Monday, April 02, 2012

 

The Long View

In a fit of responsibility, our budget guy did some projections five years out.  Simply put, the gap is growing quickly, and it’s not likely that the state will pony up anything close to enough to fill it..

It was a sobering exercise.  

Students are currently the single largest revenue source, which was never supposed to be true for a community college.  But enrollments are down from their 2009 peak, and the number of high school grads in our service area is projected to continue to decline for the next several years.  Even with thoughtful outreach to adult students, and some pickup of economic exiles from some higher-priced places, it looks like flat enrollment is the best case scenario.  And while our tuition and fees are still quite low relative to our area, nobody sees double-digit percentage increases as sustainable over time.  There comes a point at which the students are carrying all they can carry.

We don’t control what the state gives, so assuming substantial increases in state aid would just be irresponsible.  That’s not to say we wouldn’t welcome it -- bring it on! -- but that we can’t count on it.  And it’s not like political advocacy is any guarantee of success.

The college gets some revenues from non-credit offerings, which encompass both personal enrichment classes and workforce training.  We intend to continue to grow those, but they tend to be somewhat unpredictable from year to year.  The same holds true of room rentals to outside groups.  The gym charges community members and employees for memberships, and that can probably go up a bit, but it’s hardly a game-changer.  Bookstore revenues help, but with students going online more, the bookstore is likely exhausted as a source of growth.  As a community college, sports are not a revenue source.

Philanthropy is of limited benefit, since we aren’t allowed to use it for operating expenses.  It helps some with construction and capital (like microscopes), but we can’t use it for salaries.  And labor is, by far, the largest cost item in the budget.

Grants can help in some areas, but they’re typically of limited duration, they bring high administrative costs, and in most cases they can’t be used for operating expenses outside narrowly defined grant activities.  (For federal grants, they actually have prohibitions on “supplanting” existing college resources.  Put differently, that means that any money can’t be used for what you would normally use money for.  That tends to limit the usefulness a bit.)

We’ve already plucked much of the low-hanging fruit.  We used stimulus funding to improve energy efficiency on campus, lowering utility bills ever after.  We’ve shed administrators.  Our adjunct percentage is already plenty high enough.  

Online courses may help, since they continue to show growth and the infrastructure costs are minimal.  Annoyingly, though, we’re at the point at which continued growth of online offerings will bring increased costs, since we’ll have to start developing more robust online processes and services to serve students who don’t come on campus.  (Right now, the vast majority of our online students are also onsite, just using online to make their schedules friendlier.  That’s pretty normal for community colleges nationally.)  Recruiting students who never set foot on campus will require much more than manual workarounds.

We’re experimenting with various ways to improve student success, and there’s a reasonable argument that we may get some small financial benefit from improved retention.  But unless we’re willing to jack tuition up to levels that actually cover full cost, that won’t save us.  And most retention efforts cost money.

I intend to beat the bushes locally for ideas, hoping to find something, but experience tells me that faculty proposals tend to involve spending more money, not less.  

The alternative to raising revenues, of course, is to cut costs.  That’s the default path, and we’ll almost certainly continue to have to do some of that.  But the point of “access” is access TO something.  If the education has been watered down, what’s the point of having access to it?  If we want to maintain quality -- or, preferably, improve -- we’ll need to raise revenues.  

So in good Gen X fashion, I’m crowdsourcing it.  Wise and worldly readers, have you seen a public college come up with an effective way to raise revenues without compromising quality or just jacking up costs for students?

Comments:
Scary story.

Can't be much help because I'm not in administration and don't understand the financial details well. However, one thing I can say is that the state is not the main source of funding here: our community colleges are county entities. The District gets a little state funding -- during the recent financial crisis, which hit Arizona especially hard, the community colleges suffered some, but nothing like the universities. The response to the drop in state funding was simply to raise county taxes. The value of my house dropped $60,000 (taxes here are tied to valuation), but my property tax bill went through the roof.

As a result, while Arizona State and the University of Arizona jacked up tuition to obscene levels -- and cooked up every scam their leadership could think of to clip students even further -- community college tuition here remained fairly stable. It's gone up a little, but as nothing compared to ASU, the UofA, and NAU.

Northern Arizona University, not the most brightly stellar school in the Southwest's constellation but still a four-year institution, has a collaborative program with the District that allows students to obtain a bachelor's degree through the community colleges. Thus a person can get a four-year degree in certain majors without ever setting foot on our hectic university campuses. This means that some of our students stay at the community college all the way through to the bachelor's degree.

NAU, which is situated in Flagstaff (a three-hour drive from Phoenix and five from Tucson, the state's two major cities and sites of our only other public universities), pioneered online and hybrid instruction. It has had a low-residency program here in Phoenix for a long time. The vocational bachelor's and master's degrees this program offers have been shown to get people jobs.

So NAU's leadership was in a position to move in quietly and establish a four-year collaboration with the Maricopa County Community College District, which has wanted to expand to four-year offerings for quite some time but which has been thwarted by resistance from the universities, especially Arizona State. All this seems to have happened right under ASU President Crow's nose.

The result is that quite a few of my students are planning to enter NAU programs, and they have no intention of moving their venue to any of the state's rapacious four-year campuses.
 
"the number of high school grads in our service area is projected to continue to decline for the next several years"

That's the crux of the problem. It means you have excess capacity. Not a happy place to be.

I'd try to round up your most successful alumni to do a PR campaign about how important your CC was to them. Might boost enrollment. Also, see if you can document how your CC boosts lifetime earnings. My alma mater used to tell us that, high as the tuition seemed at the time, the average grad earned it all back within 4 years.

But start thinking about "right sizing." Population declines have a way of feeding on themselves.
 
A somewhat long-term perspective from a 4-year regional campus.

When I started here in 1987, our campus budget was about $25 million (in current dollars--unadjusted for inflation), and our support from the state (Indiana was about $15 million in current dollars--about 60% of our budget came from the state.

This year, our budget is $50.4 million (again, current dollars, and $16.8 million (again, current dollars) is state support. 1/3 of our current budget comes from the state...which is, all things considered, good.

Our budget has doubled, but state support is up 12%, over 25 years. Hmmm.

Our budget has grown at an average annual rate of 2.5% per year--barely enough to keep up with inflation (although enrollment is flat, basically). State support has increased at a rate of 0.4% per year. Other funding sources--mostly tuition--has grown at about 5% per year...and all that's done is keep up with inflation...

So, looking forward, I suggest that there are two possible outcomes: First, public support for higher education will continue to decline, tuition wi ll continue to rise at rates which significantly exceed the rate of inflation, and it will become costlier and more difficule for those who might benefit the most to attend college.

Second, a miracle will occur.
 
The first thing is to get the state to agree that donations can be used for operating expenses. They might buy that
 
It is too late now, but don't you wish your budget guy had done a 10-year outlook 5 years ago?

I'd recommend doing a 10-year projection right now. Further, how do the 3rd and 8th grade populations (10 and 5 years ago) track with CC enrollment in your area right now, and ditto for as far back as you have data?

The one group you didn't mention was returning veterans. Maybe they aren't as large a group in your area as mine, but it could pay off to identify and respond to the needs of that population.

Finally, apropos a comment posted this evening in a newer entry, you might resist "jacking up" costs to students and design a predictable -- and fully justified -- slow increase in tuition to respond to the problem posed by your state's educational funding system.

What I wouldn't do is produce a study showing how much Universities in your state get for teaching freshman comp with adjuncts and grad students and how much you get for teaching the exact same class with full-time professors (and probably some of the same adjuncts). That might produce enemies where you don't need enemies. Unless you can get one of the Higher Ed Think Tanks to do it for you nationwide.
 
This is probably a very stupid idea and there are loads of things that you can shoot down in it. Fine, do so, I'm just offering this as an idea with the offchance that it might give you some other much better idea...

From an academic perspective, it seems that there is one place where resources are consistently wasted, and I wonder whether it's possible to exploit that in some way, financially. I'm referring to student use of learning resources, specifically that of their instructors.

If your college is anything like where I'm familiar with, many students don't show up, or show up and are disengaged, they don't do the reading they are set, they don't turn up to office hours, they are not inclined to make the most of any help available from the instructor (except possibly the day before the deadline). Basically, there is a whole bunch of learning resources provided to them that they don't want to make use of.

What if, there was a "cut price tuition" deal, whereby students are offered the option to take a particular deal with less class/seminar/lecture time, very explicitly labelled as being more self-directed, with the same assessments as the other sections of the course. Here you'd have to make it very clear what they can expect, in terms of instructor time, explicit guidance about what reading they must be doing, which limited office hours per week they could expect, how many emails they can expect from an instructor. The idea is that you reduce instructor contact time by a value that works out to more than the tuition discount.

You could run a pilot experiment first, picking a suitable course and offering the options for different sections of the same course.

Now this is probably terrible for learning. Many students are weak and need the assistance. Some courses can't be distilled so that just the core is taught and the rest delegated to self-directed study. I agree. It's terrible. But the point is that the students who need the resources are often not making use of them. And maybe under such a scheme they would make even less use of it. But maybe the scarcity of the resources leads them to value them more and use them more. And maybe the explicit limits on instructor time has a protective effect on the hours an academic ends up interacting with the class. And on a more cynical note, if they fail a course with the cut-price tuition deal, they'll have to take it again, more money.

Maybe there are other ways of exploiting the waste of resources that the students themselves are perpetuating?
 
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