Sunday, April 14, 2013


Hot Potato

A single college struggling could be a sign of management failure.  Entire sectors of colleges struggling suggests something deeper.

In West Virginia, Bridgemont Community and Technical College will merge with Kanawha Valley Community and Technical College.  They will share one president and one Board, even though they will maintain two campuses.  The article doesn’t mention a new name.  The motivation was budgetary.

Meanwhile, according to a piece by Jeff Selingo in the New York Times, net tuition revenue is “flat or falling at 73 percent of colleges.”  This despite declining state support for publics, and despite years of significant tuition increases.  The “discount rate” -- that is, how much tuition prices have to be reduced to actually fill seats -- is getting so high that tuition increases pretty much cancel themselves out for many colleges.  

The very same day, the Boston Globe reported that private colleges’ market share has dropped from 22 percent in 2006 to 20 percent in 2011, even in the face of significant tuition increases at public colleges and universities.  Discount rates average about 37 percent. but several private colleges in my own neck of the woods are running over 40 percent, with one over 50.  The end of the Globe story lists Massachusetts colleges that didn’t fill their entering classes in 2012; the list is long, and contains some surprises.

Each story contains a budgetary version of “hot potato.”  The community colleges are trying to find savings in presidential salaries even though, in most cases, presidential salaries are rounding error within institutional budgets.  (Most community college boards are unpaid; I don’t know if that’s true in West Virginia.)  Non-elite private colleges have tried to pass along cost increases to students through tuition, but the students are passing the potato by either shopping around for more aggressive financial aid packages or simply enrolling elsewhere.  State legislatures have passed the potato to students by reducing subsidies to public colleges, forcing the publics to start acting like tuition-driven private colleges at the very moment that the business model for non-elite private colleges is coming apart.

Nobody wants to pay the cost of the current model.  

Actually, that’s not entirely true.  As Selingo’s piece mentions, there remains a small slice of high-achieving, high-income high school students who can pay full freight.  The problem is that nearly every private college in America, and a fair number of publics, are chasing that same small group.  It’s nowhere near large enough to support the number of institutions that need it.

Some of the issue is regional; the Northeast has the greatest density of small private colleges, and its population of high school graduates is flat or declining.  But issues of “discount rates” and reduced state support are national.  The tuition spiral is national and spectacular, but as adjunct advocates frequently point out, it’s not as if most of that money is going to faculty.  To my mind, the shift toward adjunct faculty across the country that started in the 1970’s is best explained as a sort of sector-wide institutional holding action.  It’s an effort to maintain an unsustainable model by playing “hot potato” with cuts.  But after a few decades of offloading budget shortfalls onto faculty, most colleges are hitting the limits of that strategy.  

People who are wedded to the idealized version of the current model see these pressures as pure decline.  And there’s a sense in which that’s true.  But it’s also an increasingly glaring signal that we need to experiment with new models.  

The problem isn’t a reduced demand for education.  I have yet to see a convincing argument that we’d be better off throwing everyone into the workforce after high school, or even that we’d be better off if we returned to the college-going rates of, say, 1940.  That’s not the issue.  The issue is that eventually, someone will drop the hot potato.  Rather than digging in our heels to defend an idealized past, we’d be much better off shaping the future.  The transition may not be pretty -- they rarely are -- but it’s necessary, and it may be great.  Forty years of hot potato is enough.  It’s time to let go of some pieties and start experimenting.

I know where you stand on the topics of efficiency, the viability of the in-person model, etc., but your usual hobby-horse of killing off the in-person experience in favor of having 18 year-olds learn from the sofa with an iPad doesn't apply here. If high school enrollments are declining then the issue is not how to increase capacity without scaling up manpower (i.e. how to teach more students with as many or fewer faculty), the question is how to do one or more of the following:
1) Shed capacity.
2) Serve weaker students, so that you admit a larger fraction of a smaller cohort of high school grads.
3) Serve non-traditional first-time students.
4) Provide post-graduate or continuing education, i.e. serve people who are not first-time because they have already gotten some sort of degree, certificate, credential, or whatever from the higher education system, but want/need additional training.

Budget crises are already taking care of option 1.

Community Colleges seem to have lots of experience with Options 2 and 3. To some extent they provide Option 4, especially on the vocational/professional side. They won't provide an MA/MS to a person who already has a degree, but they do provide classes to people who have a degree but need a class or two to polish a skill or develop a new skill to advance in their career or change careers.

So, to the extent that the problem is shrinkage of a traditional market (new high school grads who are "college-ready" by whatever selective standard and can pay some significant part of the sticker price), CC's don't need a NEW model, because they are already good at serving people outside that traditional market.
But it’s also an increasingly glaring signal that we need to experiment with new models.

This is a pretty radical idea, even if it's a suggestion on a blog, and I think it's one that's true in many sectors of post-secondary education.

However, there are two major problems: A lot of people who work in higher ed probably don't think there's a problem at all ("This too shall pass" on a global level), and no one knows exactly what a new model might look like. When we see some solid examples of what comes next, things may get a little more interesting.
My school is creating a number of "Certification Programs".

There have not been sufficient candidates for a single one of these certificates.

People who already have degrees likely do not have opportunities in their current jobs to make more money with a diploma, or would have to make less money in a new career with no experience.

There is also the flip side of the coin. The faculty in the evergreens continue to be over-worked and these technical courses require a new crew of adjuncts to teach classes to smaller groups of people. Certificates will not increase revenue.

It is sad but, in my institution, anyone who leaves, especially if the teach general ed, are replaced by adjuncts.

The students are not going to pay top dollar to be taught by adjuncts, they just leave.
That list with empty seats for Fall was, indeed, interesting. A state school is no surprise, but a SLAC that has run out of its waiting list?

A drop in HS grads (we also are seeing that) must put a lot more pressure on small colleges where each student provides a larger fraction of the funds needed to operate. I was going to propose using a review of history (a wonderful liberal art) to see how they dealt with the end of the baby boom in the late 70s, but that might not be helpful. The two responses I recall (growing the pool overall and enticing top students by the cost/benefit of a SLAC) have already been used up.

Our college is dealing with some of the other paradoxes seen in the 1980s: dropping enrollment overall but an increase in some areas coupled with larger declines in others. In the 80s it was business that grew; now it seems to be STEM.
"Nobody wants to pay the cost of the current model."

Bingo. Something's wrong with the value proposition.

Excess capacity in higher ed won't be sustainable much longer. The job market is no longer asking for the kinds or quantities of college grads we are producing.

If I were queen of the California State University system for a day I would do the following:

Institute differential funding for adjunct taught and tenure track taught courses. If you're not paying as much for the instructor, why should the state pay you the same amount per student? It's getting the same money for butts in seats no matter who stands in front of the class that in part drives the adjunct trend.
Give students one semester to get out of remedial courses in math or English. If they couldn’t meet that goal, they would be asked to leave and given the opportunity to transfer back under the transfer agreement system.

Limit required general education courses to 6 per student. Period. This would cut the CSU required GE from 51 semester units to only 18.

Move towards a unit cap of 90 for each major. It can't be done you say - but wait - I've just given you 33 GE units back. Use those and your major won't have to change at all. You could even add a class!

Create a transfer track which allows transfer students who follow a prescribed program at the community college with a 3.0 GPA or better to complete any degree on campus in 45 units. All majors would have to have this track, no exceptions. This would eliminate issues with transfer students losing time and units when they transfer.

I would start a gap year transfer program where students who completed a year of certain CC classes either during high school or during a "gap year" with a 3.0 or better could transfer in and finish their major with 68 units.

I would limit research required for tenure to one paper or scholarly work appropriate to the discipline for associate and one for full. Grants are nice but there's only a few CSU campuses where they pay for themselves and they help drive the adjunct trend by taking faculty out of the classroom. Start-up money to set up labs for new faculty is in the $100k range or more – most campuses never see that money returned through grants because the admin overhead on many is less than 15%. It’s one of the many ways that research does not pay for itself.

I think once the dust settled that our students and instructors would be better off. The focus would be on teaching, throughput, and doing more with what you have. The incentive to hire adjuncts would be muted by the decreased reimbursement. You would not save money when a tenure track faculty member was bought out by a grant and replaced by an adjunct making grants a less attractive thing. The requirement for scholarship would be reasonable, achievable and consistent in different departments.

None of this will ever happen but a girl can dream….
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