Monday, May 14, 2012

Thoughts on Vouchers

Apparently, Pennsylvania is considering moving to a voucher system for public higher education.  The idea is to zero out the direct funding for colleges and universities, and to replace it with money to students.  Colleges’ funding will become a direct function of enrollment.

There’s a superficial appeal to the idea.  Colleges would have to direct funding more intensively towards the kinds of things that result in higher enrollments or they would suffer cuts.  At some level, the locus of power would shift to students, since he who pays the piper calls the tune.

A few thoughts:

-- Under this system, it would no longer be clear what separates a public college from a private one.  If they’re both enrollment-driven, and neither gets money from the state, then the difference would be in name only.  (The key difference from the for-profits, other than private investment capital, would be the property tax exemption.)  Public colleges would have to increase their tuition drastically to avoid terrible cuts, which would probably more than engulf the value of any vouchers.

-- Given the lack of distinction between publics and privates, I’d expect to see the privates start angling for access to the voucher money.  To the extent that they succeed, the erstwhile publics will suffer that much more.  

-- The value of the vouchers will not come close to keeping up with the cost of providing education.

-- The publics will bifurcate.  Those with prestige will survive, as will those with the simplest missions.  The nothing-special-comprehensives in the middle will struggle mightily.

-- Any sort of meaningful inter-institutional collaboration will go by the boards, since funding will quickly become a zero-sum game.

-- The adjunct trend will accelerate, and alternatives to tenure will abound.  (Once the first financial exigency gets declared, even incumbent holders of tenure won’t be safe.)  The tenure system is not sustainable when funding is entirely enrollment-driven and enrollment fluctuates.  The combination of high fixed costs and variable revenues is a killer.  The only way to survive in that setting is to be able to adjust your labor costs in real time.  That’s why for-profits don’t have tenure systems.  Some will present that as centralizing power in the administration, but that’s not quite right; it’s centralizing power in the students.  The administration will have no more autonomy to buck the market than the faculty will.

-- Admissions offices will grow larger and more powerful on campus.  This will come at the expense of other constituencies.

-- As the first round of colleges start to face extinction, I’d expect to see the usual ethical compromises: pressure to pass students at all costs, a collapse of admissions standards, whatever it takes.  Desperate people do desperate things.

-- Long-term planning on campuses will become impossible, as decisions come to be made based on the most recent numbers.  Over time, this will lead to declines in quality.

The ability to say ‘no’ to short-term market pressures is predicated on a revenue source independent of the market.  Lose that revenue, and you lose that autonomy.  

I have little faith in Pennsylvania’s political class, but I hope they don’t go down this road.  The damage would be done quickly, and would take decades to undo.  The superficial appeal just isn’t worth it.