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If I had plenty of ambition and no conscience at all, this would be my plan to get my cc through the crisis and emerge with greater resources and cachet on the other side:
Upscale.
Although academics as a breed love to be idealistic, I'm increasingly convinced that economic class exerts a certain gravitational pull that can only be resisted with great and ever-mounting effort. Every institutional incentive we have is to go upscale.
If we dealt with the pincer movement of lower state aid and higher enrollments by imposing admissions standards -- say, by refusing to do remediation anymore -- the economics (and prestige) of the operation would take off. Blocking developmental students would, all by itself, result in a wealthier student body. We would have much higher retention, graduation, and transfer rates. We would have much less call for special services for students with severe learning disabilities. Our financial aid spending would drop dramatically, as would our spending on tutoring. We'd run proportionally more sophomore-level classes, to the understandable delight of the faculty. As our graduation and transfer rates went up, our standing as a college of first choice would go with it. And we could both impress our politicians and insulate ourselves from them, just like the University of Michigan has.
I've seen some public four-year colleges follow this strategy, and it almost always works. They decide at some point to become more exclusive, and a few years later, they're suddenly 'hot.' For whatever reason, they don't experience this move as a violation of their mission. If anything, they take pride in their newfound exclusivity.
(The marketing of something like that can get weird. "Your tax dollars at work, excluding the likes of you!" Tone is everything.)
Although I haven't seen cc's do this at the institutional level, many of them do it at the program level. Nursing programs often have competitive admissions, for example, and they have notably higher retention and graduation rates to show for it. One of the weird paradoxes of pass rates is that the more academically rigorous the class, the higher the pass rate. Developmental math classes have terrible fail rates, but calculus classes don't. Since most of us would probably agree that calculus is 'harder' than arithmetic, the difficulty of the material isn't the critical variable. In this case, the weaker students don't get to calculus in the first place.
Much of the angst cc's experience on a daily basis comes from the effort to fight gravity. Colleges were originally built for the second sons of the aristocracy, and the closer you get to that, the better it all works. Moving to open admissions in a society with increasing class polarization leads to some extremes for which the system wasn't built. As the K-12 systems from which many of our students come continue to founder, we spend more on tutoring and support services to try to make up the difference. Students who need those services notice that we're good at them, so they seek us out. Our graduation rates suffer, and we get flogged for it in the press and the political discourse. Meanwhile, the public four-year college down the street jacks up its standards and all is well.
(I still don't understand why there isn't a viable upscale proprietary college. Founders College tried that, but insisted on grafting an Ayn Randian political agenda to a model that otherwise could have worked. There's a HUGE market gap here. Any venture capitalists who'd like to take a flyer are invited to email me...)
If our politics and/or economics matched our mission, many of the issues that drive me to distraction would fade away. Until then, we're fighting gravity ever harder, and always with less.