Unconventional Wisdom

December 10, 2010

Rather than throwing up their hands about dwindling resources, college leaders could steer cash away from some beloved feel-good programs and into strategies that have proven to be more cost-effective in helping students graduate, a new research analysis suggests.

In a working paper, entitled “The (Un)Productivity of American Higher Education: From ‘Cost Disease’ to Cost-Effectiveness,” two University of Wisconsin at Madison professors test the relative costs and benefits of popular student success measures, such as reducing student-faculty ratios. What the researchers found, among other things, is that a college may well get more bang for its buck by replacing adjuncts with full-time faculty than by reducing class sizes – a strategy smiled upon in the influential U.S. News & World Report rankings.

What’s notable about the paper, which is not yet published, is that it applies some basic economic theory to programs and services in higher education. Relying upon formulas common to economists, the paper attempts to assess whether popular strategies like cutting class sizes actually improve productivity in the area of degree completion.

The paper lays out in stark detail one of higher education’s most vexing questions: How is it that a nation can spend more than it did 20 years ago on postsecondary education, admit more students to college, and still have stagnant if not worsening completion rates? Perhaps, the authors argue, it’s because colleges invest in what sounds good instead of figuring out what works well.

To assess the impact of lowering student-faculty ratios, for instance, the authors examine whether spending money to reduce the ratio by one student is actually cost-effective. In other words, does a college spend fewer dollars per student degree by shrinking class sizes? The answer is that it very well might not, the study posits. Conversely, replacing adjuncts with full-time faculty actually appears to produce more degrees per dollar than colleges do now on average.

Drawing on prior research conducted by the Delta Project on Postsecondary Costs, Productivity and Accountability, the study estimates cost-to-degree figures at $60,000 for four-year colleges and $25,000 for two-year institutions, making no distinction between public and private.

Sara Goldrick-Rab, who co-authored the report, notes with some irony that her home institution of Wisconsin has actually made reducing class size a key initiative.

“The things they are putting their stock in right now are not necessarily the most cost-effective,” said Goldrick-Rab, an assistant professor of educational policy studies and sociology. “The problem here is we have leaders without good information.”

“There’s not much evidence to suggest that reducing class size is going to do much of anything, and there is some evidence that it’s an expensive thing to do,” she added.

So what does improve degree completion productivity? Apart from using more full-time faculty, there’s evidence to suggest that something as basic as picking up a phone and calling students who’ve missed class makes a big difference at relatively little cost, the paper notes. The researchers drew upon data from Des Moines Area Community College, which created a call center and found that the persistence rates were between 2 and 15 percentage points higher among students with whom they had conversations than among those whom were only left voicemails. While the data are limited, the college's experiment suggests outreach and student contact matter, the paper notes.

Because call centers are relatively inexpensive, a college could produce just a few additional degrees with that method and still be more cost-effective than a popular program like Upward Bound, which supports low-income students but comes at a high cost, the report finds.

The authors are careful to note that a low productivity score for a program like Upward Bound doesn’t mean the program should be cut. There may be a perfectly acceptable public policy reason – say, reaching students who might not otherwise enroll – for spending more on graduating at-risk or historically underserved students. The problem, the paper suggests, is that policymakers don’t even have the data to have an honest conversation about such a value proposition.

“They don’t really know which of the programs are working and which are not working,” said Douglas N. Harris, a co-author of the report and associate professor of educational policy studies.

In addition to call centers and the greater use of full-time faculty, remediation holds up well as a cost-effective way to improve college completion, Harris said. Yet, strategies like cutting class sizes can drive rankings, increase prestige and garner attention.

“Some of these very inexpensive programs could be very effective,” Harris said. "They are not as sexy, [but] a lot of little things like that could add up to some really big gains.”

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