institutionalfinance

Colleges can't wait for systemic reform, must make changes now (essay)

The world still comes to the United States for higher education. Our elite institutions are the best in the world. Historically, we have done a better job of providing quality education to tens of millions of people than almost any other country on earth.

Yet we’re slipping. Simply put, our graduation rates are too low, our costs are too high, and too many students are slipping through the cracks. Reformers -- and universities themselves -- grasp these realities and want wholesale changes that will fundamentally alter how we think about higher education.

Those long-term battles are important, even necessary. New innovations in distance learning and nontraditional degrees may provide new pathways for students. But such changes may take decades. In the meantime, we have millions of college students taking on ever-higher debt loads for a long, winding road to a degree.  We need to make immediate changes to affirmatively lower costs – not just “increase affordability” – while we raise graduation rates.  We need to work within the existing framework to do what we’re already doing, but do it better and cheaper.

The good news is we have proven methods to improve our efficiency and outcomes at our postsecondary institutions.

Take student costs. Conventional wisdom focuses on high tuition costs, but there’s a related problem that’s often overlooked. Graduating from college takes most students five or even six years, while they are planning for four. That ends up an extra 25 to 50 percent in tuition costs alone, not to mention college-related fees and the opportunity cost of not working.

Institutions can directly reduce time to degree. Recent data show that “bottleneck courses,” i.e., courses where student demand outstrips available seats, play a big role in delaying degree completion.

To put it in human terms, a student who needs Biology 201 to graduate – when a seat in Biology 201 isn’t available until next year – is wasting time and money.  That dynamic is why “access to courses” consistently ranks as the biggest student complaint about higher education, according to the Noel-Levitz annual student satisfaction survey (subscription required).

The fix is relatively straightforward: offer those bottleneck courses more often. Just 5 to 10 percent of courses are responsible for the vast majority of bottlenecks, so colleges and universities can address the shortages quickly. For instance, they can ensure that their most valuable resources -- professors -- are teaching the right mix of courses to prevent bottlenecks, rather than spending limited resources on course offerings that are not needed (15-20 percent of a typical school’s schedule). Similarly, colleges can better align schedules so students don’t have to choose between two required courses, and can make sure room size is aligned to corresponding course demand.

“Quickly” is the key concept in this fix – we can save students hundreds of millions of dollars every year starting immediately.  We don’t need to wait a decade, or even a year.

Addressing bottleneck courses is one of the clearest examples of changes we can make to address the problems in higher education immediately, but it is far from the only one.  The two below, for instance, lead to real savings right away, but are easy to overlook:

  • Extensive data show that better allocation of academic space – i.e., which courses are scheduled in which classrooms at which times – is an overlooked yet vital cost issue. Better allocation of classroom resources – identifying and addressing primetime bottlenecks by focusing on room ownership, meeting pattern efficiency and last-minute cancellation, etc. – can postpone or even cancel entire expensive classroom construction projects.  (Full disclosure: Ad Astra Information Systems, where Tom Shaver serves as CEO, are providing university leaders with data-based solutions that help them make these important resource allocation decisions.)
  • College bookstores can adopt software enabling students to take advantage of economies of scale and get their expensive textbooks for vastly reduced costs (One of us wrote an op-ed on this subject in The Hill).

There are, of course, hundreds of other solutions we can adopt right away. These solutions represent just a few ideas that directly address the nuts and bolts of providing courses to thousands of students on a single campus. These solutions aren’t glamorous. They’ll never make the front page of The New York Times or be the subject of a TED talk. 

Yet they are key operational concerns that save real money. One large community college in the Northeast better aligned its faculty and classroom resources to offer more of the most oversubscribed courses, allowing it to enroll hundreds more students without committing new funding.  All told, it improved its balance sheet by over $1.7 million in a single year. A community college system in the Midwest took a similar approach and has improved its fiscal outlook by almost $3 million in just three years. Multiply those figures by the approximately 3,000 institutions of higher education in this country, and you are looking at tremendous savings for students – and for institutions.

Will these changes singlehandedly fix the deep-seated and complicated fiscal issues afflicting our higher education system? Probably not. But can these solutions -- and others like them -- vastly improve the higher education experience for both students and institutions?  There is no question they can.

In an era defined by a $16 trillion federal debt and states across the country struggling with multibillion-dollar shortfalls, we are going to see an unfortunate but inevitable reduction in government funding for higher education.  Colleges are facing this reality today.  They cannot afford to wait for next-generation solutions. They need this-generation solutions. Millions of students’ futures depend on it.

Gene Hickok is the former deputy U.S. secretary of education and a senior adviser at Whiteboard Advisors; Tom Shaver is CEO of Ad Astra Information Systems, a company using data mining technology to help colleges and universities improve student access and lower costs.

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Cooper Union, Free Since 1902, Will Charge Undergrads

The Cooper Union, an art, engineering and design college in New York City, announced Tuesday that its board voted to charge tuition to undergraduates for the first time since 1902. That decision is likely to spark controversy among the institution's alumni, who have been fighting the idea since it was raised in 2011. The college will cut in half the full tuition scholarships it offers its students starting in the fall of 2014, leaving a tuition bill of about $20,000 a year, but administrators said they would continue to provide need-based aid, including full tuition scholarships for students eligible for federal Pell Grants.

The move toward charging tuition began 18 months ago, when newly installed Cooper Union President Jamshed Bharucha announced that the college would seek new revenues to make up for an escalating structural deficit that had grown to about a quarter of the institution's operating budget. The deficit was driven by a combination of an increase in the cost of educating students and a decrease in the average return on the institution's endowment, which includes rents on the Chrysler Building.

A year ago Bharucha announced that the college could start a series of fee-based graduate, online and continuing education programs, as well as ramp up fund-raising, to generate the needed revenue. But given the size of the deficit and the minimal revenue potential of those programs, many Cooper Union students and alumni felt like the college was moving toward charging undergraduates.

 

Lone Star Pledges to Use Bond Funds for Improved Security

Lone Star College has seen two violent incidents this year: the stabbings of 14 (a student has been charged) and the shooting of three. On Tuesday, college officials pledged that if Houston voters approve a bond referendum next month, some of the funds will be used to improve security. Among the improvements planned: more video surveillance, enhanced lighting, improved public address systems and automated door locking systems.

 

 

 

 

Wisconsin System Under Fire for Quietly Building Budget Reserves

State leaders are demanding explanations -- and in some cases urging retribution -- for the University of Wisconsin System's decision to quietly store hundreds of millions of dollars of budget funds in hundreds of accounts spread across its institutions, the Journal-Sentinel reported. A state audit last week found that the university system had cash reserves of $648 million, about a quarter of its annual appropriation, that the funds were distributed among many accounts across the system -- and that the funds had gone virtually unmentioned to state officials.

Wisconsin system officials acknowledged to the newspaper that they did "not draw attention" to the funds in the past, and some legislators accused university leaders of purposely misleading state officials about the system's financial standing. Some called for a two-year freeze on new state support and tuition -- and some went further, suggesting that President Kevin Reilly should consider resigning. Reilly is supposed to testify at a legislative hearing today in Madison.

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Under Plan, California Would Embrace Performance-Based Funding For Colleges

California would move aggressively into performance-based funding for higher education under a draft plan being circulated by Governor Jerry Brown, the Los Angeles Times reported. Under the draft of a revised budget blueprint for higher education, which the newspaper obtained weeks before the governor is due to release it, the state would provide annual budget increases of 4 or 5 percent over the next several years, but tie the money to meeting goals such as significant increases in the number of students transferring from community colleges to public universities and in graduation rates, the Times reported. University officials responded coolly to the reported plan, with one saying: "We'd like to go back to the drawing board."

William & Mary adopts new financing model, embraces high tuition/high aid

Smart Title: 

New financing policy at William & Mary embraces “high tuition/high aid” model, while emphasizing middle class affordability and investing in academic quality.

Presidential Transition and $110M Gift at U. of Michigan

Mary Sue Coleman announced Thursday that she will be retiring as president of the University of Michigan in July 2014. Coleman started at Michigan in 2002. While there, she backed numerous major research projects and pushed hard to raise private funds to offset state support that was for many years in steep decline. She also promoted the hiring of more junior faculty members and the decision to be one of the founders of Coursera, a provider of massive open online courses.

Also on Thursday, Michigan announced its largest ever gift -- $110 million for graduate fellowships and to create a residential space where 600 graduate students will live in a space designed to encourage interaction across disciplines and research approaches. The residence will be named for its donor, Charles T. Munger, a close associate of Warren Buffett's.

U. of Missouri Wants to Be More Attractive to Big Donors

The University of Missouri Board of Curators is preparing to change a rule that has, until now, stated that donors to the system's campuses could have only one building named after them, The Kansas City Star reported. Officials believe that lifting the rule may encourage some major donors to give even more, enticed by the possibility of having their names on multiple buildings.

 

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Essay on importance of transparency in cutting college costs

Higher education believes in sustainability to such extent that at Midwestern universities, like my own, we advocate for ingredients on food labels. The biggest issue in sustainability, however, is not a green environment as much as the greenbacks it takes to earn a college degree.

University presidents are trying with moderate success to lower burgeoning student debt, more than $29,000 on average per student at my institution with similar amounts at other public colleges and universities. The conventional wisdom is to raise more scholarships from alumni (many of whom are still paying off debt), raise legislative awareness about the importance of higher education (been there, done that) and, more recently, raise students’ financial acumen about the cost of a degree. (Some 13 percent of Iowa State University students with loans didn’t realize they had debt).

Of all consumer economic sectors, higher education can do a better job in providing information about what tuition dollars buy. To mitigate that effect, the Iowa State Greenlee School of Journalism and Communication, which I direct, has assembled a fact sheet for current and prospective students,  informing them how long it takes to earn a journalism or advertising degree, the availability of scholarships and financial aid, current enrollment figures, recruitment and retention rates, placement data within six months of graduation (in Iowa, U.S. and abroad), and average starting salaries in advertising, journalism and public relations.

Average student debt remains a problem at Iowa State. Because administration here has focused on lowering debt, it is slowly decreasing from a high of $30,619 for bachelor's graduates in 2005-06 to $29,324 in in 2010-11. We all know that is not good enough at a land-grant institution where a college education should be most affordable.

Average debt for Iowa State advertising and journalism majors from 2005-11 essentially mirrored that of the university, with advertising hovering at $29,000 over the past eight years and journalism at about $27,000. We have been addressing debt in orientation classes by requiring students to file four-year undergraduate plans of study, to discourage people from taking more than four years (and thereby adding to their debt). We have streamlined curriculums to accelerate graduation. We also have raised millions in support from our donors.

Starting salaries in a desired field should at least equal average student debt so that graduates pay off loans in about 10 years while working in their chosen professions.

In our disciplines jobs are readily available with sufficient entry-level salaries to offset debt. But that assumes we can graduate students within 4-5 years (about 60 percent at Greenlee do) and place them in industry, graduate school or military (we place 97 percent within six months of commencement). More than half of our most recent graduates have found employment in Iowa, a fact about which we are proud, as a land-grant institution serves the state as well as the nation and world.

This is why transparency is vital if we ever hope to enlist faculty and administration (with oversight by legislatures and regents) in the collective effort to reduce tuition. I have written about that previously in Inside Higher Ed, focusing on curricular expansion and student debt.

In October 2012 we began providing transparent data on our school website that goes beyond that recommended in the College Scorecard, announced in President Obama’s 2013 State of the Union address. Each institution’s "scorecard" is supposed to provide information about default and graduation rates, average debt, cost of tuition, and job prospects after graduation.

The scorecard has been criticized on a number of fronts. There is concern that students at prestigious colleges, such as the Ivy League, for example, may not need to borrow as much as counterparts at less wealthy public institutions. Prospective students viewing average loan debt might be misled by such a statistic. The liberal arts also might come off poorly because technical and professional degree-holders earn more in entry-level positions.

Those are persuasive arguments that have little to do with transparency, which has three rules:

  • Transparency requires data. No data, no transparency.
  • Transparency requires sunshine. No sunshine, no transparency.
  • Transparency requires assessment. No assessment, no solution.

In other words, you not only must gather facts; you need to display those facts for all to see and then assess how to address problem areas. The real challenge is collecting data down to the degree level (rather than at the institutional level) and then showcasing that information on each department’s website.

Your institution, college, school or department may balk at sharing data as we are doing at the Greenlee School. There is a reluctance to acknowledge potentially embarrassing information as there was in the 1990s about publicizing crime statistics on campuses. Just as those days ended by regulation, law and decree, the current status quo of documenting vital statistics in hard-to-access fact books also soon will end.

In September, we received a letter from the Accrediting Council on Education in Journalism and Mass Communications, informing us that no later than next fall accredited colleges like ours must post graduation and retention statistics clearly on our websites, with data updated annually.

Upon further investigation, we found that the new requirement was inspired by the Council for Higher Education Accreditation, which advocates self-regulation of academic quality through accreditation. (CHEA recognizes ACEJMC.) "CHEA has been encouraging colleges, universities and accrediting organizations to provide additional information to the public about performance and what counts as academic effectiveness for some time," Judith Eaton, CHEA president, told me. Eaton added that the decision on what data to share with constituents is left up to individual institutions and academic units, but particularly welcomes "evidence of student achievement, what students learn and can do."

We have an obligation to share that information with the public. Data on student debt per academic discipline is an essential criterion of this effort. When coupled with placement, retention and graduation rates, along with job opportunities, that information can help prospective students and their parents make smart consumer choices.

However, typical institutions collect debt data only at the college and university levels. Thus, generating statistics for each academic unit can overload financial aid offices, which already have significant reporting obligations to document how federal and state aid was distributed and to make a case for more in the future. If any office needs expanding to help offset student debt, financial aid should be a top priority.

Imagine, though, the benefit of supporting that office and the utility of the data that it can generate, particularly if the information is posted on websites. What would be the effect in the public, legislative and regents’ arenas if every academic unit was obligated to do this for institutional reaccreditation?

Taxpayers would know which department requires 6.5 years on average to graduate students with a bachelor’s degree, which department’s average student debt exceeds the institutional norm, and which department’s graduates are apt to find jobs in their majors or assistantships in graduate school. These data then can become part of a unit’s assessment plan, with the emphasis on continuous improvement. Faculty can streamline curriculums with a focus on rigor rather than pedagogical expansion. Chairs can put more emphasis on recruitment and retention. Directors and deans can emphasize fund-raising. Provosts can revise budget models to reward units that recruit, retain and graduate students in a timely manner. Presidents can tout access to education to regain the public’s trust, which just may be the key to higher levels of fund-raising and legislative support.

Internally, we would also have additional criteria to evaluate the performance of chairs, deans, provosts and presidents and to focus the faculty on areas of public service and access to education.

 

Michael Bugeja chairs the Contemporary Leadership Committee of the Association of Schools of Journalism and Mass Communication.

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Faculty Layoffs at U. of Southern Maine

Seven full-time faculty members -- most of them off the tenure track but including one tenured professor -- have received layoff notices, The Bangor Daily News reported. Faculty union leaders said that the university is eliminating jobs as a tactic in contract negotiations, which have been going on without progress since a contract expired in 2011. The university's spokesman said that the layoffs were needed for budgetary reasons.

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