and others. Only time will tell as more studies come out. Until then, we readily agree with some of the author’s points and critiques and would not have decided to draft this reply had they provided an accurate representation of our study’s methods.

David Tandberg is assistant professor of higher education at Florida State University. Nicholas Hillman is an assistant professor educational leadership & policy analysis at the University of Wisconsin at Madison.

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