State policy

Strengthening systems would improve public higher education (essay)

Chancellor Nancy Zimpher of the State University of New York (SUNY) has added a new word to Wikipedia. While she was an English major in college, creating new words is not typically how she spends her time. But this particular word, “systemness,” has uncommon utility for her, as she presides over a 64-campus system of public higher education in a time of austerity politics.  In fact, she thinks that proof of this concept has the potential to ensure opportunities for affordable postsecondary education not only in New York, but in states around the country, including my adopted state of Wisconsin. 

By rethinking the traditional models of governance in which institutions exist primarily for themselves and in pursuit of their own prestige, Zimpher is encouraging colleges and universities to gather on a broader, connected playing field where serving students is the name of the game.

While this idea might sound old-fashioned to some people, given that it doesn’t explicitly involve MOOCs or other “hot” ideas, I find much to like about it. As I listened to Zimpher talk through her ideas during a recent visit to UW-Madison, I was struck by the familiarity of this territory.  Ever since writing my dissertation on “swirling students” (those who attend multiple colleges and universities in pursuit of a degree), I have put the phrase “system of higher education” in quotations because institutional culture in the United States hardly reflects systems thinking at all. 

Each school acts in a hypercompetitive, prestige- and resource-seeking space that feels almost Darwinian -- each striving to be the best and allowing those falling behind to simply die away.  Given the tremendous potential supply of college-goers most public institutions enjoy, their adherence to this approach is remarkable. Instead of flagships working in tandem with sister schools to find places for each of the state’s high school graduates, they try to hog as many resources as possible, leaving other campuses to struggle with less. The greater good suffers.

So in theory, the idea of systemness sounds nice, promoting collaboration across campuses to coordinate program offerings and services, striving for common goals, and working together to count student successes as mutually beneficial. It is an idea borrowed from health care delivery, where so many notions of reform for higher education seem to develop.

But I have to wonder, who really wins? Do the smaller public comprehensives or community colleges really gain, or do the flagships and large urban universities continue to dominate? I am skeptical.  Without specific provisions to protect against it, I am betting winners in the current system still manage to take all. It’s just too easy, even in a connected system, to downplay the players with less prestige. In other words, the system can bring everyone to the same table, but those whose voices are privileged, unless actions are specifically taken to disregard or reduce that privilege, will drive the conversation.

To be honest, really reaching the goals of systemness requires that Zimpher do more than coordinate SUNY’s 64 campuses. She must grab ahold of the current prestige drivers (inputs like student test scores, research dollars, percent of tenured faculty) and flip them, elevating the work of schools that really achieve New York’s goals. Since resources are obviously constrained, now and in the foreseeable future, this may mean pulling back a bit on the funds now flowing to the currently prioritized institutions. 

Instead, the colleges and universities that welcome all state residents at whatever quality of education they managed to secure in high school and help them learn at the next level, the universities whose faculty go out and actively solve the problems New Yorkers confront in their daily lives, and the institutions that produce the most effective teachers who help New York’s kids flourish — these places should realize elevated voices and status in a renewed system.  

Such institutions reject the notion of “higher” education and instead work at the “postsecondary” level -- they are workhorses in the creation of citizens for active democracies, picking up directly where high schools leave off (and indeed, wherever they leave off). Per-student funding needs to be higher where this kind of work occurs, not lower. Faculty should be tenured primarily for their excellence in teaching and service to the state, rather than the number of research articles published in barely-read academic volumes. And the value of degrees produced should be measured in terms of meeting the needs of a democracy, which requires teachers and social workers and writing tutors, not solely the high-tech employees that propel today’s economy.

It’s a big, audacious task and a controversial one. Zimpher seems inclined to try to do it really well — for example, next month she’s hosting a conference where both proponents and critics of systemness will get together to argue over the concept’s value.  Personally, I’m rooting for Zimpher and her word — if she can make it happen, the truly student-focused educators among us who reside in the nation’s so-called systems of public higher education will applaud.

Sara Goldrick-Rab is associate professor of educational policy studies and sociology at the University of Wisconsin at Madison.

SUNY planning systemwide fight against student loan defaults

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A large university system begins statewide effort to help students manage debt and avoid defaults.

NACUBO agenda for public universities dominated by efficiency and revenue growth

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Potential new revenue sources and “institutional effectiveness” initiatives dominated the agenda for public universities at the annual meeting of business officers.

Illinois law will restrict universities' use of search firms

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Illinois law makes it more difficult for public universities to use outside firms to identify candidates for non-presidential jobs, but critics say it won't save money in the long run.

A business-friendly argument for more government support for higher ed (essay)

Academics have historically balked when confronted with suggestions that the education system is a business and should be treated as such. They speculate that placing a monetary value on an entity with a deep, intellectual purpose diminishes the overall significance of learning. They claim that you cannot quantify the positive benefits of a degree.

But this is not the case. Education, particularly higher education, is a business, and one of the few left in this country that guarantees a positive return. To call education a business isn’t to undermine its importance to our country and citizens — it provides the proof that our higher education systems should be a top priority, if not the top priority, for government spending.

Quite simply, the future of our economy depends on well-educated workers. More than 59 percent of jobs today require some postsecondary education, yet these degrees are becoming increasingly difficult to attain. We must evaluate higher education based on the return institutions generate for the country both in terms of absolute dollars and competitiveness.

Public higher education depends on state and federal budget allocations. We have a choice as to how we distribute these public funds. By continually prioritizing Social Security, health care, and defense spending over education, the government is indirectly hindering an increase of college graduates that our economy so desperately needs. By 2018, 63 percent of jobs will require a college degree, but we are likely to fall 3 million graduates short of what the market demands, according to a recent study.

Today, the federal government spends approximately $30 billion annually subsidizing enrollment in higher education institutions, with most of the money spent on financial aid, and roughly 8 percent going to grants to institutions. According to a Cato Institute Study, the federal government also provides approximately $30 billion to U.S. universities to fund research projects. While these are certainly hefty investments, combined it means the government only contributes 14 percent of the total dollars — $420 billion — that flow into higher education institutions.

Higher education is the best investment we can make for our country’s future. But are we doing enough to support educational institutions and students? Higher education provides annuity-like returns for 40 years — the working years of most graduates. Over the course of an average lifetime, a holder of a four-year-equivalent degree (the weighted average of associate’s, bachelor’s, master’s, professional, and doctorate degrees) gives the government $471,000 in income, payroll, property, and sales tax revenue. You certainly can quantify the value of a degree: that’s more than twice what it would collect in lifetime taxes from a high school graduate lacking a college degree, according to a University of Maine study.

In California, for instance, every dollar the state invests in higher education leads to a $3 net return on investment. The University of California System (UC) contributes more than $14 billion in California economic activity and more than $4 billion in tax revenues each year, not to mention the impact from UC-related spinoffs. Further, the California State System (CSU) ensures businesses get the trained workforce they require — CSUs graduate 45 percent of the state’s computer and electrical engineers. Despite this, the UC and CSU schools have seen a 28 percent decline in state support between fiscal years 2007-2008 and 2011-2012, according to a study done by the Stanford Institute for Economic Policy Research.

Higher education graduates help fuel innovation that creates new jobs. Research universities contribute new technologies — from Internet search algorithms to genetic coding — and file thousands of patents annually. The American Recovery and Reinvestment Act (ARRA) of February 2009 provided some funds for higher education (mainly to prevent states from reallocating education dollars for other purposes). However, these funds are miniscule — less than a percent — in comparison to the total funding for research universities, according to the Washington Higher Education Coordinating Board.

If the government should plateau on its investment in higher education, we’ve raised the risk level of our current investment. When endowments are down and state governments cut funding to state universities, tuition rates rise and the likelihood of students not graduating increases. According to the American Institutes for Research, students who started bachelor degree programs in the fall of 2002 but failed to graduate in six years cost the students approximately $3.8 billion in lost income in 2010 alone.

A recent Inside Higher Ed blog post discusses an interesting approach to lowering tuition costs while increasing the numbers of students able to enroll in universities and earn degrees, using a simple supply and demand model. Approaching the problem from an economic standpoint does not undermine the importance of receiving an education; it highlights its very necessity, and makes it more accessible.

As taxpayers, we need to be asking about our tax dollars’ return on investment. From 1987 to 2006, we doubled federal support for Medicaid in state budgets — increasing these funds from 10.2 percent to 21.5 percent — but decreased federal expenditures for higher education from 12.3 percent of state budgets to 10.4 percent, according to a University of California study.

We need to have a conversation about education similar to the national debate we had about the automotive and financial industries. We should not view education expenditures as discretionary dollars that we can increase and decrease at will, but rather as the most dependable, profitable, and ultimately, important investment our government can make.

Mehdi Maghsoodnia (@mmaghsoodnia) is CEO of Rafter, which provides software tools for cloud-based distribution of course materials. Rafter is also the parent company of textbook rental service Bookrenter.com.

Business group ranks states on effectiveness of public colleges

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U.S. Chamber of Commerce ranks public higher education in state-by-state report card that measures "return on investment." Good data and transparency are lacking among public colleges, group says.

University of Texas community rallies behind Austin president in dispute with politicians

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UT-Austin president saw an outpouring of support after speculation that his governing board and state politicians wanted him gone.

Boosting higher ed performance without more state support won't work (essay)

The Committee for Economic Development’s (CED) new report, “Boosting Postsecondary Education Performance,” was not written in the spirit of Warren Buffett. Nor of Paul Volcker. More’s the pity. For if the report’s authors had acknowledged that trying to substantially boost performance without boosting investment is an unrealistic business plan, they would have seized the opportunity to change the national conversation to stimulate genuine growth and affordable, quality higher education.

Nevertheless, the CED has performed an important service in three regards. First, the report focuses on “broad access institutions,” which means “less-selective, less-expensive regional public and private colleges [and universities], community and technical colleges, and for-profit colleges.”

Too often, policy makers feature flagship publics, as if our future depends only on them. Research universities are important, particularly in graduate and professional education, creating new knowledge, and in the generally overlooked but essential role of preparing professors, the academy’s producers of value. But too much public policy privileges the already advantaged (compared to access institutions) flagships. Even the Obama administration, which has focused on community colleges, has overlooked four-year access institutions. Yet our success hinges on them.

Unfortunately, the CED report continues some policy makers’ misconstruction of for-profit universities as efficient. It is a false efficiency. As a sector, these institutions are VERY expensive to students and to the government. They have high tuition and they live largely off massive infusions of federal student aid. Disproportionate numbers of their students default on their loans at the government’s, not the corporations’ expense. That is a Wall Street bust model: high fees to average consumers, high defaults on loans for which the government and taxpayers pick up the tab.

A second contribution of the report is in emphasizing the importance of a system focus in state policy making, moving “beyond a one-institution-at-a-time approach to state policy.” Part of that focus is grounded in understanding, in contrast to too many state policy makers, that higher education is a valuable asset, pivotal to our future, not merely a cost to be minimized. With some important exceptions, most states have failed to develop policies that provide an integrated strategy for fostering affordable access to a quality higher education and ensuring a rational division of labor among institutions (a conclusion shared by Laura Perna and Joni Finney’s state policy project). The report could have extended that integration to include K-12 education, and it could have spoken more to articulation/transfer. In calling on business leaders, it could have focused on medium/small business leaders. But at least it got the systemic focus and higher education’s value as a public good right. 

A third contribution, though it likely will be lost in the rush to performance measures and “dashboards,” is the report’s recognition that “There are no proven models of state success in addressing these issues; and for that matter, one size does not fit all.” If state policymakers latch on to that phrase, internalizing the recommendation that “the strategic plan should provide wide latitude for institutional innovation through initiative and implementation,” this will be a major benefit. 

More likely, state policy makers will interpret the report to embrace a simplistic outcome measures-gone-wild approach that leads postsecondary education further down the path of the narrow numbers-blinded, short-term productivity/profit-margin-minded thinking that plagues some sectors of the corporate economy. That approach characterized Wall Street as it sought innovations (e.g., derivatives, subprime mortgages) to boost “productivity.” 

That sort of net-tuition-revenue-maximizing thinking is moving many colleges and universities away from the lower income students who are the country’s growth demographic, in pursuit of students able to pay more, with less financial aid. The CED critiqued this mentality in business, in its report, “Built to Last: Focusing Corporations on Long-Term Performance.” But it offers no cautionary note for higher education.

The new CED report misses a major opportunity to seize the historical moment. The country desperately needs enlightened business, academic, and government leaders to acknowledge that doing considerably more with no more resources is an emperor that has no clothes.

Instead, the report offers “new normal,” magical thinking as realism: “Realistically, however, given the severe budget pressures facing the states, the prospects of significantly greater public funding of postsecondary education in the short to medium term are poor.” It recommends that: “It is critical, therefore, that postsecondary institutions strive to boost their performance through productivity gains and innovation without relying heavily on new money to underwrite improvements.”

New normal thinking is provided despite noting that “public colleges and universities in some states are turning away large numbers of applicants because they cannot provide enough classrooms and instructors to handle them.” The number (about 400,000) in community colleges alone is staggering (see report of Center for the Future of Higher Education). It is provided despite the acknowledged value created by higher education that would justify increased investment. And it is provided despite the fact that the historical higher education transformations it identifies (e.g., land grant colleges, and post-WWII G.I. bill and building community colleges and four-year access colleges) required significant public investment

Although state support is at historic lows, the report suggests the U.S. already spends enough on postsecondary education, citing high average expenditures as a percentage of GDP compared to OECD countries. Yet this average ignores the steeply stratified U.S. pattern, with access universities getting the short end of the stick). The issue is inequity and “growing imbalance,” not inefficiency. The CED report could have called for redistributing appropriations on the margins to favor access institutions. It could have called on states to maintain their level of investment, rather than continuing to hack away at postsecondary budgets in an austerity strategy that undercuts our future. And it could have called on businesses to invest in the limited/nonexistent endowments of access institutions, instead of further feathering the endowment nests of the elites.

Such new-normal advice is ironic coming from a group including corporate leaders from the financial sector and companies serving it. Three-plus years ago, the nation boosted, or stimulated, Wall Street with a bailout that had no strings. Yet the CED’s CEOs’ formula to boost performance on College Street entails no infusion of monies while tightly attaching strings to colleges, though, unlike Wall Street (or Detroit), they have increased their productivity amid, in relative terms, declining state appropriations, downsized full-time faculty, and high demand from students/customers.

Increased productivity trends are particularly evident in broad access institutions. They have re-engineered their production of education: hiring increased proportions of part-time, contingent faculty; extensively using on-line distance education; experiencing record student demand and enrolling most of the national increase in student population, thereby significantly increasing student/faculty ratios. All with less public investment. Access institutions are already doing a lot more with a lot less.

What would Buffett say to the boost-performance-with-less-investment advice? Or Volcker? The time is ripe for an enlightened set of business leaders to take up the mantles of these elder business statesmen. Both have put on the agenda the need for more revenues. Buffett proposes that additional monies should come from the wealthiest Americans paying their fair share of taxes. Volcker has also supported new taxes, but also proposed the “Volcker rule,” restructuring and regulating the financial sector.  

The CED could have proposed two sets of measures. One would increase the tax rate on the wealthy and close tax loopholes benefiting the largest corporations.  The U.S. individual income tax rate for the wealthy is historically low, lower than for middle and working class Americans. Collected corporate taxes (versus the formal tax rate) are also low. Indeed, reports have highlighted the “Dirty Thirty” Fortune 500 companies that pay no taxes (or get refunds), contributing to federal and state budget deficits. The CED could have called for closing tax loopholes that enable companies to pay little or nothing despite increased profits. That might have been hard given that “Dirty Thirty” companies such as G.E., Wells Fargo, Fed Ex, Honeywell, American Electric Power, and Tenet Health Care, are on its board and committees. But it would have been fair.

A second set of measures would restructure the financial sector and higher education’s priorities. In the former, a financial transactions tax could serve as a disincentive to the proprietary trading activities that led to the collapse. Some revenues could be directed to schools and access institutions. In higher education, just as the Volcker rule separates proprietary trading from the traditional functions of banks to protect the core and the customers, colleges and universities should refocus monies on their core, academic functions, to the benefit of students, reversing 30 years of reduced shares of expenditures going to non-educational programs and personnel.

In not proposing such “disruptive innovations,” the CED report guarantees that the system will continue to operate on a C.O.D. basis -- collecting on the delivery of education, from students. That will further shift the burden to middle- and lower-income families, rather than requiring the wealthy and large corporations to bear their fair share of investing to boost access to affordable, quality higher education, for the public good.

Gary Rhoades is professor of higher education at the University of Arizona’s Center for the Study of Higher Education. He also directs a virtual think tank, the Center for the Future of Higher Education.

Kentucky limits on debt issuance hinder university constructions

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Kentucky's restrictions on university debt, at a time when many public universities are turning to bonds in lieu of state funding for capital projects, further hinder construction at state institutions.

Pikeville abandons plan to become state university in Ky.

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Facing political opposition, private Kentucky university scraps push to become a state institution.

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