Tuition Hikes Ahoy!

As we all prepare for the Napolitano era, the Regents are heading to their favorite meeting place at UCSF (safe from undergraduates) with time to stop off at Lawrence Livermore National Laboratory.   There are any number of items to be discussed but first and foremost is the question of the UC budget.  There the crucial meeting is Wednesday's Finance Committee Session.  Among other items, the Finance Committee is to hear about the long-range budget plan, the expected 2014-2015 budget, and the wondrous accomplishments of the "working smarter initiative."  Although we won't know in detail what UCOP is proposing until they actually make their presentations, it is possible to see the general strategies and narratives that UCOP is proposing for budgetary planning and decision-making.

As ever, UCOP appears not to know what it wants to say; as a result it continues to alternate in what it is asking of the State and from the University community.  But appearances can be deceiving.

If you turn the budget presentations into a narrative it would go something like the following: 

After long years of budgetary cuts, Governor Brown has, through his handling of the state's debt, his success in achieving passage of proposition 30, and his willingness to commit to a series of funding increases over the next several years succeeded in staunching the bleeding of budget cuts.  In the new state budget UC's general fund increases total $256M in unrestricted funds although $125M of those go for a tuition buy-out.  In this way, the state is now in the words of OP: "signify the welcome, necessary return of the State to being a true partner with UC." (3) BUT this "true partnership" is, notable for its stability more than its adequacy.  Indeed, at the heart of OP's narrative is the argument that although the State has agreed to helpful increases in funding it is also preventing the University from functioning properly by restricting its ability to raise tuition.

Put another way, the real message behind OP's budget narrative is that UC must increase tuition if it is to continue to function as a leading research University and the Regents, the public, and the State must accept this claim.

The headlines that OP seems to want to emerge from the meeting is that although State funding has increased, it has not increased sufficiently to cover required increases in expenditures so that long-standing problems cannot be addressed.   Again in OP's language:

The State funds provided in 2013-14 ($256.4 million) are a welcome departure from past years’ base budget cuts. However, they are sufficient to fund only the cost increases on the State-funded portion of the budget – which is now less than half of the total core funds.  (2)

Thankfully, the OP has stopped insulting the State every time it seeks funding.  But we must be clear that OP is presenting a scenario in which the state must choose between rising tuition and decreasing quality.

There are several preliminary things to be said about these claims.

First, it is clear that the state funding does remain insufficient.  The increases in State funding do not recover from the years of cuts and leave numerous buildings in need of maintenance, faculty positions unfilled, staff positions cuts etc.  But the University has accepted the state funding end of the equation as satisfactory.  It is the tuition side that they are pushing--not more public investment.  We appear to be entering a period where OP has de facto accepted an updated version of the earlier compact with Arnold.  And we know how well that turned out.

Second, it is not clear that OP's numbers add up.  In its discussion of the 2013-2014 budget OP makes their case for the necessity of tuition increases by insisting that the increase in state funding only covers the cost of increases to the core budget.  According to OP the necessary increase comes to $155M (or more than is left over after the tuition buyout).  But OP is also touting the fact that they will save $80M because of a shift in debt accounting (2) and Executive Vice-Presidents Brostrom and Taylor are claiming that they have created $171M worth of funds this year due to "working smarter." (1)  If these claims of financial and administrative wizardry are accurate then that should leave roughly $100M in funds for UC (or nearly as much as the administration had hoped to get from tuition increases and without the reduction of "return to aid").  So either their claims about the necessity of tuition increases appear overstated or the claims about the wondrous savings are overstated.

Third, if you read the documents I linked at the top (and I urge you to do so) you will see that OP has set off a set of oppositions between "truly mandatory" and "high priority" costs. (2)  Strikingly, the "truly mandatory" costs focus largely on benefits for faculty, staff, and retirees.  The "high priority" costs on the other hand tend to focus on delayed maintenance and steps taken to ensure increased quality in education.  Now, I am happy to see that OP takes the declining benefit situation seriously and also agree that with their insistence that the State commit to its responsibility for UCRP.  But the way that they have set the argument up places employee benefits and salaries and tuition increases in a paired relationship.  Put bluntly, OP appears to be constructing a narrative in which faculty and staff compensation (in all of its forms) is the driver behind increases in tuition.

There are subsidiary lines about alternative sources of revenue--mostly in terms of out of state and especially international students.  But the main thrust appears to be Tuition Hikes Ahoy or say goodbye to quality. 

Messing with the Wonkblog College Story

It is true that in the U.S.  “the tuition is too damn high,” and there’s enough righteous public anger about it for the Washington Post to have published a ten-part back-to-school Wonkblog series under that very title.  Why is tuition so high, according to this major metropolitan newspaper? The answers are of real interest: Even the best points made by the series author Dylan Matthews, in his heroic effort to create a coherent big picture, reinforce the premise behind the current perversity in state and national policy.  

For starters, Mr. Matthews agrees that college is still worth it.  B.A. degrees garner on average twice the lifetime earnings of high school diplomas.  College tuition offers an estimated 15-17% return on investment, which is better than your mama’s bond yields or the appreciation on an apartment near the Google bus.   (Parts I, II)  The other side of this is that dodging college now actively damages your economic future.  Colleges have something of a captive market, and this is where the trouble starts.

Although the customers keep lining up for the college product, they know a lot more about cars, apps, and clothes than they do about college.  Applicants have no "first-hand knowledge of colleges' quality," so a bunch of quality “signals” are gathered together to dubious effect. (VI) Brand plays a major role (Smith, Stanford, Swarthmore, Slippery Rock, and so on).  So do image, region, peer opinions, relentless marketing, and gimmicky, indecipherable financial aid packages.

The unfortunate result is that, according to various studies, "most students are not likelier to attend schools that spend more on instruction" (VIII).   So here we have an industry whose clients choose among thousands of possibilities without hard data about the quality of the core product, the education. Colleges have incentives to manipulate these millions of sitting ducks with confusing marketing and deceptive financial aid plans. More importantly, they do not have incentives to spend more money on education itself.  In the vacuum of quality data a default signal appears, “price, and in particular sticker price. The theory is schools that cost more will deliver a better education.” Here’s where a further perverse incentive appears.   “Schools have a real incentive to push up tuition for its own sake" (VI).  And they have responded to this incentive with extreme vigor: they raised tuition 297% between 1990 and 2012, or twice the increase seen in health care (I).  

We thus have opportunity for outrageous tuition increases.  What about motive? Well it turns out not to be the need of university administrators to coddle faculty with massive salary increases.  It turns out, according to Mr. Matthews, that the Baumol effect--in which services like instruction don’t see huge the productivity increases one finds in manufacturing, so labor costs always rise—isn’t really that important.  One proof is that only a small proportion of cost increases come from (generally low) increased instructional expenditures, so often targeted in MOOC discourse.  Another is that faculty salaries on the whole just don’t go up that much--  0.9% per year between 1987-2008 (V).

So why is the tuition too damn high? The first and largest immediate cause is administrative bloat.  Administration has grown far faster than any other segment of the university: one estimate is that it gets $2 for every $1 added to core educational functions (VI).  (This fits with studies of University of California expenditure growth.) The second immediate cause is the "amenities race" -- the famous climbing walls and Vegas-style sports complexes that seem to attract students with pretty good grades and truly outstanding family wealth (VIII).

But just as for Freud the psyche was not Ego or Superego alone, we must locate, Mr. Matthews assumes, an institutional Id behind the sheer relentlessness of rising prices. This was apparently best described by Harold Bowen  (not to be confused with William) as "the revenue theory of cost" (VI).  Core postulates are as follows: "there is virtually no limit to the amount of money an institution could spend for seemingly fruitful educational ends."  Each institution raises all it can.  Each institution "spends all it raises."

We have a theory of primal profligacy, and its most villainous instance is that genre known as the research university.  Their spending just goes up and up and up. While their poor relations at the community colleges raised tuition to make up for state funding cuts, public research universities increased overall revenue “by $5,793 per student, almost double the increase in per-student spending.” What this means, Mr. Matthews concludes, is that  “public research universities could have kept tuition stagnant and still had $2,651 more per student to work with, which could finance a good share of the actual spending increase. “  Why didn’t they do that and keep tuition down.  The reason is the Bowen Id: “they wanted more money than that, so they increased tuition too” (III).  Private research universities have an even worse unconscious urge, spending three times more per full time student than their public  cousins, or $12,435 during the past decade).

The tuition punch line is that administrative bloat and the amenities race are not root causes.  The root cause is the will to spend as much money as possible.  The title of this story is “just throwing money around and getting it from wherever" (III).  The tuition is too damn high because higher ed is compulsively spendthrift (except the community colleges, which are destitute.)  Plus, its managers are corrupt.  Although colleges should cut expenses to keep tuition down,  the "moral character of college and university administrators may be somewhat lacking, to put it politely." And so, our mild-mannered guide concludes, "universities could be spending far, far less than they are now without any corresponding decline in educational quality."

It is perhaps because colleges are wasteful and unreformable that the last two of the series’ segments are somewhat halfhearted. Tech innovations like MOOCs will eventually maybe be as good as college at "building human capital," but they won't ever signal "college" in the sense of subsidized fun, which is much of what state college funding really does (IX). So how to fix all this (X)? Who really knows.  Maybe make CCs free. Put other public colleges on a federal backstop when the states cut them. Perhaps try a super-voucher system with a cap on expenditures so that colleges would have a disincentive to raise fees.  And also, in a convergence with the Obama proposals that came out at the same time, force colleges to produce meaningful data on educational quality.  The series’ final line is an ominous call for better data, or else: "Without better data, there's no way to defend the contribution that college makes to our economy and our society, and no way to make that benefit cheaper for those who need it."

I retell the full Wonkblog story because it is a smart version of the dominant narrative that the university community must confront.  It embodies an important kind of liberal Reaganism.  The key premise is that government and public investment are basically good, but always opaque and perverse and in need of permanent austerity.  Public officials always want to spend way too much—that’s their Id at work—and in such an opaque way that even sympathetic wonks like Mr. Matthews can’t quite figure out what they spend the money on.  The associated practice is that audits replace the higher funding levels that built these public systems and once made them great.  A related practice is to minimize or ignore the effect of the history of previous cuts, so that behavior that is indeed suboptimal for the system, yet rational for the college, can never be understood.

That is really too bad in the case of higher education.  That is because the outsized growth in tuition via administrative bloat, hospital expenditures, Vegas gyms—every single category of non-instructional spending that so many academics constantly protest—had been driven by free-for-all competition for private funds.   If we poke our heads outside of this constrictive U.S. framework,  we can see that the huge costs and spending perversities are induced by administrators, it's true, while engaged in a free market scramble in the wake of repeated public cuts.

I have detailed much of this causality in this space before, in which I have been happy to criticize administrators for their complicity with this destructive system. But we need to see the whole system for what it is.   One can start on the technical errors in Mr. Matthews’ series via Dean Dad’s slam, "The Theory isToo Damn Thin,” and also think about a full-scale alternative via Bob Samuels’ new book, Why Public Higher Education Should be Free.  In my next post I will say more about why the tuition crisis won't get fixed without fixing public funding via this important piece by Mariam Wang at ProPublica, which I hope you have time to read.  

Rebuilding Public Universities in the Wake of MOOCs

by Leslie Bary, Department of Modern Languages, University of Louisiana at Lafayette

As I mentioned in my last post, I teach Latin American literature and culture in a public research university that, having lost half its state funding over the past five years, has moved at near warp speed to an entrepreneurial model. So as to become more current on pedagogical and policy issues affecting us and other institutions in similar situations, this summer I joined a Coursera MOOC (Massive open online course) and a Facebook group where faculty from around the country discuss online teaching. I reported on that largely negative experience in this space.

I have also been thinking about MOOCs in their global context. They have been aggressively promoted as strategies for teaching large numbers of students, in ways both more “efficient” and more pedagogically sound than the courses we give now. The companies offering these courses, as well as some faculty developing them, have  presented MOOCs as a altruistic way of extending the resources of our most privileged institutions to students worldwide.

This discussion condescends to foreign universities, an issue on which Jon Beasley-Murray has written
eloquently. It also condescends to the hundreds of thousands of students at U.S. public colleges and universities who have enrolled only to find that their institutions are being defunded and dismantled at a furious pace.

Many of us know the situation first-hand.  Universities nationwide are being forced to curtail programs. Students graduate with a debt burden that severely limits their horizons. Many faculty are part-timers without access to a living wage, let alone resources for teaching or professional development. Libraries have had acquisitions budgets eliminated, and journal subscriptions cut. Faculty and students are no longer considered primary stakeholders in the university, and administrators are tasked with repurposing our institutions to more commercial ends.

Serious as this situation is, it is premature to take it as a fait accompli whose remedy will be MOOCs and other corporate solutions. Focus groups and “town hall” meetings at our universities may urge us to leave the past behind, invent strategies for accommodation or survival, and accept corporatization as the only viable solution to the funding crisis. But the interest venture capital takes in us should indicate that we still have assets worth saving. To put the case more strongly, we are assets worth saving. We should push back against the defunding and dismantling of our institutions.

My second MOOC is underway. It is far better conceived than the one I took earlier in the summer. Our professor is accomplished in his field, and acts responsibly in the course. Fascinating global students with good English skills, strong academic backgrounds and rapid Internet connections, are benefiting from the experience just as I am. But a course, or courses, are hardly a replacement for a university.

The image of “traditional” universities the MOOC enthusiasts tend to promote is unrealistic. My own not-particularly-elite university, for example, has robust distance learning programs for those who cannot travel to campus, and is expanding its online offerings. We have textbooks in some basic courses, but we supplement them heavily with current media and scholarly work. Class time is for discussion and exploration, not “lectures.” We have well administered course websites, richly enhanced with a variety of media. Colleagues from around the country give guest lectures, in person and by Skype. In-state tuition and living expenses together are $15,000 a year. We are not “broken,” but we have surely taken a beating. We have good rates of placement in jobs as well as in graduate and professional schools, but we would like to offer more.

Rather than accept further gutting and the corporate solutions that are a domestic version of structural adjustment, we should work to meet our actual needs. Much more than support from Udacity or Coursera, we need, not in any particular order:

a. For the library: acquisitions, as there are fields in which we own no materials from the present century; and continued maintenance of all current subscriptions.

b. For study abroad: expanded programs, office support for these, and also locally based financial aid supplements since we are utterly dependent upon Federal scholarships, which are inadequate.

c. Smart classrooms: so we can access the Internet and use other a/v materials in all courses, without having to apply ahead of time for use of a special room on a special day.

d. FTEs, so students are not taught by a patchwork of adjuncts, and tenure-track lines, so that students can be taught by experts currently engaged in research.

e. Salaries and benefits adequate to recruit and retain quality faculty. At present we only contribute 1.5% of salary to retirement funds of new hires. With the lack of raises since 2008, instructors are now teaching up to seven courses per term to make ends meet. This cannot fail to have an impact on the quality of instruction.

f. Restoration of regular sabbaticals, summer salary support, research and travel funding, including funding for travel to discipline-specific conferences on pedagogy; and funds for the acquisition of books and other research and teaching materials.

All of these these things, it should be noted, are not luxuries, but essentials if we are to maintain and enhance quality teaching and learning, and research. They are what we have renounced as budgets shrank. These, and not corporate pedagogies, continue to be our needs.

The MOOC fervor has been instructive because it so well illustrates the mechanisms, both practical and rhetorical, by which institutions are gutted and public monies are moved into private coffers. Arguments for expanding access to higher education ring hollow in the absence of credible public investment in it.  When defunding requires us to cut services and raise tuition, it is easy for some to say that quality and value are declining. The problem must be pedagogy, they say, and the answer must be a new, commercial product.

This strategy has been exposed, but the discussion may have taken us all too far towards redefining university education as credentialing, and teaching as training. The same propositions will continue to arise, in service of the agenda towards-- or against--hiigher education that has been in place since the Reagan administration. We should not allow those who view us as resources to exploit define our problems, or prescribe their solutions to us.  We should instead press for the needs of public colleges that we have come to understand from the inside.