Higher ed policy is suffering through a long siege  of intellectual gridlock.  The default result is what I've been calling permausterity, a chronic funding shortage for public colleges that now rests on a chronic lack of confidence in the job they're doing.  This has become a vicious cycle that feeds itself.  

Making matters worse, faculty responses are fragmented, when faculty respond at all.  Some of the most eloquent voices are increasingly disenchanted: William Deresiewicz got so much pushback for his recent piece, "Don't Send your Kid to the Ivy League," in part because he seemed to be saying that even our premier universities are turning America's most successful students into mercenary sheep.

(1) Why Can't College be Cheaper?

Dr. Deresiewicz's piece upset many supporters of the college ideal (e.g., Jim Sleeper), and one reason is that it seemed to lend credibility to this year's leading higher ed question: "is college worth it?" If Yale sucks too, why not give up on rebuilding funding and learning and get on with the inevitable consolidation of higher ed into two dozen university-corporations along the lines of the media industries and IT? The Apollo Group could provide the management, Coursera the online platform, Pearson VUE the assessment, and Harvard-MIT-Stanford the quality control.  Three percent of the college population could still go to prestige-brand research universities and liberal arts colleges, which is about the percentage that goes to them now.  Everyone else would, in this scenario, get converted over 10-15 years to varying combinations of blended learning and online-only. In spite of the MOOC ebb that began last summer, tech-based disruption and downsizing remain at the top of the national higher ed agenda.   

There are good disruptions that should be implemented, bottom-up, in universities, and also obvious reasons not to turn universities into digital learning corporations.  One of these reasons has to do with how people actually learn (as opposed to how they receive and replicate information packets). Some of the growth in student services is a market-driven "amenities race," but much of the growth comes from new structural support for better learning. Fixing the country's educational levels is going to require more and not less money for student services, more and not less funding for active learning, and more and not less payroll to hire permanent faculty.  Adjunct Nation has new allies in Congress, which will also support a deeper discussion of educational quality. We need post-contingent education (see, for example, Jennifer Ruth's recent posts (here and here).

Another large cost is research.  The country expects the vast majority of its basic research to come from universities.  And yet few policymakers and general voters understand who pays for research and how much it costs.  The traditional funders have been the federal and state governments, but states have been reneging on their side of the deal for years, leaving the feds in the lurch.  At the same time, the feds have been partners in this decline, having never explained to state policymakers, much less to voters, that they did not fund the full cost of research.  Admitting that research loses money has been taboo, since it conflicts with Washington's demand that science lead directly to economic growth.  States have cut funding in part because they didn't know they were in effect also cutting economically strategic STEM research.

But in the last few years things have been looking up.  Washington D.C. agencies are finally going public with their concern that we don't know how to pay the full costs of university research after all.

(2) Research Shortfalls are Real

In 2012, the National Science Board published Diminishing Funding and Rising Expectations: Trends and Challenges for Research Universities, and in the same year the National Research Council of the National Academies released Research Universities and the Future of America. Both criticized the states' wholesale retreat from public funding.  Both reports noted that universities are increasingly on the hook to pay for research from their own internal funds--even when the research has an outside sponsor. Institutional funds are now the "second largest source of funding for academic R&D, accounting for $11.2 billion of the $54.9 billion of academic spending on S&E [Science &Engineering] R&D in 2009" (NSB p 16).  The NRC report stated that "The institutional contribution to research has been growing faster than federal funding," which, they added, diverts money from necessities like instruction and maintenance (NRC p 125).

Then, this past June, the Council on Governmental Relations, a leading research university lobby, chimed in with the same message and more graphic detail.  Under the title, "Finances of Research Universities," its report offers a good primer on the differences between private and public university funding and then gets into some of the gory details of research costs.  If one of your summer resolutions is to tone up your skill with calculating F&A overhead on MTDC, then this is the report for you.

The big takeaways are that universities' internal funds are the fastest-growing source of research funding, and that universities' share is large.  The total university contribution has grown again since the NSB and NRC reports, from $11.2 billion to $13.7 billion per year.

Over the period from 1976 to 2012, the share of R&D expenditures assumed by colleges and universities has grown faster than any other category. Institutional Funds accounted for 21.6% of all R&D expenditures in 2012 (adjusting out the ARRA effect) as compared to 12.0% of all R&D expenditures in 1976—a growth factor of +80%.

COGR provides a number of interesting tables, using in many cases data from the NSF's Higher Education Research and Development Survery, or HERD). Here is one:

Reseach and Development (R&D) Expenditures by Funding Source as a Percentage of All R&D Expenditures

State support for R&D is a third of what it was pre-Sputnik (1956) (although unadjusted totals continued to grow).  Federal support, though much more stable, is now heading back down towards its pre-Sputnik share. Over the same period, universities have doubled the size of their piece of research funding. Their share has doubled since the 1970s, in spite of excellent growth rates of federal research funding--or actually, because of this federal growth.  In 2011, a useful article in Nature pointed out a further problem, which can be seen in one of its figures: 

Public universities do twice the dollar amount of research that privates do, and yet spend twice the share of their own funds in subsidizing it (24% vs 12%).   Hence the title question, how can public research universities afford to do the research society does in fact want?

Back to the COGR report, which concludes with some bureaucratic fighting words:

The university subsidy is a legitimate issue and one that use be addressed honestly and constructively by all stakeholders.  [Forcing] universities to fund real, unreimbursed costs through non-federal revenue sources [makes them] potentially reduce investments in core missions and infrastructure. Ultimately, this impairs a university's ability to strategically plan and invest in its future research enterprise. (23)

In other words, concealing true research costs hurts the overall university while also hurting research.

I'm happy that a high-level organization is now explicitly saying that unrecovered research costs "are a financial burden with severe implications for the future productivity of research universities" (19).  This is progress.

(3) How Much of the Research Shortfalls are Recoverable?

There's a big wrinkle we now need to consider.  What kind of research costs are universities covering through their Institutional Funds? 

Universities need to support extramural research with outlays for facilities and administration (F&A), whose reimbursements have been capped at 26% since 1991, though only for universities. They also need to build and renew overall infrastructure and pay for research that isn't supported by outside sponsors (which includes nearly all research in the arts, humanities and qualitative social sciences).  They must help start new labs, sometimes build new buildings for them, seed new projects that may attract outside funding at some future date, and provide bridge funding for faculty who are in-between grants but have labs to run and grad students to train.  A combination of these and other activities accounts for the $13.7 billion that universities spent of their own money on research in fiscal year 2012 (out of a total of nearly $66 billion).  (The NSF breaks down costs by university in this table.)

The NSF tries to figure out how much money goes to various research categories through the HERD survey mentioned above.  The COGR report cites its findings as follows:

Of the $13.7 billion, 56% ($7.7 billion) was in the form of direct funding for faculty or student research projects, 9% ($1.3 billion) was devoted to cost sharing, and almost 34% ($4.6 billion) represented unrecovered indirect costs. (2012 HERD Survey)

In other words, somewhat over half of university research expenditures supports the research of their own faculty and students. A third goes to cover costs incurred by sponsored research that are not covered by the sponsors. Another tenth goes to cost sharing, which always involves sponsored projects. Summing up these figures, we might conclude that 44% of Institutional Funds subsidize extramural sponsors, while 56% cover internal research projects.  All of these costs are within the normal scope of research university activity--and, to get pious for a second, form part of its obligation to society.

But is this breakdown correct? The COGR report suggests it is by singling out the $4.6 billion as the main subsidy burden universities bear. It equates, in the report's terms, "to a staggering multi-million dollar obligation per university," and raises a "widespread concern as to the sustainability of the significant investments made by research universities" (19). COGR thus implies that only about one-third of universities' research outlays could be recovered by fixing reimbursement policy.

Other documents tell different tales.  The COGR report itself offers a case study (Chart 13, p 20) of a "Private Research University, Southeast."  This university spent $505 million on research but received $390 million in revenues, which required it to chip in $115 million of its own money.  So nearly 23% of this university's total research costs came from Institutional Funds.  The line-item breakdown of expenses lists University-Funded Research at $33 million, or  a bit over 28% of the Institutional Fund contribution.  This is half of the average for "direct funding for faculty or student research projects" in the HERD survey.  (It is also only 6.5% of this university's total R&D expenditure.)

To take a further case: when the University of California's Commission on the Future tried to get a handle on the university's costs, they summarized research losses like this:

In recent years, the University has received over $3.5 billion per year in extramurally-sponsored research grants, of which over $780 million per year is designated for indirect costs such as facilities support and research administration.  But the actual indirect costs of extramurally-funded research are estimated to be $1.5 billion. (page 111)

UC was thus losing $720 million a year on a research gross of $3.5 billion. This meant that 20.6% of its R&D expenditures came from internal funds, which is very close to the national average.  But this statement suggests that sponsored research caused the entire shortfall.

So we have three stories about the extent to which research universities must spend more money than the public understands in order to cover costs on behalf of research sponsors. 

1.  A third (or at most 44%) of Institutional Funds go to subsidizing costs of sponsored research, costs that the private sector would likely insist be paid in full.  About 56% goes to non-sponsored or "internal" research for faculty and students.
2. Something like a quarter of Institutional Funds go to non-sponsored research.  That leaves three-quarters supporting extramurally sponsored research. 
3. More or less all Institutional Funds go to filling in these shortfalls in sponsored research funding.

Which story is correct? I think the best answer at the moment is all of them, depending on the university. Wealthy private universities may well be close to (1), spending most of their internal funds on their own faculty's non-sponsored projects.   Less wealthy privates and some major public research universities may be close to (2). Both of these stories are about major research losses of somewhat different sizes.

The extreme case of (3), in which nearly all Institutional Funds subsidize sponsored research, may be right for the case for which it was developed, the University of California.

To check whether this could possibly be true, I offer some seat-of-the-pants numbers for one campus, UCLA.  It has formally recorded Institutional Funds expenditures from at least two sources, its Academic Senate Committee on Research, and the Office of the President's Research Grants Program Office (RGPO). The former, in the pre-cut year of 2007-08, dispensed about $2 million in travel and research support.  The latter, over a three-year period 2010-13, spent $44 million per year (  Annual Report page 25).  (I apologize for mixing years but here I'm just going for scale).  I'll assume that UCLA got about one-fifth of RGPO system resources based on its large size.  That means the campus spent $11 million of Institutional Funds through formal channels on faculty and student research projects in a period when it was grossing around $1 billion a year in extramural research funding.  In other words, UCLA spent 1.1% of its Institutional Funds on designated faculty research. 

(UPDATE 04/15: Having looked again at the RGPO awards for the relevant period, I think UCLA's share may be half of my estimate here. It's hard to say because they do not publish dollar amounts.  In addition, newer COR reports are online. Award totals are the same in 2013-14 as in 2007-08, my baseline here. The 1996-97 COR award $1.9 million, which is about $2.84 million in 2013-14 dollars: UCLA's COR now awards about half the amount it did 20 years ago.  "Half" seems to be the theme today: RGPO has awarded about half the number of multi-campus grants in this cycle compared to the last.)

This is obviously not the whole picture of internal research funding, but we don't have public information on the use of discretionary funds retained at various administrative levels--but also no reason to think a large percentage of this unknown figure goes to non-sponsored faculty research.  Throw in the fact that Committee on Research funds go to some extent to top up extramural grants. You can then see why the UC Commission report rounded up to the claim that essentially 100% of Institutional Funds go to paying for unreimbursed indirect costs of extramural research.

The implication of all of these stories, especially 2 and 3, is that public universities can pay for research, but, as we go forward, only if federal, state, and private funders stop asking them to subsidize a large chunk of indirect research costs.

(4) A Few Steps Towards Improvement

Regardless of which story is correct for a given university, they all point towards the following list of to-do's.

A. University administrations should say openly and often that research loses money. It must be publicly supported because it loses money.  The more fundamental the research, the greater its long-term social potential, the more likely it is to lose money for years if not decades. The Internet provides an easy example of this point. 

B. Point out that effectively freezing public funding to hundreds of research universities is undermining the country's research ecosystem.  Converting higher ed to online, in whole or in part, will wreck that ecosystem.

C. Act on these NSB, NRC, and COGR calls "to cover the full costs of research projects and other activities they procure from research universities in a consistent and transparent manner" (NRC Recommendation 6, p 122).  (It is already official University of California policy to charge sponsors enough to "cover all expenses, direct and indirect" (APM-020 Revised Regulation No. 4, II. 3)  Set up a multi-year plan for fixing at least the one-third of the problem that all agree is attributable to sponsors' underpaying of indirect research costs.

D. Sort through Stories 1-3 above. Get clean numbers, campus by campus, for "indirect indirect" costs--all the set-up costs that support extramural research rather than research that is ineligible for extramural funding. This will mean distinguishing clearly that research which, for historical and institutional reasons, depends wholly on Institutional Funds. It will also mean campus admins publishing those numbers to their communities, so that they can be understood and discussed.

E. Identify and quantify the needs of the large, complicated sphere of this (mostly) qualitative and/or truly experimental research that cannot receive external sponsorship. Explain why its ineligibility to receive external sponsorship follows from the historical shape of Western scientific, military, and industrial development rather than from a lack of merit or social value.  (This needs to be done for a society that doesn't generally understand market failure, spillover effects, or noncommercial social value.) Then make sure that this research has equal or superior claim to Institutional Funds.

Universities need finally to get ahead of the curve on research costs. If they don't, the "unbundling" pressures will only increase.

Whatever message the Regents wanted to send by passing the Commission on the Future recommendations, the cuts message is what came through. UC officials are promising less to future students - that's what the reporters picked up.

The sacrifice might go somewhere if it were done in an atmosphere of fairness, intelligence, and mutual attention and respect.  The UCOF process did not increase trust or communication -- the Regents, with the exception of the student Regent, did not appear at any of UCOF's listening meetings.  We'll talk about fairness in a later post on pension reforms. Then there's intelligence in planning: this would involve major educational goals for the University and a revenue plan to support it.  One may not expect major educational insight from the Regents, but revenues are their central responsibility.

The Recommendations I didn't get to in Part I take a shot at these. How do they do?

The short, special Regents meeting on Monday, December 13 will consider pension changes and the ratification of the recommendations of the Commission on the Future. Most commentators have found the Report uninspiring. The San Francisco Chronicle focused on elements that will reduce services to and contact with in-state students (more out-of-state students, on-line courses, and three-year degrees).

There's more to the Report that this, but California is in the midst of a deep crisis in which its political and business leaders adhere to a world view that makes real solutions impossible.  This bipartisan view is now taking austerity to be the way forward, although it is destroying the chance to renew public infrastructure and is starting the abandonment of a generation of young people.   The UCOF Report needed to create a context that would give the public a reason to change the framework of political debate.

Here are five sample steps in a purely instrumental version that could be developed much further. I deliberately omit all of the higher and deeper things universities do, like solving social and culture problems ignored by technology, or like inventing new, more humane philosophies.

• Economic recovery and renewal depends on high levels of educational attainment. Claudia Goldin and Lawrence Katz's remarkable economic history showed strong causal ties between U.S. early educational development and economic success: the U.S. was far ahead of European rivals in high school graduation rates by 1940 and developed a similar lead over virtually every other country in college graduation rates in the thirty years after World War II (Goldin and Katz).

• But we have an educational attainment emergency. The US has completely lost its educational lead.  For the first time in its history, younger people are less educated than their baby-boom parents (National Center; College Board, figures 1-4). The American proportion of students starting college who actually finish is now 56%, or 29th of the 30 OCED countries (Bowen et al. 2009, p.4). California, one of the world’s wealthiest places, has seen one of the world’s most astonishing declines in college achievement. The state’s continuation rate fell from 66 percent to 44 percent in just eight years (1996–2004). California’s rank among states in investment in higher education declined during the same period from fifth to forty-seventh.  The state has cut its investment in higher education by close to 50 percent since 1980, forcing tuition increases like the 60 percent rise at the University of California from 2004 to 2008, which was followed by a 32 percent rise between 2009 and 2011.

• The 50-60% reduction in public funding for California's universities coincided with this decline, and also caused it.  Contrary to popular myth, replacing public with private money reduces educational access and the quality of the result.  I will say more about this below, when I discuss Recommendation 7 in the UCOF Report.

• More egalitarian societies are more efficient and have higher educational attainment. This is a longer argument, but the circumstantial evidence is clear: the inequality boom has coincided with educational decline at every level.

• Renewed public purposes will allow a more efficient and attractive University of California.  A redesigned and more effective UC, one closer to its core public and scholarly missions, is TBD at a later date.

The public is ready to hear this kind of a sequence -- and to do something about it. For example, the Public Policy Institute of California recently found that three-fourths of Californians think higher education funding is inadequate.   But the University of California has been having a hard time making the most of its actual popularity with Californians.  It is torn between elitism and egalitarianism. The genius of the Master Plan was to have it both ways, but UC's policy frameworks and PR reflect the anti-egalitarian world view I mentioned at the start, although without actually wanting the social stratification that results. This means that UC's outreach and social missions are unconvincing to a broader public that is nonetheless waiting to be brought back in.

Where does the flagship UC Future report fit into this?

By Michael Meranze

Compared to last year, when the University was mobilized around the issues of furloughs and the President’s emergency powers, this summer has seemed quiet. But this appearance is misleading. If nothing quite as contentious as furloughs has been bandied about, the impulse that underlay the expansion of UCOP’s authority has not diminished. We would do well to focus on this impulse because it will shape the struggle over the future of the University both this year and for the long term.

Two large projects have emerged this summer out of the UCOF process: first the drive towards managerial consolidation and uniformity; second the rush to approve online education. Chris has discussed the issue of consolidation, while Catherine Cole, Toby Higbie, and I have examined the details of Edley’s online initiative. But I want to focus on a separate issue here—the centralization of decision-making, the marginalization of shared governance, and the absence of transparency in the decision making of both UCOP and the Regents. Strikingly, what the Regents and UCOP made clear this summer was that their creature—UCOF—did not deliver what they wanted and therefore needed to be cast off.

The Finance Committee of the Regents will consider an item at their July 14th meeting called "Adoption of Resolution Regarding Administrative Efficiencies" (F2).  At first glance, it is guaranteed to increase the president's executive authority, but is unlikely to increase UC efficiency.

The resolution has the following features:

• It is the first item associated with the UC Commission on the Future (UCOF)  to be considered by the Regents.
• It was not a UCOF working group recommendation, but comes from one of the Expanded Recommendations inserted by UCOP into the documents for UCOF's fifth meeting in June (page 68, Recommendation 9).
• It starts with harmless "whereas" clauses about the value of administrative efficiency. Then, in Whereas 5, asserts that "the Regents consider administrative commonality and consolidation a requirement for reaching the efficiency objective."
  

by Sharon Farmer
History, UC Santa Barbara

At its April, 2010 meeting, the Systemwide Academic Council of the UC Faculty Senate endorsed a revised version of a pilot project on online learning that had been brought forward by the UC Office of the President and endorsed by the Faculty Senate’s University Committee on Educational Policy.  In its April endorsement, the Academic Council emphasized that it would not support the use of existing university funds to develop the pilot, and that the purpose of the pilot program was to endeavor to find out how, under what circumstances, and if, quality online learning could fit the education goals and mission of the University of California. 

In the latest round of recommendations from the UC Commission on the Future, a set of “Expanded Recommendations,” which appears to have been written not by the working groups of the commission, but by the Office of the President itself, includes two recommendations (recommendations 6 and 7) concerning online learning.  The authors of these two proposals attempt to draw legitimacy for their recommendations from the Academic Council’s April endorsement for the pilot project, but the language of these 2 recommendations betrays a set of goals that are fundamentally at odds with the spirit of the Academic Council’s endorsement and with the educational mission of the University of California.    

Coverage of UC this week included a story in the Sacramento Bee on how the University's stated poverty hasn't prevented it from raising salaries at the top. The Los Angeles Times decided that the leading idea from the Monday meeting of the Commission on the Future meeting was changing the term "fee" to the term "tuition."  UCOP has spent much of this crisis year pitching on-line education, but this idea got attention only in its coverage of itself.  It's pretty obvious that on-line ed will have only a marginal, incremental effect on UC's very large educational and financial problems, and it should now be given back to the people who already know something about how it works.

The big financial story was the size of the shortfalls in UC's coverage of its research costs. We've often covered this issue (around UCOF's recs, from a lab perspective, as a pay equity issue, in its administrative details, etc.)  The theme has been that research doesn't make money, but costs money.   A 2003 Senate report demonstrated this, the Council on Governmental Relations has long had non-circulating data on the subject.  Urban legend has convinced generations of scientists that through their grants they were the university's major breadwinners.  For reasons best known to themselves, research administrators let them think this, though they have always known that gross income was accompanied by net loses, and presented that data to each other at professional conferences.  See a particularly good primer, this one from UCSB, that states, "It is less well known that the university provides about 25% of the actual cost of facilities and administrative support for extramurally funded research, over and above what it collects in indirect cost return."

The crisis has for some reason finally caused this news to erupt out of UCOP.   The  size of the loses is remarkable. "UC receives about $3.5 billion a year in research grants and about $780 million to cover indirect expenses such as paying the electricity bill in labs and other facilities. But the actual indirect costs are about $1.5 billion, a $720 million shortfall."  This is a huge number, and it also means that UC provides 48% of the actual costs of facilities and administrative support over and above reimbursements.  Obviously this internal support for research is unsustainable.

Getting the money back is important, but will be easier said than done. Gerald Barnett and I, writing in the Chronicle of Higher Education, suggested a blanket, short-term increase in federal indirect cost recovery rates while real costs get sorted out.  The odds of this happening are rather low. The political question is even more awkward.  Two weeks ago, UCOP said it could cut $500 million in expenses with administrative reforms. Now it turns out it's been losing another $750 million a year in research costs it didn't pursue. This undermines UCOP's right to lecture the campuses about their alleged inefficiencies, weakens public confidence in UCOP's managerial abilities, and gives the legislature no reason to increase state appropriations.  Sure enough, the leg split on the restoration of the one-time $305 million cut, with the relevant Senate committee agreeing only if state revenues are $2 billion greater than the forecast in the May Revise (p 32).

The good news is that the media is starting to realize that UC's businesses aren't doing much for UC education.  In its story, "UC: Millions Lost in Research Costs from Grants,"  (on its way to becoming the title of all UC news titles of the future - "UC: Millions-Billions Lost"), the authors note,

As state funding declines, UC is relying more heavily on private sources of funding such as research grants and hospital fees. Those income sources fuel the university system's medical and research enterprises, and aren't used to pay for basic undergraduate education, which relies on student fees and the state's general fund.

Sorry, that was from the negative Sac Bee story about UC's high end salaries.   But it raises the possibility that the public will increasingly realize the value of direct public funding of the campuses themselves -- if they can be sure education, including research, is what the money will go for.

To inspire such confidence, UCOP will have to be much more straightforward.  On ICR, that would mean saying, "we took losses for two reasons.  First, we did it as a service to our faculty and to the state, because unless we paid indirect costs lots of great research wouldn't get done. Secondly, we took loses because our sponsors forced us to, from federal agencies who short us and require matching payments on some kinds of grants, to industry, which expects the public to subsidize high-risk research. It was great while it lasted, but we can't afford it anymore  We'll have a new proposal for cost recovery in a month."

The UC Commission on the Future is having its fifth meeting tomorrow, June 14, for its second consideration of formal recommendations.  UCOP has performed a studio cut on the original material, which has the virtue of greater clarity.  Note in particular (page references are internal to the Meeting Materials):

•  "Selected Working Group First Round Recommendations."    (p 20) 

We are told that the other First Round recommendations are not thus rejected, but won't be discussed June 14.  There is some lack of clarity here.

• "Expanded recommendations" (p 68). These have been recently added by UCOP.

These new UCOP recommendations have not been reviewed by the Senate, and there has been some drama about this over the past week.  The upshot seems to be that "nothing will be decided at this meeting."

• Senate Chair Harry Powell's summary of the Academic Senate's review of the UCOF First Round recommendations (p 102).
• Proposed Commision Recommendation from the Academic Council  (p 109)
• Council of Vice Chancellors (COVC) Recommendations to UCOF (p 113).

The main idea that has emerged from UCOP for managing UC downsizing is on-line instruction. See Tobias Higbie's analysis.

I offer a brief overview of the financial recommendations.

Catherine Cole explores some of the complications and potential conflicts of interest of the online iniative.

Most of the UCOF  recommendations summarize common sense that has been around for years (seek administrative efficiencies . . .)  If they are proposed as solutions, one wants to identify the problem that they seek to solve. 

The Commission was created after the Regents at their July 2009 heard testimony from all of the chancellors that suggested decline on the campuses was fairly far along.  The responses of the Regents made it clear that, at least for those that spoke, this came as a real surprise. In evaluating the new UCOF materials, you may want to look at our list of the problems the Chancellors' identified, and decide the extent to which the current recommendations address them.


The same goes for comparing the recommendations to the analysis offered by the Commission's most knowledgeable guest, Jane Wellman of the Delta Project (my notes on her testimony are here, and a backgrounder on her research is here).  Do the recommendations address UC problems in this national framework?


There is nothing new in the financial or budgetary recommendations.  It is unfortunately still largely captured in my comments on First Round recs, on the continuing embrace of the high-tuition model. High tuition is clearly the path of mental least resistance.  But since 7% annual increases bring in-state tuition to about $21,000 per year by 2020, and 10% will bring it to $28,000, it is irresponsible for UC officials to continue never to discuss in public the declining political support that high tuition has and will continue to create.  In other words, is the first funding recommendation - the multi-year advocacy campaign to raise public support - undermined by the tuition-raising fiscal solution? I can't have confidence in a planning process that doesn't at least take the question seriously. 

Be that as it may, note the norm established by the UCOP budget slides that start the June 14 materials.  Slide 9 shows UC closing the budget gap.  How? The (mislabeled?) slide 8 establishes a 3% annual general fund increase standard, yielding an additional $790 million - about $120 million less than the need to close the gap this year - over a period of ten years. Slide 8 establishes a base of 7% annual fee increases.  Slide 8 also throws in an additional $200 million in annual revenues from an unrestricted endowment. At a 3% payout this would require that UC raise a new endowment of $6.6 billion in the next ten years, and that its fundraising go from about 98% restricted to 100% unrestricted, starting now.  This scenario is completely unrealistic.  The scenario for state GF increases is a self-fulfilling admission of defeat.

These slides frame the supposed UCOF break with conventional UC wisdom with the core of that conventional wisdom --  the existing funding model, in which familiar 7-10% tuition increases coexist with decline in educational resources.

The recommendations that would change how UC works are those from the COVC (p 113), and they should be read very carefully.

by Tobias Higbie
UCLA History Department

What follows is a quick review and analysis of the proposals for expanded online education reflected in the "expanded recommendations" section of the UCOF materials prepared for the June 14 Commission meeting.  Recommendations 6 and 7 are on pages 86-91.  Unlike the previous calls for an 11th "Cyber Campus," these proposals call for conversion of existing UC classes/students to the online platform.

The recommendations show the hand of UCB Law School Dean Christopher Edley, especially in their frequent reach-for-the-stars rhetorical flourishes.  They assert the inevitability of online courses and degrees in "the so-called quality sector," and propose that UC aim to be the first to do so and that "our ambitions should err on the side of boldness."

Beyond this, the proposals are mostly familiar if you've been following the issue.  There will be a pilot program to develop 25-40 online undergraduate courses focusing on high-enrollment courses with high demand from community college students hoping to transfer into the UC system.  There will be a Request for Proposals from UC faculty "with stellar teaching records" who will then get course buy-outs and other support to develop the online material.  Ultimately, the courses will be taught by graduate student instructors.

Recommendation 6 calls for an acceleration of this pilot project.  Recommendation 7 calls for planning coordinated system-wide delivery of online instruction with the frequently stated caveat that this happens only if the pilot project shows that these courses can be equal in quality to regular face-to-face UC courses.  Of course the report has already declared that success in the "quality sector" is inevitable.  So, hey, not to worry, right?

A few highlights:

* They already have a plan: "UCOP Academic Planning has developed a detailed, step-by-step, draft strategy for leveraging online instruction to expand access to UC-quality courses and degrees and generate revenues through online instruction, returning revenue to support core research and teaching."  The Council of Vice Chancellors contribution to the meeting materials asks the Regents to direct the President to have the courses up and running by academic year 2013.  If you have yet to see it, the UCB School of Information is hosting the planning materials.

* One possible strategy is to peel off departments willing to partner with the University Extension (UNEX): "there would be advantages to using UNEX as the organizational base for the online instruction program, and exploring joint branding of degrees with the individual campuses."  This seems to be a way to get around campus Senate opposition.

* The push for semester scheduling across the system is linked in part to online education.  You can only get the economies of scale if all 10 campuses are on the same schedule:  "A coordinated or systemwide approach will be more cost effective in delivering educational programs which, owing to their reliance on rapidly evolving information technologies and on high-touch interaction with potential applicants as well as with enrolled students, requires scale that is not currently available and very difficult to build on a campus-by-campus basis."  The COVC report calls for system-wide semester calendar by 2014. 

* The bold vision is at least in part related to the need to convince "donors" (which may mean "investors"):  "On the other hand, a clear vision of a University-wide effort that aggressively pursues opportunities inherent in online education would likely mobilize support from potential donors, the Legislature and the general public."  Then there is the odd statement: "some portion of the Program may be funded as an unsecured loan to be repaid if a follow-on project at scale yields net revenue."  This seems to suggest they've already had discussions about this.  But with whom?

* The recommendations are vague on the form and ownership of intellectual property in the courses.  Courseware will be "'open' in some fashion."  Revenue comes not from selling the material, but "delivering" it with credit and with an instructor.

To summarize then, it seems the pilot project will move forward ASAP and planning for system-wide online courses will run in tandem with the pilot.  But what happens if the pilot shows that online courses are not equal in quality to current courses?  That question misses the point.  The purpose of the pilot is not so much to see *if* online classes are just as good, but to demonstrate that they are.  At the end of the pilot, the advocates of expanded online courses will be able to point to a rigorous vetting process that has certified that their product is in the "quality sector."

Personally, I don't think quality is the stumbling block (although they could screw it up).  With enough money they will be able to develop highly interactive online materials that might even be superior to current classrooms.  At least in my brief experience at UCLA I've noticed spotty wireless connections, insufficient classroom technologies generally, and too many rooms with peeling paint and bolted-down chairs. Compared to those classrooms, online learning might be rather refreshing.

I think financing and long-term business model are going to be a bigger problems. This is likely to be both more expensive and less profitable than they imagine/claim.  If so, it will divert existing resources to a bold new project that will not deliver access or cost savings.  So strategically, I think faculty should demand a more detailed business plan (both for the pilot and the system-wide roll out).  Who are the donors?  More importantly, who are the "investors" or creditors (if there are to be any)?  What kind of deal they're getting for their investment/loans?  How will individual campuses be compensated if courses are on a system-wide platform?  Given the lack of budget transparency within the UC, I don't imagine the advocates of this plan are ready to answer these questions.

by Viviane Michel

To an interested outside observer, it is puzzling why the best public university system in the world saddled itself with an unproven, cumbersome mechanism of self-reflection: the Commission on the Future of the University of California. But one need not jump to the conclusion, as some have done in the press, that the culture of the university prevents innovation and change. On the contrary, if there
was ever an organizational form devoted entirely and fundamentally to innovation and change, it is the form of the university. No other organization in the state of California has a comparable mission: to enhance the life of all citizens of the state through teaching, research, and service.

Of course the Commission had to have representation from all 10 campuses and from the vice-presidential level at the system headquarters: a university is decidedly not an organization defined by its central management. This was acknowledged from the outset by voices from the President's office and from campus leadership. Try single-handedly mandating curriculum changes, policy changes, risk management changes, fiscal changes, or whatever you would like to try: it cannot legally or practically be done without full consultation. Academic freedom and shared governance are enshrined in the rulebook, and for very good reasons. They are major factors in what makes any university great. Unfortunately, this is easily forgotten. Nonetheless it is an integral part of higher education, and a primary reason for the success of universities over the past several centuries. Yet celebrating this also means acknowledging the complexity that results.

For such a complex system, an unprecedented process like this Commission on the Future poses a daunting data-management problem. One can only imagine the amount of emails, phone calls, agenda items, attachments, proposals, memoranda, policies, and comments distributed across dozens or hundreds of computers. Even if one surmises that the collectivity of such documents is thus organized in arbitrary ways that certainly mask some redundancy and cross-reference, one can safely assume the amount of sheer data - numbers, excel sheets, longer and shorter texts, graphs and curves - is not fully represented in the voluminous PDF of recommendations the Commission posted online yesterday. In turn, the Commission's own structure, with a steering committee coordinating five working groups whose total membership goes into three figures, is only an approximation of the kind of collective effort that must go into helping to run an organization as complex as this large public university. The apparent hierarchy of the Commission masks a structural need to involve multiple lateral levels, muc  in the way the operational management of the university seeks to mask the complexity of the academic enterprise.

One may go further and bet that comments, responses, and rehashed as well as new proposals are even now inexorably accumulating within the noisy channels of shared governance. By "noisy channels" I do not mean that the Commission's work, the central administration's staffing support, or the Academic Senate's activities are mere gossip or background - on the contrary, they are in fact crucial to the operation of the University, with powers explicitly delegated from the state via the Regents to the faculty. But it is clear that these days especially, educational assessment, administrative accountability, research support, and other aspects of any academic enterprise are intensely data-driven.

The question about "noise" is how, and at what point, such an accumulation of data, such a steady flow of phone calls, webcam conferences, emails and other online encounters, turns from sheer quantity into quality. At what point do data enable decisions, formal recommendations? This question must be rephrased as a question about defenses against complexity. For the faculty members and administrators involved, the sheer amount of data is enough to overwhelm every hour left available between student contact hours, lecturing, preparation and grading, and other such routines and mandatory frameworks of the academic year.

Systems theory describes this sort of management as producing the distortion that brings a complex system into equilibrium. The conditioning that the noisy channels of shared governance (shared between campus administration and faculty members) introduce is preferable to the overwhelming complexity of the system's raw data feed. It is an illusion that an organization as complex as a 10-campus university (each campus composed of schools division, and they in turn organized in departments, but with a flat hierarchy that affords few controls) could ever be directly administered centrally. Indeed the opposite is the case: central administration might wish to portray itself as the direct cause of certain institutional effects we observe, but they actually cannot affect such change directly (I will spare us all a long list of empirical historical illustrations here). The illusion is maintained in order to communicate to the large organization a vision of itself - but it is an impotent vision that strips away the noise, the essential complexity. This pleases many of us in its simplicity, although we may well intuit how inaccurate it is. The levels of central management that appear to control the university's operational functions certainly have more direct influence over the corporate auxiliaries and profit centers at the margins of each campus - housing, parking, medical centers - but such hierarchical influence is felt far less in the main campus areas, where general management is de facto and de jure a matter of shared governance within the legal framework of the institution.

Of course there are lots of controls in academia - internals levers, ranging from curriculum committees to peer review of proposed publications, and external limits, ranging from limited and shrinking higher education budgets to the quality of the high school education incoming students bring to the table. But largely their contribution to the complexity of the mission of the university is irreducible - they cannot be "managed away". Management in any kind of large organization is confronted with complexity. Operational management refers the uncertainty of appropriate ends and useful means to economic markets. General management refers the necessarily resulting internal tensions to modalities of the organization. Corporate management refers the allocation of power and influence to the social and political challenges of our times. In each mode, management is not just a way of coping with uncertainty, but also a way of cultivating uncertainty. It is clear to most observers of higher education that university management is assuredly not a reduction of short-term questions to the most efficient response. There are no case studies in MBA courses on total control of an academic institution. Inversely, the axiom that we "do not already know" is a fundamental academic virtue.

By emphasizing this as an intrinsic defense against over-stimulation, we may cast shared governance itself in a defensive role - and we do so advisedly. Campus administration and the Academic Senate must play defense: not only because there are some perverse voices on the Commission who get a rise out of portraying academia as hide-bound and in need of some simple and long overdue change-management (sell the buildings, fire the faculty, outsource teaching to online distance education) - certainly there are always going to be some resentment-mongers, given today's political spectrum in California. Yet at any given moment, and even in the best of times, proper shared governance necessarily overwhelms. All administrators and faculty members know this and can attest to it. Whether one believes that this is because administration is bloated, or because few unpaid volunteers among the professoriate pick up the slack for the many faculty who avoid such chores, or because the university has always been in the idea business and thus all sorts of ideas are always bounding around: the fact remains that shared governance confronts all participants with considerable complexity. (In fact, if one forcefully inserts into an organic organizational system an unprecedented mechanism like the UC Commission on the Future, it can easily become a magnet for bad and previously rejected ideas, as is evident from some of the recommendations the Commission discussed publicly yesterday.) This kind of organizational complexity can neither be fully controlled nor fully understood, it can only be managed.

To that extent, the necessarily and essentially noisy role of the Academic Senate and of campus administration is defensive management.  But it is not just defense against the new mechanism the UC invented for itself: it is a more systematic response that helps explain why UC would do this to itself - by assigning the Commission the role of an inoculation, as it were. Look at one example. At the UC student Regent's live blog of the full Commission meeting, Dean Edley is quoted: "We cannot get bogged down in the endless consultation process which typifies the University. We cannot afford to go through the normal consultative process, we need a more muscular central system."  Quite apart from the fact that this lawyer should be reminded of the constitutionally delegated authority of the Regents
and the Academic Senate, it is a great quote. It is great in the way Edley's colleague Yoo provided history with great quotes about how inconvenient international treaties about torture are to those who desire greatly expanded authority. (But if we wished to amuse ourselves with cartoonish ideas of Edley cast in the role of Kissinger to Yudof's Nixon, central casting would correct us and point out that perhaps it is Yudof who resembles quick-witted and jowly Kissinger, while Edley's public persona may recall Nixon's bundle of resentment and authoritarian ambition.)   More to the point, the inoculations offered by Commission members like Edley will boost the university's defenses. Even the most casual observer of higher education knows that online delivery of courses has in fact lost dozens of universities million and millions of dollars each. It works well for some forms of training and testing, but it is not education, even the most populist critics of US universities acknowledge as much. So it may be a good thing in times of crisis to force the institution to recall its core virtues, and to communicate them back to its central administration, even though the ranks of Yudof's advisors are oddly thin on people with a solid grounding in a main campus research discipline.

Perhaps one unspoken recommendation issuing from the Commission is that the President's office must not rely too heavily on professional school faculty. For the Commission to be successful, for the UC to succeed, the challenge is to involve enough people from the very core of enough campuses, instead of letting a few ill-tempered outsiders who have yet to acculturate to main-campus academia ruin the institution. For instance, one cannot (and indeed must not) recommend fiscal changes without understanding the historical, piece-meal evolution of the university's funding; and there are major inequities and grandfathered differences that compounded over decades that UC must rebalance before anyone even begins to discuss differential student fees by campus or major. Likewise, there is award winning competence in risk management on some campuses, and this know-how should be shared and understood before another campus obliviously claims to have hired the right consultants that will enhance the university's efficiency. Vague claims about potential administrative efficiencies run the risk of ridicule if they remain unquantified; more importantly, they certainly should not be generalized from one campus to another (let alone from a fat campus to a lean campus).

The press keeps reporting about administrative bloat in state government and in the state's education sector, yet none of the UC Commission's work groups took it up. The compensation scandals in the office of the UC President have not been forgotten; scandals in the UC medical centers have not stopped. Perhaps only the state audit of the UC can yield a clearer picture of this complex system's budget.  Meanwhile, it is equally obvious that the bulk of our politicians do not value the state's research university system any higher than they do their own community-college alma mater. UC was once the envy of the world; circumspect planning for our public university's future to remain so is appreciably complex. And for that reason alone, it cannot be left to those who cling to bad ideas from the dot-com boom era.

by Rei Terada, Professor of Comparative Literature, UC Irvine

UCOF'S EDUCATION & CURRICULUM RECOMMENDATIONS: LESS FOR MORE

The proposals offered by UCOF this week quite literally ask students to pay more for less instruction. How to get them to pay more is covered under the funding recommendations; how the UC might deliver less instruction is covered in the section called “Education and Curriculum,” which will be my focus below. I’ll try to give an analytic summary of this 25-page section (pp. 29-54), as well as to suggest some larger concerns that emerge from its reading.

(1) The first set of Education and Curriculum recommendations (pp. 29-35)suggests moving students through degrees faster, for example by raising average credit loads, changing or “streamlining” requirements, and increasing summer and cross-campus enrollment. This set of proposals includes possibilities that could benefit students by facilitating graduation; transfer credit, for example, might be treated less bureaucratically, and major requirements could become more practical to fulfill. In a system so revised, however, students may also have less leeway about when to take courses, tighter add and drop deadlines, and more regimented courses of study. Further, another goal is to get them to graduate with fewer UC courses all together, through increased use of AP, high school, and community college credits and by lowering the total number of units students may take. In an obvious sense, a three-year B.A. gives less UC experience to the student even as fees are desired to rise.

In addition, the UC courses students do take would be less likely to be taught by ladder faculty. For the recommendations wish to “make more effective use of faculty resources” (29), or, bluntly put, to pay less to get courses taught. The working group suggests “extend[ing] the use made of research grant funding to buy out ladder faculty from instruction” while deploying lower-paid lecturers and graduate students to “backfill” the gap (29). In this all-too-appropriate construction metaphor, ladder faculty are removed by excavation, while lecturers and TAs are the gravel you scrape back into the hole. The “fiscal implication” of these recommendations for “the state and the University” is to “reduce the cost per degree . . . by efficient use of campus facilities and instructional personnel” (31), and the long-term “implementation method” that corresponds to this suggestion is: “consider changes in mix/type of faculty deployed to various courses” (32). So, savings are realized by channeling students and faculty into non-UC courses, summer sessions in which ladder faculty are paid less per course than in the regular academic year, and by using cheaper labor. The supposed benefit to students is that by graduating earlier, they will “have the opportunity to reduce their total costs”--costs that need reduction because the Regents are raising them even while continuing to lower the cost of the instruction they are receiving.

It's well-known that instruction is the only part of the UC budget, in distinction to capital and administration, where expenditures have been on a downward course. On the educational level, to ignore the implications of “changes in mix” of teaching staff is to refuse to recognize that top universities maintain their reputations by maintaining students’ access to tenure-track faculty. On the level of labor relations, graduating students on the basis of fewer courses necessarily reduces the ranks of ladder faculty, not just while they’re off doing research but structurally and permanently. The ladder faculty’s ability to shape the UC would be eroded by emphasis on lower-paid temporary staff and graduate students who are not voting members of the Academic Senate and are excluded from the job security and governance rights of regular faculty. And that in turn would make it easier to accomplish further corporatization.

(2) The second set of Education and Curriculum recommendations (pp. 36-39) advises the UC to “continue timely exploration of online instruction in the undergraduate curriculum, as well as in self-supporting graduate degrees and Extension programs” (36). This recommendation is linked directly to the first set in that online instruction would facilitate cross-campus, high school, and community college enrollment in UC courses and hence students' graduation with fewer UC courses. In addition, lucrative post-baccalaureate degrees offered online could “generat[e] revenues that support the University’s educational mission” (38; online courses are already offered, for example, by UCLA Extension). The possible impact of expanded online instruction on student access to faculty and on the faculty as a labor force is plain enough. The recommendation is presented somewhat gingerly, in the consciousness that people are likely to regard online instruction as inferior. The working group therefore stresses that the pilot project of 40 online courses currently being coordinated by the Office of the President be treated as a chance to evaluate the quality of online courses (36; while this is not the place for a discussion of the social science of educational assessment, what constitutes valid assessment is clearly an issue). In this section “Faculty concerns, e.g., about academic quality, workload, ongoing institutional support, intellectual property rights,” are acknowledged in a single line. Students' desires for personal relationships with their teachers and fellow students and concern for the university as a community are not mentioned among the “challenges” the online education proposal faces.

(3) The third recommendation is to “expand use of self-supporting and part-time programs” (40) including UC Extension and professional M.A. programs, with a focus on “high demand disciplines” for which students are willing to pay top dollar. The third recommendation therefore echoes part of the second, in which online instruction is envisioned to be an appropriate venue for “self-supporting” programs. Many such programs already exist in the UC--in business, engineering, health sciences, and information science programs, for example. In addition to non-degree, certificate, and professional M.A. programs, a new part-time B.A. in “one or two general, interdisciplinary majors” is also contemplated. Again, these programs are imagined to be staffed in part by cheaper TA labor (41), and while additional TAships would help graduate students in the short run, substituting TA labor for faculty labor in a large program also reduces the ranks of faculty and so shrinks the employment prospects of those same graduate students.

The part-time B.A. introduces a topic worthy of discussion--increased access for nontraditional students--but in troubling ways. Instead of furnishing nontraditional students with the full range of educational and research possibilities, it offers "general” degrees, even though the “admission criteria would be the same as current transfer requirements” (41). So even though this new body of part-time students would be as qualified as other UC transfers, it would be offered a reduced range of degree possibilities in return for fees “most likely . . . approaching non-resident tuition level” (41; my italics). The “underserved population” mentioned as an example is the “26% of the adult population” in L.A. County with “some college” (40). Now, the median income of that group is about $36,000 a year. Non-resident tuition is recommended to increase from $33,181 in 2010-11 to $36,027 in 2015-16 (89). Thus before financial aid, the “underserved” (but equally qualified) student who needs a part-time degree because she must keep working (p. 40) is here imagined to be the exemplary recipient of a reduced-option B.A. whose annual fee is equal to her annual income.

The working group adds that “these programs can be designed to return a portion of the fees to financial aid,” but also that “to the extent that self-supporting programs generate additional revenues for academic departments, this improves access for students in the regular programs” (41). That "extent" would be small if the new B.A.s were structured financially like existing Extension programs; current non-professional Extension revenue is “relatively small--generating modest amounts above program costs” (42). But Extension courses are nondegree programs and presumably less valuable. So it is not clear whether the part-time B.A. would also generate only modest revenue (if financial aid was significant), or would extract it from a target group with a median income of $36,000. No justification is ever given for why part-time students equivalent scholastically to transfer students should be excluded from the full range of degrees. None of the social inequities involved are mentioned among the “challenges” to the proposal (42).

(4) The fourth recommendation reads: “Develop a systemwide academic planning framework that incorporates campus goals within the context of priorities identified for the University as a whole” (46). A new way to coordinate planning systemwide might be useful, but it is not obvious what the working group envisions. An “assessment” program is part of it; would this be a standardized assessment of programs? How standardized? And used to what end by whom? The working group wishes to “establish and routinely update an integrated set of campus and system academic priorities” (48), but does not give a clue about how this would be done, who would articulate these priorities, and how the identification and articulation of priorities might involve the Academic Senate and other governance structures. As it stands, the specific disposal of budgets handed down to individual campuses, deans, and eventually units is left to the discretion of the local entities involved. The working group suggests that “budget cuts implemented by individual campuses during a year or two may not pose immediate risk to the systemwide academic profile, but the cumulative effect of such decisions over a longer period could be quite harmful” (48), and so suggests that a systemwide body wants some measure of control or oversight over how local entities distribute the budgets they are given. Local and centralized authorities may of course end up at odds, and it is not explained how conflicts would be resolved and what rights in the matter local entities would retain. An idea of “striking appropriate balance between campus/system interests” needs to say what balance is appropriate, and to confront the possibility that the interests of an entire campus could be de-emphasized from a central perspective. Instead, the working group introduces the notion of creating “an integrated set of campus and system academic priorities” without reference to the UC Master Plan or to existing long-range plans developed on each campus before the height of the global financial crisis.

Since the question of planning process emerges in this section, it's worth pointing out that in practice the procedural form that dominates the entire document is that of the special “task force”--innumerable “task forces” are proposed to further develop recommendations that are general to the point of being obscure. But task forces are highly problematic exceptions to the structure of university governance. They are smaller, appointed, often oligarchic bodies that shape topics, deciding what's worth discussing and what’s not worth discussing, before proposals get to the properly elected bodies that eventually consider them. Justified as time-saving and convenient, they too often save us from the inconveniences of a more democratic culture.

(5) Finally, although the recommendations on Education and Curriculum repeats throughout that proposals should be explored while maintaining “quality,” its final portion (pp. 49-54) demurs from explaining what “quality” means and instead “seeks UC input on its forthcoming recommendation on quality.” By deferring discussion of the criteria by which it knows its recommendations must be measured, the working group evades most consideration of the intellectual impact of its suggestions. The definition of quality devolves upon “metrics” yet to come (49), suggesting again that assessment methods may be a future area of contestation. Usefully, faculty are stated to be the arbiters of quality in their own fields. But the background document that comprises Appendix A to this last section, “Characteristics of UC Quality Courses, Majors and Programs” (52-54), operates at a level of generality that is unable to distinguish the University of California from any other college, and so does not bode well for the ability of current assessment procedures to provide directive criteria.

So far, I’ve been reading the UCOF recommendations on their own terms and following UCOF’s presentation, but in fact its terms and presentation are part of the problem. As Christopher Newfield noted in his post on Monday, the content of the UC’s educational mission is set aside instead of being developed so that budgetary thinking might be organized to meet its principles. As it stands, when the profitability of a recommendation is being pointed out, and the phrase “support the University’s educational mission” is tacked on--as in “generate revenues and create workload efficiencies that support the University’s educational mission” (36, 37)—the statement becomes entirely circular, since no mission is ever elaborated except the optimization of assets. The recommendations on Education and Curriculum are above all evasive. They remarkably omit any consideration of connections between educational programs except when advocating the elimination of redundancy. Faculty opinions tend to be referenced under “challenges,” as they are called when the working group is afraid of faculty objections. Students' views of education and hopes for the UC are literally never mentioned, as though they did not exist. As it stands, even the financial advantage for instruction of the recommendations is obscure, because although it’s noted in several places that lucrative programs can help to fund less profitable ones, it is never said that they should. The document’s studiously impoverished account of what public education might be implies that a genuine account is somehow irrelevant. Its refusal to be articulate is so pervasive that it becomes the main message: the vision is that there should be no vision, and that no one should even have to say so.

I don't like throwing that word around but I don't see any way around it here, having just read today's Funding Strategies Working Group (FSWG) report.  Its genuine positive contributions are outweighed by recommendations of large tuition increases that embrace the current--failing-- higher education funding model without seriously considering the likely negative effects.

A hasty overview: this section is 29 pages long, proceeds through dozens of bullet point observations, and offers 6 recommendations plus 3 others for "longer-term" consideration. As I'd feared yesterday, funding strategies are identified without discussion of educational goals.

 The first recommendation has  become UC apple pie: build grass-roots support for UC as a "major priority for state funding" (p 73).  I will return to the question of whether the effort described here could be successful.

The second is also fine - more administrative efficiency - but its call for best practices does not identify or prioritize recommendations in numerous previous efficiency reports.   In the apparent absence of clear ideas of its own, FSWG tosses the ball to the latest in a long line of consultants - Berkeley's Bain Consulting.  Since UCOP has recently shown that about 3/4ths of UC employees are administrative staff, we really should be able to do much better than this. Savings on the system level are not to be expected soon.

Recommendations 3 and 4 are very important: revise practice and policy on charging indirect cost recovery (ICR) for non-federally funded research, and improve ICR rates with federal research.  Various Senate committees have been trying to understand research losses for at least a decade, and FSWG offers the first semi-official UCOP estimates that I have seen for how far short UC falls in covering the full costs of research. 

Usefully, the report acknowledges that UC is obligated to obtain "total cost recovery," and also acknowledges that it does not do this.  In a major statement, the FSWG declares that  ICR practices "are currently leading to the use of core-funds to subsidize this research in the range of more than $300 million per year" (p 84).   It notes that federal grant ICR falls sort of that for peers, and that an increase of 5% would recover $150 million per year.  Calculations that Gerald Barnett and I have done suggest that these are low estimates, but they total to more than half the over $800 million recent cut in UC state funding.   The Report usefully notes that faculty misunderstanding remains a major obstacle to reform.  Research is a vital public good and must be properly supported, but should be supported by sponsors, as is required by policy. 

Recommendations 5 and 6 are to replace student fees with tuition and to increase enrollment of non-resident students.  The statements are mostly autopilot, made more annoying by the absence of any referencing or discussion of the large literature on declining access and attainment under the widespread "high tuition / high aid" model (I recently referenced some major work, which is not hard to find);  and by an almost nonexistent acknowledgment of the need simultaneously to "protec[t] racial diversity" (p 93), which hardly does justice to the serious problems created by, for example, the pitiful proportion of African American students at the San Diego campus, among others.  The University of Michigan continues to be touted as an exemplar, although its low-income student population as measured by Pell Grant eligibility is 1/3rd that of UC Riverside (p 96).

What is new are concrete tuition dollar amounts and revenues under various scenarios (pp 89-92).  The "low" increases (5% annually) get resident undergrads to $13,148 in 2015-16, and nonresidents to $36,027. "Aggressive" increases take resident undergrads to $20,721 by 2015-16, a further doubling of next year's fees,  and nonresidents to nearly $40,000.

So these eye-popping tuition hikes that erode if they don't wholly eliminate the public character of UC -- at least they would solve our financial problems, right?  Wrong.  The "low" increases net $445 million over five years, or about 1/8th per year of the $800 million cut. The "aggressive" increases net $1.63 billion over five years, or a bit under half of that cut per year.  The same is true for the non-resident tuition plan - a significant shift away from the resident population for $174 million a year at best, and I've commented elsewhere on the problems with this idea at its best-case campus, UCB.

Huge tuition hikes are supposed to end the "death-spiral" that Regent Gould described at the first UCOF meeting, but their established track record is poor.  During the three decades in which high-tuition has formed the core of the American funding model for higher ed, and created widespread tuition envy among public university officials, the U.S. has lost its previous large lead over the rest of the world in college attainment, and has now produced the first generation that is less well educated than the generation before.  One reason for this is simple: the post-war boom in attainment depended on mass access, and mass access came from low- to no-tuition schemes in public universities.  If you look at where disadvantaged students preponderantly attend college, you can see that it still does.

The FSWG proposes the abandonment of that model for the sake of revenues that are not sufficient to maintain educational quality, much less access.  Acknowledging this, it calls simultaneously for a restoration of public funding, without acknowledging that the power to raise tuition regularly and faster than both inflation and economic growth is the main reason given by elected officials for the reduction of public funding over twenty years. In California, the Legislative Analyst's Office recommended against any increase in state funding this year (as proposed by the Governor) precisely on the grounds that tuition increases are a legitimate source of revenue. 

As tuition goes up, state funding goes down -- this is the history, and if we follow the FSWG, this is our future.  Not to mince words, this doesn't sound like the cure for the death spiral, but the death spiral itself.

This is a big week in UC admin.  The Regents are meeting at Mission Bay in San Francisco, and the UC Commission on the Future is to hear its first round of ideas in the five main areas under study.

A core question will be whether financial trends are driving UCOF's educational planning, or whether planning has some independence of thought. The separation of working groups could help, but freeing educational goals from immediate and systematic funding issues is a constant battle at UC, and it's especially hard to keep the institution's eye on education in our perennial state of fiscal turmoil. 

Nonetheless, most of the game consists in not tailoring UC to its current and currently imagined future means, a downsized version of 20th century mass higher ed that was struggling to keep up with changing public needs even before its budget got whacked.

It's interesting to look at our notes on Jane Wellman's remarks when she appeared at the first UCOF meeting last September. Her ninth principle was, "if you don’t have attainment goals then the financial questions won’t work."  You don't know what you need to pay for unless you know what you're trying to get. 

My translation is that if UCOF hasn't set goals that match future challenges and opportunities, and then pursued the right funding structure for them, the funding crisis will dictate shrinking goals.

My impression isthat  both funding and educational analyses have retreated into hundreds or even thousands of local discussions around the system.  Everyone is helpfully offering patches and workarounds, and chairs of research centers and departments are gradually adjusting to a new lower normal by force of the absence of anything else. Folks aren't thinking big or circulating information to tie their issues to the overall picture.  People feel a little embarrased imagining great public purposes although the state of California has never needed these more than now. 

Chairs and principal investigators whose units inevitably sit on a small piece of the UC labyrinth of side-deals special supplements and arcane cross-subsidies  naturally see no percentage for them in transparency, which could subject their particular arragements to unwanted scrutiny.  This is a recipe for the triumph of local financial self-interest over the larger mission. Unless there's momentum in the whole, each individual part instinctively tries to protect itself. 

The UC system desperately needs a moonshot vision from UCOF.  If it provides even fragments of that, we should all take our turn filling in the gaps.