College costs/prices

Public Missions, Private Dollars and Ordinary People

You can tell a lot about institutions – and societies – by how they invest their money. This is why many public college and university leaders, myself included, are so concerned by the shameful spiral of disinvestment in public higher education in America.

At a time when our global competitors from Ireland to China are investing aggressively in their higher education systems, almost every state in our nation is headed the other direction. This pattern, now nearly three decades old, not only hampers our ability to be engines for economic prosperity, it also threatens our historic -- and essential -- role in creating opportunity for students who have traditionally looked to us as their gateway to success.

Varying degrees of recovery in state funding for public higher education in the last two years offered a glimmer of hope -- until the current economic slow-down. Forecasts of further financial turmoil and economic uncertainty are dramatically undercutting states’ general revenue budgets nationwide, and that surely will mean further belt tightening for campuses that have long since run out of notches on their belts.

In 1980, states funded nearly half of the operating budgets of public campuses. Twenty-five years later, states were covering only one-fourth of the bills, and that percentage has since fallen even further. Here in Oregon, for example, our largest public universities receive only about 15 percent of our funding from the state. Consequently, students have been forced to pick up a larger share of the cost of their education through tuition increases.

According to the College Board, tuition and fees for in-state students at public institutions went up 6.4 percent this year, to $6,585. Add in room and board, and annual costs now average $14,333. If you think that’s steep, try covering the estimated $25,200 expenses of an out-of-state student.

It will get worse. So far, 17 states anticipate midyear budget cuts that could result in midyear tuition increases for the 14 million students enrolled in universities there, according to a senior leader of the American Council on Education. Colleges and universities in other states, including my own, are already being asked to produce scaled-down budgets in anticipation of revenue shortfalls for the next fiscal year or two. Already, our neighbors in the University of California and California State University systems have announced plans to roll back enrollment by thousands for the coming academic year, and California high school seniors are scrambling to apply by newly announced deadlines at the end of this month.

The long-term consequences of these ever-shrinking budgets are troubling, indeed. America no longer risks simply falling behind educational needs in an increasingly sophisticated, technology driven global economy; we now face the prospects of being mostly privately funded and losing our public mission.

Lest we forget, that public mission is to provide higher education opportunities to students who often come from ordinary or worse economic and social circumstances, many of whom are capable of accomplishing extraordinary things. In fact, the history and the promise of this great nation is predicated on the fact that social and economic mobility have provided the dynamism that has created the most technologically sophisticated and prosperous nation on earth. Education has been the most powerful source of that mobility and dynamism. If public universities are forced to abandon that public mission for lack of funding, we are at risk as a nation of creating a permanent underclass of disadvantaged citizens who have little or no stake in our society and of losing the dynamism that has served us so well at the very moment when challenges we face relative to global economic competition have never been greater.

There are further, clear benefits to society within this public mission. The average college graduate working full time, for instance, pays roughly 134 percent more in federal income taxes and about 80 percent more in total federal, state and local taxes than the average high school graduate. In Oregon, it has been estimated that an average group of 1,000 college graduates will generate at least $62 million in state income taxes over the course of their lifetimes.

For a land grant university like Oregon State, which I serve as president, it would be easy to adopt a private mission and to keep our financial house in order. This would allow us to focus on what is good for the university in terms of reputation and financial strength, rather than considering how effectively such actions might address public needs, including access for qualified students. There is no shortage of companies that might like to support proprietary research at our university and other similar
institutions, and we could market our academic programs in high-demand fields to wealthy, out-of-state-students, charging private college tuition in the process. We could abandon teacher education programs and devote resources to those activities that attract the most outside support.

But all of the above would mean no less than an abandonment of our founding values. The Morrill Acts of 1862 and 1890 provided land and money for states to establish public campuses “to promote the liberal and practical education” of their working-class citizens. President Lincoln referred to the land grants as the "people's colleges." For more than 140 years, colleges and universities established through those initiatives have helped to create the world’s best-educated workforce and fueled a dynamic, innovative economy. Where will the most financially vulnerable students on those campuses turn if they are priced out of the most affordable option for a four-year degree – increasingly, the basic credential required to compete in today’s job market? Where will the American economy be without the enhanced contributions that education prepares them to make in the workplace? We should all lose sleep considering the answers to those questions.

Oregon State University created an innovative financial aid program this year in support of that land grant mission – the Bridge to Success Program. Combining federal Pell Grant funds, Oregon Opportunity Grant monies, donations from Oregon State supporters and operating funds redirected toward this program, Bridge to Success aimed to cover tuition and fees for some 1,500 students this fall – 10 percent of our in-state students. With the economy spiraling downward, response to the initiative escalated; aid awards were given instead to a breathtaking 2,900 students; demand surely will grow significantly next year, as will the challenges to ensure the program’s sustainability.

Other public universities in states whose economies have been hit harder than ours are feeling the pinch more immediately and more deeply. There are no easy answers for any of us, only a collective recognition that our nation’s capacity to move forward rests in large measure on our ability to find solutions. State and federal governments need to consider funding strategic investments in the enrollment capacity of community colleges and public universities to provide access to quality higher education for an increasingly diverse population of students; such students often come from ordinary circumstances but often have extraordinary potential. To do so requires more support for public higher education from existing funds and possibly new sources of revenue. There is no way around it: Public higher education needs public investment.

Our public universities have represented hope to generations of Americans. In a campaign year in which the concept of hope has become central to our electoral dialogue, we must not forget that real hope, meaningful hope, requires financial investment and that among the institutions in need of a financial rescue plan, public higher education must be a top priority.

Ed Ray
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Ed Ray is president of Oregon State University and an economist.

Let Us Disarm!

It is high time for the federal government to adjust the antitrust laws to allow American undergraduate colleges and universities to “disarm” unilaterally from wasteful expenditures. Current law does not permit us to disarm because we cannot talk to each other about how to control costs without running the risk of being accused of what can only be considered anti-competitive trade collusion.

It is time for all of us in higher education to think about what it would be like to compete only on the quality of our academic programs and not on the excesses of our amenities. Why can’t we be bold and courageous enough to come to the common sense conclusion that not competing on amenities would in the long run be good for students and for those who have to pay tuition? Why can’t we temper our “capitalistic compulsion” to compete with each other in ways that only serve to drive up tuition costs? Wouldn’t we be in a position to render better service to the American public if we arrived at some common conclusions about how to reduce costs?

Colleges and universities are feverishly rushing to cut expenses because of the current and very real economic crisis. Witness all the presidents announcing hiring freezes, postponements of construction projects, furloughs, lay-offs, salary freezes and modest tuition increases. While none of my colleagues want these cuts to affect the quality of the academic program, it may, in fact, be an unavoidable result.

Yet with all this trimming and restraint, the public is not likely to see the price of an undergraduate education decrease any time soon. The traditional higher education business model does not permit it. At many, if not most, institutions the cost is significantly higher than the sticker price. At Dickinson, for example, it costs us $13,000 above the sticker price of $47,800 to educate a single student. What rational “business” begins with costs always being significantly higher than price and then tries to sustain that model by further increasing costs? The constraints higher education imposes upon itself now might well soften somewhat the threat of the current economic crisis by reducing marginally the gap between cost and price, but will do nothing to alter a business model that does not work because you cannot have your cake and eat it too.

The only way to control cost and moderate price is to perform radical surgery. Since the historic mission for many colleges and universities is to offer a liberal education that prepares students for informed participation in a democracy, the activities that undergraduate education has added over the centuries to this essentially academic intent are the most vulnerable to “the knife” -- residential life, student life, athletics. A combination of classroom and out-of-classroom experiences is now defining a distinctively American undergraduate education that is distinguished from classroom-only university programs in other countries. It is this very surgery that for-profit universities have already performed to keep tuition across their sector more affordable. Academic degrees are offered online (excepting short-term residencies on a host college campus or coursework in a modest office building); there are no residence halls; there is no athletic program; and, of course, there is no student life except conversation about coursework online. For-profit universities are already growing rapidly in enrollment and if tuition keeps rising among non-profits, this opportunity may become increasingly attractive to the American public.

I suggest that nonprofit education will be reluctant to go so far as the for-profits in altering what has evolved over the centuries as the American “model” of undergraduate education. That said, a viable first step to control costs without sacrificing the academic experience is for colleges and universities to pull back as a “sector” from the extravagances that have developed in the out-of-classroom amenities over the last few decades because of a compulsion to outspend the competition in what is most visible to the paying public -- sports palaces, fancy hotel-like accommodations, spa-like student unions, gourmet-style dining facilities, etc.

On behalf of the public and our own desire to remain a key contributor to the national ambition, we ought to disarm in at least one aspect of our activity. We should have a positive deflation of our ambitions and our competitive fever (regardless of the numerical ranking gimmicks) in those areas that are not historically related to our role in advancing knowledge.

What would happen, for example, if all of us came to the conclusion that it would make sense only to build residence halls that conform in design and purpose to the academic program of our respective college or university and to the pricing and construction standards of eco-friendly “low-income housing” that offer inhabitants perfectly livable, attractive space without extravagance? The initial cost may still be high (although not higher than luxury-hotel accommodations), but the long-term energy savings would be significant. What if we all agreed that students could, indeed, survive and even thrive in double rooms? What if we all scaled back our competition for student athletes? What if we pledged to reduce conference and meeting costs by relying more heavily on virtual technology? What stands in the way is not only antitrust laws but also our own attitudes and egos.

It is quite obvious that none of this radical change could be accomplished systemically by a single president or a small group of institutions; it would take a sea change across higher education. But even if we have the best of intentions and can overcome our reluctance to change, the antitrust laws stand squarely in our way. Right now, any discussion with the intent of disarmament cannot prudently be attempted.

The federal antitrust laws were applied in the 1990s to challenge financial aid meetings among colleges that had an “overlap” in the students they recruit. The aftermath of that litigation has had the unfortunate consequence of severely limiting discussion among colleges and universities about cost and competition, at great detriment to the public. I assert that if we, as a nation, are serious about reducing the cost while improving the quality of higher education, we in higher education need a “safe” space in which to talk candidly. Congress should revisit the law and permit such conversations for the benefit of the public. We can’t disarm if we can’t talk. That is Diplomacy 101!

Let me be clear. I am not talking about encouraging discussion among institutions about faculty salaries, annual tuition charges and the like. I do, however, believe we need the will and determination to try to achieve change in those current practices that have escalated our costs. As a first step we need change from the federal government that would give us the legal means to help the public with the cost of higher education. Not to entertain disarmament leaves us with an intolerable alternative -- escalating tuition without foreseeable limit.

Leadership is also required and that probably best comes from established associations. It is time for an organization like the American Council on Education to issue that call for us and to work productively with the federal and state governments to revisit the antitrust laws to allow us to work towards affordability.

There will, of course, be those who decry any form of cooperation among those who meet to discuss cost. They distrust us. This caution is understandable were it not for the intractable crisis in higher education. If we do not find ways to reduce the cost of our colleges and universities, students will potentially seek alternatives such as for-profit universities or study at foreign universities, or be shut out of higher education. And many of those who attend our colleges and universities will be saddled with increasing debt that will burden them and/or their families for years – all at the wrong time in our economic cycle. If “self-interest” is not a consoling safeguard for the skeptics, let us request a temporary exemption of two years to allow colleges to address the exorbitant tuition issue to demonstrate that there are benefits to the public in this approach. If there are such benefits, let the exemption be extended. If not, shame on us!

William G. Durden
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William G. Durden is president of Dickinson College and a member of the Board of Directors of Walden University.

Going on a Diet

For American colleges and universities, the deepening recession means that costs will be rising (because of increased enrollments as unemployed persons return to school to stay gainfully occupied) while revenues will be falling, as state appropriations, private donations, and endowment income shrinks. Political and economic considerations alike will preclude meeting the revenue shortfall exclusively through tuition increases. Colleges must cut costs. The potential severity of the recession means that the magnitude of the cuts is uncertain, but likely to be relatively large.

In such an environment, higher education institutions and their faculty may start to do some unpalatable things previously off the table. Let me list 10 possibilities:

Bigger Teaching Loads. It is a dirty little secret that teaching loads of full-time faculty have been declining for at least a half a century. At medium quality state four-year schools, in 1960 a professor would teach 9 or even 12 courses an academic year; today, the number of classes taught is more likely to be five or six. At research oriented institutions, a similar reduction has occurred, with a rare senior professor at research oriented institutions teaching over four courses annually these days (teaching loads are much higher in community colleges, however). This trend might start to reverse.

The cost per student credit hour of instruction for regular full-time faculty is perhaps an unsustainable multiple of that of adjuncts and graduate students. Related to this is another reality: the majority of non-grant funded research done today to justify low teaching loads leads to publication in third- or fourth-rate academic journals that are little read; the research is indefensible on cost-benefit grounds. Hence, the Journal of Last Resort may start to get fewer submissions as teaching loads start to creep up.

Reduce Support Staff. The number of non-teaching professional staff has doubled in relation to enrollment over the past generation. Universities have added scores of public relations specialists, wellness coordinators, diversity czars, international program administrators, assistant deans, associate provosts, and the like. Some paring of the Bureaucratic Army will become necessary. To cite one example where change could come, consider that we are in an era in which we have elected an African-American president, where Oprah Winfrey is probably our most popular television personality, and in which the last four Secretaries of State were either black or female. Do we really need an army of Affirmative Action Police to monitor the race and gender of job applicants, students or contractors?

Reevaluating Tenure. Tenure has already diminished somewhat in importance as universities resort to hiring cheaper adjuncts or use graduate students more intensively in the classroom. The prospects of several years of dismal funding may prompt more universities to go further, perhaps putting all new appointees, including ones considered potential permanent additions, on term appointments. As the demand for new faculty sharply diminishes, universities will gain the bargaining power to enter into these sorts of arrangements.

Unionization Attempts May Grow. In response to attempts to raise teaching loads and reduce or even end tenure, more faculty members may start to talk about faculty unionization, especially in the public institutions.

Moves to Increase Attainment May Slow. The Spellings Commission, higher education coordinating boards, governors and some academic cheerleaders (Claudia Goldin and Lawrence Katz’s new book The Race Between Education and Technology comes to mind) have all called on increasing the proportion of adults with college degrees, especially for those in underrepresented racial or ethnic groups. While the rhetoric supporting such moves will probably increase as Barack Obama takes office, the presence of other vast and very expensive problems may hamper the ability to move forward, although attempts will be made to include various financial aid programs for underrepresented students under “economic stimulus.”

Endowment Spending Rules Are Dead. The talk of forcing universities to spend more out of their endowments should end, if any semblance of rationality exists in Washington (to be sure, a tenuous assumption).

Cooling Big Salary Increases for Top Officials. We have entered the era of the million dollar college president (and, of course, the two or three million dollar football coach). The move to rapidly escalate salaries for top leaders will probably temporarily abate a bit, as well publicized increases become politically unsustainable for not-for-profit institutions in an era of high unemployment, stagnant wages, and continually soaring tuition fees.

A Temporary Truce in the Athletic Arms Race. Spending in big time athletic programs have been rising by double digit annual amounts in recent years. It becomes increasingly difficult to justify growing subsidies for ball throwing competitions in an era of joblessness, rising student loan debt, and growing resentment of the easy life of many hedonistic college students;

Slowdown in the Academic Arms Race. It seems the president of every mediocre American college wants buckets of money to allow that institution to get to “the next highest level,” an impossible dream for all but the very few. Financial exigencies will scale such cost drivers as building luxury quasi-country club-like facilities and hiring superstar prima donna professors who teach little but demand a lot. The abatement will be temporary, however, until such time as we find a better means of measuring institutional performance than the U.S. News & World Report rankings.

Using Technology to Lower Costs. To this point, new technologies have increased expenses. Colleges will get more serious about capital-labor substitution, using distance learning and related technologies to cut per student instructional costs. Socrates’ approach to teaching may undergo its first fundamental wide scale challenge in 2,400 years.

I could go on, but I have run out of fingers. I have not, for example, mentioned efforts to get serious about having students finish college in a timely fashion, punishing institutions with large numbers of students lingering for five or six years, and rewarding efforts to institute three-year baccalaureate degrees, as in many European countries.

I have stuck my neck out enough for one essay, and have shown, once again, that Thomas Carlyle was right -- economics is the dismal science.

Richard Vedder
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Richard Vedder is the Edwin and Ruth Kennedy Distinguished Professor of Economics at Ohio University and director of the Center for College Affordability and Productivity.

Bucking Conventional Wisdom on College Costs

A national agenda for postsecondary education in the United States is beginning to form, motivated by the goal of moving the United States to a position of international preeminence in postsecondary education by the year 2020. The size of our achievement gap and current fiscal realities present real challenges, making productivity increases in higher education imperative, to maintain access and increase degree attainment on a reduced funding base. One strategy is to improve the management of costs within higher education — reducing the need for tuition increases, improving public credibility necessary for increased public investments, and better targeting resources to those functions that pay off in terms of increased educational attainment. Managing costs will require attention both within institutions and at the state policy level — changing how funds are allocated, and focusing on the relationship between resource use and quality.

Clearly, changing postsecondary finance without a lot of new money to grease the skids will be difficult. The status quo is always easier than change — particularly change that will be objectionable to those who benefited most in the previous system. But political objections aren’t the only barrier to changing funding in higher education: A much bigger impediment comes from conventional wisdoms about college finance, truisms about costs that aren’t based in fact. The power of these myths is that they are held uncritically by people inside and outside of the academy: Governors and state budget officers, legislators, legislative analysts and fiscal staff, presidents, trustees and faculty. In the hopes of fostering a better dialog about how to improve performance in higher education, we’ve identified some we think are the biggest obstacles to change.

Conventional wisdom #1: Spending increases in higher education are inevitable, because there is no way to improve the productivity of teaching and learning without sacrificing quality.

The belief in the inevitability of rising costs may be the most damaging truism of all, as it affects the way that institutions budget and plan. The common approach to building the base budget is a case in point. It starts with taking last year’s budget and adding to it the replacement of any prior year reductions, salary increases, benefit increases, and costs of inflation for supplies and equipment. Institutions can get a 5 percent increase in overall funding and still claim – and believe – that their budgets actually were reduced, since they should have grown at least that much to get to a zero base. Small wonder that policy makers and the public are coming to doubt that colleges and universities are trying to control spending, and that they place their own institutional ‘bottom lines’ ahead of public needs for higher education.

Moreover, faculty labor productivity is only one part of the higher education cost pie. Spending on faculty is a minority of all spending in most institutions, a proportion that has been declining in all sectors for the last two decades. This has happened as institutions have shifted to more part-time and non-tenured personnel, who now do more than half of the teaching in higher education.

Has this hurt quality? It’s hard to tell: Rates of degree and certificate production have not gone down; in fact, they’ve increased slightly in most types of institutions. This doesn’t mean that shifting to part-time faculty and increasing the use of technology is the only or maybe the best way to increase labor force productivity in higher education. Institutions could do a lot more to increase the cost-effectiveness in their faculty investments, using the opportunity of faculty turnover to translate faculty lines into more productive uses. This doesn’t mean getting rid of full-time and tenure-track positions, but it might mean trading a senior tenured position in classics for two junior level assistant professors in first year writing courses.

Institutions also can put more resources into salaries if they find ways to reduce the explosive growth in benefits costs. It could be argued that even if increases in faculty compensation costs aren’t inevitable, they are still desirable because faculty deserve to be appropriately compensated, and competition for faculty means their pay will rise over time. That may be true, but this places this argument in the "nice work if you can get it" category, rather than an immutable requirement for basic functionality. In a national environment of stagnant wages and declining productivity, there’s no immediate reason why higher education should be allowed to increase costs more than other major sectors of the economy.

Conventional wisdom #2: More money means more quality, and quality means higher performance.

Another enduring myth of higher education finance is that money buys quality, and since quality is the ultimate goal of every institution, higher quality means better performance. If quality means reputation, we could buy this, since in our highly stratified system of higher education, spending correlates with common measures of institutional prestige, such as admissions selectivity, class size and faculty reputation. But if quality means getting more students to a degree with acceptable levels of learning, it’s something else entirely. There is no consistent relationship between spending and performance, whether that is measured by spending against degree production, measures of student engagement, evidence of high impact practices, students’ satisfaction with their education, or future earnings. Instead, the research shows that the absolute level of resources is less important than the way resources are used within the institution. This shouldn’t be surprising: similar findings have emerged from research on K-12 finance and effectiveness. It’s good news for institutional and policy makers wanting to improve performance within higher education, since it means that leadership and intentionality matter more to educational performance than money alone.

Conventional wisdom #3: Among public institutions, state governments are now minority shareholders in higher education, and as a result public policy goals should take a backseat to market rules to steer institutions.

State funds have declined as a proportion of revenues among public institutions and tuition revenues have gone up. Even so, the taxpayer is still the single largest funder of the core educational functions of instruction, student services, and academic support in most of the country. The institutions are still public institutions, perhaps more analogous to private-non-profit institutions than agencies of state government, and as such they have the same responsibilities to ensure that their resource allocation decisions meet the standard of serving the public trust. Presidents of research institutions are most likely to make this argument, because they compare state revenues against funds for federal research, auxiliary enterprises, teaching hospitals, and and public service. Almost all of the funds for these activities are restricted as to their uses, and cannot be used to pay for the general academic support of the institution. Even with as little as 20 percent or 30 percent of total unrestricted revenues, state government can drive a major change agenda by focusing on goals and performance and paying attention to public accountability. Look at the example of shareholder reform in the private sector, where shareholders with as little as 3 percent of the voting stock have been able to leverage huge changes in management performance.

The "privatization" argument is also used by college presidents (and others) to justify executive compensation packages in higher education that rival those paid in the private sector. Colleges and universities should be able to recruit and retain the best and brightest leaders, no argument about that, and they should be paid appropriately. But it is simply bogus to use diversification of revenues as a basis for salary and benefit packages that bear no relation to real institutional performance or, more particularly, to the role of the president in producing that performance. Excessive compensation packages have been corrosive both within higher education and with policy audiences: damaging to faculty and staff morale, inexplicable to parents and students who are paying higher tuitions while they see class sections being cut, and detrimental to the argument that higher education institutions are social investments in the country’s future.

Conventional wisdom #4: Colleges and universities cannot be expected to invest in change or to pursue state priorities without new money. A corollary is that any reductions in funds must be replaced before funds can be considered as “new."

This argument presumes that institutions are operating at 100 percent efficiency, which is simply not true for any organization. Evidence that institutions are on the “efficient frontier” in terms of resources used to generate results should be required before this assertion is swallowed – evidence that few colleges or universities can find, since relatively few of them look at spending in relation to performance. To be sure, it is hard to make budget cuts at the huge levels now being forced around the country without having to cut into core capacity. But not all expenses are equally high priorities for any institution, and in this budget climate the standard for efficiency has to be set by looking at spending against performance in light of current priorities.

Conventional wisdom #5: Instructional costs rise by the level of the student taught – e.g., lower-division students are cheaper than upper-division students, graduate students are more expensive than undergraduates, and doctoral students who have been advanced to candidacy are the most expensive of all.

Higher spending levels don’t necessarily mean higher “costs." It means these activities are more expensive because we’ve always spent more money on them. The higher costs are only partly intrinsic to the specialized nature of upper-division and graduate coursework that require smaller class sizes. Institutional spending preferences including subsidized faculty time for departmental research are the primary reason for increased costs at higher levels. The senior faculty (who are the most expensive instructional resource) typically teach the upper-division and graduate classes; lower-division classes are overwhelmingly the responsibility of junior faculty, part-timers and, in research universities, teaching assistants. Spending patterns also reflect historic funding advantages for institutions with a research and graduate educational function, since departmental research is counted as a cost of instruction. And finally, upper-division costs are higher in part because institutions lose so many first and second year students to attrition. The marginal costs of adding more upper-division students to courses that are under enrolled are very low. If retention is increased, then the unit cost of upper-division instruction will decline simply because class sizes will be larger.

A corollary to conventional wisdom #5 is that lower-division students are cash cows, necessary to generate the resources to support the more expensive upper-division and graduate students. Retaining students is a better financial strategy than continuously recruiting more entry-level students, nearly half of whom never make it to a degree or certificate. While the direct costs of instruction are lowest for lower-division students (although as noted above they don’t have to be) new students actually cost the institutions more administratively than continuing students. The costs to recruit admit and enroll first-time students are around $700 per student in public institutions, and over $2,000 in private institutions, according to surveys by the National Association for College Admission Counseling. If all of the costs are counted, first-time students may well end up being ‘negative’ cost centers for many institutions. Higher education can’t expect to solve its money problem by continuously spending more on each student than it gets in revenue, while hoping to make up for it in volume.

Conventional wisdom #6: Institutions can make up for lost public subsidies by increasing research revenue.

Since money from students and states is harder to obtain, many institutions and states are looking to the federal government as a source of revenue. Stimulus funds are a short-term source for some, but funding from research grants has long been a preferred option, both because it is a new revenue stream and because pursuit of such funds aligns so well with the academic culture.

While there may be reasons to pursue federal research funds, their contribution to unrestricted institutional revenues isn’t one of them. Research grants almost never pay for their full costs; either overtly or covertly they require institutions to bear part of the cost. The cost of faculty time for research goes up significantly, typically in the form of reduced teaching loads to allow faculty to pursue research opportunities. The institutions -- and states, and students -- pay for this, so costs per student increase even as the amount of faculty time available for teaching goes down. Institutional and policy makers share responsibility for supporting this "mission creep," as does the federal government, which has limited reimbursements for the indirect costs of research administration for years.

Conventional wisdom #7: An expansive undergraduate curriculum is a symbol of quality, and necessary to attract students.

Many institutions operate on the assumption that a wide selection of undergraduate courses is a core dimension of quality, and furthermore needed to recruit students to the institution. The reality may be much different. The majority of students satisfy their general education requirements by enrolling in relatively few courses. In most institutions, more than half of the lower-division credit hours are generated in 25 or fewer courses. The result is a few high-enrollment courses and a lot of low-enrollment courses.

Furthermore, there is mounting evidence that a more prescribed path through a narrower range of curricular options leads to better retention, since advising is more straightforward, scheduling easier to predict, and students are less likely to get lost in the process. A narrower curriculum is more coherent, can be better focused on learning outcomes, and is actually preferred by many students. So an educationally effective undergraduate curriculum is also the most cost-effective curriculum. Recognizing this opens up opportunities to address costs while improving attention to positive learning outcomes. Higher education doesn’t have to go to Henry Ford’s extreme (“any color you want as long as it’s black”) to take a lesson of sorts from the portions of the automotive industry who have managed to avoid bankruptcy, by bundling options and eliminating product lines to cut production costs without compromising customer satisfaction. In our own industry, well regarded for-profit institutions have satisfied customers who have had few choices in a streamlined, cost-effective curriculum. If quality is measured in terms of outcomes achieved, not appearances and status, attention to the undergraduate curriculum is a place to start looking for improvements.

Conventional wisdom #8: States can improve postsecondary productivity if they direct more students to community colleges.

If states want to make cost-effective investment decisions, they need to pay attention to what it costs to get students to a degree, and not just entry-level costs per student. Moving more students to community colleges is a case where cutting costs may actually hurt productivity if the goal is to increase bachelor’s degree attainment. Unit costs per student are lower in community colleges than in four-year and research universities. But shifting more students to community colleges won’t necessarily reduce the overall cost per degree or certificate in a given state. Nationwide, costs per degree are highest in community colleges (among the public institution sector) not because they have more money, but because they award so few degrees or other credentials relative to student enrollment.

Although transfer works well for some students, for far too many students, enrollment in a community college lowers rather than increases the probability that they will be successful in obtaining a college degree. Does this mean that states should plan to increase enrollments in public research universities, where degree attainment levels are higher? No, since this means shifting public subsidies from instructional functions to pay for research. The best way to invest in student success is to invest in institutions that put teaching and success at the front of their missions: community colleges that are effective in translating access to a credential or to transfer, or to public four-year teaching institutions.


At a time when improved productivity has to be a priority for all policymakers, the search for better ways to use resources that are available shouldn’t be impeded by false or unexamined “truths.” Higher education costs can be contained without sacrificing either quality or access. It can be done through management of resources, including using data to make decisions, paying attention to spending, and looking at the relationship between spending and results. Still, we would not want to end this essay without rebutting a final "myth" about higher education finance, which is that American colleges and universities are grossly overfunded, and that better management of resources by itself will generate enough ‘new money’ to pay for the nearly doubling of capacity needed to return our country to internationally competitive attainment levels. That’s not true, either: a lot of our institutions are operating on very lean budgets, and many have been increasing enrollments without getting the resources to do so for the better part of the last decade.

These are the very institutions that must serve the majority of students who need access and degree attainment. Better management of spending is a necessary, but by itself not sufficient, condition for doubling current levels of degree attainment. To do that, we need to be reinvesting public resources in higher education, beginning with public resources from state governments. In this political environment, we should not kid ourselves that we will get the public investments necessary to increase attainment unless we first attend to better public accountability for effective management of the resources we have. That will require a different way of thinking about higher education finance, beginning with the institutions and extending to government. Getting rid of conventional wisdoms that get in the way of new approaches from both sides is a good place to start.

Dennis Jones and Jane Wellman
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Dennis Jones is president of the National Center for Higher Education Management Systems. Jane Wellman is the executive director of the Delta Project on Higher Education Costs.

Picking Up Crumbs

Last week, The Harvard Crimson and then The New York Times reported that, in a cost-cutting move, Harvard University would no longer provide cookies for faculty meetings, saving approximately $500 per meeting. A Harvard faculty member was quoted as saying, “We are sharing the pain with the undergraduates.” Meanwhile, due to the economic downturn, Harvard’s endowment has dropped to a mere $27 billion.


It is high time to educate the supporters of education and publications that cover higher education that Harvard’s cookie crisis, however traumatic it may be in Cambridge, is not remotely illustrative of the depth of the economic crisis being faced by the colleges that serve those who need education the most. I’m the chancellor of an open-admission, two-year college within the 14th poorest congressional district in the country; we have half as many freshmen as Harvard, yet only a minuscule amount of the resources. We have had a 35 percent increase in enrollment since 2006, yet kept tuition the same. Our state appropriations – already the 47th lowest in the nation in terms of support for higher education – have never recovered from budget cuts back in 2002. Our budget was flat last year, at best will be flat this year, and will very likely decline in fiscal year 2012.

Approximately 86 percent of our degree-seeking students receive some type of financial assistance, and many work full time while going to school. Most are first-generation college students, and a disproportionate number are single parents. Yet, we are breaking the cycle of poverty and providing future opportunities for students who, because of admission standards and financial needs, don't choose which college to attend, but whether to go at all.

Few people outside of the Ozarks know about Missouri State University-West Plains, where we don’t spend $500 every meeting on cookies! Maybe it’s time to stop drawing attention to the alleged sacrifice of doing without cookies and ask what’s wrong with a system where some institutions have that much money in the first place. Another example is Princeton University spending $5,000 each on chairs for its new library. Every time I read about something like this I want to shout that a million-dollar gift to an institution like Harvard or Princeton is a drop in the bucket, while the same gift to a two-year, rural college is a tsunami.

Who wants to endow a chair at our school? Currently we have none.

Who wants to modernize facilities for our nursing program? We have a waiting list of students wanting to be accepted into the program, but because of program limitations, we cannot admit them. This is an extremely successful program in which virtually 100 percent of our graduates find employment upon graduation.

Who wants to fund our Honors Program for an overseas trip? Many of our students have never traveled farther than 100 miles, let alone visited another country.

Let me tell you what we have cut back.

  • For 13 years we have been trying to add classrooms and facilities for the 75 percent of our students who require developmental classes before they are ready for freshman-level math and English. Last year we finally got $8 million appropriated for two buildings. This appropriation passed the legislature and was signed into law by the governor, but because of the lack of state revenues has now been withheld indefinitely.
  • Our Honors Program, which includes some of our best and brightest students, no longer visits China, a country that will have a greater and greater impact on the world in which they will live, work and compete.
  • We have closed our Center for Business and Industry Training, and we are closing one of our satellite classroom facilities.We have eliminated, consolidated, or reduced to part time numerous staff positions.
  • Our faculty and staff, who always go above and beyond the requirements of their jobs, have been underpaid for years, did not receive a raise last year, will not receive one this year, and will be fortunate to have a job next year. Compare the average salary of our professors and assistant professors, $53,333 and $40,307, to the average salary for Harvard’s professors and assistant professors, $192,600 and $101,400. While I am well aware that Missouri State-West Plains is not a four-year college with elite graduate programs, I am also well aware that faculty at two-year colleges educate almost half of the undergraduates in the United States.

While this information is specific to my campus, you will find similar examples of administrators stretching the dollar at two-year campuses across the country.

Let me recognize that Harvard is a world-class institution, and Ivy League universities provide unique educational opportunities. That is not the issue. While I concede that the “cookie cutback” and subsequent faculty comment are not indicative of all of Harvard’s programs, they do serve to highlight a very real problem – the lopsided support of different institutions within higher education.

One can make a sound argument that a Harvard education is worth more than an education at Missouri State-West Plains. But, when you remember that our campus has half as many freshmen as Harvard, that our institution is the only option for many of our students, and that our endowment of $1.7 million is just pennies compared to Harvard’s $27 billion, is a Harvard education worth over 15,000 times more? Let me put it another way – are our students 15,000 times less worthy of the benefits of higher education? We must find a way for supporters of education to contribute in a more meaningful and balanced approach. Otherwise, a growing philanthropic egoism widens the chasm between those who have and those who can’t even have the opportunity to have.

Are we just going to keep saying, “That’s the way the cookie crumbles?”

Drew A. Bennett
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Drew A. Bennett is chancellor of Missouri State University-West Plains.

Define 'Frill' and Use it in a Sentence

Your “frill” is not my “frill. “ My frill, in fact, is an essential component of the work I do, which is an equally essential aspect of our institution’s mission. Maybe you say the same about yours.

And therein lies the heart of the difficulty in discussing what has recently become a phrase bandied about in the world of higher education. “No-frills education” has been touted by the Pennsylvania State Board of Education, the president of Southern New Hampshire University in recent attention-getting interviews, and pundits commenting on the out-of-control costs of college. If we can just strip the college experience down to its most basic form, the argument goes, we can restore sanity to the price structure and access to those who need it.

But the first challenge comes when we begin to discuss, and decide on, what constitutes a “frill.” Unfortunately, the contentious and fractured nature of higher education, long a hotbed of competing priorities, makes that a difficult conversation.

Shopping for a college education is not like buying a new car, and building an effective institution to provide that education is not like building one. If one of us goes into a car dealership with a plan to buy the most stripped-down vehicle on the lot, and we stick to that plan, we have a pretty good idea of what we will drive away owning: a car without many of the nifty features now available. No GPS, no satellite radio. We will have a smaller engine, which we understand will leave our simple little car a bit underpowered on the highway.

But we know too that we will have a car equipped with the basic safety features required by law -- seatbelts and airbags -- and that it will have the components necessary to drive off the lot: four wheels supporting a frame, powered by an engine.

But what is it about a college education that is truly essential? And how do we arrive at that conclusion? We can start with the curriculum, but if there is an institution out there that has not suffered through lengthy debates about the components of that curriculum, neither of us knows where it is. The only thing constant about the “essential” components of a curriculum has been the regular change each institution imposes on it.

Foreign languages, for example, have been a mainstay of a liberal arts education. But as demand has lessened and resources have dwindled, a number of institutions have reduced or eliminated this requirement. Skill in writing has long been one hallmark of a college education, but at many large research institutions, students can graduate having written fewer than a dozen substantive papers, many of those having been graded and returned with few comments and corrections. Colleges and universities have added, and then removed, requirements for courses addressing diversity, gender issues, global concerns.

What was essential in one decade is seen as frivolous in another. At the furthest extreme is an institution as esteemed as Brown University, which has no required courses among its thousands of offerings.

Is academic support a “frill”? If one agrees that writing is indeed an essential component, then is a writing center that provides intensive tutoring in this skill also an essential component? That’s a fairly easy argument to make. And yet, in a time of budget cuts, we have seen writing centers forced to reduce their hours and staff. At what point does this essential component become so limited that an institution’s mission is threatened?

To return to the car-buying analogy, we know that tastes and needs have an impact on standard equipment in a car, and that over time, we adjust our expectations of that equipment upward. One would be hard-pressed, for example, to find a car without a radio today. It doesn’t mean the radio hasn’t added to the cost of the car, just that we are in agreement that we will accept the cost as part of the price of the car.

But easy acceptance has never been part of academic culture. We can, and do, argue over everything from the lack of vegetarian options in the dining halls to class schedules, from the awarding of tenure to a less-than-stellar instructor to the political correctness of a mascot. Debate is, one could argue, an essential component of our mission (though we have to admit there are days when we wish it were a frill that we might be willing to do away with). The risk for our institutions is not in the content of this debate, but in the oft-reflexive assumptions we bring to the debate, which can then degenerate into a harsh and morale-sapping exchange between groups of colleagues.

“No-frills education” discussions have their common fodder: gleaming recreation centers, posh residence halls with concierge desks, heavily-funded student activities events, athletics and all its attendant costs. These are among the items that proponents of “no-frills” education seek to eliminate. The “no-frills” education offered by Southern New Hampshire University, for example, is a commuter-based approach to garnering credits; many classes are taught by the same faculty who teach at the university’s “heavily frilled” other campus. But are those students getting the same education as their peers down the road? Perhaps they don’t need a recreation center, but is there any doubt that students learn valuable skills from activities outside the classroom?

Over the past 20 years, service learning as a component of the curriculum has become increasingly common as faculty and students alike, supported by data, acknowledge the deep level of learning that takes place when students must put their classroom skills to good use in the community. What about learning to develop a budget for an organization, motivating volunteers, evaluating the success of an effort? And practically speaking, how does a no-frills education impact a student’s relationship with the institution? Will these students be loyal alums 10 or 20 years after graduation?

It’s equally critical that we remember that very few frills are either/or propositions. Most exist on a continuum of cost and usefulness. Perhaps a climbing wall (a “frill” often cited as an example of an unnecessary expenditure) isn’t a good use of campus dollars. But is a fitness center with basic cardio equipment that gives students, as well as faculty and staff, a convenient way to relieve stress and stay healthy in that same category? Similarly, a residence hall with a spectacular view of Boston’s skyline, such as the luxury accommodations recently opened by Boston University, can hardly be discussed in the same conversation as the standard double-room, shared-bath residence halls still operating on most campuses.

These debates about “amenities” versus “necessities,” about what our students need versus what they want, rage on, as they should. It is our responsibility as the keepers of our institution’s educational integrity to own these debates and decisions. If we abrogate our responsibility to do this, someone else, like a state legislator or policy maker or a popular magazine that makes a bundle on its “rankings” issue, will step in.

Who should get to decide that a particular outside-the-classroom activity is a frill? Living on campus is a “frill” in the minds of some higher education policy makers, and certainly the community college system in American has shown for a century that students can receive a good education without experiencing dorm life. But who would argue that learning to live with others isn’t a valuable skill? It’s certainly one we hope our neighbors have learned before they move into the townhouse next door.

Is residence life essential? No. Is it a frill? No. Is it somewhere in the middle? Most likely. So who on any given campus is best positioned to determine whether it stays or goes as part of a move toward “no-frills” education?

An athletics program is similarly difficult to gauge. At one of our institutions, a small, professionally focused college, athletics was eliminated without much of a fight, and the college hasn’t missed a step.

At the other of our institutions, a small, selective liberal arts college, a quarter of the students participate in an intercollegiate sport. The budget to support these efforts, while modest compared to larger schools, is not insubstantial at a time when every dollar is scrutinized. There are on this campus, as we’re sure there are on every campus, those who would characterize athletics as a “frill.”

But if we eliminated the entire program, or even a few sports, enrollment would suffer greatly as those student-athletes sought other opportunities to continue their athletic pursuits, and we would have a hard time keeping our doors open for the rest of our students. It’s also worth pointing out that on this campus, as is the case on many small college campuses, our athletes are retained at a higher rate, and receive less financial aid, than the student body in general.

Some of the “no-frill” efforts being proposed are closely aligned with a view of higher education that is more vocational in nature, more targeted at providing students with skills essential to building an effective and pliable work force to rebuild the American, and global, economy. Setting aside the enormous question of whether this should be the true purpose of a college education, we nonetheless need to consider the role of career services in this equation.

Does a “no-frills” institution help its students find jobs after education? Perhaps, but how? Does it help students identify possible internships with employers? That would be a good idea. Does it invite recruiters to campus to interview students? That makes sense. Does there need to be an employee whose responsibility it is to arrange these internships and visits? That is helpful. Should someone work to prepare these students for these interviews? Review their resumes? Help them determine which recruiters might be of interest to them? Offer a workshop on interviewing skills? Those services make sense if the institution is truly committed to helping students move successfully into the workforce. So now perhaps this institution needs a career services office to provide these opportunities, replete with staff, a small resource library, some career-oriented software supplied on office-located computers.

Frills? Yes, no, and somewhere in between, depending on the vantage point from which you approach the matter.

The point of these examples is not to lead us down a path of endless debate about residence halls, athletics, career services, student activities, or any of the “frills” that proponents of “no-frills” would like to eliminate. It’s to point out that we have, at this point, no agreed-upon framework with which to discuss and define “essential” versus “frill.”

Will these “no-frills” campuses take a pass on academic support services? How about orientation or a campus conduct system? Will faculty at these no-frills institutions be any more comfortable dealing with students in serious academic or emotional distress than our faculty colleagues are now, most of whom appear grateful to have a counseling center (which some might consider a “frill”) to refer these students? Will students with learning and physical disabilities still be able to get the assistance they need, or will anything beyond the bare minimum required by the federal government be considered a “frill” and cast aside along with the climbing wall, spring concert, turf field and whatever else is the frill-of-the-day as portrayed in the media?

We can’t, and won’t, answer yes or no to these, though we each have our opinions. We just want to propose that each institution should own its discussion about these matters. Casting aspersions on the work of others, on the contributions of that work to students and to an institution’s core mission, is not productive. What is productive is an ongoing, civil conversation about those students and that core mission, and an effort to first build a framework for that conversation that educates each of us in the work of one another.

Every institution must have its own conversation, and no two institutions will reach identical conclusions. One institution’s frill is another institution’s essential service: ours to decide, and ours to defend. Leaving the definition of “frill” to others puts us at grave risk of losing control over our very purpose. We must look inward for the anchor points of this conversation. Who are our students, and what do we owe them? What do they need from us (rather than want from us) to ensure they have the best chance of succeeding at whatever it is we have crafted as our institution’s goals? And then we must measure what we offer against those goals, rather than against the college down the road that is awash in apparent frills (which, perhaps, they don’t define that way, and that is, of course, their prerogative).

What each one of us believes is essential may not be what another believes is essential, but we do share, at our best, a deep commitment to this work of educating college students, and we each deserve a voice in the conversation.

Lee Burdette Williams and Elizabeth A. Beaulieu
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Lee Burdette Williams is vice president and dean of students at Wheaton College, in Massachusetts, and Elizabeth A. Beaulieu is dean of the core division at Champlain College.

The Federal Regulatory Compliance Fee

Administrative costs on college campuses have soared in recent years, contributing in no small measure to the striking rise in student tuition and fees. Higher education leaders themselves are at least partly to blame for this, as their institutions’ focus on rankings and reputation has led them to spend increasing amounts of time and money on non-academic matters. But true to college officials’ complaints, the growing demands of government regulation also contribute significantly to the administrative bloat.

I propose that institutions be much more explicit about the money they spend to meet federal (and, for public colleges, state) demands. They should add a line to their tuition bills called the Federal Regulatory Compliance Fee, so that parents and students (and, yes, politicians) know just how much regulation costs them. Here’s why.

The explosion in administration costs has been striking. With the number of campus administrators, on average, now equaling the number of faculty members (and, perhaps even exceeding it given the increased reliance on adjunct faculty as resources are shifted to from instructional to full-time administrative positions), it appears that the university administration has become the tail that now wags the educational dog.

Some of this administrative burden is clearly self-imposed. When college students became customers, and institutional rankings became focused on reputation, fund raising and selectivity rather than educational opportunity or academic quality, the education of students became almost incidental to the institutional priority of getting onto somebody’s – anybody’s – top 10 list.

Who has time to worry about what happens in the classroom when there are glossy brochures to design and publish, colleagues to woo (it is they who will assess your institutional reputation when ranking season rolls around), earmarks to seek, research infrastructures to build, grants to win, press to avoid, coaches to hire, merchandising opportunities to pursue and donors to cultivate? I sometimes wonder how cheaply we could run colleges and universities if we got rid of capital campaigns, selectivity ratings, federal grant programs, commercial athletic enterprises, and architectural showcasing and went back to the traditional focus on … silly me … teaching and learning.

Oh that’s right, we do know how affordable it is to educate students without all of the extras -- community colleges are the perpetual reminder of how inexpensive it can be to provide a quality education at an affordable price (although these institutions are currently under-resourced given the role they play not only as institutions of higher education, but also as the new high schools).

Rules Require Cost Shifts

Nonetheless, a great deal of administrative burden does flow from the growing list of federal regulations that may ultimately be the greatest barrier to innovation, efficiency and quality in higher education. Many of these regulations force institutions to shift valuable resources away from classroom instruction and into administrative functions and salaries, not to mention electronic data systems, non-instructional facilities, external advisory groups, and teams of consultants and lawyers who help institutions complete the annual ritual of checking boxes and submitting reports to bureaucrats who are unlikely to read them and who will never confirm their accuracy.

In fact, even when regulators know that they are asking institutions to use outdated and faulty methods to collect inaccurate data on a non-representative population of students, they still hold institutions accountable for producing the coveted report. Can you say … IPEDS?

That does not mean that all regulations are bad or wasteful. Truth be told, there are many regulations that are productive, necessary and critical to maintaining our national edge in the area of higher education. The federal regulatory framework does, in many ways, level the playing field among institutions and set minimal standards for financial and instructional integrity among a group of institutions that are increasingly focused on the wrong priorities. And for those institutions engaged in scientific research, some regulations are critical to ensuring student and worker safety and to protecting our national security when sensitive work or materials are involved (although the current regulations are outdated and far too expansive in this regard).

It is true that colleges and universities can opt out of a great number of federal regulations simply by declining to participate in certain federal programs, such as federal student aid programs and federal grant programs. But during this time of shrinking state support and significant endowment losses, can institutions afford to turn away ANY potential source of funding? I sometimes wonder if institutions ever do the math to determine if the benefits of participating in various federal programs -- and especially federal grant programs -- actually exceed the costs.

While some degree of regulation is a good and necessary thing, how do elected officials, and perhaps even more importantly, the voters, know when the regulatory burden is too great? As we see with each reauthorization of the Higher Education Act of 1965, when Congress can’t do anything to address the legitimate challenges that students or institutions face, they show the love by authorizing grant programs that will never be funded, expanding existing programs that have never shown positive results, and adding layer upon layer of additional regulations so that they can tell their constituents just how serious they are about solving all of higher education’s problems.

Congress can’t actually guarantee that undergraduates will have access to the Nobel-winning faculty featured on the glossy college brochures, and they can’t force an institution to offer enough sections of required courses so that all students can graduate in four years, but they sure can force institutions to tabulate more data and report on more things. Whether or not the data are meaningful or the reports are useful is not terribly important. One wonders, however, if for the cost of writing yet another report, the institution could have hired another professor to teach freshman composition.

Sure, it sounds good for an elected official to say that he or she is going to hold an institution “accountable” for instructional quality, or campus safety, or cost containment, but what if the regulatory framework intended to improve a legitimate problem only makes it worse? For example, what if regulations aimed at increasing retention rates serve only to provide the sort of perverse incentives that further erode institutional quality? After all, the unintended consequence of our past efforts to increase high school completion rates is that we essentially made the high school diploma meaningless, and yet we still can’t give the thing away to 20% of the population.

Or what if regulations intended to control escalating college costs serve only to make it more expensive to operate – and, therefore, attend – an institution of higher education? What if regulations intended to increase the quality of classroom instruction do nothing more than shift precious resources away from the classroom and over to the administration building?

The problem with our current regulatory system is that voters do not have access to the sort of information that would allow them to evaluate the true efficacy or the actual cost of the regulations created or imposed by the officials they elect (no, elected officials don’t write the regulations, but it is they who write the laws that require, and set the specifications by which agencies promulgate and enforce regulations). I’ll bet that the average student or parent has no idea just how many federal regulations apply to institutions of higher education, or how the compliance burden contributes to soaring costs.

Elected officials of both parties have realized the polling benefits associated with castigating higher education leaders about rising tuition costs, but do the voters understand that each time Congress passes a law, they contribute significantly to those rising college costs? In the absence of good information, voters seem to think that doing something is better than doing nothing, especially when they are misled into believing that someone other than them will pay the cost (as if regulatory costs are ever absorbed by producers and not passed along to consumers).

Calculating, Not Complaining

In order to provide students and voters with the information they need to make informed decisions, it is imperative that colleges and universities provide clear information about the true costs of these regulations to the people who ultimately foot the bill -- the students, their parents, and the taxpayers.

Instead of just complaining about regulatory burden, colleges and universities should take the time to calculate actual cost of compliance -- including the cost of personnel, information systems, specialized facilities, and programmatic changes that are required to meet regulatory standards -- and then disclose this information to students and the public on the institution’s homepage as well as on each student’s bill.

Moreover, instead of burying compliance costs in the overall tuition rate, I urge institutions to start billing students separately for their portion of the compliance costs through a line-item Federal Regulatory Compliance Fee. Utilities have used this sort of billing practice for years, and perhaps it is time that colleges and universities follow the lead to inform students of just how much the federal government shares in creating, rather than solving, the problem of rising college costs.

Then, when new regulations require the institution to hire more staff or purchase new technology, the students will understand the direct connection between the cost of attendance and increased regulatory burden. Not only will this allow academic leaders to place the cost-increase blame squarely on the shoulders of the responsible parties, but it will also provide students and the public with the information they need to engage more effectively in the democratic process.

Conversely, the data may reveal that regulatory burden contributes only minimally to rising college costs, in which case we know to start looking harder for the real problem.

Regulations clearly have associated benefits as well as costs, but there is generally scant information about the cost side of the equation and an overabundance of promises on the benefits side. It is my guess that once students and the public have access to accurate information, they may be willing to forfeit a few of those “government assurances” in order to be able to afford the opportunity to attend college in the first place.

And with a paring down of regulations to those that are truly important, institutions may be better positioned to comply more fully while at the same time allowing the dog to, once again, wag its tail.

Diane Auer Jones
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Diane Auer Jones is president and CEO of the Washington Campus and former U.S. assistant secretary for postsecondary education.

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.

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

Changing the Equation

Even before the current economic downturn, cost had become the dominant public concern about American higher education. As the president of a private college, it had also become my dominant concern. And with good reason: over the past decade, following the national trend, tuition at my institution increased at a faster rate than inflation, than the growth in family incomes, even faster than the increase in health care spending. Many of our students were graduating with considerable debt. It was obvious, as well, that cost was discouraging too many students from modest backgrounds from viewing my institution as a realistic option.

So each year we struggled with two decisions -- where to set tuition for the following year and how much institutional financial aid we should offer. We wanted to keep the college affordable but, at the same time, wanted additional resources to invest in our ongoing efforts to strengthen programs. But each year, after some gnashing of teeth, we opted to set tuition and institutional aid at levels that would maximize our net tuition revenue. Why? We were following conventional wisdom that said that investing more resources translates into higher quality and higher quality attracts more resources.

Among the colleges and universities I know best, quality is the main driver. And most people inside and outside the academy – including those who control influential rating systems of the sort published by U.S. News & World Report -- define academic quality as small classes taught by distinguished faculty, grand campuses with impressive libraries and laboratories, and bright students heavily recruited. Since all of these indicators of quality are costly, my college’s pursuit of quality, like that of so many others, led us to seek more revenue to spend on quality improvements. And the strategy worked.

Over the last decade, every available dollar we had from tuition revenue, as well as from enrollment growth and fund raising, was invested in traditional indicators of quality. We built new state-of-the-art facilities, hired great professors, gave generous scholarships to high-achieving students, maintained small classes, expanded our co-curricular activities and invested in a host of high-impact educational practices such as learning communities, service learning, and diversity initiatives. And our reputation for quality grew exponentially. Our applications have doubled over the last decade and now, for the first time in our 134-year history, we receive the majority of our applications from out-of-state students.

But our nagging concern about affordability wouldn’t go away. We didn’t need fancy economic models to realize that our college, along with so many others, was quickly approaching a very steep cliff. If we continued to raise tuition as we had in the past, more and more prospective students, even those who had their hearts set on attending our institution, would find that they simply could not afford to do so. It became clear that, unless we found ways to reduce our costs, and moderate our annual tuition increases as well, there was no way to avoid the cliff, no matter how quickly the economy recovered. We were caught in a classic “damned if you do, damned if you don’t” dilemma. No one wants to cut costs if their reputation for quality will suffer, yet no one wants to fall off the cliff.

I believe that, for the vast majority of colleges and universities, public as well as private, the elephant in the room is the cost structure of our academic programs. We don’t talk about it because of the perception that cost is inextricably related to quality, and no one is ready to sacrifice that. When quality is defined by those things that require substantial resources, efforts to reduce costs are doomed to failure.

But we know there is another way to think about quality. Beginning with Sandy Astin in the 1980’s and extending to Jamie Merisotis today, some of the best thinkers in higher education have urged us to define the quality in terms of student outcomes.

The notion of defining quality in terms of outputs rather than inputs, by the achievements of our graduates rather than the achievements of our entering class, had been a key element in the strategic plan my institution began developing in 2002. During the planning process, dissatisfaction with traditional models of education came to the surface. Faculty said they wanted to move away from giving lectures and then having students parrot the information back to them on tests. They said they were tired of complaining that students couldn’t write well or think critically, but not having the time to address those problems because there was so much material to cover. And they were concerned when they read that employers had reported in national surveys that, while graduates knew a lot about the subjects they studied, they didn’t know how to apply what they had learned to practical problems or work in teams or with people from different racial and ethnic backgrounds.

Based on those concerns, and informed by the literature on the “teaching to learning” paradigm shift, we began to change our focus from what we were teaching to what and how our students were learning. In the process, we broadened our conception of what students should learn by including more than subject-specific information. We established what we call college-wide learning goals that focus on "essential" skills and attributes that are critical for success in our increasingly complex world. These include critical and analytical thinking, creativity, writing and other communication skills, leadership, collaboration and teamwork, and global consciousness, social responsibility and ethical awareness.

Shifting our paradigm from teaching to learning enabled us to approach the question of cost in an entirely new way. Instead of assuming we needed all of the expensive accouterments of quality, we could focus our attention on those things known to have the most impact on student learning. And it doesn’t take long to discover that, despite claims to the contrary, many of the factors that drive up costs add little value. Research conducted by Dennis Jones and Jane Wellman found that “there is no consistent relationship between spending and performance, whether that is measured by spending against degree production, measures of student engagement, evidence of high impact practices, students’ satisfaction with their education, or future earnings.” Indeed, they concluded that “the absolute level of resources is less important than the way those resources are used.”

So we started searching the literature for instructional designs that require fewer resources and result in high levels of student learning. The ones we found shared certain characteristics. They were driven by clear learning goals and involved extensive assessment and feedback to students. They stressed active learning and took maximum advantage of technology. In each design, faculty spent less time lecturing and more time coaching, proactively asking and answering questions with groups of students. And faculty were assisted in their coaching role by teaching assistants or peer mentors. Finally, economies of scale helped to produce significant cost savings.

With these principles in mind, and with support and encouragement from my board, I decided to commission a demonstration project. I pulled together a team from our school of business and told them that the goal was to develop an undergraduate degree completion program in business that produced more and better learning at half the cost of our traditional program. After more than a year, the group had developed what we now describe as a low-residency, project- and competency-based program. Here students don’t take courses or earn grades. The requirements for the degree are for students to complete a series of projects, captured in an electronic portfolio, that mirror core activities in the business world. To complete each project, students must acquire and apply specific competencies – competencies identified as necessary to function effectively in a modern business. The list of competencies also includes all of our college-wide learning goals. Students acquire the competencies by accessing a rich repository of learning resources and activities that our faculty have compiled and made available online. These are enriched with multimedia features, communication and social networking capacities and contextually rich simulations and animations. Faculty spend their time coaching students, providing them with feedback on their projects and running two-day residencies that bring students to campus periodically to learn through intensive face-to-face interaction.

After a year and a half, the evidence suggests that students are learning as much as, if not more than, those enrolled in our traditional business program. Although it will take some time to fully evaluate this model, and to assess the true costs of delivery, the approach shows real promise.

One thing we are learning is that providing students with sophisticated online learning materials and supporting their learning with face-to-face interaction with faculty who are attuned to their different interests, orientations and learning styles can be a powerful combination. That’s consistent with a meta-analysis recently published by the U.S. Department of Education, which showed that students learn more in courses that combined online and face-to-face elements (called hybrid or blended learning) than they do in programs that are exclusively online or exclusively classroom-based. In short, the report documented that high-tech plus high-touch works best.

As the campus learns more about the demonstration project, other faculty are expressing interest in applying its design principles to courses and degree programs in their fields. They created a Learning Coalition as a forum to explore different ways to capitalize on the potential of the learning paradigm. They designed a problem-based general education curriculum for high-achieving students. They are using students as peer teachers in a number of settings. Every academic program has articulated a set of program-specific learning goals and is developing ways of assessing student progress toward these goals. And our business faculty members are designing a new M.B.A. program using a model similar to the one they used in the demonstration project.

There are hundreds of private institutions like mine that have longstanding and well-deserved reputations for maintaining high standards for student achievement and providing personal encouragement and support for students to meet those standards. High-touch is at the core of their educational philosophy. That is a costly model that I fear is unsustainable. I don’t know if hybrid or blended instruction will be the magic bullet that allows us to cut our costs and thus moderate the rate of our annual increases in tuition. It’s more likely that different programs will find different ways to integrate efficiencies, high-tech or not, into their largely high-touch designs. Some, like theater and studio art, may not be able to do so at all.

My institution will continue to experiment with different instructional designs until we find approaches that work for us. But I suspect we won’t have the luxury of time. There are enough for-profit and not-for-profit institutions that are quickly putting the pieces together to be in a position to mass-market multiple high-quality, low-cost degree programs that students of all types will find enormously attractive.

I don’t know how close we are to the edge of the cliff where we find we have priced ourselves out of the market. Perhaps the cliff is really a slippery slope that we have been on for some time. Or perhaps we’ll tap into a new and lucrative market, like many of us did twenty years ago when we developed programs for adults, which will enable us to subsidize our high-touch programs.

Trying to predict the future is fraught with risks. But I believe that private colleges, including largely residential colleges with modest resources, can survive the challenges ahead. There are many families who see great value in having their children leave home to have the holistic and often transformative learning experiences these schools provide. At the same time, I see danger ahead unless we can cut the Gordian knot between cost and quality. At the very least, finding innovative ways to lower costs without compromising student learning is wise competitive positioning for an uncertain future. The search at my college continues.

Michael Bassis
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Michael Bassis is president of Westminster College.

A Federal Impediment to Quicker Degrees

In February 2009, at a meeting of the American Council on Education, I challenged a group of university presidents and other leaders of higher education to focus on the need for greater innovation in higher education. I encouraged those leaders to heed the lesson offered by George Romney to the auto industry in the 1970s to innovate or lose their advantage: “There is nothing more vulnerable than entrenched success,” he said. I followed up in October 2009 with an article in Newsweek entitled "The Three-Year Solution: How the reinvention of higher education benefits parents, students, and schools."

The response has been pleasantly surprising.

Over the past year and a half, a growing number of institutions of higher education came forward with proposals to offer three-year degrees to their students. Here are a few examples:

  • Grace College, in Winona Lake, Ind., is offering an accelerated three-year degree in each of its 50-plus major areas of study. Dr. Ronald Manahan, Grace's president, cites the cost of college as a driving force behind the decision. “We have listened to people’s concerns about [the cost of] higher education and we are answering them,” he said.
  • Chatham University, in Pittsburgh, Pa., is offering a three-year bachelor of interior architecture without summer classes, allowing students to get into the job market a year earlier. School officials have reconfigured the four-year degree by cutting Studio classes from 14 weeks to just seven, and when compared to similar programs, these students graduate two years earlier.
  • Texas Tech University, in Lubbock, Tex., is offering an accelerated three-year medical degree, rather than the usual four. The program is aimed at making it easier and more affordable for students to become family doctors.

As institutions of higher education look into the possibility of offering a three-year degree, some have run into federal policies that seem to interfere with their ability to innovate. For example, this May I received a letter from Jimmy Cheek, chancellor of the University of Tennessee-Knoxville, describing a potential obstacle to a three-year degree surrounding student loans.

Here’s the issue: Under the Higher Education Act, student loan limits are tightly set to prevent over-borrowing by students. Federal annual loan limits and lifetime loan limits establish a maximum amount one can borrow under the federal student loan program. The annual loan limits are designed to pay for two semesters per year (see chart below).

Example: Scheduled Academic Year

Academic Year Semesters


Loan Amount



Scheduled Academic Year 1



Fall 2010 and Spring 2011






Scheduled Academic Year 2



Fall 2011 and Spring 2012






Scheduled Academic Year 3



Fall 2012 and Spring 2013






Scheduled Academic Year 4



Fall 2013 and Spring 2014















For most institutions of higher education, and most students, this works and makes sense. But 3-year degree students often take a third semester’s worth of classes over the summer. The federal limits appear to prevent students from obtaining a loan to pay for those summer courses.

Fortunately, there is a solution. Working with the Congressional Research Service, and the staff of the U.S. Department of Education, my office has identified an option that exists under current regulations to give flexibility on these loan limits to institutions of higher education and students. Instead of following a standard “Scheduled Academic Year” as outlined above, an institution of higher education offering a three-year degree could award loans to students through a “Borrower-Based Academic Year," per the chart below:

Example: Borrower-Based Academic Year

Academic Year





Loan Amount



Scheduled Academic Year 1



Fall 2010 and Spring 2011






Scheduled Academic Year 2



Summer 2011 and Fall 2011






Scheduled Academic Year 3



Spring 2012 and Summer 2012






Scheduled Academic Year 4



Fall 2012 and Spring 2013















This option would use the same annual loan limits and lifetime loan limits, but compress them to match the student’s academic schedule. Compared to the typical “Fall-Spring” academic year over each of the four years, a three-year degree program could use a “Fall-Spring, Summer-Fall, Spring-Summer” structure to allow for a compressed academic schedule.

I have been told that this “Borrower-Based Academic Year” option is currently not well used because it is administratively complicated for institutions to offer both “Scheduled Academic Year” and “Borrower-Based Academic Year” loan structures at the same time for individual students. But for an institution that offers a comprehensive three-year degree program involving a number of students, this seems to make sense as a way of helping students in that program afford the tuition and fees.

I have asked Chancellor Cheek to let me know if this option would work for the University of Tennessee, or if more flexibility needs to be added. When Congress last reauthorized the Higher Education Act in 2008, we made several changes to the Pell Grant program to allow that funding to be used on a year-round basis. There is no reason students should not have that same flexibility with their student loans.

It is my hope that more institutions will explore innovative ways to provide a high-quality postsecondary education. The three-year degree is one idea for some well-prepared students, but it is vital to our competitiveness as a nation that we develop other ideas to improve the efficiency of higher education and expand access to more Americans.

Institutions of higher education are rightly feeling pressure from parents, students, state and local leaders, the business community, Congress, and the Obama administration to do a better job of providing more Americans with a quality college education at an affordable price. That pressure will likely grow more intense every year as more jobs require higher education, advanced certificates, or technological skills from their applicants.

Some have asked whether all colleges and universities should be required to offer a three-year degree. My answer is a resounding no. Just as the hybrid car isn’t for everyone, all students and all institutions won’t want a three-year degree. The last thing we need is more federal mandates on higher education.

The strength of our higher education system is that we have 6,000 independent, autonomous institutions that compete in the marketplace for students. It is that marketplace that needs to develop the new ideas for the future -- and not become a victim of its own “entrenched success" -- so that our students, and our country, can continue to thrive.

Senator Lamar Alexander
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Sen. Lamar Alexander (R-Tenn.) is chairman of the Senate Republican Conference and a member of the Senate Committee on Health, Education, Labor and Pensions. He served as U.S. secretary of education under President George H.W. Bush and as president of the University of Tennessee.


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