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
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.
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.
GIVE ME A BREAK!!!!
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
Drew A. Bennett is chancellor of Missouri State University-West Plains.
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
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.
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
Diane Auer Jones is president and CEO of the Washington Campus and former U.S. assistant secretary for postsecondary education.
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.
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 is president of Westminster College.
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
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
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
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.
Rather than bore you with the details of our recent report highlighting problems with the Higher Education Price Index (HEPI) and the Higher Education Cost Adjustment (HECA), we thought we’d tell you about recent developments concerning lunch at the Center for College Affordability and Productivity (CCAP).
Contract negotiations at CCAP typically involve plenty of Janx Spirits and closely resemble Ford Prefect’s favorite drinking game. After winning the previous round against our boss, we insisted on a lunch per diem. We decided that we would construct the Lunchtime Cost Index (LCI) so that we would know how much the per diem should be each week.
Everything was going smoothly, until one day, while eating our now routine steak and scotch lunch at Smith and Wollensky, we realized that CCAP was in dire financial straits. We conducted a thorough analysis to determine the cause of this unexpected turn of events. It turned out we were spending an inordinate amount of money on the newly established lunch per diems. We studied charts showing that the per diems, adjusted by the LCI, were relatively stable. And yet here we were, running out of money.
With little else to be done, we brought in consultants to get to the bottom of things. The final ValueLandShackWoodenShowerRepair, LLC report (we couldn’t afford the better-known PricewaterhouseCoopers) pointed out that when determining the cost of the per diems to CCAP, it was inappropriate to adjust them by the LCI. Doing so indicated the cost of the per diems relative to the cost of lunch (assuming the LCI accurately gauged the cost of lunch), but what we wanted to know was the cost of the per diems relative to everything else in the budget – something that a lunch-specific price index could not reveal.
Moreover, it turns out that the LCI was not even a good measure of the cost of lunch, because it was biased whenever there was a change in productivity, whenever substitution occurred, whenever quality changed, and because it was self-referential.
Prior to the lunch per diem, Andrew and Jonathan would trek to Subway and order an a la carte meatball sub every day ($5.00). The LCI was supposed to tell us the cost of maintaining a meatball sub’s worth of lunch. However, shortly after CCAP introduced the per diem, Subway introduced value meals. Now, we could get chips and a drink with our sub for the same $5.00. Theoretically, the LCI should have registered this as a decline in the cost of a meatball sub’s worth of lunch. But since we were still spending $5.00 at lunch, and the LCI was determined by asking how much the standard meatball sub option at Subway costs, the LCI reported that the cost of lunch was unchanged. Economists would say that the LCI missed the productivity increase -- more output (lunch) for the same input ($5) - and was therefore biased upward.
The following month, Subway raised the price of their meatball sub meal to $6.00. Quizno’s, however, did not. The price of their meatball sub meal remained at $5.00. Jonathan and Andrew started buying Quizno’s subs instead. However, the LCI continued to ask how much a meatball sub at Subway costs. By failing to account for the substitution from Subway to Quizno’s when their relative prices changed, the LCI was again biased upwards (reporting an increase when actual spending was unchanged).
The astute staff at CCAP quickly diagnosed this particular problem, and changed the methodology of the LCI from just the cost of a meatball sub at Subway to tabulating lunch costs wherever they were spent. In retrospect, this merely caused other problems.
Since Jonathan and Andrew were used to spending $5 out of pocket prior to the per diem, after they started receiving the per diem, it wasn’t long before they started to buy higher-quality meals. They were still willing to spend $5 out of pocket on lunch, which with the per diem meant that they could now spend $10. They started off upgrading to chicken subs at Subway and Quizno’s. These higher-cost subs would then drive up the LCI, and as the LCI grew, the per diem grew.
Of course, the cost of a meatball sub's worth of lunch hadn’t changed, but as higher-quality subs were ordered, the LCI was unable to disentangle the different effects. Because the LCI did not hold the quality of lunch constant, it was unable to distinguish between (1) cost increases due to changes in the quality of lunch and (2) cost increases due to higher prices for a given lunch.
The last problem we discovered was that our actions affected the LCI. As the per diem increased, it wasn’t long before Jonathan and Andrew began venturing beyond Subway and Quizno’s. Each move resulted in higher spending, which led to a higher LCI, which led to a higher per diem, which then spurred us to go to a better restaurant, starting the cycle again. The LCI kept increasing, not because the cost of lunch kept increasing, but simply because we spent more. In other words, the LCI was self-referential. It wasn’t long before we were eating a steak and scotch lunch at Smith and Wollensky every day.
Our consultants suggested that rather than creating a highly specific price index with all these problems, we should just use what everyone else uses 90 percent of the time, the Consumer Price Index (CPI). While the LCI was useful in answering some questions that were specific to CCAP lunch patterns, it was not at all appropriate to rely on it as a gauge of how much lunch should cost.
Sadly, before this sensible change could be implemented, Jonathan and Andrew lost the next round of contract negotiations, and with it, their lunch per diem. In fact, as punishment for the lost revenue, Jonathan and Andrew are required to write more op-eds. Fortunately, they’ve discovered that fiction can at times be easier to write than nonfiction.
Ridiculous as this may seem, our lunchtime escapades are not too far off from what has been occurring with HEPI and HECA in the higher education industry. In addition to both of them suffering from quality, productivity, and substitution biases, the HEPI is self-referential. Even more importantly, because of what they measure and how they measure it, their actual usage deviates substantially from their appropriate usage.
If we had our choice, Sarah Lawrence would never be listed among the most expensive colleges in America. Since we are, though, and in the premier position with tuition, fees, room, and board set at $58,716 for 2011-2012, it’s important that our colleagues in higher education – as well as the general public – understand exactly what goes into the price, why that investment yields an extraordinary liberal arts education that continues to offer dividends after graduation, and how we help deserving and qualified students attend, regardless of ability to pay.
One of the problems with "most expensive" lists of any kind is that they assume a uniformity of product or service. In fact, though, Sarah Lawrence differs from other institutions, even liberal arts colleges, in fundamental ways. For example, our faculty have twice the one-on-one contact time with individual students as faculty at other prestigious institutions, including liberal arts colleges.
That’s partly because over 90 percent of all Sarah Lawrence classes are small seminars (with an average of 11 students) and every seminar includes a "conference" component in which each student designs an independent project and meets biweekly with the professor to confer on progress. This is essentially a tutorial in the Oxford-Cambridge tradition. Also in that tradition, we assign each student a don, a full-time faculty member who serves as his or her adviser, mentor, and intellectual guide. Donning is necessary because Sarah Lawrence students are accountable for designing their own education in a curriculum with concentrations instead of majors, so the don’s expertise and individual knowledge of each student is consequently invaluable in helping chart the best possible academic course.
Like much at Sarah Lawrence, donning may be difficult to justify on a purely economic basis, as is our refusal to use graduate students as teaching assistants or our insistence on providing extensive written evaluations of each student in each course in addition to grades. But we maintain these standards because we believe the customized, "handcrafted" education we provide helps ensure that each student achieves his or her greatest potential. And like anything handcrafted, it is significantly more cost-intensive, and thus more costly, than what’s produced on an assembly line.
That said, the college is particularly sensitive to the financial pressures facing families. Because of our high sticker price, we feel compelled to provide the most robust financial aid possible, which is why our average financial aid award is over $34,000. But providing that kind of financial support to students, especially in these economic times, comes at a cost. Our faculty, staff, and administrators are in the second year of a salary freeze; we have among the lowest staff-to-student ratios in the liberal arts sector; and we can’t invest in our physical plant nearly as robustly as we’d like. Those are just some of the sacrifices we feel worthwhile to providing the best education possible and making it accessible via financial aid.
Ultimately, the most compelling response to the question of high cost is to focus instead on value. The key issue for us and our constituents is whether we’re providing graduates with the skills and competencies critical to living productive lives and pursuing successful careers.
To some degree, all good colleges do that. But again, Sarah Lawrence goes beyond the traditional benchmark as a result of our process and pedagogy. Because there are no majors, students learn to plan and navigate their own paths, frequently including multiple disciplines that would be impossible elsewhere. As a result, they learn how to learn just about anything. Because writing pervades the curriculum – in virtually every class -- they reason and communicate in a compellingly mature manner. And because we don’t offer vocational courses per se, they learn how to think like entrepreneurs and create their own jobs and careers, which is precisely what the world demands as traditional jobs and professions disappear or are outsourced.
Transformative is a word often used by our alumni to describe their educations, and it aptly describes the contributions of our better-known graduates, such as Chicago Mayor and former White House Chief of Staff Rahm Emanuel; MacArthur “genius” choreographer Meredith Monk; actors Julianna Margulies, Jane Alexander, and Jill Clayburgh; JJ Abrams, creator of Lost; broadcast journalist and author Barbara Walters; W. Ian Lipkin, physician-scientist whose team first identified the West Nile virus; and Brooke Anderson, Chief of Staff and Counselor for the National Security Agency.
The point, though, isn’t the renown achieved by our alumni. It’s that thousands of Sarah Lawrence grads have transformed themselves, their families, their workplaces, and their communities because of a truly unique educational experience.
And the fact that the model is costly? It means all of us need to find new and creative ways to generate revenue, reduce expenses, and ensure that future generations of deserving and qualified students can benefit from a Sarah Lawrence education. It’s far too glib to quote the MasterCard “priceless” line, and a Sarah Lawrence education is by no means for everyone, but for the intellectually adventurous student who wants to explore learning as deeply as possible under the personal tutelage of a brilliant and caring faculty, I believe there’s no finer education to be had anywhere. Without in any way minimizing the impact of our cost, we’re worth every penny.
Karen Lawrence is president of Sarah Lawrence College.
Henry E. Riggs, president emeritus of Harvey Mudd College and the Keck Graduate Institute, recently argued -- wrongly, in my view -- in The New York Times that it is supply and demand that explains why the price for college is so high. In fact, at the selective, nonprofit privates, there is huge excess demand for seats that is not cleared by price; the seats in these colleges are rationed, with all those rejected applicants (upwards of 90 percent of those who apply to some of these colleges) wanting a spot at the current price.
Price is explicitly not allowed to rise and clear the market. Some parents might have been willing to pay an extra $100 or $1,000 to get their child into their dream school, or perhaps even an extra $10,000, given what they are paying SAT tutors and admissions advisers. Colleges and universities create this excess demand, so that they can select the students they want from the long queue of applicants, recognizing that the quality of their college or university depends to a large extent on the quality of the students who attend. The excess demand is intentional, and is generated by spending more than the price charged and spending those resources in ways that make the institution as attractive as possible to desirable students. Some colleges do this by keeping class size small; some do it by having great football teams.
These expenditure decisions in part depend on what kind of students the college wants to attract – how they define student quality. Why doesn’t Pomona College eliminate tuition and spend less on each student, perhaps what Earlham College spends, as suggested by Riggs? Because then the excess demand on the part of students for a Pomona education would go down, and Pomona would not get to choose among the same quality of applicants as they do now. And they realize that eliminating tuition wouldn’t increase that excess demand as much as cutting spending reduces it. Many families are willing and able to pay for those things that would have to be cut, were tuition not bringing in any revenue to support spending, and will go elsewhere in search of those programs. Are these families and students just in search of prestige? I would argue that prestige is closely related to the quality of the program and of the students who attend an institution, which in turn depends importantly if not perfectly on how much is being spent per student, and not so much on price.
Do they "need" to spend so much, as Riggs asks? Maybe another way of asking this is, is it good for American higher education, or more importantly for America, that this is how this market works? An important outcome of this is that the most talented students, as defined by these selective institutions, have the most spent on their educations. And, with significant resources allocated to financial aid and a commitment to diversity, this includes talented students from all different backgrounds, certainly more so than in the past. If talented students benefit the most from large investments in their education, then this may be optimal. (One could still worry a bit about more being spent on students that these institutions value for reasons other than academic talent, such as legacy status or athletic ability.)
The important public policy question, which in times of budget cuts will become increasingly important, is just how much more should be spent on talented students relative to others. As funding for public higher education, where most students are educated, continues to be reduced, relative spending will shift even more toward the talented students who get admitted to the most selective schools. To the extent that the nonprofit private sector and these selective colleges remain committed to and increase their commitment to academically talented students from all backgrounds, through their admissions and financial aid policies, their large investments are being made for the right reasons.
Catharine Hill is a higher education economist and the president of Vassar College.