Business issues

Let Professors Choose

Endowments have plummeted, alumni will donate less, and students won’t be willing to pay as much. Because of all this financial trauma, colleges will inevitably expect more from their faculties. But I urge college presidents and trustees, in responding to this situation, not to make inflexible demands of professors, but to rather empower us to decide which sacrifices we shall bear.

Colleges need to reduce costs, and one way could be to cut professors’ salaries. But some professors would do a lot to maintain their incomes, so why not give us the option of keeping our salaries as long as we agree to teach an extra class or take on significantly more administrative responsibilities? After all, if some professors did more work, a college or university could postpone when it needed to hire new employees.

To make up for a hiring freeze, some colleges might be tempted to force all professors to teach additional classes. But some professors live frugally, have lots of family income, or would do most anything to preserve research time. Why not let these instructors take, say, a 10 percent pay cut in return for not having extra teaching responsibilities?

A hiring freeze might also necessitate some professors taking on more administrative duties. But no school should push all professors into doing what college administrators do. If, for example, one instructor hates meetings while another dreams of being a dean, let the former teach one of the latter’s classes, thereby freeing up the latter’s time for paperwork.

Colleges should present professors with a menu of sacrifices they must pick from. Of course, there will have to be some planning so that not too many professors pick the same option. Perhaps the most senior faculty members would get their first choice from the menu, and less senior members would get to choose only among sacrifices consistent with their institution’s needs.

But a better way to allocate sacrifices would be to have professors bid for what they want. For example, a college could declare that all but 100 members of the faculty must teach an extra course each year. Professors could then bid with their salaries for one of the 100 slots, with some kind of limitations built in so that not too many professors from the same department win the auction. The auction winners would be the professors who value money over time, and the “losers” those who value time over money. Each professor would be making the choice that best suits his or her needs. True, affluent professors might seem to have an advantage in such an auction, but it would be the least affluent who would most benefit if the auction’s revenue prevented the college from cutting everyone’s salary.

Departments, too, should be given choices over how to share their college’s financial hardships. A department, for example, might be told to either postpone its next hire by a few years or give up half of its administrative budget. Each department would use its knowledge of its own needs to make the decision that would best serve it and would probably best serve the college.

Professors care about many aspects of their jobs, including salaries, teaching loads, administrative work, sabbatical opportunities, travel money, office space, research expectations, and grants. Most professors accept that, because of the financial crisis, our terms of trade with employers will become less favorable to us.

By giving professors options over how these terms will change, schools can potentially get more out of their professors while inflicting less harm on them (and so encountering less resistance). And this most holds true if different professors can make different choices, rather than the college negotiating with the faculty as a whole for all professors to make the same sacrifice.

James D. Miller
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James D. Miller is an associate professor of economics at Smith College.

From Survival to Sustainability

You may think things are bad now -- and you’re right, they are. But today’s economic concerns are obscuring what may prove to be even bigger strategic challenges ahead for higher education.

Everyone knows that we’ve entered a period of profound anxiety and uncertainty. Everywhere we look -- from this publication’s own headlines, to university cabinets’ strategy sessions, to our now more thinly attended professional association meetings -- we see people devoting tremendous amounts of energy to the work of decoding the economic predicament in which we find ourselves. We’re working feverishly to understand what this economic downturn will portend for everything from bond financing to financial aid to endowment management to enrollment performance, and much else besides. In many respects, our key focus right now is survival. We are striving to protect the core of our colleges and universities. And we are hoping that higher education may yet again prove to be counter-cyclical to prevailing market conditions – a rare winner in the economic lottery.

Beyond survival, however, higher education has to be thinking about its own sustainability. Even as we struggle with present conditions, a number of farsighted universities are working hard at decoding the future, too -- because change is certainly coming. Demographics are shifting. Competition for talent is global. And the very financial structures that have supported higher education for the past 40-plus years may now be at risk.

In our current circumstances, these forward-looking universities read signs that the old ways of doing things may be approaching obsolescence. As a senior executive at one large, private university recently said to me, “We’re not persuaded that the business model or the economics of higher education are sustainable. We’re asking the question, ‘What if we were to start from scratch?’ ”

In short, now more than ever, we in higher education need to rethink our place in the economy and how we deliver value. What markets will we serve? What programs and credentials should we offer? How will they be delivered? How should we define success?

Faced with these questions, many of us will retreat to our intellectual comfort zones -- those familiar ideas supported by anecdote as often as by evidence. “Why should higher education change?” some of us will ask. “We’re doing just fine.” Others will be certain that we should follow this or that path -- stick to our knitting, or reinvent ourselves completely. But it pays to spend some time with these questions before rushing off to whatever answers may be nearest at hand. As former Secretary of the Treasury Robert Rubin once observed, “Some people are more certain of everything than I am of anything.” In transitional and uncertain times such as these, we should be cautious of following the lead of those who peddle certainty, those who know exactly what they think.

“It’s much harder psychologically to be unsure than it is to be sure,” wrote the investment guru Seth Klarman recently. “But uncertainty also motivates diligence, as one pursues the unattainable goal of eliminating all doubt.”

Diligence is critical to evaluating not only the challenges that higher education faces today, but also the opportunities. In a number of respects, this is a best-of-times/worst-of-times moment in higher education. For example, President Obama has asked “every American to commit to at least one year or more of higher education or career training.” The Lumina Foundation and others have called upon the higher education community to produce 16 million additional degrees by 2025. And old industries -- energy among them -- are about to become new again.

At the same time, we may at last be reaching the tuition ceiling for many parents, and there is the very real prospect of enrollments drifting toward less expensive institutions. Shrinking endowments are creating significant challenges for managing university operations. And a business model based on exclusivity does not scale; it limits the potential for impact -- whether intellectual or economic.

Growing numbers of universities see this special moment as a unique opportunity to reassess their business strategies. Developing a strategy, of course, involves not only deciding what you will offer and how you will serve the market, but also -- and just as importantly -- what you will not do. Many higher education institutions suffer from trying to be too many things to too many people -- a very risky strategy for any enterprise. If we are going to successfully protect the core, and also plan for the new realities awaiting us in the future, then we are going to have to focus our investments of time, money, and human capital.

Because higher education in the U.S. involves so many diverse types of institutions serving so many diverse markets, the choices we face as a system of higher education are myriad. But among the choices that college and university leaders must face are these: by what means can a quality institution be simultaneously selective and open? Should the institution strive to be “global” in reach or regional? Will it continue to prioritize so-called “traditional” students or adjust its operations to better serve working adults and employers? Will it emphasize a unique, place-bound experience at a single campus or the delivery education services through multiple and widely dispersed sites and online? Will it prioritize research or teaching? Will it be a leader in emerging industries? Fundamentally, what form of value will the institution create?

In conversation with university presidents, provosts, and other academic leaders over the last six months, I’ve often asked what higher education can do to avoid the classic investor error of buying high and selling low. Jack Wilson, the president of the University of Massachusetts, responded to this question by saying that he anticipated a return to “value investing” in higher education -- something akin to the longstanding investor practice of buying stocks in companies that are trading below their intrinsic value. “The last few decades, people have not thought about higher education as a place to look for value,” Jack said. “But now, they’re going to be looking for quality institutions that offer a great experience, and a great value at a great price. There’s going to be a lot of pressure on higher education institutions to get their value propositions in place.”

This is what’s coming down the track at us. We have to protect core. We have to survive. We have to stay in business. And yet at the same time, we have to create more value and become more competitive. We have to develop a focused strategy and choose from among numerous competing opportunities. And if that weren’t enough, we have to achieve all of this in a period of tremendous demographic transition.
According to the National Center for Education Statistics, in 2007, 37 percent of the U.S. population over the age of 25 had earned an associate degree or higher. That doesn’t sound altogether bad, but degree attainment rates within the U.S. have been relatively flat for decades while countries such as Canada, Japan, and Korea have advanced beyond 50 percent of their adult populations earning the equivalent of an associate degree or higher. Reading the economic tea leaves and sensing where this growing asymmetry may leave us, the Lumina Foundation has set out what it characterizes as an “audacious” goal of ensuring that 60 percent of the adult U.S. population possesses an associate degree or higher by 2025.

There are numerous challenges associated with meeting this very laudable goal. First, it represents a roughly 50 percent increase in our annual degree productivity on an annual basis for the next 16 years, and would require an effort several times the scale of the post-WWII G.I. Bill. Second, if we were to achieve it, we would have to accomplish it under circumstances in which the demography of the college age population is shifting dramatically.

Today, 29 percent of U.S. adults aged 25 to 29 possesses a bachelor’s degree or higher, according to the National Center for Education Statistics. If we disaggregate this figure by race/ethnicity, however, we see that 32 percent of whites, 19 percent of blacks, and 13 percent of Hispanics in this age group has a bachelor’s degree or higher. What makes this especially significant is that Hispanics and blacks are among the fastest growing populations within the U.S.

According to the National Center for Public Policy and Higher Education, in 1980, whites accounted for 82 percent of our population. In 2020, this figure is projected to be 63 percent. Over the same 40 year period, the proportion of Hispanics in our population is projected to have increased from 6 percent to 17 percent, and the proportion of blacks is projected to have increased from 10 percent to 13 percent. In a paper published in 2005, the National Center for Public Policy and Higher Education goes on to argue that if current racial and ethnic enrollment gaps remain, the net result would be a projected 2 percent decline in per capita income over the period from 2000 to 2020. That may not sound like much, but consider that per capita income grew by 41 percent from 1980 to 2000. If higher education leaders don’t attend to these challenges now, the result in another 10 years’ time may well be a shrinking tax base and a weakened competitive position on the global stage.

Such an outcome would represent a more subtle but potentially longer-lasting economic downturn -- a quieter crisis, but perhaps more profound.

Changing markets call for a change in strategy. Even if it doesn’t prove necessary for most colleges and universities to “start from scratch” to respond effectively to our changing demographic profile or to global competition for the best students, it will be vital for us to move beyond our comfort zones and question some of our basic assumptions about how higher education is financed and managed -- and fundamentally reexamine which challenges and opportunities each of our thousands of colleges and universities is best positioned to address.

Now is the time to reflect on our strategic objectives, our missions, and our success measures. The institutions that are among the future leaders of U.S. higher education are likely to be those who embrace these challenges and reflect upon these questions most seriously. It may well be that we need to do something truly audacious to generate lasting value – for our institutions, our students, and our economic health.

Think about it.

Peter Stokes
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Peter J. Stokes, is executive vice president and chief research officer at Eduventures, Inc., a higher education research and consulting firm.

Harvard Isn't Poor

It’s a dramatic tale: The story of the once-wealthy institution that houses America’s smartest -- our leading university, perhaps the world’s -- now just scraping by. Searches frozen and secretaries dismissed, hot breakfasts suspended, trash piled high: Harvard is “poor,” its endowment “collapsed,” according to Vanity Fair magazine.

Harvard isn’t taking issue with this impoverished profile. In fact, the stream of leaked letters and memos pouring out of this typically proud and stoic institution seem to suggest it is unopposed to its characterization as strapped. But is it true? Is Harvard really poor?

The university has lost a lot. The precise numbers will be in soon, but Harvard’s endowment appears to have lost about a quarter to a third of its value, or at least $8 billion.

Yet this massive loss has not made Harvard poor by any measure. At over $28 billion its endowment continues to tower over that of any other university, museum or private foundation aside from the Bill & Melinda Gates Foundation, which has a couple more billion in the bank. Today, Harvard has more than $4 million in its endowment for every undergraduate it enrolls. It has not lost generations of wealth, as reports imply, but merely returned to around its 2005-2006 value. Harvard remains the richest school in our nation’s history.

So why the firings and belt tightening? Because Harvard, like many universities, is committed to spending only meagerly from its endowment. In 2008, before the present economic disaster, Harvard spent just 3.25 percent of its endowment to support its operations. While the absolute amount may be large, this is a miserly level of spending.

Now, with the value of its endowment plummeting, Harvard appears unwilling to break this habit, even at the cost of imposing a hardship on education and research. This is stunning given that, even with Harvard’s shrunken endowment, just increasing spending to slightly more than 4 percent would maintain support to the institution’s operating budget.

News reports, again unopposed by Harvard, would have us believe that donor restrictions prohibit a higher rate of spending. But in 2008, 46 percent of funds in billion-dollar-plus endowments at independent colleges and universities were completely unrestricted, according to the data in a table produced by the National Association of College and University Business Officers. And Harvard hasn’t released any information to suggest that its endowment is more restricted than most.

Harvard's funds may be restricted in this peculiar sense: The institution appears, in effect, to have restricted its endowment itself by tying up huge portions of it in long-term investments that are costly to pull out of. Yet those costs should be paid if they are necessary to maintain the operating budget. After all, that's the “rainy day” purpose for which endowments were created. But even cutbacks and widespread talk of Harvard's demise don’t appear to be enough to get the institution to alter its assumptions about endowment spending. Harvard refuses to spend from its rainy day fund even when it is pouring.

That Harvard’s endowment exists to advance education and research is not what an observer would infer from the institution's behavior. Instead, Harvard appears to have decided to put financial dominance ahead of the current needs of students, families, and citizens -- even while the institution remains almost unfathomably wealthy. Taxpayers, who help to support this nonprofit, have reason to ask whether this is the best choice.

Harvard has options, even if its financial gurus find many of them unattractive. The institution’s academic leaders need to remind them that endowment investment and spending decisions must be guided by the twin goals of furthering education and research, not winning the hedge fund Olympics.

And if Harvard’s gurus found it acceptable to follow an investment strategy that could, and did, lose close to 25 percent in a year, then they should certainly deem spending a few tenths of a percent more to hold harmless the operating budget acceptable, too.

More than a decade ago, the Yale University law professor Henry Hansmann said that “a stranger from Mars who looks at private universities would probably say they are institutions whose business is to manage large pools of investment assets and that they run educational institutions on the side… to act as buffers for the investment pools.”

These words have only become more true with time.

Lynne Munson and Donald Frey
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Lynne Munson researches college and university endowments for the Institute for Jewish and Community Research. She has testified on endowment spending before the Finance Committee of the U. S. Senate. Donald Frey is professor of economics at Wake Forest University.

Sleepless in Academic Affairs

Some fellow deans and I have noticed that when faculty conversations turn to administrative travel, there’s a curious split. A good number of our faculty colleagues suspect that we go jetting off to Cabo San Lucas, to luxuriate in radiant warmth amidst drained snifters of cognac and the fragrant waft of smuggled cigars.

By and large, those are the ones who like us.

Others suspect a furtive rendezvous with Lord Vader and Emperor Palpatine arranged so as to advance our plans to crush the rebel departments and rule unchallenged.

Those are the ones who think like us.

I jest. Alas, the reality of my own conference travel is, by contrast, so dull as to explain the persistent rumor that deans suffer disproportionately from narcolepsy. The average experience comes down to a January day in Calgary, where I'm left to choose between such enriching topics as “Formative Assessment as Instructional Practice” and “Meeting the Challenge of Deferred Maintenance in a Constrained-Endowment Environment” (here I have to say that only a career change to administrative work could have made me pine for an MLA panel on, say, poststructural critiques of the Victorian nautical drama).

But there are some payoffs. It was at just such a gathering a few months back that I joined a troubling discussion on a simple question:

“Amid international economic collapse, what keeps you up at night?”

The room -- packed with we former starry eyed types who had entered academic administration to pursue the dream of strengthening the academy -- reported on the nightmare of slashing budgets (sometimes by a third), layoffs (sometimes by the dozen) and closing academic departments (sometimes their own). But of all the answers, the hardest to hear was one of the last:

“I don’t think we’ve seen the worst yet.”

Thoughts about that possibility kept me up nights all summer.

In the end, though, it isn't the prospect that we might fail to make conventional changes in response to new economic realities that worries me.

My real concern is that we will cling to the status quo rather than bring the creative energy of our talented faculty to re-imagine our goals for student learning and the nature of faculty work. That conversation is one we in academe must have -- apart from the present crisis -- if we are to serve the nation and the world in ways that will meet present needs. It may be that we in academe are collectively whistling past the graveyard in the hope that this crisis will pass in time for us to avoid transformative change.

Of course we must do the things we’ve always done to address financial exigency: trim budgets, cut expenses, pull back on maintenance, and the like. These conventional responses won’t guarantee that we will thrive, but they can buy us time to take the next step: trying initiatives that we’ve never tried before.

These new initiatives will bring no guarantees, either, but they can buy us time to take the critical step: we need to imagine a college that we’ve never been before and work to embody it.

We've taken the painful and practical steps to bring our budgets back into balance.

The challenge for deans in a budget crisis such as colleges across the country are facing now is clear: how to reduce the budget by five or ten percent while maintaining the elusive "excellence" that so often finds its way into presidential rhetoric? In the absence of genuine conversation across the campus, the conventional choices are clear enough. For our part at Augustana, even as we have completed two record years for the college, we are nonetheless cutting back on administrative costs, reducing funds for travel, and curtailing reassigned time.

But such measures won't create a sustainable college. Such actions, for campuses across the country, are a way station, not a destination. They’re unpleasant; they're occasionally productive; and they are merely expedients, buying us time.

But time for what?

At Augustana, we're using this time to try initiatives we’ve never tried before, and the early conversation is promising: amid demographic decline across our Middle West, we're seeking students through all manner of new partnerships -- with high schools, junior colleges, and peer colleges alike -- that we expect to improve student learning and reduce costs. We’re exploring opportunities, for example, to offer liberal education to local high school students who may not have encountered the kind of pedagogy we value most; we hope such outreach will result in more students for our college.

We're building revenue by developing a 12-month academic program through expanded summer offerings linked to our admissions effort. And we're offering majors that affirm our identity as a liberal arts college even as they speak to new areas of interest for today's high school students, such as environmental studies.

Ultimately, I've come to believe that these initiatives, valuable as they may be, still will not help us to create the model that will enable our college to thrive for the next century. The fundamental flaw in the budget cutting/revenue expansion model is that it remains grounded in a series of assumptions bequeathed to us by the academy of the 19th century. Those assumptions reflect the pedagogies and institutional expectations of another age. They constrain, rather than support, those of our own. And so we need to take a further step: to re-imagine what our college might be for students of the decades to come.

At Augustana, we're engaging faculty deeply in that conversation, asking colleagues to think creatively about how we will change in response to the challenges before us. For deans, this is the opportunity of a career: we now know we must reframe the work that we do in order to create a new model that will better serve our students and our communities alike even as it will sustain our institutions.

We might, for instance, seek to learn from years of assessment data that tell us that traditional classroom learning contributes only a fraction to student growth and learning in college. One result might be that we further our efforts to build connections between the traditional curriculum and the co-curriculum. We might imagine new partnerships with our community that will form a central place in our students' experience and that might help to revive struggling neighborhoods; at Augustana, we have forged a relationship with an elementary school in our neighborhood with just such a goal in mind.

I believe the answers to these questions will best come by engaging the faculty. The challenge for academic administrators these days ought to be how we might better utilize the creativity and imagination of our faculty so as to avoid these conventional approaches.

How can we enable faculty to take on an entrepreneurial approach to their work, such that the resources of the college are not seen as a bank account from which one draws funds but rather as an investment into which all must contribute for the greater good?

How can we bring the intellectual creativity of faculty to the hard questions that are before us?

Can we change the question from “How can we best manage budget cuts?” to “How can we make it again possible for bright students of moderate means to attend the college?”

I am hoping to start with some stakes in the ground:

Focus on student learning. The point seems obvious, but once the specter of budget cuts is raised, it will be difficult to focus on anything but finance. Deans and faculty alike need to focus first on the primary question of what our students are learning and how we know.

Take into account the ways new pedagogies affect faculty work. Over the last two decades, the faculty's work at liberal arts colleges has grown infinitely more complex. With the addition of undergraduate research, investigative labs, process writing assignments, intensive mentoring and advising, service learning, and a host of other pedagogical reforms, we are asking faculty to do more than ever. Often, such reforms have been added on to a curriculum that has remained essentially unchanged, so that demands on faculty have increased substantially.

Work as a team. The adage that curriculum is determined by faculty and finances by administrators is laughably false. It rests on the absurd premise that curriculum and budget can somehow be separated (if they could, I would advocate for Oxbridge style mentoring for each and every student, from freshman year on!).

Commit to completing the conversation. Too many dialogues are shut down every year on campuses because of the threat of divisiveness. If administrators want faculty to bring all of their creative energy to the table, they have to be prepared to arrive at answers they might not have expected. If faculty want to guide decisions about resources, they can't throw up their hands and suggest that they won't have a role in decisions that lead to actual reductions.

What would transformative change look like? Every college and university will have a different answer. At Augustana, we hope to find ways to deepen student learning through the experiential pedagogies that the faculty have made a priority over the past two decades while easing the burden of the new methods on faculty. We hope to build on our efforts to connect a traditional liberal arts curriculum with vibrant and exciting careers, while helping students to see that a vocation -- or calling, in Martin Luther's sense of the word -- is considerably more vast than career. We hope to find ways to extend their learning in blended learning environments that have just begun to take shape on the horizon for academe.

Of course we can't be sure that our approach to the conversation will yield the sort of transformative change we seek. At Augustana, we are just starting to ask hard questions about how we will sustain our strength for the years ahead. I do know that 180 of the brightest people I know are turning back to the foundations of our community to study what we do best, what we know deeply about ourselves, and what we might be in the years to come.

Once we get that figured out, I'll return to the underrated charms of subzero Calgary for a good night's sleep.

Jeff Abernathy
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Jeff Abernathy is dean of the college at Augustana College, in Illinois.

Brandeis Wasn't Wrong

In 2001 I donated my collection of prints by sculptors to the Block Museum of Art at Northwestern, though some of the prints still adorn the walls of my house and won’t get to Evanston until after my death. You can assume -- and you would be right -- that a collector of such works has been a lifetime “consumer” and supporter of the arts.

And yet, I said to myself “good for them” when reports first surfaced last winter that Brandeis intended to sell its collection of modern art, so that the considerable (envisaged) proceeds could support functions closer to the central goals of the university.

Understand that my print collection went to Northwestern because I had been dean of arts and sciences there for thirteen years. Understand also that regarding this issue, my experience as dean trumps my love of art and that is why I disagree with the views expressed in numerous articles in The New York Times and one this month in Inside Higher Ed called “Avoiding the Next Brandeis."

I see a significant role for art museums on higher education campuses. But, with quite special exceptions, I see a very small pedagogic function for colleges and universities to own works of art, especially given the current cost and value of so many of them. I’d rather those museums were reclassified as galleries. To be sure, the provisions of deeds of gift must be scrupulously observed; but assuming that to be the case, let them sell their works of art if the funds thus gained will better serve the institutions’ educational mission.

The premise here is that the roles of museums on campuses are not like those of museums downtown, since the former exist to serve the specific needs and interests of a campus’s students and faculty.

This month’s article in Inside Higher Ed quotes a task force formed by arts groups to figure out ways to avoid the next Brandeis as saying that campus museums should be regarded as “essential to the academic experience and to the entire educational enterprise.”

But why should they be so regarded when, by my admittedly not systematic observations, most of those museums do nothing or very little to deserve to be so regarded? As dean, I had to bludgeon the Block Gallery to present an exhibit of the work of Northwestern’s prize painters, William Conger, Ed Paschke and James Valerio. (This was before the Gallery was transformed into a Museum and long before its current director, David Robertson, came to Northwestern.) Art history departments are mostly held at arm's length by campus museums who prize their (inappropriate) autonomy. Mostly, the museums don’t even know how to communicate with other than art faculty on campus.

It is excellent, therefore, that this cluster of issues is being looked at. In my view, however, the goals sought by the task force for campus art museums are not likely to be realized by means of works of arts owned by museums, but rather by means of exhibits brought in and often locally curated for specific pedagogic purposes.

Members of the task force, make sure, therefore, that you are not just talking to yourselves. You are looking for ways to relate A to B; there must thus be strong representation from both poles. As announced, the organizations participating in the task force are mostly from the Category A: the art museum community.

I strongly recommend that it also include not only representation from the art history and studio art departments, but knowledgeable people who have thoughts about how to involve art museums in educating students who are not primarily concerned with the arts. Indeed, given the way in which so many campus museums lead existences so separate from their campus surroundings, it might even be necessary to initiate reflection about about their possible wider functions. The task force might want to consider forming a committee consisting of a couple of department chairperson, a couple of deans or associate deans, perhaps some interested students assigning them the task of reporting to the museum-powers-that-be how those museums might serve a broad campus constituency.

Accordingly, if the just-formed task force keeps its eye on the ball (as I see it), that Brandeis bomb will have very positive, if unintended, consequences.

Rudolph H. Weingartner
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Rudolph H. Weingartner is former dean of arts and sciences at Northwestern University.

The Museum at the Heart of the Academy

When I first learned last winter that the Brandeis University trustees had voted to sell the collections of the Rose Art Museum and close the museum, my reactions were many: concern for Brandeis students who were losing an important learning tool; sadness that a great university was breaking trust with many benefactors; annoyance that the museum industry would be yet again living the trauma of defending our collections as other than semi-liquid assets.

To these were added a suspicion that somehow the Rose must have failed in its campus-wide engagement and in its outreach to key campus constituencies (including its trustees), or those very trustees would never have felt they could make that particular decision, no matter how great the budget gap facing them. Even as I recognized the right of any university to shutter any program no longer deemed sufficiently important, I shuddered at such a reactive decision.

Nowhere in my response did I consider the “good for them” proclamation made by Rudolph Weingartner in his Views column of October 23 for Inside Higher Ed, arguing against both the pedagogic value of owning works of art and the effectiveness of university museums generally. Most troublingly, in reading of the view of a panel of experts arguing that university museums should be regarded as “essential to the academic experience," Dean Weingartner observes “by my admittedly not systematic observations, most of those museums do nothing or very little to deserve to be so regarded…. Mostly, the museums don’t even know how to communicate with other than art faculty on campus.”

Drawing such conclusions -- and a kind of pleasure in the demise of a fine museum -- on the basis of random evidence seems not to represent the rigors of academic policy making at its best.

More dangerously, this view fails to note either the sheer range and variety of campus museums in the United States or the extent to which many have worked mightily in recent decades to make themselves central to their parent institutions. Long gone are the days when most university museums could be seen as, at best, the laboratory addendum to a department of art or art history. Seeking not merely (although importantly) to shape future art historians and museum professionals, the nation’s best university museums have long been engaged in the practice of fostering critical thinking and visual literacy, the understanding of times and cultures dramatically distinct from our own, the awareness of a common humanity, and thus, ultimately, the shaping of good citizenship.

Here at Princeton University, we have long crossed boundaries to partner our museum with disciplines and departments from the humanities to creative writing to architecture to civil engineering. The Yale Center for British Art routinely connects with fields ranging from natural history to cultural studies; their exhibition this year on the impact of Darwin’s theory of evolution on subsequent creative practice was a model for cutting-edge investigation of value to us all.

The Wolfsonian Museum at Florida International University offered an almost shockingly timely exhibition looking at the art of propaganda during last year’s presidential campaign. The new wing opened this year at the University of Michigan Museum of Art -- which I led until recently -- was designed to architecturally embody and make possible a commitment to deep campus-wide engagement, providing a second home for programming in performance, creative writing, film, and the humanistic disciplines generally.

And many universities increasingly use their art museums in medical curriculums, having discovered that sustained close looking makes their doctors-in-training better diagnosticians. From Dartmouth, to Emory, to Wisconsin, to UCLA, great university museums have shown themselves deeply capable of being essential to the lives of their universities, even as they also often function as enormously beneficial gateways to those universities for the general public.

The argument that academic museums can do these things is no mere abstraction. They are doing these things, and are increasingly recognized as playing an essential role in a time of bottom-line driven programming at many of even our greatest civic museums. With less at stake in the battle for attendance, the university museum can often take on difficult projects whose popularity cannot be assured, advancing the cause of new knowledge presented in accessible ways that yet seek to avoid pandering or the much dreaded “dumbing down." Many of the first thematic exhibitions -- sometimes operating in the sphere of a social history of art, the so-called “new art history” -- took place in our university museums. Increasingly, and happily, the special role of the university museum is recognized by the media: Writing in The New York Times this year, the art critic Holland Cotter observed “The august public museum gave us fabulousness. The tucked away university gallery gave us life: organic, intimate and as fresh as news.”

And why do we university museums so annoyingly feel the need to collect artworks, creating the inevitable drain on resources caused by those pesky stewardship requirements? I offer in answer a fundamental article of faith, that even in the digital age, the sustained engagement with original works of art necessary for teaching, research, and layered learning would be difficult if not impossible if we ceased to be collecting institutions and instead taught only from objects temporarily made available for exhibition.

In the way that great texts live in our libraries, available for revisiting and sustained scholarly investigation, the works of art in our museums offer the possibility of deep critical engagement, close looking, and technical analysis -- made all the deeper when brought together as collections in which dialogues arise through the conversation of objects with each other and with their scholarly interlocutors. Surely a key role of the academy -- the advancement of new knowledge and the challenging of past knowledge -- is that fruit of curatorial, faculty, and student research made possible by the sustained presence of great works of art, whose survival for the future is also thus (and not incidentally) guaranteed.

Like libraries that often also find themselves embattled in times of budget cuts (since typically neither museums nor libraries directly generate tuition streams), great university art museums are a “public good," offering value and possibility to the whole of our university communities as well as to users from outside the walls of the ivory tower. That all university museums do not achieve this centrality of purpose -- often, I suspect, for lack of adequate resourcing by their parent institutions in the perpetual fight against the perception that art represents a “luxury” in the logo-and data-centric university -- is to be regretted. Without question much work remains to be done to make our museums central to the academic experience.

But just as any academic department desires a certain autonomy to define its foci and particular strengths within the university curriculum, no academic museum should be “bludgeoned” into showing the work of particular artists or serving as the handmaiden of narrow administrative modishness. The academic model has never, thank heavens, been one of pure utility, even as we seek to be responsible, effective, and impactful.

For me, the lesson of the Brandeis debacle is the reminder that the fight for the central role of our museums is not won. Contrary to Dean Weingartner’s views, however, that fight has long and often successfully been underway.

James Christen Steward
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James Christen Steward is director of the Princeton University Art Museum.

Adapt or Decline

In a faraway colony, one in a thousand people -- mostly young, rich, white men -- are sent to live in isolated, rural Christian communes. Some are pious, learned, ambitious; others are unruly younger sons with no other prospects. The students spend hours every day in chapel; every few years, the entire community is seized by a several-days-long religious revival.

They also get into lots of trouble. In their meager barracks they drink, gamble, and duel. They brawl, sometimes exchanging bullets, with local residents, and bother local women. Occasionally they rebel and are expelled en masse or force administrators to resign. Overseen by low-paid clergymen too deaf or infirm to control a congregation, hazed by older students, whipped for infractions of the rules, they’re treated like young boys when their contemporaries might be married with children. And, oh yes, they spend a few hours a day in rote memorization of fewer than a dozen subjects.

This was the typical 18th century American college, loosely modeled on England’s Oxford and Cambridge, which date to the 13th century. Nine colleges were founded in the colonies before the Revolution, and they’re all still in business: Harvard, William and Mary, Yale, Princeton, Columbia, Penn, Brown, Rutgers, and Dartmouth.

For universities, history is authority. It’s no accident that America’s most prestigious institution, Harvard, is also its oldest, or that some of the oldest organizations of any kind, worldwide, are universities.

Surveying the history of American colleges and universities with a jaundiced eye convinces me that many aspects of the current so-called crisis in higher education are actually just characteristics of the institution. It has always been socially exclusionary. It has always been of highly variable quality educationally. It has always had a tendency to expand. In fact, it is precisely because we are always asking more and more of education at all levels that its failures appear so tremendous.

Still, the United States does seem to have reached an impasse today, given escalating demand for higher education, spiraling costs, and limited resources. Unlike the 1860s and unlike the 1960s, there is little national will to grow our way out of this problem by founding more colleges or spending much more money on the ones we do have. Is this merely one more symptom of national decline? Have we hit some kind of natural limit for an educated population? Or is there a mismatch between the structures of the past and the needs of the present?

America can’t remain a global economic powerhouse while it slides to the middle of the heap in education. Nor can we grapple with the challenges we face as a global community without meeting the world’s burgeoning demand for education. Nor can college leaders get away with claiming that their hands are tied and only more taxpayer and tuition dollars can solve their problems.

There are two basic options the way I see it: fundamentally change the way higher education is delivered, or resign ourselves to never having enough of it.

The good news is that all over the world people are thinking big about how to change higher education. Brick, stone, and marble institutions with centuries of prestige behind them are increasingly being joined by upstarts, both nonprofit and for-profit, and even more loosely organized communities of educational practitioners and apprentices.

The open courseware movement started at the Massachusetts Institute of Technology in 2001, when the school decided to put its coursework online for free. Today, you can go online to MIT OpenCourseware and find the full syllabuses, lecture notes, class exercises, tests, and some video and audio for 1,900 courses, nearly every one MIT offers, from physics to art history. As of March 2010, 65 million people from virtually every country on Earth have raided this trove.

Open educational content is just the beginning. Want a personalized, adaptive computer tutor to teach you math or French? A class on your iPhone that’s structured like an immersive role-playing game? An accredited bachelor’s degree, in six months, for a few thousand dollars? A free, peer-to-peer Wikiuniversity? These all exist today, the beginnings of a complete educational remix. Do-It-Yourself University means the expansion of education beyond classroom walls: free, open-source, networked, experiential, and self-directed learning.

This opening world presents huge questions about the true nature of a college education: questions that are legitimate even when they are raised with self-interest by traditional educators.

The university is over a thousand years old, older than modernity itself. On American soil it has grown like Katamari Damacy, the Japanese video game in which a magical “clumping spirit” snowballs around the world collecting everything in its path until it attains the size of a star. The latter-day “multiversity,” as it was dubbed by the University of California president Clark Kerr in 1963, clumps teaching with research, vocational and technical education with liberal arts, sports, clubs, and parties with intellectual life, accreditation and evaluation with mentoring and friendship. For students “college” means very different things at different times: the place to grow up, be out on your own, make friends, take leadership roles, prepare for and find a good job, and even learn.

Technology upsets the traditional hierarchies and categories of education. It can put the learner at the center of the educational process. Increasingly this means students will decide what they want to learn, when, where, and with whom, and they will learn by doing. Functions that have long hung together, like research and teaching, learning and assessment, or content, skills, accreditation, and socialization, can be delivered separately.

There’s no good way to measure the benefits of the old-fashioned face-to-face educational model; there’s worry that something important will be discarded in the race ahead. More fundamentally, no one knows if it’s possible to extend the benefits of higher education to the majority of a population without diluting its essence. But those are questions that educators ought to be testing and investigating rigorously. College leaders who want to be on the right side of history won’t hold stubbornly to the four-year, classroom-hour-based “butts-in-seats, nose-to-nose, face to face” model as the only way to provide the benefits of a liberal arts education. They will innovate to meet students wherever they are, and they will reinvent assessment to provide much better transparency about what students are learning.

Here are four trends guiding this transformation, as they might look from the point of view of college leaders:

1. The 80/20 Rule. Is your institution part of the leading-edge 20 percent? How will you attract and serve the “nontraditional” student who is the new norm? Most of the growth in higher education over the next century will come from the 85 percent of students who are “nontraditional” in some way -- older, working adults, or ethnic minorities. They will increasingly attend the 80 percent of institutions that are nonselective. This includes most mainstream public universities and particularly community colleges and for-profit colleges, which saw the sharpest growth in the 2000s.

For-profit colleges are the only U.S. institutions that have both the resources and the mission to seriously expand their numbers in the foreseeable future. Community colleges already enroll half of all undergraduates. Both disproportionately enroll the demographic groups that dominate the next generation of Americans: Hispanics, all other minority groups, and first-generation college students. Some of the boldest thinking is happening in institutions that are far from the ideal of either the multiversity or the colonial “little college.” Yet, they typically lack the opportunity for undergraduates to participate in original research, not to mention many of the intangibles of college life like dorms and extracurriculars. Concerns about quality and affordability in the new mainstream of higher education have to be addressed head-on. The answer is not for established institutions to exclude the upstarts from the conversation.

2. The Great Unbundling. Which services and departments are core to your mission? Where can you partner, outsource, or pool resources across the state, the nation, or the world for greater efficiency? Universities have historically combined many social, educational, and other benefits in one-stop shopping. Increasingly, some of these resources (e.g., faculty time) are strained, while others (like written course content) are approaching a marginal cost of zero.

As it has with industries from music to news, the logic of digital technology will compel institutions to specialize and collaborate, find economies of scale and avoid duplications.

Books can be freed from the printed page, courses freed from geographical classrooms and individual faculty, and students freed from bureaucratic obstacles to transferring course credit between institutions, or designing their own courses of study.

Could any of your departments flourish on its own? Stripped-down institutions that focus on instruction or assessment only, or on a particular discipline or area, will find more and more audience. The most cutting-edge sciences and the most traditional liberal arts can both flourish in a specialized, concentrated, and technologically enhanced setting. I have seen professors elevate the craft of teaching rhetoric, composition, and critical thinking to new heights using social media and applying cutting-edge research about learning.

3. Techno-hybridization. Are distance learning decisions confined to the IT office? Are you creating online courses through a cheap, hands-off process, or are you experimenting across disciplines with the best ways to integrate online and offline experiences? How can you identify and support your internal innovators among faculty? Department of Education research shows that a blend of technology-assisted and traditional class instruction works better than either one alone. This blending can occur with institutions enrolling students on campus or off, in classrooms or online -- studies have shown that students do a better job collaborating online if they meet in person even once.

4. Personal Learning Networks and Paths. How well does your college serve the transfer, dropout, and nontraditional student? How easy do you make it for students to design their own experiences? People who graduate from high school at 18 and go straight through four years of college are already a tiny minority of all young Americans, around one in ten. Pulling America out of its educational slump requires designing programs flexible and supportive enough to reach the 44 percent of students who currently drop out of college and the 30 to 35 percent who drop out of high school. These programs have to provide socialization, personal development, and critical thinking skills, not just job training.

Self-directed learning will be increasingly important. Already, the majority of students attend more than one institution during their college careers, and more than half seek to enhance their experience with an internship. In the future, with the increasing availability of online courses and other resources, individuals will increasingly forge a personal learning path, combining classroom and online learning, work and other experiences.

The open-education pioneer Alec Couros at the University of Saskatchewan talks about assembling personal learning networks that include mentors, colleagues, media sources, books, and collections of links. The existing system will be challenged to come up with new forms of accreditation, transfer credits, and certification so that the value of this work can be recognized by potential employers and others.


Education is an essentially conservative enterprise. If we didn’t believe that one generation had something important to transmit to the next, we wouldn’t need education. So changing education makes lots of people nervous, especially school leaders whose salary comes from the old model.

Still, in an ideal world, we can agree that opportunities to stretch your abilities, test your personal mettle, follow your natural curiosity, and jam intellectually with friends, colleagues, and mentors -- all the good stuff that is supposed to happen in college -- would be more open to more people at all ages and transition points in life. Traditional colleges will continue to find plenty of eager applicants who want the experiences only they can provide.

The 80 percent of American college students who currently attend nonselective institutions will have many more options, and so will the majority of young people, those who drop out or who never apply. Alternatives to the four-year bachelor’s degree will get more visible and acceptable, which might help bridge one of the biggest social divides in American life. Tuition costs would reach sane levels due to increased use of technology, true competition, and better-allocated federal and state incentives. This would lower one of the most important barriers to educational access.

By modifying the economics of the nation’s second largest industry, we’d save money, and tap the resources and energy of a whole new generation to tackle challenges like building a greener society, expanding the middle class, creating better jobs, and providing people with health care. Whether these incipient changes will lead to that kind of positive transformation, however, still hangs in the balance.

It depends largely on whether the guardians of existing institutions embrace transformation, or let history pass them by.

Anya Kamenetz
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Anya Kamenetz's new book is DIY U: Edupunks, Edupreneurs and the Coming Transformation of Higher Education (Chelsea Green), from which this essay is adapted She blogs here.

Learning From the Masters (Tournament)

My son and I recently went to the 2010 Masters, saw Tiger Woods come back to golf, and witnessed one of the greatest tournaments in decades. But what was most impressive to me about the Masters was not the amazing golf, or even the course itself (my son referred to it as an “outdoor museum”).

No, the most impressive thing was the actual running of the tournament and its concept of customer service. All college presidents would be well advised to attend the next Masters and study its management system. For what became crystal-clear to me as a nonprofit higher education consultant was the tournament’s very precise conception of who its customers were, compared to the very imprecise understanding by colleges and universities of who their customers are.

Here is the problem: Colleges and universities have a difficult time deciding whom they are serving. For a major golf tournament the choice is narrower: the corporate sponsors or the media or the patrons who come through the turn styles. Augusta National Golf Club, which runs the Masters very much like a nonprofit enterprise that is content to break even, views the fans who come to the course as their obvious customers.

All concessions are inexpensive (sandwiches: $1.50!); even the cost of golfware in the pro shop is reasonable. Bathrooms are strategically located, as are food stands, and every line of customers is designed to move quickly so fans can get back to the action on the course. Even the spectator locations are populated by movable chairs that the patrons over the years have bought ($29 this year) and placed where they want. Chairs are left there with one’s own marker on them, and no one sits in them but the owner, even at the most popular locations. When the day ends, you leave the course feeling cared for: You are a paying customer in the best sense.

Colleges and universities have more chaotic management systems because they are unclear about their preferred customers. Who is analogous to the fans at the Masters?

Here are the many choices for colleges, depending in part on the type of institution: enrolled students, their parents, state taxpayers, the local community, alumni donors, government granting agencies, even their Boards of Trustees -- increasingly dominated by corporate leaders. All are “paying” in one way or another.

Yet the principal customer on any college campus must be the student, and one statistic makes this fact obvious: the abysmal retention rate of students between their freshman and sophomore years. A third of all full-time college freshmen do not return for their second year. Very few have flunked out; some transfer for a major offered elsewhere or have to yield to family financial pressures. But my own experience has persuaded me that the freshmen who leave do so primarily because they were not treated as the school’s principal customers.

To take one example, colleges often treat distant parents who pay the bills as the principal customers when it comes to increasingly obscure fees -- but it is the students who must understand and rationalize those fees to their parents back home. We may think a $100 fee here or there is nothing to a middle-class parent (not true, of course), but it certainly is important to the student who wasn’t aware of it ahead of time, and does not appreciate having the issue minimized by a staff member to his or her face. If a student comes to an office on campus visibly upset about something, it should not matter how minor we think the issue is: it must be treated, for the student’s sake, as if it is major. It only takes a couple of calls home, after some insulting experiences on campus, to galvanize a family into leaving their school of choice.

In higher education, we do not know how to deal with 18-year-olds. Are they adults, despite being so needy and anxious, or are they just kids, despite being glad to be on their own for the first time? Even though sustained tuition income depends on their satisfaction on campus, we often treat them as spoiled and completely replaceable, like an object that is cheaper to throw away than to repair.

That might have seemed true when the baby boomers were sending increasing numbers of children to campuses. But in 2008 those numbers leveled off, and by 2012 they will be declining. By then, we had better figure out how to hold onto the students who, as customers, have chosen us, instead of treating them as lucky to have been chosen by us.

That has been our attitude -- that they were lucky to have been chosen by us. Perhaps that attitude is excusable at elite colleges that know their vaunted reputations will hold students on campus, even through their anxieties, for the prestige of the degree they receive. Those colleges -- only a few score nationwide regularly return 95 percent of their freshmen into the sophomore year.

But the numbers plunge from there for thousands of other colleges and universities that, until recently, have assumed there was no problem replacing the students who leave by the second year.

We must start treating freshmen as the adults they are -- but adults who are understandably apprehensive about, and sometimes irresponsible with, the freedom that college life gives them. Too often we view them as knowing how they ought to behave, even though we are less than clear about the regulations we do have and more than willing to reprimand them, condescendingly, for not knowing those regulations.

We think they do not want any rules when in fact they want our support and respect -- not permissiveness -- to mentor them on their way to the maturity they do desire It is going to be increasingly difficult to replace these young adults if we are disrespectful of them. It would be much wiser to help them manage the institution in which they have put their faith as a first step into maturity

Precisely because they are only going to be with us for a while -- as at the Masters -- we need to redouble our efforts at customer service from day one -- to take every student anxiety and complaint seriously, even if it turns out to be nothing more than normal freshman fear. Since it is reasonable for freshmen to be anxious, we must treat them as reasonable people, without being condescending or peremptory in our own attitudes.

We need to treat them as the Masters Tournament treats every one of its patrons: welcome, well-managed, and constantly appreciated.

David Stinebeck
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David Stinebeck, a former college president, is President and CEO of Concordant Consulting, LLC, a firm that specializes in managing personnel issues.

Not Dodging Health Care Law

Six months after passage of the Affordable Care Act (ACA), health care reform has finally moved off the front pages of America’s newspapers and is no longer the lead story on the nightly news. But below the surface, the controversy and political fights over the issue continue to roil.

Evidence of that came when higher education was recently drawn into the fight. On August 12, the American Council on Education and several other higher education associations wrote to the Department of Health and Human Services and the White House Office of Health Reform to ask for guidance regarding key ACA provisions to ensure colleges and universities could continue to offer students affordable, high-quality health care plans.

The response by the news media, spurred by interest groups following the issue, was almost immediate, and in the last few months organizations ranging from The Wall Street Journal to the College Parents of America have mischaracterized our effort as an attempt to carve out an “exemption” or “waiver” from ACA requirements. Some groups have suggested that we actually oppose efforts to enhance the quality of student health plans, while others say we’re only in it for the money.

They couldn’t be more wrong. Read the letter for yourself.

First, colleges are not seeking either an exemption or a waiver from the law. Historically, student health plans have operated under federal law as so-called “limited duration plans” because they provide coverage for a specific time period and are neither employer-based group plans nor plans offered on the individual market. These programs are tailored to meet the primary care needs of students as well as additional services such as mental health coverage.

Each is priced according to the eligible campus population and provide coverage to all eligible students and their dependents, do not vary premiums based on an individual student’s health status, and typically do not impose pre-existing condition exclusions. They are particularly important for international and graduate students. In short, these plans provide coverage that is responsive to the unique needs of the student population.

While the law specifically states that institutions may continue to offer student health plans, ACA is silent on how the law’s new requirements affect these unique plans. Federal agencies will need to write numerous regulations to implement ACA. Our letter seeks to include among them regulations that clarify how student health plans can continue operating as “limited duration plans” under a structure that incorporates reforms in the ACA -- and not, as some claim, to elude those reforms.

Specifically, we have asked HHS to provide rules of the road on two key topics:

  • What insurance reforms in ACA apply to student health plans? ACA includes many insurance reforms, such as prohibiting preexisting condition exclusions or other discrimination based on health status, but it is not clear which apply to student health plans.
  • Assuming student health plans incorporate required insurance reforms and provide at least a minimum ACA-defined level of coverage, will that satisfy the individual mandate to purchase health insurance under ACA?

We seek answers to these questions now because although many of the reforms in ACA don’t take effect until 2014, a number of institutions will soon be negotiating with insurers for new long-term contracts that will define the benefit coverage of their student health plans through 2014.

Are we opposing efforts to enhance the quality of student health plans? Absolutely not. In fact, we are following the lead of the American College Health Association, which has a longstanding set of standards to guide colleges and universities in structuring high quality coverage for student health plans. We also believe ACA will inevitably lead to improvements in the quality of student health plans, which is important because while the majority of institutions offer health plans of high quality — some continue to lag behind and must be improved. The key for us is ensuring that the changes brought about by ACA will result in plans that are both high-quality and affordable.

It is also wrong to characterize our efforts as an attempt to shield a major higher education profit center. The money made off these plans by colleges are modest, and revenue — if any — is returned to campus health centers or used to help maintain stability in the premiums paid by students.

In short, student plans respond to the unique health insurance needs of undergraduate and graduate students. They provide coverage over a limited time period for students under the age of 26 whose parents are uninsured and nontraditional students who are too old to access their parents’ plans. In some instances, student plans offer better coverage than students can get under parental plans, especially if they’re going to college hundreds or thousands of miles away from their parents’ networks or parental coverage does not adequately cover out-of-network care, making it prohibitively expensive.

Colleges and universities recognize the importance of ACA’s reforms and want high-quality health insurance options for their students. We are confident we can work with the administration on a constructive solution to ensure students have access to affordable, high-quality health coverage that is consistent with the reforms in ACA.

Terry W. Hartle and Steven M. Bloom
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Terry W. Hartle is the senior vice president and Steven M. Bloom is the assistant director of federal relations for the American Council on Education.

Commercialization Is Not the Problem

Encouraged by critics like Derek Bok, Gaye Tuchman, and Jennifer Washburn (who characterizes market forces and commercial values as “a foul wind [that] has blown over the campuses” of our nation’s universities) the commercialization hypothesis has been accepted, often without critical thought, by many members of the academy. They are not big fans of the business community to begin with, and it is convenient to assume our problems come from “outside agitators” like intrusive business people.

We in higher education do have major problems with cost and quality, and they need fixing. But commercial forces are not the problem – our own internal practices are. A major factor in the persistence of our cost and quality problems is too much emphasis on public relations and too little emphasis on introspection.

Having served for over three decades in higher education and almost a decade in publicly held corporations, I have always found the assertions about the dangers of commercialization curious at best, since the way colleges and universities are run bears no relationship to the way corporations are managed.

Serious reflection reveals inconsistencies within the commercialization hypothesis. The corporate model leads to remarkable increases in product quality and lower costs; the record is clear in this respect. So how could such a model have exactly the opposite result (higher cost/lower quality) when applied to higher education?

The exceptional increases in total real expenditures per full-time student and the net cost of attendance are well documented. The only dissenting data with respect to the cost problem comes from the College Board, which claims that the net price (tuition and fees minus all grants, veterans’ benefits, and tax benefits) has declined over the past 15 years. The College Board data come from preliminary annual surveys. In contrast, the actual data reported by all institutions to the federal government institutional and longitudinal surveys reveal a persistent upward trend in real net price.

With respect to quality, I am aware of no scholar who makes the case that the quality of undergraduate education has increased over the past three decades. Furthermore, graduation rates, grade inflation, declining student study time, and lower prose, document, and quantitative literacy among college graduates all suggest at the very least that quality has not improved despite lower teaching loads and smaller class sizes for tenure-track faculty.

Our problems with cost and quality have an internal origin. The chain of causation runs from these problems to outside interference, not from outside interference to cost/quality problems. On the other hand, there has been an ongoing clash of values in higher education for the past three decades. The conflict is between traditional academic values and the values inherent in public relations. The combination of reputation competition and public relations governance makes introspection an improbable task. Building image conflicts directly with candid discussions about campus problems. If faculty members, administrators, and governing boards vigorously pursue cost and quality issues, they appear to admit the institution has problems. Without serious introspection, even the best institutions cannot get better. The first step in recovery is to admit you have a problem.

Reputations rule in higher education competition, and reputations are a factor only in markets where providers sell “experience goods.” An experience good is any good/service where the consumer does not know quality prior to purchase; he has to “experience” the good before he can judge quality. Quality uncertainty leads consumers to use the provider’s reputation for previous quality produced as an indicator of current quality. In extreme cases, the consumer assumes the higher the cost, the higher the quality. The reader may recognize this as the “Chivas Regal effect” among selective colleges and universities. Notice the perverse incentive this creates. If the institution spends more per student, the public assumes quality is increasing; if the institution cuts cost per student, the public assumes quality is declining. Hence, prudent cost control (which might make it possible to lower prices) lowers academic reputation!

Our dismal cost record since 1980 was made worse by the intrusion of public relations values, and those values are now comfortably at home in the academy. The reason the public relations people came to dominate campus administration is that reputations rule and reputations are built (at least temporarily) by public relations. This also explains why governing boards prefer presidents with fund-raising skills over presidents with either managerial skills or higher education experience.

Rather than a commercialization model to explain higher education’s woes, a better analogy is a political campaign, where the focus is to raise all the money you can and spend all the money you raise to create an image that may or may not accurately reflect reality. The conflict of values is between public relations expediency and the academy’s traditional regard for quiet substance. As faculty, we acquiesced in this takeover because it was in our financial interest to comply; more fund-raising meant more money for salaries and perks.

A recent study, written by Jay Greene and others at the Goldwater Institute, documents the growth of “administrative bloat” in higher education. Greene et al find, “Between 1993 and 2007, the number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent. Inflation-adjusted spending on administration per student increased by 61 percent during the same period, while instructional spending per student rose 39 percent.” A study of the Maine university system shows similar results. Further, NCES data reveals full time faculty members represented 64% of total full time professional employees in 1976; by 2007 the proportion had declined to 46%.

Overhead cost (the cost of administering colleges and universities) should benefit from economies of scale and from the significant technological progress that occurred over the last three decades; as “output” increases, the overhead cost per student should decline. Unfortunately, overhead costs per student grew significantly and steadily during this period. By my calculations, as much as two-thirds of the increase in total cost per student came from increased overhead costs.

The Goldwater report raises serious questions about why governing boards allowed such exorbitant increases in overhead costs. After all, most governing boards include prominent business people who pay very close attention to overhead costs in their own businesses. Why would they not ask the basic questions? Is it possible the governing boards did not know what was happening to overhead staffing?

As the size of the administrative staff grew relative to faculty members and as the administration replaced tenure track faculty with contract faculty, the tenure-track faculty’s governance role declined. Curiously, the dominant public narrative concerning what ails higher education is that tenured and pampered faculty members obstruct all the good work proposed by administrators and governing boards; the reality is that most of the cost increases come from rising overhead costs, and tenure-track faculty play an increasingly smaller role in determining how the campus employs its resources.

An individual faculty member’s ability to influence governance is dependent on his or her academic reputation and alternative employment opportunities. Established scholars have alternatives; they can vote with their feet. Established teachers have little opportunity to vote with their feet.

Other things equal, one would expect that faculty governance would be stronger at research universities than at teaching colleges, and Greene’s findings seem to back this up. They show that in 23 of the 198 Research I universities studied, instructional employment grew faster than administrative employment. It is revealing that many of these institutions were elite research universities such as Harvard, California Institute of Technology, Rice, Emory, Cornell, Chicago, Princeton, University of Michigan, and University of Virginia, where faculty governance is stronger than it is in the rest of the academy. Hence, it is likely that growing administrative bloat is driven, in part, by weak faculty governance; precisely the opposite of public perceptions about higher education.

There are two ironies here. First, contrary to public perception, higher education’s chronic cost problems have at least as much to do with administrative decisions as they do with faculty members behaving badly. Second, if the corporate model had been applied to higher education, administrative bloat would not have happened. If governing boards closely followed overhead staffing patterns with respect to numbers and salaries, the explosion in overhead costs could not happen. The mystery is why governing boards did not monitor overhead cost.

The solution to these problems is to align the higher education incentive system with the public interest. The first priority is to move reputation competition away from public relations and toward “value added” competition, by providing more information about teaching value added. Teaching value added refers to the additional new knowledge retained by the representative student in Professor X’s classes or among College Y’s graduates. It also includes the ability to integrate and apply that new knowledge (critical thinking). The second priority is to offer faculty members incentive compensation contracts that lead to greater productivity and lower cost.

The third priority is to reinstate the faculty’s role in shared governance. Governance is shared in higher education because each group (faculty members, administrators, and boards) is supposed to monitor the behavior of the others; since administrative bloat accounts for two-thirds of the cost increases and, at best, the quality of undergraduate education has not improved over that same period, academic governance has not succeeded. Administrators prevent communication between board members and faculty members, and board members believe communication with faculty is a violation of the “chain of command,” a notion at odds with how higher education governance is supposed to work.

In the end, these are our problems and it is our responsibility to solve them. Denying problems exist betrays our students in at least two ways. First, beyond just teaching value added, we claim critical thinking skills, social responsibility, justice, citizenship, etc. are important parts of what we teach students. How can students take us seriously if we are unwilling to critically evaluate our own behavior and our institutions? Second, by our inaction, we deny students access to college. Uncontrolled rising real costs make it impossible for society to ever fully fund college access.

Robert Martin
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Robert Martin is emeritus Boles Professor of Economics at Centre College and author of The College Cost Disease: Higher Cost and Lower Quality, forthcoming from Edward Elgar, Ltd.


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