3-year baccalaureate, access to education, Ahmed el-Tayeb, Bologna Process, decrease in state funding, European Higher Education Area, European Student Union, for-profit universities, going global, state budget cuts, stratergy
One of the pleasures of the winter holidays is the time it affords to read materials other than the obligatory academic journals and students’ term papers. This year, like every year, most major magazines I caught up with published a review of 2010. I avoid reading those reviews because I already experienced those events (I did not like them much then!).
The major magazines also attempt to forecast the more salient issues of 2011 and some of their guesses are pretty good while others are pretty ridiculous. If they can do that, fearing no shame, why can’t I?
So what is the Tao of 2011? Chinese astrology tells us that on February 3, 2011 the Year of the Rabbit will begin. The I Ching says that in “the year of the Rabbit without concentration you will fail.” So watch what you are doing, focus on your intent, don’t go looking both ways, except when crossing a street.
Heeding the rabbit’s caution and remembering Yogi Berra’s uncertainty about predictions and, because my business is higher education, I thought I would suggest ten events that are likely to have a significant effect upon higher education in the United States in 2011. Here it goes.
Number One: Early in 2011 cities and states that are broke now, operating with deficits, and projecting deficits through 2012, will begin to either default or furiously renegotiate their outstanding bonds. Because colleges and universities that borrow do so with tax-free bonds under the authority of their state, their bonds’ perceived risk will be lumped with the “municipals” and it will cost substantially more to borrow money for anything. At the same time, state’s contribution to higher education is expected to decline, precisely when demand from 18-24 year olds is projected to grow sharply (fueled in part by the nature of this recovery). This will exacerbate the financial issues already being faced by the whole of higher education, from decreased state contributions for public universities, to tapped-out Federal pools for loans and new requirements for additional reserves for private universities. This will lead to a new musical hit, maybe a country western or blues or more rightly a rap, on how being a CFO of a college or university in 2011 “ain’t nothing but pain.”
Number Two: In 2011, the Feds will continue their attempt to push the Capitalized Universities (CUs) further away from the educational trough. The Federal case has been weakened by the revelations that the GAO study which gave it impetus did not live up to its title: “FOR-PROFIT COLLEGES Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices.” The GAO was forced to send corrections on critical data presented to Congress. Nonetheless, a series of changes in government regulations applying mainly or only to CUs and new legislation now in Congress, will move forward to limit the use of CUs business model for attracting students. The Feds will hurt CUs in the short term with lower sales and lower profits, but this will only serve to make the CUs a stronger competitor and cause it to move into more of the Traditional Universities’ (TUs) traditional areas. The CUs will successfully adapt, the TUs will need another strategy.
Number Three: Some universities will have no choice but to raise tuition and students will respond adversely to those attempts. For universities, the cost of tuition has been a proxy for quality, i. e., the higher the tuition the better the college is perceived. This has worked to their advantage as they tried to maintain services while costs rose and state contributions declined. But for students and other payers, higher tuition means higher debt burdens. I predict that this year students will react like their European counterparts and provide political pushback. (See Hell No We Won’t Go and Off with their heads.)
Number Five: An aging faculty and administrative staff will bring about a wave of retirements this year. Most of us are running on super lean staffs so the retirements will require new hires (projected at 15-18 percent) however budgets will constrain replacing all vacancies. Will universities know how to reallocate funds for new hires so as to reflect their strategic objectives? I don’t think most will or can. Lack of a robust faculty pipeline, particularly in areas of high need, such as health professions, engineering, basic sciences, will push starting salaries up? 15-20 percent for faculty and 20-25 percent for administrative roles. This will be partially ameliorated by a willingness for faculty who could retire, to remain on the job
Number Six: Some major universities will begin to use Bologna processes successfully. The Tuning Process will expand and be supported by regional accreditation agencies. The 3-year baccalaureate will be proposed and will become available from traditional state universities, just to overcome increases in “time to completion” which has the average student taking 5-plus years to complete a baccalaureate in the U.S. today. (See here)
Number Seven: While somewhat attenuated by the tight financial picture, this will be the year for venturing abroad. A campus abroad will be initiated by dozens of universities and expanded for those already present.. Data will drive the movement. India will require an additional 5 million professional degreed people in 2012. China will add 7 million to the demand by 2013. But here at home, by the year 2020, President Obama wants us to produce 23 million more graduates than we are producing now. Most attempts will not succeed and will distract from the main business of a TU in the United States. Heed the caution of the rabbit and remember that “without concentration you will fail” (Look up my thoughts on global strategy, part 1, 2 and 3)
Number Eight: We will require a massive improvement in productivity, in order to meet our own need in the U.S., and this is not likely to happen this year. When budgets go south, CU’s cut back and get more done with fewer people. TUs can do that only to a very limited extent. They can restructure programs, close some, open others, make them leaner, faster, delivered through media. Nearly all universities will attempt to increase productivity, but their level will remain stubbornly at that of the 1950’s when no one had ever heard of a computer.
Number Nine: Regional accrediting bodies and other regulators will tighten their reviews to meet social pressure to show outcomes. “Quality”, now a noun, will become a verb. As it was in the 70’s that the noun “impact” became the verb “impacting.” talking about quality in higher education will become so commonplace that “quality” the noun will metamorphise. But what will the new word be? Quality-ing?
Number ten: Seven of the ten predictions above will unfold just as I predict. Three will not. At this time, I can’t tell which will be which, but a predicted .700 batting average ain’t bad.
 Technically a Gerund (Verbal Noun)
Europe’s first university, the University of Bologna, started with students hiring their own professors who would read and explain the classics and soon, it seems, we will be back to the same student-supported model, except that now the state is permanently there, regulating as if it was still paying for it.
Last year England decided it could no longer afford to subsidize higher education to the extent they had for the last 500 years. Things must be very bad in the realm for something like that to happen. Allowing higher education support to decline has traditionally been political dynamite in England. Conversely their American cousins across the pond were lowering their support of higher education every year and no one in the US noticed or protested very effectively. But when, in 2009, Tony Blair proposed a program whereby students would have to pay a higher proportion of the costs, the BBC reported “That move proved even more contentious in Parliament than Mr. Blair’s decision to wage war on Iraq.”
This year there are new cuts proposed that continue shifting the
cost of higher education from the taxpayer to the student, but they are modest in comparison. Compared to the U.S., England’s reform could be said to be negligible. In England, the entering student contributes approximately 47 percent (£3,290 of an average tuition of £7,000) towards their annual educational costs. In the U.S. the average student entering state supported institutions pay 72 percent of the costs. In England, the state partially subsidizes the gap, and also lends students the money to pay their fees and living expenses. These student loans are repaid once the graduate is employed at a job paying £15,000 [about $25,000] a year or more. In the U.S. interest accrues from day one and the borrowers must begin paying as soon as they leave school, whether or not they are employed. Nonetheless, the BBC predicts, “A new proposal for graduates to contribute more to their education could spark a rift in the Conservative-Liberal Democrat coalition government.”
Demand for higher education is increasing rapidly around the world. In England of fifty years ago, only 5 percent of the 18 year olds went to college, now it is forty-five percent and rising. Other European governments have experienced similar increases and responded to this high demand in the same way, by forcing students to contribute a higher percentage of the costs. Germany, Spain, Ireland and England have already submitted proposals to their parliaments. Der Spiegel of Germany contends that the increase in higher education tuition is responsible for the ruling party’s decline, “… after forming a coalition with Chancellor Merkel, the Social Democratic Party (which was the guardian of free education) slipped to 23 percent of the vote.” In Spain the national newspaper El Pais documents an even longer history of free higher education (900 years) and asks the government whether they can afford not to continue with the investment. “In a time of unemployment when youth can either go to college or live on welfare, the government has chosen welfare.”
This week the University of California at Berkeley announced it will be the first public university to charge out-of-state residents $50,649 for tuition, fees, room, and board. The price for in-state residents is $27,770. In California, higher education is no longer a public good; it is now a private burden.
There are 100 universities in the U.S. that belong to the $50,000-plus club, but UC Berkeley is the only public institution. In 2009, there were 58, so the club has expanded considerably in the face of decreasing endowments, decreasing support and currently increasing demand. This demand will flatten out over the next decade and that makes for the perfect storm.
The number of 18-24 year olds in the U.S. will decline by more than a million over the next decade and assuming the rosiest projections, that the percentage of that population going to college increases to 70 percent (from 49 percent now) over the same time, it would then make the overall demand stay flat. This will force universities to raise tuitions every year, because it would not be likely that the taxpayer will see increasing their contribution as a good idea. Decreasing value of endowments, decreasing support from state and private sources, flat demand and increasing student-paid tuition is a horrible set of circumstances for Traditional Universities (TUs).
What an excellent opportunity for Capitalized Universities (CUs). TU’s are raising their tuitions to levels above the CUs resulting in CUs becoming economically more competitive. At the same time, CU’s traditional market of 25-40 year olds without a degree will increase substantially over the next decade. This is not a market TUs have traditionally served well. We can project that CUs will continue to advance in this market.
Presently, the Senate is going after the CU’s and in particular their participation in the student loan program. The Senate wants CUs to provide evidence at time of recruiting that their students will be able to secure a job (an impossible thing to do) when they graduate. These threats to CUs have resulted in the price of their stock to fall to the point that Apollo Group Inc., owners of the University of Phoenix, is selling at 9.8 times earnings, clearly a bargain for a growth stock with a promising future.
TU’s cannot continue to raise tuition and fees in order to survive. This is analogous to when a Wal-Mart opens in a small town, forcing local retail stores to raise their prices to maintain their income, and gradually these higher prices resulting in their loss of sales. TUs will experience the same fate and some will be forced to close as well.
Some universities are taking on debt to cover current deficits. Stanford University has borrowed millions in order to replace the income their endowment is no longer producing. When an institution borrows to meet operating expenses, things are very, very, bad indeed. Stanford has “kicked the can down the road” as the popular phrase of the day goes. Why shouldn’t they when everybody else seems to be doing the same thing? But for Stanford it could be fatal.
There will come a time when the Stanford University bonds will have to be paid. A scenario might ensue whereby Stanford fails to attract enough students to break even, as they gradually raise their tuition to $100,000 a year, and then payment is due.
In that scenario I can see Apollo Group purchasing Stanford’s bonds and merging it into their system, nuclear accelerator and all.
Last week a reader posted a comment with the intriguing suggestion of having “college critics” as we have “movie critics.” Although the suggestion resonated with me, I was challenged on how to develop it. The movie critic has the advantage of reviewing an entire movie. The “college critic” lacks this advantage. The college critic cannot enroll just to review the teaching, besides evaluating one or two professors tells us little about the college. Another reader agreed the “buyer” of a college education needed more information and asked me “Do you have any ideas?”
The question: Is there any valid method to assess colleges comparatively, objectively and meaningfully in terms of what a student desires? I think so.
All post-secondary institutions (including Capitalized Universities) that participate in Federal financial aid programs are mandated to report some of their data to the Integrated Postsecondary Education Data System (IPEDS). This is the Department of Education’s main data source on universities. Participation in IPEDS is a requirement for the 6,787 institutions (in year 2008-2009) that were eligible for Title IV federal student financial aid programs, such as Pell Grants or Stafford Loans. No IPEDS data, no Federal money!
IPEDS defines itself as consisting of “institution-level data that can be used to describe trends in postsecondary education at the institution, state, and/or national levels.” In addition to describing trends, I argue that these data could be used to compare institutions within a certain category and a specific geographic area.
The Feds say that “researchers can use IPEDS to analyze information on (1) enrollments of undergraduates, first-time freshmen, and graduate and first-professional students by race/ethnicity and sex; (2) institutional revenue and expenditure patterns by source of income and type of expense; (3) completions (awards) by type of program, level of award, race/ethnicity, and sex; (4) characteristics of postsecondary institutions, including tuition, room and board charges, and calendar systems; (5) status of career and technical education programs; and (6) other issues of interest.” Imagine the possibilities.
I envision a document (let’s call it a brochure) that all of the 6,787 institutions WILL HAVE TO provide their applicants BEFORE they make their decision to enroll. This brochure would provide the following key information to the applicant: 1) how many students enrolled and how many re-enrolled the second year, 2) how many years does it take for the average student to get a degree, 3) how much does the institution charge per year (tuition, room and board and fees), 4) what percentage of the college’s budget is spent on faculty salaries, 5) how many full-time faculty per student and maybe more. These indicators will appear in the brochure in comparison with the 5 equivalent universities that offer the same type of degrees (comparables).
It would also help if the brochure would indicate why the information provided is important. It could say something like “Universities with increasing enrollments but report large attrition after the first year, may not be providing what they promised.” Or “Universities that spent less that XX% (the year’s median of all reporting) of their income in teaching costs, may not be providing a good value for the money you are paying them.” Or “Those institutions that spent more that 10% in marketing costs, may be using a greater portion of your money than average to attract other students.” And so on.
I would mandate that this brochure (and a student’s signature stating that the student has received it) would be given by EVERY university to EVERY applicant. In addition, when the potential student, parent or significant other logs-on to apply for financial aid, or sends a paper version of the FISA (student aid form) to the government, the government must send them a copy of the brochure for that university. A copy of the brochure will be required at every university’s home page. The IPEDS’s web site will also have it available.
That’s one idea. Might this help? Would this information –as objective as one can make it—be useful to the potential student, in order for the student to determine the broad outlines of the quality of the educational service he/she is going to receive? I think so.
If after reading the brochure, the student, the parent (or sometimes the employer who reimburses the student) decides this is the place to enroll, then they would have decided having some essential facts presented to them, comparing at least five institutions in the general area. After reading the brochure we can say that caveat emptor (buyer beware) can be applied; now the buyer has been made aware.
The fifth round in the fight between Capitalized Universities (CUs) and those who have oversight over them has begun. The Senate Education Committee is meeting to hear testimony on illegal recruitment practices at CUs and also investigating why CUs consumed more than double their proportionate share of federal student aid, and whether or not that is good for the country. Senator Tom Harkin (D Iowa) holds the gavel. You can see the August 4th hearing at this link. http://help.senate.gov/hearings/hearing/?id=19454102-5056-9502-5d44-e2aa8233ba5a
In the first round of this fight, back in the 70’s, Dr. John Sperling, the founder of the University of Phoenix, was the only boxer in the ring. He was fighting the Western Association of Schools and Colleges (WASC), which had denied accreditation for his proposed degrees. He eventually won that round.
There were four other major fights in the past 40 years and every time CUs were challenged by accreditors, legislators and bureaucrats, the CUs prevailed. Now in round five, CUs will probably triumph again. The CUs reason for success is not that they spend lots of money lobbying, the reason is that these institutions meet (or exceed) the same standards that are evaluated at the Traditional Universities (TUs). Thus, however accreditors define quality, or whatever legislators propose as standards to evaluate their worth, CUs need only point to the methods accreditation agencies use to evaluate the quality of Traditional Universities (TUs) and are only too happy to say, “me too.”
Accreditation agencies use an old panel peer-review method to assess institutional compliance with their rules. After the institution prepares a self-study, a panel of peers and agency staff, review the report, verify a few items, then the panel leaves (not to return for another five to ten years). During the one-week visit (more in larger colleges), the institutions do the organizational equivalent of “holding their stomachs in”. They can certainly hold their metaphoric stomachs in for one week and then, once the threat has passed, resume breathing.
Colleges and Universities have always been on the honor system when undergoing accreditation review. Evaluators assumed the primary motivation behind TUs policies and practices was the public interest. This attitude was, for the most part, correct. However, CUs neither operate in the public interest nor have academic quality as their main objective. CUs operate on the profit interest and have maximization of profits as the main objective. They clearly need a new method of review.
If accreditation agencies and federal regulators design special rules for CUs they will cry “foul” and go to the courts, but the fact is that neither the student nor the public at large can accurately determine whether or not any college’s degree is a basic building block of our culture or just a piece of paper.
CU’s operate within the post-secondary market and respond to market forces. The market says that the buyer must “beware,” caveat emptor a concept so old that is enshrined as a term of art in law in its original Latin. But when it comes to education, a service given and received in the form of multiple contacts of the students with facts, faces and figures (courses, professors and empirical data), the student as buyer has scant knowledge of what level of quality she WILL receive or even what level of quality she HAS received at the conclusion of the studies. They may have felt the rigor, experienced the joy and leave with much respect for some professors, but they have nothing with which to compare their experience. They can’t answer the questions (as they can for other products or services) “Did I just have the best college education I could get?” It is even difficult for the graduate to evaluate the extent their education advanced their professional attainment or their personal fulfillment until many years later.
Someone, some authority, must decide on the legitimacy of a degree. Accreditation has been the traditional tool, but its validity is now questioned. TU’s have resisted for many years any quantifiable measure of the quality of their outcome. They say, (and I concur), that the best qualities of education (i.e., the synthesis of knowledge) cannot be measured. In my own college the overarching goals are, to prepare “competent, committed, and reflective professionals”. How does one operationalized that?
Quantification and valid assessment does not occur by the accreditation agency’s rules. I will argue that “competence” can only be quantitatively assessed at the conclusion of a program via an examination, such as those given as pre-requisite for professional licenses, but CU’s can prepare their students to pass a test just like or better than TUs. Some will argue that “competence” may only be assessed by looking back at a decade of performance and determining whether or not the student has achieved it in their field. “Committed and reflective” can be minimally measured by what a professor sees, as the student demonstrates their hard work and insight. But no one can say that we produced that outcome as a university. In my experience, commitment and reflection, come from the most part from the student, gained in 18 years of living.
Edward Deming the father of organizational quality would not grade his students at NYU (would just give them Pass or Fail). He said he didn’t know how his students would be doing ten years later and that is what should be measured. The best assessment system in the world is neither objective nor valid, we use it because our rational mind demands it, but we can see by the advancement of CUs, how they can be used to project an image rather than produce a quality outcome.
Every Dean has a program within his or her college that has low enrollment. Let’s say in this case a Masters in School Library Science, with 5 students. Let me take you into a meeting of faculty and the department head to discuss the issue.
Now, it doesn’t take much “figuring” (which is what you call analysis using the “by the seat of the pants” method) to conclude that the program “costs money to the university.” Very often the person realizing this will also say, “but the Masters in Library Science (another related degree) enjoys a rich enrollment and is a ‘cash cow’ for the university. And that’s true.
Another person will point out that both programs “use some to the same faculty” and this would be correct; and another person would say, “besides, all the faculty members are tenured, what are we going to do with them if we close the program?” That would also be correct. That ends the meeting; we all go to our respective cubbyholes certain in the knowledge that we have “solved” that problem.
This example illustrates one of the main reasons why TUs have to raise tuition and fees, not because faculty salaries have escalated dramatically (we get paid less of a percentage of the income every year) a very important reason is that thousands of programs in TU’s around the world are in the same situation as our Masters of School Library, they have become the opposite of “cash cow”, which would be something like a “bleeding cow” and we are not equipped, prepared or ready to do something about it.
Who cares about such things as “operating costs” at a TU? Everyone should, beginning with the Department Head for that program, but also the program faculty which –unless they are aware of the relationship between having students and getting to keep their jobs— do not care. That’s not their job.
Part of the problem is the background of CEOs of Colleges and Universities. If you were hired as a Dean you were hired to “lead” the College, not to manage it. The Vice President may expect you to control your budget and touch all the administrative bases, but that’s not management it is called administration.
Deans are for the most part, celebrated faculty with minimal operating experience or sometimes, they are bureaucrats who have risen through the ranks and are now ridding the administrative escalator. The first type is clueless about what to do with a “bleeding cow”, while the second type knows only too well the trouble one can get into when trying to close a program. There’s a third type, a celebrated faculty who also knows how to manage the enterprise. I like to call them “the rare birds”, (a select breed). They know how to ask for the appropriate information and if they do not receive it, they hire somebody to cobble together their own report and they use it. This is fine as far as personal operating data is concerned, but because they are your own estimates, the university does not take them seriously and very often question your assumptions. It is definitely not a decision-making tool.
TUs know something about how their costs and income go, college-wide and university wide, but at the program level, the basic operating unit it all gets papered over by political considerations. After all, if we know the data and it s not good, we’ll have to do something about it.
Next post: Round Five in the accreditation wars
Recently I asked six CFOs of Traditional Universities (TUs) in the United States and Mexico if they routinely produce reports on the actual cost and income of each program; the answer (for all but one) was “No.” The lone exception was the Mexican TU, which operates more like a Capitalized University (CU). I asked the American CFOs why didn’t they and their answer was very logical, because no one asks for them.
These reports are the primary metric of all operating data in an organization. It is usually the first aggregation, that is the summing of costs and income at the lowest level of operations, of a program’s fiscal record. It consists of 1) actual direct cost of instruction for the program the previous month, 2) allocated cost of overhead, and 3) other operating costs.
The report should also present income data such as, 1) units sold to students, 2) tuition and fees, and 3) state and local payments per capita. What is left over (at a CU) would be called “gross or operating profit” but at a TU would be called something like “contribution to operating budget” which is all TU’s are allowed to collect.
If there’s nothing left over and instead the program is losing money, then those who manage it must take action. One either raises income or cuts costs. If the program that is losing money has no market, the question becomes, is the university supporting the program because of the public mission and therefore is considered crucial? If the answer is no, then perhaps its time to close it. But there’s also the income side, if the program has a market, then the new marketing units of TUs should take a look at it, see if a greater number of students can be attracted and then proceed to market to them.
But if we don’t have any operating reports, how can we take remedial action? CU’s produce Operating Reports (as is the case at the Mexican university) every month, and these statements provide (in dollars and cents), the income and cost of each program. While my sample of six CFOs is not representative, from my own consulting I know that in the TUs, these reports are rarely produced.
TUs do not, therefore, have the basic building blocks for controlling costs at the Program or College level. At TUs, only when specifically requested by upper echelons, will CFOs produce these accountings, because of that, you can believe me when I tell you that they don’t know what programs cost and whether or not they contribute to overhead (make or loose money).
Why don’t the CPAs and financial consultants who work for universities, insist that their clients account for costs in this way? Simple answer, because they don’t care, it is outside of the scope of their intervention, not their job. OK then, why don’t Deans and Department Heads demand that they be given these data? Sometimes they do but the CFO who must authorize its production, is so high up the organizational ladder that few can get their requests heard.
Therefore, when Deans and Department Heads fail to ask and demand these data, the result is that no report is produced. How can any manager operate without these data? At most TUs that question has a simple answer, “by the seat of the pants.”
If we as managers of programs and colleges continue to manage program delivery using the “by the seat of the pants method”, augmented by the “political realities” method and synthesized into the “no one is responsible” method; we will end up with tuition rates that grow at 3-5 times the rate of inflation. Wait a minute, isn’t that what is happening now?
Next Post: What does Higher Eduction actually cost? Part 2
Higher education significantly impacts the states’ economic strength. However, states are failing to fund higher education appropriately. Nowhere in the developed world, (the 36 nations that most resemble us) is public education so expensive for their students. In most countries that have leaped over us in their rate of college completion (US was ranked first; now twelfth) higher education is free or very low cost.
We cannot continue to follow this downward trend in college completion rates because we risk failing to (a) maintain our infrastructure, (b) educate our children, (c) create new goods & services, and (d) maintain the current powerhouse economic status of the United States. Presently, we outsource certain technical services (not because of low salaries overseas), but because we simply do not have enough qualified people. This downward trend will continue unless we in higher education act now.
Traditional Universities (TUs) perform more than Capitalized Universities (CU’s) to foster economic and social development. While CUs resemble TUs in that they offer courses and issue degrees, TUs conduct research vital to our national security, our economic welfare and our leadership in technology word-wide. TUs also produce poets, musicians and cultural scholars, which CU’s do not. Education is more than preparation for a given career. If only a career is desired, the process is more properly referred to as “training”.
Universities are said to provide a public good (income to the states), as well as a private good (the increased in personal income for their graduates). If the state contributes only 17% of the higher education cost as they do now, then the public good is riding on the back of the private good and tilting the balance so that inviduals are shouldering most of the burden.
Let’s take one state that has abundant data and cite it as an example. Universities in Texas bring $33.2 billion a year in income to the state. Considering that the system receives approximately six billion annually in state general revenue and local property taxes, every dollar invested in the state’s higher education system eventually returns $5.50 to the Texas economy.
According to the Texas Controller of Public Accounts Susan Combs “This is a remarkable return, even for a high-stakes technology startup. But when it comes to the Texas higher education system, the stakes are much higher. For here, we are investing in our most important venture—the future of young Texans.”
I am suggesting that a state likeTexas should increase its investment in higher education. Doubling the investment to twelve billion would be great but even one billion would be a good start. This investment must be targeted to reduce tuition, provide opportunities for more students to access and succeed, and improve and expand programs of research and development in critical areas of need. Assuming that the additional investment yields the same per-dollar return, Texas would garner an additional 6 billion in income. This would make Texas the destination for US-based future technologies, just about the time that the oil that has fueled Texas growth for a hundred years, would be exhausted.
Not all states and universities are as productive as Texas universities, some are even more productive. Take the case of UCLA. An updated report by the Los Angeles County Economic Development Corporation shows that UCLA-related economic activity generated business revenues of $9.3 billion in greater Los Angeles alone during fiscal year 2005-2006.
That year, UCLA had an operating budget of $3.6 billion, (see above graph) of which only $626.4 million (17.4 percent) was provided by the state. Regional spending by the university, its employees, students and visitors totaled $3.9 billion, and spawned another $5.4 billion in indirect activity through goods and services supplied to the university. Statewide, UCLA adds a further $535 million in business revenues. This brings university-related economic activity throughout California to $9.9 billion. Therefore the return rate to the state is nearly 16 times its investment. No other (legal) investment in the world can compare with this.
These are examples for just one university and one state. A 16% increase in support to universities, let’s say to 33% of expenditures, will most certainly yield the same return (if properly targeted) and would stop or reverse the trend in tuition, so that more families can afford state-sponsored higher education without going broke or burdening their children with unconscionable debt. I must say it again, this increasing the burden of tuition on students is equivalent to sentencing them to a worse economic life than their parents enjoyed, with less education. That to me is the end of the American dream and its reality.
Next post: What does higher education actually cost?
It seems to me that there are three basic moves a regional college or university can make to ameliorate and maybe even benefit from the trend to turn community colleges into 4-year institutions. They can either move closer, move up and/or move in.
Which move you chose first depends on who you are, and how well you are currently articulating with the community college next door. If you are a regional university with a poor record of collaboration with the community college you need to move closer. Let’s discuss that option today and the others later.
For years, community colleges and their 4-year counterparts have entered into “articulation agreements” that would in theory assure students of a smooth transition from their 2-year campus to the nearby 4-year campus.
Historically, these transitions have not been very smooth in part because the 4-year institution did not have “its heart in it”. Student enrollment and advisement has not been facilitated, credit promised for the units taken is often sacrificed by additional requirements of the departments in which the students enroll, and costs go up dramatically as does the complexity of the system the new student must navigate.
All of this and more led a friend, who is a President of a community college, to comment that his “articulation agreements are very inarticulate.” You must go beyond articulation agreements and enter into full partnerships.
You should understand that even if the community colleges are allowed to become four-year institutions and decide that they want to pursue this course, they will likely not have a degree to offer for a year or two. This is the time to take the articulation agreement out of the dusty files and study what changes could be made to it that would delay their entry into your market.
Unless your articulation agreement works well and more than 20% of your students come as a result of the agreement, (and that would put you in the top 5% nationally) you need to move closer.
The barriers cited above –which you should eliminate totally– are the internal creation of your institution. Facilitate student advisement by coordinating with the community college advisors and setting up special services teams to deal with them and begin to view enrollment as a seamless process which starts in the community college’s website and ends with the student being accepted and funded, without having to leave his or her campus. If you put your heart into it, you can do it.
Articulate fully and without reservation even when you are giving your partner an advantage, which your faculty does not think you should give. There’s never a good time to maximize the income you receive at the expense of the students who believe that they are earning transferable units.
Students coming from the community college should be sold on your university way before they are ready to enroll and just after the completion of their first year. Assuming the student qualifies academically, it is time to bring that student on campus. A basic required course taught by a very good professor would really help to sell the student on your institution and through student testimonial serve to attract the best students.
Sharing the most interesting aspects of your student’s life experience with them should follow next. Of course, if you have a ball team worth watching, share the tickets. Declaring intent to attend your institution after graduation should be sought early and early admission must be the norm, so as to give them preference. And so on, opening the doors wide and laying down the red carpet, while maintaining your standards is the way to go. Treat their faculty as you would your own, if they have faculty who are very good, integrate them into your faculty and consider joint appointments.
Turn all of these practices into a more formal Partnership Agreement to expand and extend your articulation agreement and negotiate it with an eye to your main objective, to increase your productive interdependency so that independence is not needed.
It is what a comedian must have when delivering the punch line, what a batter displays as he connects with the ball and it is a very important factor in the offering of new academic programs. Timing is key to all these endeavours.
Last week a colleague at an academic meeting pointed out the obvious; that demand for new degrees in health, health care administration and related areas are likely to go “through the roof.” As far as labor economists can see, in the near term –5 to 10 years—, there are no other areas of growth in employment and training that would compare.
The new national health bill promises to “reduce the deficit by $143 billion over the first ten years” while “expanding coverage to 32 million more Americans.” That neat trick is supposed to be accomplished largely through the re-organization of health care delivery and the improvement of health care communications. Strangely, this leads to a need for more people in the near term.
This new demand will come on top of what is already an overheated demand market in health care. In March, the latest month for which unemployment data are available, advertised vacancies for healthcare practitioners or technical occupations that support it outnumbered the unemployed looking for work in this field by 4 to 1, and the average wage in these occupations is $32.64/hour. In the category of health management the ratio of jobs to people looking for them is 8 to 1.
The supply of trained professionals in health care is globally sourced. The big change is taking place in the U.S. but thousands of jobs will go to Canadians, Europeans, Indians and Filipinos. They have more experience and our jobs are more attractive. But that will leave thousands of jobs that must be filled by Americans who will be trained by the timely academic programs my colleague predicted would come about.
Who will be those students that will enroll in new Associates, Bachelors and Masters of Nursing, Health Education, Health Management, Health Care Management, etc? There will definitely be some full time typical students, but at the graduate level at least, those students would (and should) come from the health care ranks. They would, of course, be employed and since hospitals run 24 hours a day, their schedules are not likely to be 8 to 5. So how should Traditional Universities serve these clients?
If you are going to take advantage of the timing of this market change and expand or create new degrees now, you should consider carefully how to use the student’s time in teaching them your curriculum. Mr. Jose Cruz, Vice President for Information Services and Planning at one of the nation’s fastest growing community college, made a very insightfull observation in response to the last blog: “The conveniences of today’s time strategies adopted by CUs (shorter periods, clustered periods, open-entry-open-exit periods, etc.) are powerful because of their contribution to a greater sense of control that attracts today’s choosey, market-savvy consumer. The message from CUs is only superficially, “we have convenient times for you”. The real message, when time is clustered with all of the other strategies adopted by CUs, is, “you are in control of your time (and education). You call the shots.”
Undoubtedly a great number of TUs will be responding to the market demands posed by the new health care growth but (particularly those who will be simply expanding current programs) are likely to ignore that the competitive advantage is not just timing, it is also the choice they give students for the use of their time.