Thursday, May 19, 2016
This one is a little wonky, even for me. But the subject matters.
Robert Kelchen did a great piece Thursday looking at various ways that people measure state funding for higher education. If you want to make it sound high, for instance, you don’t correct for inflation; if you want to make it sound low, you do. And including enrollment figures can change the picture dramatically: a five percent funding increase looks good until you realize that it has to cover twenty percent more students. Check the piece out.
From a community college perspective, I’ll add a few more qualifiers.
The usual way of measuring enrollment is FTE’s, or full-time equivalents. That’s the total number of credits taken divided by 15 for a semester or 30 for a year. The idea is to aggregate part-time students into full-time students. So if you have two students taking six credits each and one student taking three, they’d equate to one student taking fifteen. It’s a way to correct for different mixes of full-time and part-time across institutions or sectors. And in terms of teaching, it’s mostly right.
But in terms of institutional cost, FTE tends to underestimate for community colleges and overestimate for elite schools.
That’s because costs don’t aggregate proportionally with credits.
For example, a student taking fifteen credits can’t take two classes in the same time slot. But two students taking six credits each absolutely can. “Peak” times in a community college can be much busier than an FTE count would lead you to think. That impacts instructional cost -- professors can’t be split, either -- along with the need for parking, library space, and the like. A single student taking fifteen credits will necessarily spread them out over the week, but a collection of part-time students won’t. The peaks are higher and the valleys are lower.
In back-office terms, every single student -- headcount, not FTE -- has to have a transcript. Part-time students (six credits or more) are eligible for financial aid, so the demand for financial aid staff and time is higher than an FTE count would suggest. Students struggling with personal issues often attend part-time precisely because of those issues; those same students place greater demands on support services than raw numbers would lead you to think. If you only scale based on FTE count, you’ll fall short. When funding is based largely on FTE, whether directly through tuition or indirectly through operating subsidy, that shortfall matters.
For support services, what we call “unduplicated headcount” matters. That’s the number of actual people who take classes. It doesn’t always move in tandem with the FTE number, either; over the past couple of years, we’ve seen FTE drop but unduplicated headcount remain almost constant. The economic recovery has made it easier to students to work more hours for pay, so they do, and more of them shift to part-time enrollment to make it possible. That means just as many bodies on campus, but fewer credits apiece. Some costs drop, but many don’t.
We know that from the perspective of the “completion agenda,” it would be ideal if more students were full-time or more. (Financial aid defines full-time as taking 12 credits, though it takes 15 credits per term to graduate in two years.) And we’re working on ways to nudge students who are able to do that, to do that. But many just aren’t in a position to do that, for various personal reasons. We don’t have the luxury of a Guttman Community College to say “full time or nothing,” so we do what we need to do to meet the students where they are.
To my mind, a reasonable first-approximation of a funding formula would start with a “cost of doing business” number that covers some basics, and would then look at both FTE and unduplicated headcount. (By basics I mean costs that don’t really scale: every college needs a president, a library director, and a registrar, for example.) Then we could look at rewards or incentives on top of that -- per-graduate bonuses, say. Ideally, it would also track or offset increases in health insurance costs, which are the 800 pound gorilla of higher-ed finance. We’d also build in some room to experiment with other models until we find something more sustainable.
If we got really ambitious, we’d even look for funding parity across sectors. Dream big.
Kelchen’s point is that depending on which measure you choose, you can change the story you tell about funding (going up or down) and still be correct. He’s even more right than he gave himself credit for.