Business issues

College endowments rise 12.2 percent in 2017, but experts worry about long-term trends

Rising returns in 2017 weren't enough to keep up 10-year averages, fueling concerns about endowments' long-term spending power -- especially in light of new tax.

Lessons learned in merging a college with another (opinion)

In 2009-10, I was an American Council on Education fellow. All who undertake that leadership development preparation have a memorable experience called Pennyfield. Groups of fellows come together as the president and senior staff of Pennyfield College and -- based on a range of information about finance and mission, competitive market complications and national circumstances -- are asked to work together to create a presentation for the college’s Board of Trustees.

Teams have about 24 hours to identify core problems, propose solutions and, most crucially, reformulate the annual budget. Mentors are available around the clock, and groups can quickly become enthusiastic, competitive and dedicated advocates of the fictitious college. I do not remember what solution we found to Pennyfield’s financial morass nor how we proposed to solve the budget dilemmas, although the Pennyfield board, composed of former and present college presidents and chancellors from around the country, applauded our PowerPoint presentation and solution.

Contrast that experience to July 2012, when I became president of Shimer College. The board I worked with was not a role-playing one gathered to teach and mentor aspiring leaders. Nor were the students, faculty, staff, alumni, community members or our partner institutions imaginary. The financial dilemmas were real, the market challenges facing liberal education (especially in Illinois) immense, and our educational mission perplexing to or misunderstood by many people around us. In this, I was not unlike many of my peers who imagine administrative work and then face the realities of institutions that have their own particular histories and possibilities. Shimer was not Pennyfield.

And yet I thought about Pennyfield repeatedly during my years as president of Shimer College. I thought about who was not in the room when we undertook our 24 hours of work (faculty, students and administrative staff, for example, not to mention local community leaders). I thought as well about the ways the Pennyfield experience, created to help aspiring leaders understand finance, risked allowing educational mission to slip into a secondary place in the work of each team.

In fact, Pennyfield came to mind over and over again as insider’s shorthand for the intersecting dilemmas and hopes, the Gordian knot, that is American higher education generally and American private liberal arts colleges more particularly.

Recently, I reflected anew on Pennyfield, as I thought about the processes by which I led Shimerians to a new future. The work required finding Shimer College a potential partner (eventually North Central College). Then followed a nearly two-year process of regulatory, legal, financial and curricular work at two institutions, undertaken alongside significant data management, technological, infrastructure and employment changes. This past summer, Shimer and North Central College’s deal was completed, and what was once an autonomous Shimer became the Shimer Great Books School of North Central College. In one sense the deal was done. In another, it was simply another step along the way to a fully embedded Shimer Great Books School of North Central College.

Three Motifs

Neither the form of this victory nor the lessons I learned in pursuit of change would have occurred to me as I worked through the night on the difficulties facing Pennyfield in 2009-10. Here are three that are worth remembering.

First and foremost, life is not a case study. No matter how messy any case study is, reality is much messier. Much, though not all, of that mess may be discernible only in hindsight.

In the case of mergers and acquisitions in higher education, the messiness is not limited to a single aspect of the institution(s) but can be pervasive, reaching into every arena of institutional functioning -- including personnel, finance, governance, marketing and communication. Whether understood through the lens of structural, human resources, political or symbolic frames, the full organization is involved. (Of course, no such deal occurs in a vacuum, so the messiness may extend well beyond institutional boundaries.)

Among the messes that were notable were those where the governance differences between the two institutions were most evident. For example, internal Shimer governance was an assembly, which included all students, staff, faculty and administrators. And our Board of Trustees included two faculty members and three students as voting members. North Central follows a more traditional shared-governance model. Shimer’s community was tiny and close-knit, while North Central’s was larger.

As a result of those two differences, our communication plan at Shimer was substantially more complex than one might have guessed given the smaller scale -- for every member of the Shimer community had a governance role in our decision making and following one’s governance procedures is vitally important in such transactions. In our case, as well, every Shimerian, whether faculty member, administrator or student, was affected -- though differently -- by our decisions. Our student trustees, by the way, were amazing in their capacity for confidentiality and for responsiveness in the process.

Among the messy details we addressed together were:

  • shifting from semesters to trimesters;
  • ensuring students at various stages of their Shimer careers were able to graduate on time;
  • meeting the housing and commuting concerns of students -- whose needs varied significantly as we moved to a residential campus;
  • retaining staff members when few would be offered jobs at our new campus;
  • supporting student and staff choices about their futures with an eye to what was best for each individual while meeting metrics of student and staff continuation that would ensure the success of the deal;
  • raising substantial dollars from alumni and friends while navigating nondisclosure agreements;
  • planning for deal success while knowing how to manage deal failure;
  • managing emotions associated with loss and success as the deal neared completion; and more.

Such pervasive messiness has been acknowledged in the literature on mergers and acquisitions in higher education at least since the wave of mergers in the 1970s and the spate of meta-analyses of these that followed. While we may forget such messiness eventually -- as perhaps has happened in the decades-old cases of Carnegie Mellon University and Case Western Reserve University -- recognizing its likelihood may help prevent a forced choice between closure and merger, enhance our understanding of mergers as one of a series of kinds of strategic alliances, and strengthen the potential to accomplish the missions to which we are all committed.

It turns out, on reflection, that messiness can be the source of creativity and hope rather than failure. Working to ensure that is the case is one lesson to take from Shimer’s experience that is perhaps less obvious than what one learns from the more staged work of a case study.

Second, although Pennyfield was developed to facilitate financial and budgetary learning among aspiring leaders, nothing in higher education is simply or solely about money. In short, decisions about money have far-reaching implications and ought not be made in isolation. That is equally true of decisions regarding educational mission that willfully ignore the financial situation. In some very real sense, the tension between educational mission and the “business model” of higher education operates as a fractal -- it appears whether acknowledged or unacknowledged, in every decision, large or small, made by every actor in higher education.

Certainly that was true at Shimer, where the educational mission was distinctive and beloved and the financial precariousness both legendary and long-lived. To be successful, the acquisition, which led to the emergence of the Shimer Great Books School of North Central College, required meeting fund-raising and fiscal management goals and sustaining a continuity of curriculum and culture.

Third, presenting the idea is not the conclusion of one’s work -- most often, it is the beginning. Whereas the work of Pennyfield was done when the fictitious board applauded, the work of the real world is not concluded when the actual board receives reports, votes or recommends action. Much of the effort preparing for board meetings -- and then the follow-up work that comes from board decisions -- is relatively invisible to anyone not regularly on the campus. And the extraordinary work of a merger takes place in the interstices between routine educational, regulatory, financial and other activities.

There were many board votes at both Shimer and North Central, each a decision marker along the way. Each brought increasing commitments to engage with shared governance as well as rising demands for staff and faculty members at both institutions to prioritize efforts to make the deal “work.” That included a full summer of intensive labor (often by North Central personnel) on a change of control document for the Higher Learning Commission, a regulatory approval prerequisite to any further action, and the fulfillment of additional deal-related requirements. Some of Shimer’s board members appeared on a regular basis (and at some points, on a daily one) on the campus as we moved toward the future -- communicating, raising money, managing budgets and personnel, and helping ensure that the board’s decision came to fruition.

The idea of coming together with another institution as a new form of Shimer was, thus, only the beginning. We came to know that as the days, weeks and months wore on from our initial conversations to the final signatures on documents. The changes we were managing -- leading -- always felt rushed and always took too much time. The carrying of the business solution of mergers and acquisitions into the landscape of our particular corner of American higher education did not mean that the tension between speed and deliberation, business model and educational mission, dissolved.

In fact, regulatory, legal and financial tasks of higher education mergers and acquisitions are time-consuming. They have opportunity costs and are often undertaken in circumstances where staff and faculty members are already stretched, as was the case with Shimer and to a lesser extent North Central College. What began, we thought, as a six-month process was, in fact, a two-year process. As we build change together, we are both building and refusing history -- working at the cusp between a certain past and an uncertain future, when history matters less than the stories we tell to hold past and future together. Time matters -- and we never have enough to be prepared for what comes next.

Wicked Problems

Everything else is a corollary to these three points: messiness is pervasive, money is not everything and ideas are the start -- not the end -- of institutional work.

Whether we are discussing the kind of asset purchase agreement undertaken by Shimer and North Central or other decisions on other campuses, the quandaries we face in higher education are what I referred to above as a Gordian knot and what some refer to as “wicked problems,” raising matters that are ethical and managerial -- affecting more people than one is likely to imagine both at individual and group levels. Those matters are located at the confluence of the symbolic, the political, the structural and the interpersonal. Rarely is our time frame 24 hours. Rarely are our options singular. Most often, they require a both-and approach rather than an either-or. Change is always about loss and gain.

The kinds of full-on change that Shimer -- and North Central, perhaps less obviously -- risked involve every one of the characteristics of wicked problems: “a social or cultural problem that is difficult or impossible to solve for as many as four reasons: incomplete or contradictory knowledge, the number of people and opinions involved, the large economic burden, and the interconnected nature of these problems with other problems.” Wicked problems require us to resist both simple binaries and endless perseveration, both the absence of analytical thought and analysis paralysis, both simplistic approaches and immobilizing complexity.

Indeed, a quick review of the literature on higher education reveals that much of what we at colleges and universities do has been labeled a wicked problem in recent years: assessing our quality, strategy and strategic planning, as well as our capacities to transform our institutions to meet the needs of the social order; moderating the growth of tuition; addressing access and affordability; and much more. While Pennyfield was itself attempting to present us with a wicked problem, capable of many solutions and yet nearly impossible to solve, such problems become more salient than ever when one moves from case study to real life.

Among the challenges facing us at Shimer were the conflicting requirements to hold matters confidential yet to be transparent, to use democratic processes of shared governance yet retain the urgency of top-down, board-level decision making. In real-world dynamics, we had no choice but to focus on institutional (regulatory, legal, financial and educational) change and the cultural particularities of Shimer itself.

The fact is, whether we are discussing Pennyfield or Shimer, change in higher education is always about refusing the easy solution. It is about change as loss and gain, about the human impact of all we do, and about the capacity to hold multiple possibilities in mind and in action as we build a more sustainable educational model.

When we are successful, leadership in higher education and in the classroom means navigating between necessary change and change for change’s sake, between proactive and reactive stances. When we are successful, we are the bridge between past and future that refuses nostalgia and empty optimism in favor of hope. That is the victory Shimer has found -- for now.

Susan Henking was the 14th president of Shimer College. She is president emerita of Shimer, professor emerita of Hobart and William Smith Colleges, and a senior consultant to Academic Career and Executive Search.

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The tax on college endowment unconstitutionally targets institutions (opinion)

In December, Republicans in the U.S. Congress passed a tax bill aimed at helping the very, very rich. Meanwhile, the rest of us will be paying for it the rest of our lives, as it adds trillions to the national debt. But the Republicans excluded one group of rich institutions from the gift it gave to big corporations: elite colleges and universities.

In fact, the tax legislation includes a big bill for the wealthiest higher education institutions: a 1.4 percent tax on endowment income for any college with more than 500 students and an endowment worth over $500,000 per full-time student. For about 30 colleges, the Republicans are the Grinch who taxed Christmas.

It might be tempting for some of us not to cry any tears for overprivileged colleges, run by wealthy administrators to serve the children of the affluent, which waste vast sums of money to prove how much better they are than everybody else. But doing so would miss a vital point: the endowment tax is an attack on academic freedom, and it is an attack on all colleges and universities. This is a warning shot across the bow of higher education, done for explicit ideological reasons to try to pressure institutions to silence leftists and lift up conservatives.

Although the endowment tax will raise a few hundred million dollars a year to offset the massive tax cut for the wealthy, both supporters and opponents of the tax acknowledge that its true purpose is to send a political message to American colleges and universities deemed hostile to Republican interests.

Columnist George Will argued that “the Republicans, without public deliberations, and without offering reasons, would arbitrarily make university endowments uniquely subject to a tax not applied to similar entities.” Neal McCluskey of the Cato Institute said it “amounts to little more than a politicized, ‘Take that, Harvard!’”

Harvard Law professors Jack Goldsmith and Adrian Vermeule blamed elite universities themselves for the endowment tax, citing “the public contempt of so many university academics for those who fund their subsidies.” According to Goldsmith and Vermeule, “Conservative politicians and their constituents hear, on the one hand, that government owes universities a continuance of largesse and, on the other, that conservatives are ignorant, unworthy or corrupt. This sounds suspiciously like special pleading by an intellectual elite that wants to indulge in social criticism at the expense of the criticized, in both figurative and literal senses.”

Yes, it sounds like educators want the government to fund education and yet they want to have the freedom to criticize the government. Since when is free speech considered “special pleading”? Since when is supporting the ideology of the government in power considered part of a professor’s job in a free society?

The few Republican politicians who have commented on the endowment tax have tried to disguise the obvious ideological motives. Tom Reed, a Republican congressman from New York, claimed that the tax would be aimed at pushing colleges to address the “college debt crisis.” Reed did propose to tax only colleges that fail to spend a minimum amount of endowment dollars on financial aid. But the endowment tax that passed has no such provisions, and taking away endowment money that’s used for financial aid has the exact opposite effect.

Kevin Brady, a Republican congressman from Texas and the lead sponsor of the Republican tax bill, claimed that the endowment tax “ensures that private endowments are placed on equal footing with private foundations.” Private foundations, which disperse money to charities, are required to pay a tax. But colleges are the only kind of charity being targeted by Congress. Just as Democrats could not target churches for leaning conservative and demand that they should pay extra taxes, right-wing Republicans cannot target universities based on ideological beliefs.

The political motives behind the bill were also revealed by how hard Republicans worked to exempt conservative colleges from the tax. Passage of the Republican tax bill was delayed by a day as part of a failed attempt to exempt a Christian college in Senator Mitch McConnell’s Kentucky from the endowment tax. Only four Senate Republicans voted against a special exemption for Hillsdale College, the college beloved by conservatives for its right-wing political correctness. But because that special exemption didn’t pass, Republicans protected Hillsdale by raising the threshold for taxes to an endowment of $500,000 per student. That indicates a clear political motive in passing this special tax and a desire to punish colleges perceived (incorrectly) as being too liberal.

In short, it’s clear that the point of the endowment tax is not to tax wealthy universities. It’s to send a warning shot at all colleges and universities to restrain academic freedom or risk further economic assaults on higher education.

Punching Progressives in the Mouth

Richard Vedder and Justin Strehle at Minding the Campus attribute the endowment tax to “growing hostility by Republican lawmakers angered over the large political donations and public criticism that academics have made attempting to oust them from office. Lawmakers are growing tired of feeding the mouths that bite them.”

Vedder and Strehle praise the endowment tax because it “does send a warning to politically relatively clueless college administrators that their special privileges as institutions should not be taken for granted, and, indeed, are under intense scrutiny.”

But the First Amendment does not allow Congress to punish people or institutions as a way to send politically motivated warnings aimed at silencing criticism. And that is what makes it unconstitutional. Congress cannot impose “ideology taxes” on particular types of corporations they believe are antithetical to the political interests of the party in power.

What’s more, tax-avoidance schemes are notorious among the wealthy, and there’s no reason to think rich universities won’t adopt them if taxes become onerous enough. In fact, there might be an easy way every college could refuse to pay the endowment tax. They could perhaps avoid it by simply offering online courses and declaring that anyone who takes free online classes is an enrolled “student.” Students don’t need to be eligible for a degree and don’t even need to pay anything, since earlier provisions about “tuition-paying” students were ruled out of order by the Senate parliamentarian. Harvard’s online Introduction to Computer Science, with about 350,000 registrants from around the world, should be more than enough students to exempt Harvard from a $43 million annual tax. That would be a very real act of resistance if universities are courageous enough to risk retaliation from Republican politicians by refusing to pay a politically motivated tax.

But will colleges challenge the constitutionality of the new endowment tax as retaliation for the expressions of controversial ideas by their employees? The First Amendment protects freedom of speech and academic freedom, so a law by Congress that punishes colleges hated by the party in power is deeply suspect.

The Constitution also specifically bans bills of attainder, when Congress targets an individual or a group for punishment. If Congress passed a law imposing a 1.4 percent tax specifically on Warren Buffett or Planned Parenthood, it would be unconstitutional. Attacking a small group of elite colleges for their perceived political offense of being too liberal should also be unconstitutional. Although courts have interpreted the bills of attainder provision narrowly, it adds to the argument of a constitutional prohibition on congressional retaliation against their ideological enemies.

No, rich colleges won’t be bankrupted by this law. That’s not the point. The point is the principle. If Congress passed a law imposing a 1.4 percent excise tax on college professors making over $100,000 a year, it might not bankrupt anyone. But it would still be wrong, and unconstitutional.

David Horowitz, who long ago pushed for the Academic Bill of Rights, has written Big Agenda: President Trump's Plan to Save America, which proposes massive repression of liberal institutions as a tool of political power. According to Horowitz, Republicans cannot “continue to allow the left to use the trillion-dollar structures of the university system as a political base to destroy the society that created them.” He argues that Republican politicians must target universities for repression by using the power of money: “Republicans control the purse strings that can be used to restrain the progressive juggernaut. Why should half the country fund institutions that regard them as racists, sexists, homophobes, Islamophobes and xenophobes -- in a word, ‘deplorables’?”

Horowitz believes that conservatives “must begin every confrontation by punching progressives in the mouth.” The endowment tax is the first punch. More taxes, and other efforts to silence criticism of President Trump and his Republican supporters in Congress, will follow.

If the Republicans are allowed to target universities (even wealthy ones) for political retaliation, the repression will only escalate. The endowment tax is an unconstitutional attack on higher education by powerful conservatives who see universities as an enemy to be destroyed. And that means we are all vulnerable.

John K. Wilson is the author of eight books, including President Trump Unveiled: Exposing the Bigoted Billionaire (OR Books).

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Predictions for higher education in the coming year (opinion)

When we wrote last January about the trends coming for 2017, we thought colleges and universities would have a full-to-overflowing plate of challenges. That was true, but at the same time we could not have predicted the amount of turbulence and change that has affected higher education over the past 12 months.

As we look at the landscape in 2018, here are seven major trends college leaders should prepare for. Spoiler alert: it’s tough out there.

1. Eroding support for higher ed. In the past 12 months, we saw increasing evidence that higher education is no longer sitting on a pedestal and that college may not be viewed as necessary to get ahead in modern society. Polls have found gaps among men, rural Americans and Republicans in belief that a college education is worth the price, and policy makers have begun to emphasize vocational education and apprenticeships over traditional college pathways.

Research also finds that students and parents don’t value the label of the “liberal arts,” although they do prize a broad-based education that prepares college graduates for success in a changing world. Nevertheless, data continue to show that college graduates have substantially better career outcomes than those without a degree.

Conservative dissatisfaction with higher ed has resulted in criticism of everything from free speech to the kinds of academic programs offered, and we saw this anger on display in both the tax reform bill and proposed higher ed legislation. And despite the March for Science, decision makers in Washington continue to introduce policy that seems to disregard or undermine scientific evidence.

What’s ahead: Increasing attacks from a variety of sources -- some unexpected -- on cost, student debt, tenure, free expression, research topics, political makeup and whether colleges offer degree programs and skills that employers require.

What to do: Be clear about the value your institution provides to students, alumni, employers and the region. Translate jargon into language, data and concrete examples that demonstrate relevance and value. We wrote this last year, and will underscore it again: higher education as a sector needs an honest reassessment of the public compact and should take the warning signs about its status very seriously.

2. Challenges to the business model. Higher education is in the midst of a shakeout, fueled by changing demographic trends along with rising costs, lackluster job markets and questions about whether students are prepared effectively for the work force. The past year saw a wave of closures and mergers, and rising discount rates led a number of institutions to engage in tuition resets -- although experts question whether this will have the desired effect. On the basis of unfavorable federal policies, Moody’s downgraded the outlook of the sector from “stable” to “negative.” And Harvard University professor Clayton Christensen went viral with a prediction that half of all colleges will be bankrupt in 10 to 15 years.

Colleges and universities have turned to graduate programs, international students and dual enrollment as cash cows, but various academics and policy analysts have raised questions about the value of some of these programs, and international student enrollment appears to be declining in response to hostile federal immigration policies. Even business schools and law schools are facing market threats. One interesting trend has been novel partnerships, such as Purdue University-Kaplan, Ohio State University-Apple, or Arizona State University and the Mayo Clinic. The Hechinger Report has noted the growing trend of colleges banding together to save on costs.

What’s ahead: More financial pressures as enrollment growth slows or declines in traditional markets, increasing closures and consolidations, and questions from board members about innovation and digital offerings.

What to do: Use market research to understand what distinguishes your institution and drives student choice. Pursue new and diverse student populations, but be sure you have the campus supports to retain them and help them succeed. Partner with businesses, nonprofits and other institutions to create savings and new opportunities.

3. Violent activism and balancing free speech, safety and climate. The violence at the white supremacist rally in Charlottesville, Va., was a sobering moment for us all. Grieving over the ugliness on display shifted into planning for groups that are intent on staging hateful conflicts on campuses across the country. Even where students and faculty members are well prepared for dissent and debate, outside agitators often arrive with plans to inflame. Campuses are wrestling with how to balance deeply held views about the importance of free expression with the need to keep their communities safe from physical harm.

What’s ahead: Controversial speakers and hate groups will continue to target campuses for events and rallies. Expect high theater, with demands followed by threats of legal action and press releases about how the university is shutting down free speech.

What to do: Review your policies to make sure you have a plan for room rentals, event sponsorship, access to campus by protesters and media representatives, heckler policies, and reasonable limitations on protest. Educate people about your policies and enforce them consistently. Have regular conversations on your campus about protest and speech before an incident occurs. Work continuously to improve campus climate, whether or not your institution is targeted for fliers and other forms of hateful speech.

4. #MeToo movement in the academy. U.S. Secretary of Education Betsy DeVos and lawsuits from the accused may have created a backlash against policies that tried to strengthen campus response to sexual misconduct. But let’s not forget the Office of Civil Rights’ Dear Colleague letter and the outspoken support of leaders like Senator Kirsten Gillibrand were fueled by activists who had been assaulted and felt the response was, at best, inadequate. Federal policy aside, those who have experienced sexual assault and sexual harassment are fed up. The wave of reports and takedowns of powerful leaders -- including some well-respected faculty members -- has been breathtaking.

What’s ahead: More allegations from students and faculty members about sexual misconduct, some of it stretching back years; more complaints from LGBTQ, international and other vulnerable student populations; and a corresponding backlash from those who perceive a rush to judgment.

What to do: Be proactive. If you haven’t already, survey your population to understand the frequency and nature of sexual misconduct. Review policies and programs to ensure they are working to protect the dignity and safety of complainants and provide fairness to all parties. Look to other institutions for a growing list of best practices and effective interventions.

5. Student safety in Greek life and athletics. Two college institutions have come under the microscope with a new level of intensity in recent months. Calls to end fraternities have followed a number of high-profile student deaths in hazing incidents -- a record number, according to Dillard University President Walter Kimbrough. In the meantime, campuses continue to suspend Greek life activities in the wake of incidents.

College athletics has been caught up in the #MeToo moment, with the highest-profile case involving criminal assault charges against the U.S.A. Gymnastics team doctor who was employed at Michigan State University. Campuses also face broader concerns over athlete safety. Research and lawsuits about the dangers of concussions have affected not only college football but also sports like women’s lacrosse.

What’s ahead: Parents will demand new safety measures to protect students. In both Greek life and athletics, new deaths and injuries will lead to heightened scrutiny and tougher sanctions, both by colleges and through legislation. As the cost of compliance and lawsuits rises, institutions may re-evaluate participation.

What to do: Scrutinize your safety practices and policies. College and university leaders must host frank dialogues about campus values and safety that lead to stronger oversight and institutional support for real change, not platitudes.

6. Reckoning with the racist past. In recent months, many college communities have done the hard work to confront their institutions’ ties to slavery and racism. This year Harvard University hosted a major public conference, Princeton University launched an in-depth research project, Yale University renamed its Calhoun College and Colby College renamed the president’s house to honor a former janitor. In the wake of Charlottesville and as national racial tensions heighten, campuses across the country are re-evaluating whether to remove Confederate monuments or retain them with added historical context.

What’s ahead: Expect more and broadening concern about historical practices, names and markers. With rising white supremacist activity, Confederate-era monuments and other symbols will continue to be campus lightning rods.

What to do: Take steps to understand your institution’s past and the significance of campus symbols, buildings and program names. Higher education is distinctly suited to this work. Consider representative steering committees, faculty expertise and early student engagement. Review existing naming and statuary policies, and establish clear guiding principles for future decision making.

7. Presidents as public thought leaders. Many of us look back fondly on the days of towering public intellectuals like Robert Maynard Hutchins, Father Theodore Hesburgh, Vartan Gregorian, Derek Bok, Chuck Vest and others. In the last decade or more, higher education leaders have appeared reluctant to speak out on issues, perhaps out of concern for angering important stakeholders. But here’s one upside of the turbulence in the past 18 months: the environment has unleashed a new set of highly visible college leaders who know how to use the bully pulpit, and their voices, to advance their principles and institutions.

Some who came from the political arena, such as Janet Napolitano, Mitch Daniels and Margaret Spellings, are savvy about the power of a well-placed op-ed. Others -- including Ángel Cabrera, Ronald J. Daniels, L. Rafael Reif and Robert Zimmer -- have tackled an important issue, sometimes enriched by their personal stories. And a growing number of college leaders know how to leverage the power of social media.

What’s ahead: The number of topics important to higher education and worthy of thoughtful commentary will only grow. Fortunately, an explosion of digital media channels will provide leaders with many good avenues to express their ideas. Social media further extends the reach of worthy and interesting commentary.

What to do: Identify topics that are compelling and advance the priorities and mission of the institution. Assemble key ideas, data and examples -- and when a moment of news makes the topic relevant, act quickly to provide relevant commentary. Colleges and universities have an obligation -- and an opportunity -- to foster informed debate and model what civil discourse looks like in 2018. Presidents can avoid political land mines if they stay closely connected to mission, avoid partisan rhetoric and pretest draft language with key alumni, board members and other trusted advisers.

Lisa M. Rudgers and Julie A. Peterson are co-founders of Peterson Rudgers Group, a consulting firm focused on higher education strategy, leadership and brand.

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Sweet Briar eliminating tenured faculty positions as it puts new curriculum in place

Small private women's college is cutting more than 10 percent of its faculty as it overhauls curriculum.

Will the merger help or hurt the University of Wisconsin System? (essay)

On Oct. 11, 2017, University of Wisconsin System President Ray Cross proposed that the UW Colleges, a system of two-year liberal arts institutions, merge with seven of the state’s four-year universities. Just under a month later, the University of Wisconsin Board of Regents voted to approve this merger.

UW Green Bay, a four-year institution where I teach English composition and creative writing, will merge with three of the two-year colleges: UW Marinette, an hour to our north, and UW Manitowoc and UW Sheboygan, 45 and 60 minutes to the south. Our chancellor has dubbed this “Project Coastal,” because each city resides along Wisconsin’s eastern coast, bordering Lake Michigan or the bay of Green Bay, Lake Michigan’s largest inlet.

Many faculty and staff members across the system were blindsided by the announcement and worry about what this merger means for our departments, our curricula, our institutional missions, our jobs. At the four-year universities, what some are calling the “parent” campuses, some are concerned their new stepchildren will sink us with their budgets in the red. Those at the two-year colleges worry their jobs will be at risk and their autonomy subsumed by the new “partner.” Are they now colonies at the mercy of a more powerful institution? What will this new university system look like? And what influence can the two-year campuses have in its creation?

I have been teaching at UW Green Bay for nine years; for five of those years, I also taught in the UW Colleges. I am an adjunct, a nomad, one who takes work where I can get it, spreading myself thin between teaching online and in the classroom -- freshman comp in the English composition department and creative writing in the English department. I have spent most of my teaching years saying yes to every scrap of work that’s offered, as I can lose classes due to enrollment issues or the whims of my bosses at any moment (or at least up to seven days before the semester begins, according to my contracts, which are always semester to semester and pending funds).

But this hardscrabble teaching life has been incredibly instructive. I have seen how both institutions function and what each does well. I can see how this merger could strengthen the UW system or how it could hasten its decline.

The whys of the merger are known and unknown. Wisconsin is faced with a decline in college-age students, though some people dispute the urgency -- and accuracy -- of this claim. More to the point, the budget pressures have been intensified by the $250 million cut to the system’s budget in 2015-17, courtesy of Republican Governor Scott Walker and a Republican-controlled Legislature. This translates to an average 11 percent reduction in state support, which hit the UW Colleges, with their smaller campuses, lower student tuition and fewer alternative revenue streams, especially hard. The University of Wisconsin System has a budget of $6 billion, and today only $1 billion comes from state funding.

The UW Colleges function as points of access for students scattered across Wisconsin, offering a guaranteed transfer agreement with the comprehensive four-year universities. They are open-access institutions that serve students who want to get their start close to home and in the intimacy of a small campus, but for roughly half the price tag.

In his press release announcing the proposed merger, Cross argued, “The proposed restructuring will allow the UW system to better address current and projected enrollment and financial challenges at the two-year institutions, while maintaining the important UW presence in local communities.” What he didn’t say is that closing one or more of the two-year campuses, an idea that’s been floated over the past couple of years, would be political suicide for whoever represents that district. In an Oct. 27 governance group meeting, Cross reportedly said, “It's critically important that we don't lose our access portals. Without the university presence, all you have left is a bar and a convenience store.”

According to the Milwaukee Journal Sentinel, the system estimates 2,500 fewer students have enrolled this year compared to last. And yet, according to a local news report, this fall UW Green Bay has 7,158 students enrolled, “up nearly 400 from 6,779 students in fall 2015.” That’s an increase of nearly 6 percent. How can this be? The report goes on to credit the increase to “new courses being offered and success UW Green Bay students have finding a job after graduation.”

Such growth appears to be most likely the result of institutions trying to put more butts in seats. Following the decline in state support, coupled with an ongoing tuition freeze, institutions in the system have become heavily dependent on bringing in more tuition-paying students to cover operating expenses. In doing so, at least some of the four-years are, for all intents and purposes, becoming open-enrollment institutions, thereby appropriating the mission of the two-year campuses. The system is cannibalizing itself.

The comprehensives have the advantage of bigger campuses, shinier facilities and more prestigious faculty, so of course they seem more attractive to students than their local two-year extension. As a result, the two-year colleges are hemorrhaging students, with declines in enrollment ranging from 29 to 52 percent when measured (rather unfairly) against the 2010 recession-era peak. But any way you slice it, insolvency is in the air. And so Cross’s plan is clever in one respect: by combining the systems, the four-years have to take responsibility for this problem. They can no longer simply poach students from two-year campuses. They will soon be married into them.

A Question of Direction

But can the four-years provide students with the support they need? Do they even know what that support should look like? In a letter to the Board of Regents, published in the Wausau Pilot and Review, members of the UW Colleges Faculty Council lamented, “The curriculum and support programs we offer [at the UW Colleges] for underprepared students who come to college with prior educational experiences that may not be aligned with college expectations -- but who have the potential and capacity to develop those skills -- simply are not offered at the comprehensives. If we hope to increase retention and graduation rates of students -- wide ranges of students from wide ranges of backgrounds -- these programs must be increased, not decreased, if the stated goal of increasing student success and attainment of degrees is to be achieved.”

The two-year colleges aren’t simply open-enrollment institutions in name -- they put the mission of support to first-generation and at-risk college students in the forefront of every decision they make. And they have success in doing so. The UW System Office of Policy Analysis and Research reports that students who transfer from the two-year to the four-year institutions are more likely to graduate than students who transfer among the four-years.

Given the demographic shifts and the decline in state support, the four-year institutions have been awakened to the concept of retention -- finding ways to support the students they enroll, to remove roadblocks to graduation. At UW Green Bay, we’ve seen some nods in this direction: we now have a director of the Center for Students in Transition, Denise Bartell, who works to increase student success and engagement. She’s implemented an “early-alert” grade report so that struggling students can be helped early in the semester. Bartell has also established an emergency grant fund so that students with a financial emergency aren’t forced to drop out of college to pay for a car repair or unexpected medical bill.

Chancellor Gary Miller has previously proposed “re-missioning” UW Green Bay to put more focus on research and STEM and to align us with the needs of local businesses. Not surprisingly, that did not sit well with many liberal arts faculty who are passionate about the university’s interdisciplinary focus. But then, in his Project Coastal memo after the merger announcement, he wrote that the institution “will become a four-campus university. The university will operate under a single vision and mission.” What will that mission be? What will take precedent? Can a university focused on research also care significantly about teaching and student retention?

The two-year colleges, with their tradition of serving first-generation college students, many of whom are underprepared and simply don’t feel they belong, are old hats at student support. The English department, in particular, has been on the cutting edge of developmental education reform: they’ve implemented placement measures to provide students with a more accurate and focused foundation for their first year of college, created tutorial-style support courses, and have received a Gates Foundation grant to gather data on these innovations, with the goal of accelerating student progress toward their degrees. What will become of this curriculum, this leadership, this research, all of which has the potential to shape course design and retention rates at universities across the country?

My first years of teaching at UW Green Bay were brutal. I worked constantly. I second-guessed every decision I made and constantly felt like I was failing. In the eyes of my boss, teaching evaluations were the only judge of my abilities. They brought me such anxiety that I could hardly bring myself to read them. There were -- and are -- many good teachers at this university, but the institutional administrative support for those practices is patchwork -- strong in some departments, nonexistent in others.

Then I began teaching at UW Marinette, a rural outpost with a shipping and manufacturing history at the edge of Michigan’s Upper Peninsula. The challenge of working with underprepared, first-generation college students, students with shaky confidence who didn’t understand the conventions of college life, who didn’t know how to ask questions, who didn’t feel they were “college material,” taught me so much about careful course design and transparency, and prompted me to simply rethink my own biases and assumptions about what college teaching is. If you want to learn how to teach, teach developmental writing in a two-year institution. The UW Colleges made me the teacher I am today.

But I couldn’t have succeeded in such a challenging environment without the support and wisdom of so many amazing colleagues, who mentored me, supported me and, above all, created paths for my success. The English department in the UW Colleges gave adjunct instructors like me the same kinds of assistance that they provided for tenure-track faculty -- and for students. I wasn’t just an adjunct, someone to be cast aside if my teaching evaluations weren’t good enough, just as students weren’t just butts in seats left to sink or swim. Instead, I was someone worth training and investing in. Likewise, faculty members know their students can succeed, provided they’re given the right support, in the form of appropriate placement, small class sizes and well-trained instructors -- even the adjuncts. It also helps that those adjuncts have a path to promotion with title increases, pay raises and benefits. Teachers who are supported can in turn support their students.

Ultimately, the UW Colleges will cease to exist. In a letter to the editor in Madison’s The Cap Times, Cassandra Phillips, UW Colleges writing program coordinator, warns that “the curriculum and support system the UW Colleges provide the state’s most vulnerable students will be lost with this merger.” It’s my deepest hope that it won’t -- that, rather, the UW Colleges can transform their four-year “parent” institutions for the better. We will see what the future holds.

Tara DaPra, who teaches English composition and creative writing, is an associate lecturer at UW Green Bay and formerly a senior lecturer at UW Marinette. Her writing has appeared in such places as Creative Nonfiction, Sheepshead Review and The Rake.

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Students at UW Marinette
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Campus administrators weigh a more practical argument for higher education

Facing skeptical public and politicians, campus business officers discuss strategies for making a more practical case for higher education.

Key questions to ask about free college plans (essay)

We have recently witnessed the introduction of a growing number of diverse plans for free public college. But what we’ve not seen -- and what must be done -- is to determine a set of criteria to judge the effectiveness and the viability of these various financial aid models.

A major concern is that some of the new programs do not appear to have a sustainable funding source, and many do not look closely at the relation between state support for financial aid and state support for campus funding. Moreover, if we enter another recession, and state revenues fall again, free college programs will be in significant jeopardy.

Another problem is that most of the proposed and enacted plans focus on making tuition free and do not take into account the total cost of attendance. The issue with this approach is that nontuition expenses -- room, meals, books, transportation and the like -- often make up the majority of the cost and are a leading reason for student debt. The best plans, then, should pay for the total cost of attendance and seek to focus on the students who need the most help. Unfortunately, however, most politicians and pundits only talk about tuition costs, and that creates a distorted view for the public.

Many plans also rely on an increase in state support for financial aid, but this approach could function to crowd out the already decreased state support for general funding -- or the money that goes to pay for the salaries of faculty and staff members and other vital infrastructure costs. For instance, if a state currently spends $500 million on financial aid and $1 billion for direct funding, what happens if the financial aid costs go up to support free tuition? And if more students are induced to attend, but institutions have less money to pay faculty members, what will happen to the quality of instruction?

It is important to ask such funding questions now. In the past, whenever states suffered from a lack of tax revenue, they have reduced their appropriations for higher education because they know the institutions can make up the difference by increasing tuition. In this system, state budget cuts to support higher education are partially made up for by increases in financial aid. But during a financial downturn, pressure is placed on all support for higher education, since many other government programs are mandated by law or popular initiative, and states cannot run a deficit or print more money.

Although many local and state free college programs have not identified a new revenue stream to support their programs, they will have to consider developing other revenue sources or passing new taxes to remain sustainable. Moreover, these free college plans must not only have enough financial support but also act to contain and control rising costs. While many people think that the solution to this problem is to reduce the number of faculty members or to move instruction online, colleges and universities have already decreased instructional costs by turning to large lecture classes and non-tenure-track faculty. Further, as I stated above, much of the reason for student debt involves nontuition costs, and so policy makers, institutions and concerned citizens have to take a serious look at the rising amount of money spent on housing, dining, parking, health care and amenities.

As I argued in my book Why Public Higher Education Should be Free, we not only have to control noneducational costs, but we also have to focus on improving the quality of instruction and basic research. So far, most of the free college plans have focused on financial aid and mentoring, but they have not been centered on a more holistic approach to controlling costs and improving instructional quality.

A rare exception to this problem is Senator Bernie Sanders’s 2015 plan proposed in Congress, which called for providing “an assurance that not later than five years after the date of enactment of this act, not less than 75 percent of instruction at public institutions of higher education in the state is provided by tenured or tenure-track faculty.” That push to have more tenure-track faculty reveals a desire to protect the quality of instruction and research. But a more realistic and effective goal would be to have at least 75 percent of all courses taught by full-time faculty, whether on the tenure track or not, with academic freedom, shared governance rights and job security.

Sanders also proposed making sure that more money ends up in the classroom. His plans would require a state that receives a grant to use any remaining funds and any matching funds “to increase the quality of instruction and student support services by:

  • Expanding academic course offerings to students.
  • Increasing the number and percentage of full-time instructional faculty.
  • Providing all faculty with professional supports to help students succeed, such as professional development opportunities, office space and shared governance in the institution.
  • Compensating part-time faculty for work done outside of the classroom relating to instruction, such as holding office hours.
  • Strengthening and ensuring all students have access to student support services such as academic advising, counseling and tutoring.
  • Any other additional activities that improve instructional quality and academic outcomes for students as approved by the secretary through a peer-review process.”

Sanders's plan was thus not simply a model of eliminating tuition costs for students. Rather, he sought to guarantee that not only would students be able to afford higher education but their education would also not be cheapened or short-changed.

It is commendable that so many states and local institutions are trying to make higher education more accessible. But we do not simply want more students to attend: we want them to learn and earn degrees. Since it does not look like the federal government will be much help here, state policy makers will have to come up with comprehensive plans that raise new sustainable revenues as they motivate institutions to spend money on the right things.

Bob Samuels is a lecturer at the University of California, Santa Barbara.

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Senator Bernie Sanders
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Proposal on indirect costs would put research universities in an impossible situation (essay)

Over the past 20 years, technologies based on university research have launched entire new industries, cured fatal diseases and even put new foods on your grocery store shelves. Since 1996, these technologies have contributed an estimated $1.3 trillion and 4.2 million jobs to the American economy. In 2015, Florida’s state universities spun out 48 start-ups and achieved a multitude of scientific breakthroughs in health, engineering, agriculture and basic sciences.

The partnership between America’s research universities, industry and the federal government is the envy of the world. But a proposal by the federal Office of Management and Budget to severely cut the reimbursement government agencies make to universities for shared research costs threatens to destroy it.

University research expenses are typically divided into two buckets of money. Money in the first bucket pays for the direct costs of the project: salaries for researchers and stipends for graduate assistants, lab equipment and supplies, and travel.

The money in the second bucket funds all the other things researchers need to do their work, like the building itself; electricity; heating, air-conditioning and other utilities; janitorial services; building security; laboratory safety equipment; and information technology. It also pays the salaries of the support staff members who help scientists develop and submit highly technical research proposals, manage millions of dollars in public funds, and comply with a myriad of federal rules and regulations. These highly trained professionals enable the scientists to focus on what they do best, whether it’s finding a cure for diabetes or protecting computer systems from ransomware.

In the business world, these are called overhead costs.

For most universities, such overhead costs amount to about $1 for every $2 spent directly on the research. They are determined not by the universities but by the federal government through a rigorous review process.

But the federal Office of Management and Budget proposes to pay as little as 20 cents for every $2 of research, grossly shortchanging universities and leaving them with the option to either pick up the tab or simply not do the research. You don’t need an M.B.A. to understand that any business forced to sell its services for less than its costs is doomed. For the universities within Florida’s State University System, this “tab” would be more than $100 million per year, a cost that would have to be covered with other university revenues. As such, it would place the universities in the state of Florida, and every other state, in an impossible situation -- either subsidize federally funded research with other university money or quit doing research on next-generation technologies and medical treatments.

As the chief research officers for Florida’s 12 state universities, we are committed to recovering the costs for services provided to the federal government at no loss to the institution. We urge our representatives in Washington to make every effort to stave off this action by OMB and the agencies. Otherwise, the research efforts at our universities, a shining beacon of American know-how that has been decades in the making, will be crippled. Faculty members at each of our 12 institutions are working each day to generate new discoveries for the benefit of current and future generations in our state and nation. We hope to continue these efforts for many years to come.

Daniel Flynn, Vice President for Research, Florida Atlantic University

Andrés Gil, Vice President for Research and Economic Development, Florida International University

John Kantner, assistant vice President for research, University of North Florida

Elizabeth Klonoff, vice president for research, University of Central Florida

Timothy Moore, vice president for research, Florida Agricultural & Mechanical University

Pam Northrup, vice president for research and strategic innovation, University of West Florida

David Norton, vice president for research, University of Florida

Gary Ostrander, vice president for research, Florida State University

Lee Ann Rodríguez, director of the office of research, New College of Florida

Paul Sanberg, senior vice president for research, University of South Florida

Jeanne Viviani, director of sponsored programs, Florida Polytechnic University

Tachung Yih, associate vice president for research, Florida Gulf Coast University

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A recommendation to Jeff Bezos to award transformative philanthropic gifts to colleges (essay)

On June 15, The New York Times published an interview with Jeff Bezos, the founder of Amazon, in which he was asked about his philanthropic interests, now that his net worth exceeds an estimated $80 billion. His philanthropic giving to date has been modest by the standards of many other multibillionaires.

Bezos responded, “If you have any ideas, just reply to this tweet …”

Within a day, Bezos had received more than 18,000 replies. No doubt the flood of tweets will continue unabated for days to come. Yet it’s very difficult to compress a good idea into the 140-character limit of a tweet.

With that in mind, I offer my own suggestion.

Dear Mr. Bezos,

You indicated to The New York Times that, when it comes to philanthropy, you are interested in making investments that are “at the intersection of urgent need and lasting impact.” I have a suggestion that I think would do just that. But first, let me set the table for you.

In 1992, Henry M. Rowan Jr., an industrialist living in southern New Jersey, did something literally unprecedented: he gave $100 million, virtually all of which was unrestricted, to a local public institution, Glassboro State College. He had no particular history with that institution, but it was the only four-year college near his business offices. It was, at the time, the largest gift ever given to a public institution -- and Glassboro State College then had an endowment of less than $1 million. In recognition of this gift (and not, as some people have speculated, because it was a condition of the gift), Glassboro State College changed its name to Rowan University.

Rowan was rolling the dice with an enormous bet. He was betting that a gift of this size could be transformational for Glassboro State. He was a graduate of the Massachusetts Institute of Technology, and that institution was soliciting a major gift from him. But he decided that MIT was already so rich that even $100 million would do little to effect a transformation there, and he wanted his gift to have an impact.

Rowan’s gift was paid in installments over 10 years, and I had the good fortune to be hired as president of Rowan University in 1998 to move the university “to the next level” -- a concept that was not specifically defined but was assumed to mean making the university better, stronger and more recognized.

The gift was intended to be an endowment, with some of the investment earnings available for spending every year. But the sheer size of the gift allowed us to leverage it in the market for purposes of borrowing funds to improve the campus. We built engineering, science and education buildings. We renovated many of the existing buildings and improved landscaping. We constructed a town house complex to increase student housing. We acquired 600 acres of land near the campus for future expansion and the construction of a technology park.

Over a 10-year period, working with the town of Glassboro, we constructed campus-related buildings (residence halls, a hotel, a bookstore and a parking garage) on city-owned land adjacent to the campus, and to benefit the town, we orchestrated a public-private partnership to ensure the new buildings would be taxable at normal rates. Most of them included shops and restaurants on the ground floors, as a way of attracting the local populace to the area.

The campus grew in size and reputation, and shortly before I left in 2011, we built the first new medical school in New Jersey in 40 years. The work continues under my successor, with an intention of growing the student body from 8,000 in 1998 to 25,000 by 2025. (It’s more than 17,000 today.)

Rowan died two years ago, but he lived long enough to see his legacy in full bloom. His gift was every bit as transformational as he had hoped. He was a tough businessman, but when he spoke of the university that bore his name, his eyes filled with tears, and on more than one occasion he told me, “That was the best money I ever spent.”

Some cynics speculated at the outset that the university would never receive another gift, since any gift would pale in comparison to Rowan’s gift. To the contrary, philanthropists reasoned that a university that could attract a gift of $100 million must certainly be worth their much smaller investments, and over the subsequent decade, we received more than a dozen gifts of $1 million or more, with one gift of $10 million. Success breeds success -- and large philanthropic investments attract other philanthropic investments.

The Rowan story is gradually becoming better known. For instance, it was featured in a Malcolm Gladwell podcast last year as an example of how philanthropists should be investing in colleges where their gifts will have meaning and impact, as opposed merely to swelling the bank vaults of well-known institutions that are already fabulously wealthy.

So, Mr. Bezos, here is my suggestion for a philanthropic investment.

  • Transform 10 colleges or universities each year for 10 years by awarding them an unrestricted endowment gift of $100 million. That’s $1 billion annually for 10 years.
  • Any public or private four-year, nonprofit institution with an endowment of less than $100 million would be eligible to apply.
  • An anonymous panel of experts whom you select would review the applications each year and select the 10 that promise to be the most transformational, affect the largest number of students and have the greatest societal impact. The specific criteria for evaluation would be yours to state, and those criteria may well change over the 10-year history of the plan.
  • As a condition of the gift, each recipient institution would be obliged to prepare an annual report, for 10 years, documenting their success (or failure) in achieving the goals they stated in their initial proposal. Those reports would be public, so that everyone could see the ways in which the colleges and universities were being transformed by virtue of winning a Bezos grant.

Mr. Bezos, this proposal, if funded, will positively impact the lives of hundreds of thousands of students every year -- forever. But more important, if something like this does not happen, our country will continue to see a major shortfall of college graduates relative to our economic needs, and that shortfall will occur largely among would-be first-generation students, many of whom are members of ethnic and racial minorities.

There are many worthy philanthropic investments that you might make. But the economic future of our country depends on doubling the percentage of American adults with a four-year degree. A study last year by the Georgetown Center on Education and the Workforce showed than 73 percent of all jobs created since the Great Recession required at least a baccalaureate, and only 36 percent of adult Americans currently have that level of education. The current system of higher education will never get us to where we need to be, but philanthropists such as you can show us the way.


Donald J. Farish, president
Roger Williams University

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Jeff Bezos
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