Monday, January 18, 2010


Ask the Administrator: Charter Colleges?

A longtime reader writes:

Here in [unnamed state] state support for higher education is shrinking fast. Some of this is cyclical, but those cycles can't mask a longer term, downward trend. Where once the state provided support for about 65% of our operating budget, that number has fallen to around 17%. I'm writing from a four year university, and don't have comparable numbers for community colleges. They are funded through a separate state agency.

There still remains a substantial overhead structure for the [unnamed state] state universities, and second guessing and restrictions on activities, tuition/fee increases and the like. And, to a limited extent, there are some joint operating arrangements - mostly in terms of legacy information systems.

Though most of my colleagues hope we can just hold our breath until times get better, I am more pessimistic and don't expect any windfall increases in state funding once the recession cycle is gone.

So - is there something we can learn from the charter school movement in primary and secondary education? Should our university work to become more private and less public - at least in terms of organizing our educational process? If we could gain the higher education equivalent of charter school status, could we free ourselves from self-limiting regulation? Anecdotally I'm aware of some state-sponsored schools that look more private than public, so the model is not brand new.

I'm an economist so worry about fixed and variable costs and the like. I'm not sure there is enough cost savings if we could "shed" the burden of state administration. Presumably we could keep, at our option, any joint purchasing/operating arrangements with the other schools. The major advantage that could come from this arrangement would be more strategic flexibility, and perhaps, over time, more buy-in from our own faculty for innovative, cost reducing processes.

Honestly, I'm conflicted on this one.

Certainly, the direction of things is an accelerating pace of cost-shifting from the taxpayers as a group to students individually. Your state isn't alone in that. Last week IHE had a story about somebody proposing a new public college in Philadelphia, which struck me as odd since Temple University is already there. The story mentioned that Temple is "state-related," as opposed to "public." That was a new one to me. I don't know the particulars -- Pennsylvanian readers are invited to clarify that in the comments -- but it struck me as similar to what you're proposing here: greater autonomy in exchange for less funding. (I think UVA, in Virginia, did something similar a few years ago.)

The arguments in favor of this boil down to making a virtue of necessity. If the funding is drying up anyway, why not acknowledge the fact, get ahead of the curve, and at least gain some operating autonomy for your troubles? If he who pays the piper calls the tune, then stiffing the piper means you have to shut the ()&^^ up. I've noticed in my own state that the state's share of our budgets is dropping like a stone, but its demands in terms of restrictions, reporting, and all flavors of 'accountability' keep growing. Presumably there will come a point at which the trade-off simply isn't worth it.

That said, though, most of the reforms I think would help couldn't really be implemented on a single campus. Movement away from a time-based measure of learning ("credit hours," "four-year degrees," etc.) is an absolute necessity for long-term cost control, but it would only work if it were done on a large scale. If my cc decided unilaterally to move to credits based on, say, demonstrated competencies, then our students would be in for a series of nightmares when they tried to transfer. Financial aid, which is largely federal, would get even more complex than it already is.

It gets worse. Even if the states pulled back, the feds would still be involved through financial aid. We'd still have all the compliance costs of the various pieces of federal legislation, and the omnipresent carrot-and-stick of federal funding and oversight. In some states, too, community colleges draw local funding as well as state funding, usually from counties. If the state pulled back but the county didn't, the potential for local county political shenanigans would be even greater than it already is. In states that fund cc's through 'millages' -- dedicated property taxes passed by referendum -- the voters would be given a free pass never to support millages again. (Alternately, we could theoretically see incredible disparities in funding from county to county, just like we do from school district to school district. This strikes me as a terrible outcome.)

Then, of course, there's the basic issue of fairness to low-income students. Financial aid is great, and it helps, but most of the increased cost to students would come in the form of loans. Student loans are a nasty deadweight cost when you're just starting out in the workforce, especially when the workforce is shrinking.

Yes, there are some costs involved in rules unique to the state, but they're a pretty small part of the overall picture, at least from here. And the structural issues that create the cost spiral and that stand in the way of real improvement don't come from the states. I won't deny the existence of some quirky rules that don't help, but they're not the real problem.

All of that said, though, I concede that I'm no expert on the charter school movement in the K-12 system. Is there a magic bullet that I've missed? Alternately, is there something unique to higher ed that makes "public but self-supporting" a better model? I'm hoping that my wise and worldly readers can see something that I don't.

Have a question? Ask the Administrator at deandad (at) gmail (dot) com.

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