More Degrees/Dollar -- Damn the Quality?

A new report asserts that higher ed can double production of degrees with no more public money. Really? At what cost? asks Garrison Walters.

April 11, 2011

The idea that technology and management changes can substitute for public support to American higher education is growing. As an avid critic of this concept, I read with interest a recent statement from Department of Education Deputy Secretary Tony Miller “that the 2020 goal [of increasing college attainment rates by 50 percent over the coming decade] can be achieved without increased public funding…”

The source for this major announcement was a study on higher education productivity, “Winning by Degrees,” recently completed by McKinsey and Company. The study, which was supported by the Bill & Melinda Gates Foundation, apparently found highly productive colleges and universities whose practices could be copied. This was big news. I was on Google instantly.

While the McKinsey report was downloading I wondered how I had failed to notice this major and deeply portentous change in higher education. Evidently, somewhere in the U.S. someone had done something surprising and dramatic. Was it "Selective State," a flagship public research university with an exciting new approach to teaching? Or perhaps "Standard State," a regional public college that had figured out how to deal with underprepared students in a way that was both effective and efficient?

Well, I was certainly surprised, but not in the way I expected.

First, the McKinsey report employs a statistical analysis to look across institutions, finding that there are big differences in cost/degree among comparable places. Stipulating that the math is correct (this is McKinsey), I looked at their assumptions about comparability and costs.

A mixed bag. Some are insightful, some appear at best puzzling, some will provoke academic outrage (e.g. increasing student-faculty ratios by 50 percent). In addition, I’m pretty sure that critics will challenge their use of IPEDS data. In a situation like this I would normally just wait for the reviews before forming an opinion. Here, though, my wait will be steeped in skepticism. The reason is that the report supports its conclusions by providing examples in the form of eight exemplary institutions. Here is McKinsey’s Exemplary Eight -- the list of places the rest of higher education should emulate:

  • Brigham Young University-Idaho (not the main campus)
  • DeVry University
  • Indiana Wesleyan University-CAPS (onsite and online)
  • Rio Salado College (online for certificates)
  • Southern New Hampshire University
  • Tennessee Technology Centers (primarily certificates)
  • Valencia Community College
  • Western Governors University (online only)

My first reaction was that, to paraphrase President Clinton, this isn’t a list that “looks like America.” Several of the institutions promoted by McKinsey were previously unknown to me despite nearly 40 years of higher education administration. That’s an indictment of me rather than of the colleges and universities, of course, but it certainly suggests this isn’t a mainstream group.

The best known here, and one that I am reasonably familiar with, is DeVry. McKinsey applauds them. The Education Trust not so much. Indeed, a recent report from that worthy promoter of improved education pans the Illinois-based for-profit for its 31 percent six-year graduation rate.

DeVry would respond that its students are non-traditional, typically working full or part time, and that in consequence these data aren’t fair when applied to them. Many of their students, I’m sure the university would also say, get the skills they need from a collection of courses that comprise less than a full degree and drop out in order to take good jobs. I side with DeVry on this argument and believe that the university’s value to society is far greater than its graduation rates suggest (it helps that their technology programs are accredited by ABET, an organization that really understands quality and effectiveness).

But, just as I agree that a specialized university’s graduation rates aren’t a valid indicator of its worth, so I believe that the niche institutions McKinsey has chosen as exemplars don’t tell us much about the potential to cut costs across the full range of higher education.

Specifically, what practices does McKinsey say we should emulate? Well, there’s the usual better management stuff (no surprise given the source) but the numbers seem highly unpersuasive. For example, McKinsey finds a variation in “core services” (HR, IT, finance, central administration, financial aid support, libraries, audio/visual, plant operations) between best and worst of a whopping 16-23 percent in cost/degree.

I don’t doubt the numbers, but don’t you suppose the low-cost end is an adult and online focused place with mainly business students who do all their research in electronic databases (see the Exemplary Eight, above), while the high-cost end is an institution with arts and sciences students and an actual library? Etc.

An example of academic substance is McKinsey’s suggestion that institutions avoid the waste that results from excess coursework and switching majors (a recommendation singled out for praise by Deputy Secretary Miller). This isn’t just cutting the number of hours required for a degree, as many mainstream institutions have done, it is instead suggesting a more limited curriculum with students allowed fewer choices. It’s the difference, for example, between an engineering technology institution and an arts and sciences one.

Now I agree that one cost driver in higher education, particularly at smaller universities, is the proliferation of majors. There are many very lightly populated majors, and therefore many very expensive upper division courses, at these institutions. When confronted on this issue, presidents defend their program structure by arguing that their clientele demands these kinds of choices and that becoming a more narrowly-focused university would sharply hurt enrollments in all programs. It’s not a fully persuasive argument, since I think there’s a lot these smaller universities could do in combining programs that would save costs and improve quality. But they do have a point about the market.

The market. Hmmm. I wonder if McKinsey thought about that?

One aspect of higher education that critics seem to want to ignore is that a lot of choice exists already. In most places, students can choose between lower-cost institutions that have only a light emphasis on scholarship and research -- certainly among the most expensive elements of college -- or instead choose a higher tuition university that places a premium on these activities. In making their choices, many students and parents clearly show that they see value in the latter type of institution, yet “reformers” want to take that decision away by making everything the same.

Let’s consider a typical student at Standard State, our example of a non-selective public university. This student is 18, has a weak science and math background, but plans to go to medical school. What can McKinsey tell us about managing this type of student? Do we just tell them we won’t let them take organic chemistry because we’re pretty sure they would fail and that would look bad on both their and our (performance funding) report cards? It’s a decision made more difficult by the fact that a not insignificant number of such students do go on to medical school and become successful physicians.

There’s an array of such challenging student examples faced by the Standard States, and also the Selective States, that the McKinsey report doesn’t speak to, directly or indirectly.

So, I’m back to the same problem I have with performance funding. There’s nothing wrong with the goals of improved productivity, and some of the methodologies McKinsey touts might work, but the expectations are completely out of whack with the likely benefits. Put simply, the McKinsey strategies don’t provide a credible foundation for the idea that all of higher education could raise enrollment by 50 percent with no increases in public funding. It’s the vision of American higher education’s future as painted by Salvador Dali.

Another Perspective

If the McKinsey folks were starting over again, I would encourage them, in addition to thinking more carefully about the differences in types of students between institutions, to read Robert B. Archibald and David H. Feldman’s excellent Why Does College Cost So Much (Oxford University Press). In the context of funding higher education, this is where opinion founders on the rocks of science. The book makes clear that, instead of asking why tuition is so high and how management improvements can offset it, we should understand that getting tuition lower will be an extraordinary economic act because we’ll be fighting against a market in which technology lowers the price of goods and therefore drives up the comparative price of services -- especially knowledge-intensive ones like higher education.

Even a tough environment like this isn’t a reason to throw up our hands. We should do what McKinsey suggests and carefully analyze everything for greater productivity (as most institutions have been doing for a long time). Some benefits will ensue, as is already the case, but a reasonable analysis will conclude that improved management is not going to provide anything other than incremental benefit.

Similarly, it’s highly unlikely that online learning, another easy option touted by McKinsey and many others as a cost reduction strategy, will have a big impact.

There seems to be a movement toward using online learning as a mass credentialing option. The idea is to find the cheapest and least demanding level of instruction and set that as the standard, noting in our defense that no one can definitively prove anyone else is actually doing better. This reminds me of the popular Soviet joke about the economy: “We pretend to work and they pretend to pay us.” Our variation would be: “We pretend to teach and they pretend to learn.” Fortunately, I doubt many will want to beat the diploma mills by joining them.

At the other online extreme there’s much praise for what Carnegie Mellon University (CMU) does with its Open Learning Initiative, and I agree it looks like a great system. But consider just two of the many sets of questions the strategy raises: (1) How many students will do as well as CMU’s elite students in this structure? Specifically, what about the students at the nation’s non-selective Standard States? And (2) will people want to pay the same or even much at all for a mostly self-taught program? If not, what will sharply lower income do to the economics of the university? Would cheaper general education lead to higher costs in major programs?

Despite my skepticism about these strategies, I’ll agree that general education is likely the most promising area for greater instructional productivity. And if I had a large, critical-mass-changing, pot of grant money for this purpose, I’d give 90 percent of it to the American Association of Colleges and Universities (AACU).

Unlike so many of the “reform” leaders who’ve never taught a general education course and don’t have a clue about the challenges involved, these are folks who have long been thinking about the value of general education, how to teach it, and how to assess it. Their “high impact practices” speak to both critical elements of learning and the productivity issue.

AACU also understands the fact that, in today’s economy, general education can’t be just a minor distraction on the way to a credential. On the contrary, it has be much deeper and more sophisticated than in the past, including “Essential Aims and Outcomes” that include “knowledge of human cultures, and the physical and natural world,” “integrative learning,” and more. AACU also appreciates that, by contrast to the past, these aims and outcomes are critical even for people working on technical certificates. The people at the Gates Foundation also know this, but you won’t see it in “Winning by Degrees.’

What about the other ten percent (of the grant money I don’t have)? I’d put that into projects designed to create more of a pervasive education culture in the U.S. My belief is that much of the inefficiency in our educational system -- certainly vastly more than can be attributed to management -- occurs because students don’t think learning is important or don’t believe they can learn, or both.

To illustrate, I’ll make a hypothetical bet. Let’s put McKinsey’s High Productivity U, with every administrator holding at least a “Six Sigma Black Belt,” vs. my Same Old U run by literature professors who only rate yellow suspenders.

Here’s the catch: High Performance U would have a standard American student body while Same Old U’s students would have similar academic history but would all be education-focused, for example Korean-Americans, young men and women holding a deep belief that education is not only essential for economic success but that it also has intrinsic value for a high quality of life. With just this difference in attitude, I’ll wager Same Old U would destroy High Performance U and its “black belts” in everything from cost/degree to actual learning.

Few people in academe are paying attention, but the “more degrees/dollar and damn the quality” school is fast gaining credence in statehouses across the country. The thinking goes like this: 1) Higher education is getting more expensive; 2) Higher education is more necessary than ever; so 3) we should be able to get our colleges and universities to produce the same product at half the cost.

That shrieking sound in the background is the logic alarm going off. Unfortunately, many can’t hear it over the loud, unceasing babble about “reform.”

We need to escape from the “creating more degrees through better management” box. If we don’t, my great fear is that the ersatz reform movement will win and higher education will come to resemble K-12: a vast machine run by bureaucrats and focused on outputs that are truly quantitative but only pretend qualitative. It’s the vision of America’s higher education future not as painted by Dali but as drawn by Gahan Wilson.


Garrison Walters is executive director of the South Carolina Commission on Higher Education.


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