Wednesday, March 31, 2010

Saw That One Coming

According to this story in IHE, Bristol Community College in Massachusetts is partnering with a for-profit provider (The Princeton Review) to create what amount to express lanes in its Nursing program. The idea is that students who currently get waitlisted for the Nursing program at Bristol will have the option of paying more to get seats in the Princeton Review's program. It's a chance for students to substitute cash on the barrel for the opportunity cost of waiting.

Although the story drew a fair share of negative comments, I'm less offended than resigned. This is the wave of the future, and it's not necessarily entirely bad.

There's nothing new about students who can't get into a program at one college trying their luck at another. That happens routinely. And there's nothing new about private, and even for-profit, higher education competing with public higher education in vocational programs. That has happened for decades. As near as I can tell, what's new here is the intentional link. Put differently, what's new here is the relative convenience.

I expect to see much more of this in the coming years.

For reasons well-known by now to regular readers, growth is a cost for public higher ed, but a profit center for proprietary higher ed. To see the publics outsource growth to the proprietaries makes sense for both sides, given their incentives. If you want to change the behavior, you have to change the incentives. Moralistic huffing and puffing won't cut it.

One way to change the incentives would be to tie public funding to enrollment levels in a serious way. Right now many states claim to do that, but they actually just tie shares of public funding to enrollment. That is not the same thing. A worthwhile approach would be "we will pay you x dollars per student/credit/graduate." If the 'x' is high enough, then the college could combine it with tuition/fees and more than cover the costs of growth; it would have every reason to grow to meet demand. (Ideally, 'x' would be indexed to some relevant measure, so its value wouldn't get inflated away over time.) Instead, what usually happens is that states take enrollment figures at the various colleges throughout the state, and uses them to determine the proportional share of that year's pot that goes to each campus. When the pot doesn't grow as quickly as overall enrollments and inflation -- it hasn't in my adult lifetime -- then the funding for growth falls short of the cost. So you get waitlists, or larger classes, or heavier adjunct percentages as ways to paper over the gap.

Theoretically, you could make up the difference with enormous tuition or fee increases. But the political obstacles to that are staggering. When you start with a very low base, even small absolute increases register as huge percentage increases -- California is living this particular version of hell right now. Since cc's are priced far lower than their true cost, getting anywhere close to breaking even would require percentage increases that are simply beyond political imagination.

But the same public that gets righteously angry at a public college increasing tuition by $100 a year merely shrugs as a private college raising it by $1,000. The label makes the difference.

In the case of Bristol, they've offloaded part of a high cost program onto a separate label, one that has implied political permission to charge whatever it needs to. And the off-label part can grow as much as the market will bear, without political interference.

If we want to stop this sort of thing, obviously, we'd have to give public colleges either much higher subsidies or the same permission to charge whatever the market will bear. (Over the long term, we need much more fundamental restructuring on a systemic level, but that won't solve the immediate problem.) If you hamstring resources long enough, sooner or later deeper pockets will come along. The only difference here is that the deeper pockets are cooperating, rather than simply supplanting. In a world of limited options, this is not entirely bad.