By Richard Vedder
If the CFOs of leading competing corporations got together to discuss things like common purchasing of materials, investment practices, etc., the Department of Justice would no doubt file a suit about collusive practices under the anti-trust laws. When colleges do it, it is business as usual. The organization representing these people is NACUBO --the National Association of College and University Business Officers. Question du jour: why would a meeting of Ford, GM and Chrysler CFOs be viewed as illegal under the Sherman and Clayton Acts, while one of college financial and business officers is not?
Actually, I think the anti-trust laws are archaic and ineffective, so I am not really pushing for anti-trust harassment of colleges. But I think we need to start monitoring the behavior of groups like this. Andrew Cuomo is doing that. From the INSIDE HIGHER ED account I read, vendors were still giving away iPods and fancy dinners to their clients. They "sponsored" events. The potential for corruption is huge, and accountability is limited.
I actually have a second beef with NACUBO. It collects great data --yet it does not make it available to policymakers or the interested public. It fights transparency. Yet it exists in part indirectly from public subsidies of institutions that send persons to these meetings and pay their fees to attend. Should that not trigger the release of NACUBO gathered data on college revenues, expenditures, endowments, etc.?
Speaking of transparency, our last blog on the topic triggered an INSIDE HIGHER ED mention today. I think Scott Jaschik was a tad bit annoyed that the ALEC proposed model legislation was not released to him, because it is still a working document that has only undergone preliminary, not final, approval by ALEC. I understand his frustration, and personally if I were in charge I would have probably released it. But the feeling on the powers to be was that until the document was approved, it should not be released. That is not an unreasonable position, and my guess is that when ALEC officially decides on this matter, the text will be readily made available to the press.
Tuesday, July 31, 2007
Colleges and the Minimum Wage
By Richard Vedder
Colleges face one moderately significant cost increase this coming academic year because of federal labor law. In particular, the minimum wage rose by over 13 percent to $5.85 an hour on July 24, and is scheduled to rise to $7.25 (an increase of over 40 percent from the original wage) in two years.
Universities use a lot of student labor, appropriately in my judgment. Those workers are relatively unskilled and often paid at or very close to the minimum wage. When the minimum wage undergoes a big hike, universities must do one of several things:
1) If the budget for student wages remains relatively fixed (often the case), then some employees must be let go, or hours reduced.
2) Alternatively, if wages are increased with no employment effects, the school needs more money to finance the higher labor costs; this often results in larger tuition increases than otherwise occur.
3) Sometimes, schools compromise and do a bit of both --a little cutting back in student employment, along with a little larger tuition increase than otherwise would be the case.
In any case, the increase in the minimum wage poses burdens on universities that aggravate the problems of soaring university costs. The higher minimum wages to college students do little to alleviate poverty (most college students come from moderately affluent families), and, like most economists, I prefer that we deal with social problems like poverty through means other than fiddling with markets. The 2008 and 2009 minimum wage hikes will add to the financial woes that American universities face.
Colleges face one moderately significant cost increase this coming academic year because of federal labor law. In particular, the minimum wage rose by over 13 percent to $5.85 an hour on July 24, and is scheduled to rise to $7.25 (an increase of over 40 percent from the original wage) in two years.
Universities use a lot of student labor, appropriately in my judgment. Those workers are relatively unskilled and often paid at or very close to the minimum wage. When the minimum wage undergoes a big hike, universities must do one of several things:
1) If the budget for student wages remains relatively fixed (often the case), then some employees must be let go, or hours reduced.
2) Alternatively, if wages are increased with no employment effects, the school needs more money to finance the higher labor costs; this often results in larger tuition increases than otherwise occur.
3) Sometimes, schools compromise and do a bit of both --a little cutting back in student employment, along with a little larger tuition increase than otherwise would be the case.
In any case, the increase in the minimum wage poses burdens on universities that aggravate the problems of soaring university costs. The higher minimum wages to college students do little to alleviate poverty (most college students come from moderately affluent families), and, like most economists, I prefer that we deal with social problems like poverty through means other than fiddling with markets. The 2008 and 2009 minimum wage hikes will add to the financial woes that American universities face.
Monday, July 30, 2007
Are Community Colleges Losing Their Way?
By Richard Vedder
I have written frequently about how four year universities have deviated from the straight educational path, becoming distracted by all sorts of non-academic things, and instilling a country club atmosphere for the students. I have always thought two types of schools were relatively immune from this sordid trend: the for profit schools and the community colleges.
I am not so sure about the community colleges anymore. I had heard a few stories that suggest that community colleges may be starting to abandon their single-minded emphasis on low cost, no nonsense instruction. For example, a few miles from me, the local two year school (Hocking College) that had long owned a lake that served as a laboratory for its students studying parks and recreation, was now trying to turn that lake into a luxury resort --kicking out locals who had swam and fished there for almost nothing for years. (It looks like their plans will be thwarted on legal grounds --violating the agreement signed at the time the lake was created).
Now my good friend Steve Stanek of the sainted Heartland Institute has told me an even wilder story. McHenry County College (MCC) serves moderately affluent Chicago suburbs. It announced that it wanted to borrow $26 million to build a minor league quality baseball stadium -- seemingly on speculation. The goal is to lure a Frontier League team to play in the stadium. No team has committed to go there if the facility is built. To be sure, the stadium is ostensibly part of a larger physical fitness center, but the MCC officials are not providing details on the project (so much for transparency in the Chicago suburbs).
The idea is horrible on many grounds. First, community colleges should concentrate on low cost education, not speculative investments with funds borrowed via tax-exempt bonds. Second, in this case, another group of totally private persons in the same county has been trying to do the same thing (respecting minor league baseball), so this is an attempt by a government entity (a college) to preempt a private effort financed without any public subsidies. Third, for higher ed officials to want to devote their major new effort to promoting professional sports rather than improving existing programs or offering new ones shows a shocking disdain for the basic purposes of higher education. Fourth, and actually almost irrelevant, it is a dumb idea on economic grounds, since even if a team came in the stadium would likely be a money loser unless subsidized by taxpayers. (Steve could probably cite a couple other objections, but enough is enough).
I have favored reallocating more of higher ed public funds towards community colleges on cost-saving grounds. But as these colleges join their four year counterparts in getting away from the basic purposes of higher education, the case grows for government to give all government assistance to students, none to the institutions that succumb to hubris and empire building at great cost to those financing these indulgences. And the case grows compelling to end the ability of colleges and universities to borrow on a tax exempt basis for non-educational purposes.
I have written frequently about how four year universities have deviated from the straight educational path, becoming distracted by all sorts of non-academic things, and instilling a country club atmosphere for the students. I have always thought two types of schools were relatively immune from this sordid trend: the for profit schools and the community colleges.
I am not so sure about the community colleges anymore. I had heard a few stories that suggest that community colleges may be starting to abandon their single-minded emphasis on low cost, no nonsense instruction. For example, a few miles from me, the local two year school (Hocking College) that had long owned a lake that served as a laboratory for its students studying parks and recreation, was now trying to turn that lake into a luxury resort --kicking out locals who had swam and fished there for almost nothing for years. (It looks like their plans will be thwarted on legal grounds --violating the agreement signed at the time the lake was created).
Now my good friend Steve Stanek of the sainted Heartland Institute has told me an even wilder story. McHenry County College (MCC) serves moderately affluent Chicago suburbs. It announced that it wanted to borrow $26 million to build a minor league quality baseball stadium -- seemingly on speculation. The goal is to lure a Frontier League team to play in the stadium. No team has committed to go there if the facility is built. To be sure, the stadium is ostensibly part of a larger physical fitness center, but the MCC officials are not providing details on the project (so much for transparency in the Chicago suburbs).
The idea is horrible on many grounds. First, community colleges should concentrate on low cost education, not speculative investments with funds borrowed via tax-exempt bonds. Second, in this case, another group of totally private persons in the same county has been trying to do the same thing (respecting minor league baseball), so this is an attempt by a government entity (a college) to preempt a private effort financed without any public subsidies. Third, for higher ed officials to want to devote their major new effort to promoting professional sports rather than improving existing programs or offering new ones shows a shocking disdain for the basic purposes of higher education. Fourth, and actually almost irrelevant, it is a dumb idea on economic grounds, since even if a team came in the stadium would likely be a money loser unless subsidized by taxpayers. (Steve could probably cite a couple other objections, but enough is enough).
I have favored reallocating more of higher ed public funds towards community colleges on cost-saving grounds. But as these colleges join their four year counterparts in getting away from the basic purposes of higher education, the case grows for government to give all government assistance to students, none to the institutions that succumb to hubris and empire building at great cost to those financing these indulgences. And the case grows compelling to end the ability of colleges and universities to borrow on a tax exempt basis for non-educational purposes.
Friday, July 27, 2007
The Transparency Movement
By Richard Vedder
American business had a bad day yesterday as the Dow fell 2.3 percent. What happened to American higher ed yesterday? Did its stock rise or fall? What are the colleges doing --are they getting better or worse? Who knows? Fortunately, as an outgrowth of the Spellings Commission report, some real moves are coming to provide more transparency into the operations of universities.
Much of the act has to take place at the state level, and I was encouraged yesterday when the American Legislative Exchange Council brought two pieces of model legislation closer to adoption. They are proposing a Higher Education Sunshine Act and a Higher Education Accountability act. The first proposed law to be introduced into state legislatures would require universities to provide information as to the extent of intellectual diversity on campus and encourage universities to promote intellectual diversity in carrying out its mission. Colleges are more interested in skin color diversity than idea diversity, and the free flow of different ideas is critical to a vibrant university environment.
The accountability legislation would require universities to report in a consumer and legislator friendly manner all sorts of data on an easy to find web site --admission standards, data on costs, crime statistics, transfer policies, teaching loads, average time to degree, etc. -- the kinds of things parents and students want and need to know. Some states are already doing that, and legislators need to nudge others to do so.
American business had a bad day yesterday as the Dow fell 2.3 percent. What happened to American higher ed yesterday? Did its stock rise or fall? What are the colleges doing --are they getting better or worse? Who knows? Fortunately, as an outgrowth of the Spellings Commission report, some real moves are coming to provide more transparency into the operations of universities.
Much of the act has to take place at the state level, and I was encouraged yesterday when the American Legislative Exchange Council brought two pieces of model legislation closer to adoption. They are proposing a Higher Education Sunshine Act and a Higher Education Accountability act. The first proposed law to be introduced into state legislatures would require universities to provide information as to the extent of intellectual diversity on campus and encourage universities to promote intellectual diversity in carrying out its mission. Colleges are more interested in skin color diversity than idea diversity, and the free flow of different ideas is critical to a vibrant university environment.
The accountability legislation would require universities to report in a consumer and legislator friendly manner all sorts of data on an easy to find web site --admission standards, data on costs, crime statistics, transfer policies, teaching loads, average time to degree, etc. -- the kinds of things parents and students want and need to know. Some states are already doing that, and legislators need to nudge others to do so.
Thursday, July 26, 2007
CCAP Makes Inside Higher Ed
By Bryan O’Keefe
CCAP is happy to report that we made the big time this morning – an op-ed in Inside Higher Ed. The piece – which can be found at this link – was written by Lynne Munson. Lynne is joining CCAP as an Adjunct Research Fellow and is working on what will surely be a terrific book on university endowments. Her Inside Higher Ed piece is a preview of what’s to come.
CCAP is happy to report that we made the big time this morning – an op-ed in Inside Higher Ed. The piece – which can be found at this link – was written by Lynne Munson. Lynne is joining CCAP as an Adjunct Research Fellow and is working on what will surely be a terrific book on university endowments. Her Inside Higher Ed piece is a preview of what’s to come.
The Word from On High
By Richard Vedder
I am at the annual meeting of the American Legislative Exchange Council, working on hammering out model state legislation on improving the reporting of college data in a consumer and policymaker friendly fashion in each state. There is widespread agreement that needs to happen, and there are important efforts afoot at state and even regional levels in this direction. I am encouraged that this aspect of the Spellings Commission report is having some real impact.
Speaking on the Spellings Commission, I attended a meeting at which President Bush spoke. Befitting my advanced age and senility, I was given a VIP seat and actually briefly chatted with the President. I said, "I was a member of the Spellings Commission on Higher Education." He said, "I bet THAT was interesting." He appeared to know what I was talking about, which was good news, but in his remarks about education, all he talked about was the reauthorization of No Child Left Behind, which is bad news, since the higher ed component of our national education system probably plays a key role in determining both our prosperity as a nation and the progress of western civilization.
By the way, CCAP has now past 300 blogs. You may question the quality of what we have done over the last year in commenting on American higher education, but the quantity is pretty good for an organization that has had 1.5 workers for most of its existence (although that number is starting to grow).
I am at the annual meeting of the American Legislative Exchange Council, working on hammering out model state legislation on improving the reporting of college data in a consumer and policymaker friendly fashion in each state. There is widespread agreement that needs to happen, and there are important efforts afoot at state and even regional levels in this direction. I am encouraged that this aspect of the Spellings Commission report is having some real impact.
Speaking on the Spellings Commission, I attended a meeting at which President Bush spoke. Befitting my advanced age and senility, I was given a VIP seat and actually briefly chatted with the President. I said, "I was a member of the Spellings Commission on Higher Education." He said, "I bet THAT was interesting." He appeared to know what I was talking about, which was good news, but in his remarks about education, all he talked about was the reauthorization of No Child Left Behind, which is bad news, since the higher ed component of our national education system probably plays a key role in determining both our prosperity as a nation and the progress of western civilization.
By the way, CCAP has now past 300 blogs. You may question the quality of what we have done over the last year in commenting on American higher education, but the quantity is pretty good for an organization that has had 1.5 workers for most of its existence (although that number is starting to grow).
Three Cheers for Hank Brown
By Bryan O’Keefe
Rich posted a blog a couple of days ago about Ward Churchill, which generated quite a discussion in the comments section of this blog (that’s a good thing – please post away!) While much of that post and the subsequent comments debated tenure, there is a strong case to be made that the real underlying issue with Ward Churchill is accountability.
Hank Brown, the president of the University of Colorado, makes this point in a compelling op-ed in this morning’s Wall Street Journal (subscription required). Mr. Brown says that taxpayer’s fork over $200 million dollars a year for his university. In return, the university has at least some obligation to make sure that the faculty members are meeting scholarship standards, even those who are tenured and/or controversial, like Mr. Churchill.
Accountability is a word that few people in higher education like to hear – and Mr. Brown recognizes this unpleasant reality. He writes that,
“Mr. Churchill's difficulties in facing up to his academic responsibilities are in many ways emblematic of higher education's trouble with accountability. Too often, colleges and universities tend to insulate themselves in ivy-covered buildings and have not been as diligent as necessary to ensure that the academic enterprise is conducted rigorously and honestly. This elitist attitude is simply outdated, and our university has made tenure reforms -- precipitated by the Churchill case -- that will ensure academic integrity.”
I won’t spoil the rest of the piece and if you don’t have a WSJ subscription, this op-ed alone is worth the cost of the newspaper today. It’s important that we look at Ward Churchill outside of his controversial comments (which, on their own, might not be a reason to fire him) and examine how academic frauds are able to survive on college campuses. The lack of accountability in higher ed is a major part of that problem.
Rich posted a blog a couple of days ago about Ward Churchill, which generated quite a discussion in the comments section of this blog (that’s a good thing – please post away!) While much of that post and the subsequent comments debated tenure, there is a strong case to be made that the real underlying issue with Ward Churchill is accountability.
Hank Brown, the president of the University of Colorado, makes this point in a compelling op-ed in this morning’s Wall Street Journal (subscription required). Mr. Brown says that taxpayer’s fork over $200 million dollars a year for his university. In return, the university has at least some obligation to make sure that the faculty members are meeting scholarship standards, even those who are tenured and/or controversial, like Mr. Churchill.
Accountability is a word that few people in higher education like to hear – and Mr. Brown recognizes this unpleasant reality. He writes that,
“Mr. Churchill's difficulties in facing up to his academic responsibilities are in many ways emblematic of higher education's trouble with accountability. Too often, colleges and universities tend to insulate themselves in ivy-covered buildings and have not been as diligent as necessary to ensure that the academic enterprise is conducted rigorously and honestly. This elitist attitude is simply outdated, and our university has made tenure reforms -- precipitated by the Churchill case -- that will ensure academic integrity.”
I won’t spoil the rest of the piece and if you don’t have a WSJ subscription, this op-ed alone is worth the cost of the newspaper today. It’s important that we look at Ward Churchill outside of his controversial comments (which, on their own, might not be a reason to fire him) and examine how academic frauds are able to survive on college campuses. The lack of accountability in higher ed is a major part of that problem.
Wednesday, July 25, 2007
Ohio State's Latest Waste of Money
By Richard Vedder
Karen Holbrook stepped down as president of Ohio State this summer, to be replaced, at considerable cost, by Gordon Gee, president extraordinaire who received a contract that should keep him employed to age 73 or death, whichever comes first. The retiring president had a contract that provided for a bonus payment, which she received, but the Trustees, wanting to show their love for her (actually, Ms. Holbrook had less than stellar support among the trustees, rumor has it) by giving her a going away bonus in the six digits. Why? She was gone. It was pure economic rent --a payment made which elicits no output.
Moreover, the Trustees just did it --no public vote, which is illegal under Ohio law. This is another example of the extravagance and arrogance of universities. Laws do not apply to us, they think. Taxpayers are to be seen and to empty their billfolds--but not to be heard. Money is available by the buckets from governments or students. We will raise student tuition or fees $2 a quarter to pay for it.
The question is: where is the public? Where is the oversight? The Trustees at OSU are not looking out for the taxpayers, the students, or the public, but instead making payments to their friends. It happens everywhere, all the time in higher ed.
When are we going to put a stop to it? I am speaking to a convention of state legislators in Philadelphia this week, and believe me I am going to encourage them to demand more accountability from their universities. Will it do any good? I doubt it.
Karen Holbrook stepped down as president of Ohio State this summer, to be replaced, at considerable cost, by Gordon Gee, president extraordinaire who received a contract that should keep him employed to age 73 or death, whichever comes first. The retiring president had a contract that provided for a bonus payment, which she received, but the Trustees, wanting to show their love for her (actually, Ms. Holbrook had less than stellar support among the trustees, rumor has it) by giving her a going away bonus in the six digits. Why? She was gone. It was pure economic rent --a payment made which elicits no output.
Moreover, the Trustees just did it --no public vote, which is illegal under Ohio law. This is another example of the extravagance and arrogance of universities. Laws do not apply to us, they think. Taxpayers are to be seen and to empty their billfolds--but not to be heard. Money is available by the buckets from governments or students. We will raise student tuition or fees $2 a quarter to pay for it.
The question is: where is the public? Where is the oversight? The Trustees at OSU are not looking out for the taxpayers, the students, or the public, but instead making payments to their friends. It happens everywhere, all the time in higher ed.
When are we going to put a stop to it? I am speaking to a convention of state legislators in Philadelphia this week, and believe me I am going to encourage them to demand more accountability from their universities. Will it do any good? I doubt it.
College of the Ozarks: A New Model?
By Bryan O’Keefe
A friend forwarded along to me today an interesting New York Times piece article about the College of the Ozarks. In the world of higher education, CO– as we shall call it in this blog anyway – is a true anomaly. The students graduate with virtually no student loan debt, which is pretty much unheard of these days. They can accomplish this goal because the university requires students to work 15 hours per week, usually in rather undesirable jobs like milking cows and baking bread. They have far less bureaucracy than most universities and they do not pay their professors big salaries. The school – which has a Christian bent to say the least – also bans much of the recreational activities that are commonplace on most other campuses, like drinking.
Now, it’s very clear that the College of the Ozarks isn’t for everyone (I’ll be honest and say that it isn’t for me). But there could be some variations on this model and some lessons to be learned. First of all, there is nothing wrong with requiring students to work during college. Many people will say “but isn’t that what work study is for” – yes, but a lot of students do not qualify for work study and even those that do usually don’t work that much. I was a work study student and still found time to work an additional job or two, depending upon the circumstances. It might make sense for a college to offer tuition discounts to those students that do work a lot.
On the other points, CO makes a compelling case for why we don’t need 25 associate deans of blah, blah, blah. They also seem to be able to recruit decent faculty despite the lower pay, which has been a topic of some discussion in the comments section of this blog lately. I suppose that the zero alcohol policy also fits with the school’s larger mission. I would never go that far, but there is probably a happy medium between getting drunk every night and instituting Prohibition.
In any event, CO is a worthwhile case study on how to depart from the traditional university model. And to the people out there that claim that academic prestige, faculty quality, etc. all suffer when you go down this path…..think about this. The University of the Ozarks just became a four-year college in 1965. But it already ranks no. 30 by U.S. News and World Report among Midwestern colleges offering both liberal arts and professional degrees. They must be doing something right.
UPDATE: An intrepid reader made an important correction to this blog after I posted it. The NYT story was about the College of the Ozarks, not the University of the Ozarks, as I had originally written. I'll confess to not being aware that the Ozarks had so many colleges/universities named after them! In any event, I have corrected the original blog to reflect the right name. But my entire blog was based on information I gleaned from the NYT story, so nothing else changed. But thank you to the alert reader who pointed out the error.
A friend forwarded along to me today an interesting New York Times piece article about the College of the Ozarks. In the world of higher education, CO– as we shall call it in this blog anyway – is a true anomaly. The students graduate with virtually no student loan debt, which is pretty much unheard of these days. They can accomplish this goal because the university requires students to work 15 hours per week, usually in rather undesirable jobs like milking cows and baking bread. They have far less bureaucracy than most universities and they do not pay their professors big salaries. The school – which has a Christian bent to say the least – also bans much of the recreational activities that are commonplace on most other campuses, like drinking.
Now, it’s very clear that the College of the Ozarks isn’t for everyone (I’ll be honest and say that it isn’t for me). But there could be some variations on this model and some lessons to be learned. First of all, there is nothing wrong with requiring students to work during college. Many people will say “but isn’t that what work study is for” – yes, but a lot of students do not qualify for work study and even those that do usually don’t work that much. I was a work study student and still found time to work an additional job or two, depending upon the circumstances. It might make sense for a college to offer tuition discounts to those students that do work a lot.
On the other points, CO makes a compelling case for why we don’t need 25 associate deans of blah, blah, blah. They also seem to be able to recruit decent faculty despite the lower pay, which has been a topic of some discussion in the comments section of this blog lately. I suppose that the zero alcohol policy also fits with the school’s larger mission. I would never go that far, but there is probably a happy medium between getting drunk every night and instituting Prohibition.
In any event, CO is a worthwhile case study on how to depart from the traditional university model. And to the people out there that claim that academic prestige, faculty quality, etc. all suffer when you go down this path…..think about this. The University of the Ozarks just became a four-year college in 1965. But it already ranks no. 30 by U.S. News and World Report among Midwestern colleges offering both liberal arts and professional degrees. They must be doing something right.
UPDATE: An intrepid reader made an important correction to this blog after I posted it. The NYT story was about the College of the Ozarks, not the University of the Ozarks, as I had originally written. I'll confess to not being aware that the Ozarks had so many colleges/universities named after them! In any event, I have corrected the original blog to reflect the right name. But my entire blog was based on information I gleaned from the NYT story, so nothing else changed. But thank you to the alert reader who pointed out the error.
Thursday, July 19, 2007
Congress Will Screw It Up
By Richard Vedder
The Gang of 535 sometimes does things right, but not often, and the current circus over higher ed is no exception. The Senate seems poised to adopted a bill slightly less offensive than the House version I blogged about earlier, but only marginally so. The notion that Congress should determine profit margins for loan providers is a very bad idea, albeit a continuation of existing practice. The notion that we should squeeze lenders to increase other forms of spending is dubious public policy at best.
Speaking of all of this, INSIDE HIGHER ED this morning reports that a new study shows that legislatively mandated limits on tuition increases are likely to constrain public universities more than private ones. This is supposed to be scandalous, but I say --so what? Constraining growth in costs to something more resembling the general inflation rate is a good idea, even if that constrains the behavior of the publics a bit more than the privates. A much better way to deal with costs, of course, is to deal with the dozen or so root causes, many of which are Congressional-determined in part. For example, if we slow the growth in the number of dollars we drop out of airplanes over student homes, we probably will slow the growth in tuition sticker prices. If we reduce barriers to entry imposed by accreditation rules, we can open up price competition, and, as one higher education entrepreneur friend on mine says, "prices will plummet." But Congress ignores all of this, merely rearranging the chairs on the Titanic. Don't look to this crowd of "our nation's leaders" for solutions, but merely for additions to the existing problem.
The Gang of 535 sometimes does things right, but not often, and the current circus over higher ed is no exception. The Senate seems poised to adopted a bill slightly less offensive than the House version I blogged about earlier, but only marginally so. The notion that Congress should determine profit margins for loan providers is a very bad idea, albeit a continuation of existing practice. The notion that we should squeeze lenders to increase other forms of spending is dubious public policy at best.
Speaking of all of this, INSIDE HIGHER ED this morning reports that a new study shows that legislatively mandated limits on tuition increases are likely to constrain public universities more than private ones. This is supposed to be scandalous, but I say --so what? Constraining growth in costs to something more resembling the general inflation rate is a good idea, even if that constrains the behavior of the publics a bit more than the privates. A much better way to deal with costs, of course, is to deal with the dozen or so root causes, many of which are Congressional-determined in part. For example, if we slow the growth in the number of dollars we drop out of airplanes over student homes, we probably will slow the growth in tuition sticker prices. If we reduce barriers to entry imposed by accreditation rules, we can open up price competition, and, as one higher education entrepreneur friend on mine says, "prices will plummet." But Congress ignores all of this, merely rearranging the chairs on the Titanic. Don't look to this crowd of "our nation's leaders" for solutions, but merely for additions to the existing problem.
The Cost of Tenure: Reflections on Ward Churchill
By Richard Vedder
The Colorado Board of Regents is having a special meaning soon to consider whether to fire tenured professor Ward Churchill. University of Colorado President Hank Brown (with whom I served on a panel only last week) wants to can Churchill. As a civil libertarian, I am very, very reluctant to let persons go because of their views, and believe colleges are havens where outrageous things can and should be said. At the same time, Churchill has allegedly been guilty of several other forms of irresponsible and highly unprofessional conduct, so the case to fire him appears strong. Hank Brown strikes me as a judicious man, not one prone to take strong actions unless justified. Many of the faculty in the "he is guilty as charged but should not be fired" camp are also believers in near absolute job protection for life for faculty under any circumstances, which I think is not defensible.
What is most interesting about the Churchill case is NOT the ultimate decision whether he will be fired or not, but rather the huge cost of taking any action. The earliest Churchill will be removed is more than 2.5 years after charges against him were initially brought. And this ignores subsequent court actions initiated by Churchill. The cost of firing tenured faculty is extremely high, so high as to be prohibitive for all but the most heinous of offenses ( I believe my university has fired 3 tenured faculty in over 200 years in existence).
Ryan Amacher and Roger Meiners in their interesting book Faulty Towers indicated that tenure is a vastly overblown problem, and while I partly agree with them, their contention that legally you can get rid of tenured faculty who misbehave proves little, particularly if the costs of removal are extremely high. Tenure raises resource rigidity and imposes a significant cost. For that reason, there has been a significant decline in the use of tenured faculty in teaching (in part, however, because of falling teaching loads that tenured faculty give themselves). I advocate allowing professors "buy" tenure rights --for a price. If they want tenure protection, which is somewhat costly, they have to forego some other fringe benefits, such as Lexus quality health care plans or free parking next to their office building. In what other profession would it take a special meeting of a dozen or more important persons to fire a mid-level employee?
The Colorado Board of Regents is having a special meaning soon to consider whether to fire tenured professor Ward Churchill. University of Colorado President Hank Brown (with whom I served on a panel only last week) wants to can Churchill. As a civil libertarian, I am very, very reluctant to let persons go because of their views, and believe colleges are havens where outrageous things can and should be said. At the same time, Churchill has allegedly been guilty of several other forms of irresponsible and highly unprofessional conduct, so the case to fire him appears strong. Hank Brown strikes me as a judicious man, not one prone to take strong actions unless justified. Many of the faculty in the "he is guilty as charged but should not be fired" camp are also believers in near absolute job protection for life for faculty under any circumstances, which I think is not defensible.
What is most interesting about the Churchill case is NOT the ultimate decision whether he will be fired or not, but rather the huge cost of taking any action. The earliest Churchill will be removed is more than 2.5 years after charges against him were initially brought. And this ignores subsequent court actions initiated by Churchill. The cost of firing tenured faculty is extremely high, so high as to be prohibitive for all but the most heinous of offenses ( I believe my university has fired 3 tenured faculty in over 200 years in existence).
Ryan Amacher and Roger Meiners in their interesting book Faulty Towers indicated that tenure is a vastly overblown problem, and while I partly agree with them, their contention that legally you can get rid of tenured faculty who misbehave proves little, particularly if the costs of removal are extremely high. Tenure raises resource rigidity and imposes a significant cost. For that reason, there has been a significant decline in the use of tenured faculty in teaching (in part, however, because of falling teaching loads that tenured faculty give themselves). I advocate allowing professors "buy" tenure rights --for a price. If they want tenure protection, which is somewhat costly, they have to forego some other fringe benefits, such as Lexus quality health care plans or free parking next to their office building. In what other profession would it take a special meeting of a dozen or more important persons to fire a mid-level employee?
Wednesday, July 18, 2007
Political Correctness Trumps Science at Elon
By Richard Vedder
Our good friend Jane Shaw just pointed out to me a great column in the Pope Center's Clarion Call by another good friend (and American Enterprise Institute colleague) Steve Hayward, the author of a superb biography of Ronald Reagan's life before the presidency.
Steve notes that North Carolina's Elon University is requiring students, as part of its summer reading program, to read the book version of Al Gore's movie An Inconvenient Truth. Gore's book is full of passion and emotion, but is weak on fact and objectivity. There are dispassionate, more objectively scientific works that provide a balanced view of the global warming debate, as well as right-leaning accounts (Chris Horner of the Competitive Enterprise Institute has written a great one), but Elon assigns only Gore's work, in effect saying it wants to promote not a search for truth but environmental activism, Gore-style.
I am not a scientist, and I am not sure about global warming, but I do know there are multiple points of view on the issue, and some very prominent scientists dissent from what the press calls the scientific consensus with respect to the evidence and perceived policy solutions. Universities who want to promote truth should select middle-of-the-road objective accounts (Steve names one or two). Or, if the goal is to invite debate on the issues, why not assign both Gore's book and Chris Horner's? Or some of Steve's own work on the issue?
Universities and colleges very often use required readings programs to push a political agenda, which is the antithesis of what universities should do. They should stay neutral in the policy debate, offering evidence of all kinds and varieties, and let the facts dictate policy by outsiders. Or, if they are trying to promote critical thinking and the realization that there are at least two sides to almost any issue, they should provide equal access to alternative viewpoints. That very often does not happen. Ideology tied to junk science increasingly trumps factual presentations of evidence. As I have written before, the Age of the Enlightenment may be winding down, as the forces of secular faith overcome the forces of reason and science. If schools want to have a deliberate ideological bias (and there are such schools on the right, too, such as Hillsdale College), they should label themselves as such: "We are Elon University and we promote left-of-center policies as part of the curricular experience."
As Steve Hayward points out, of course, this is nothing new. Students were coerced to read Paul Ehrlich's screed The Population Bomb a generation ago, another alarmist book whose thesis today seems rather laughable, particularly in parts of the world where the chief demographic concern is depopulation. For everyone who read works by the late great Julian Simon in college on this issue, there were 50 students forced to read Ehrlich (I am guessing at that figure --it may be more or less). And these are not isolated examples: other faddish books have gained attention for a while (old-timers: remember The Greening of America?)
What do students and parents want from a college? For many, the prime interest is vocational --job preparation. But most of us believe colleges do prepare young Americans to become adults, to be good citizens, and that, in turn, requires some knowledge of our heritage, our culture, and, yes, issues perceived to be important in our times (of which global warming is one). And in asking students to read, we should not shelter them from polemical tracts, from strong points of view, etc., but we should aim for balance with respect to policy options and for truth with respect to evidence. I think that American colleges are not doing that very well based on the rudimentary evidence I have seen. Of course, we don't really know, since it is a deep dark secret what students actually learn in their postsecondary education, and colleges, by and large, want to keep it that way.
Our good friend Jane Shaw just pointed out to me a great column in the Pope Center's Clarion Call by another good friend (and American Enterprise Institute colleague) Steve Hayward, the author of a superb biography of Ronald Reagan's life before the presidency.
Steve notes that North Carolina's Elon University is requiring students, as part of its summer reading program, to read the book version of Al Gore's movie An Inconvenient Truth. Gore's book is full of passion and emotion, but is weak on fact and objectivity. There are dispassionate, more objectively scientific works that provide a balanced view of the global warming debate, as well as right-leaning accounts (Chris Horner of the Competitive Enterprise Institute has written a great one), but Elon assigns only Gore's work, in effect saying it wants to promote not a search for truth but environmental activism, Gore-style.
I am not a scientist, and I am not sure about global warming, but I do know there are multiple points of view on the issue, and some very prominent scientists dissent from what the press calls the scientific consensus with respect to the evidence and perceived policy solutions. Universities who want to promote truth should select middle-of-the-road objective accounts (Steve names one or two). Or, if the goal is to invite debate on the issues, why not assign both Gore's book and Chris Horner's? Or some of Steve's own work on the issue?
Universities and colleges very often use required readings programs to push a political agenda, which is the antithesis of what universities should do. They should stay neutral in the policy debate, offering evidence of all kinds and varieties, and let the facts dictate policy by outsiders. Or, if they are trying to promote critical thinking and the realization that there are at least two sides to almost any issue, they should provide equal access to alternative viewpoints. That very often does not happen. Ideology tied to junk science increasingly trumps factual presentations of evidence. As I have written before, the Age of the Enlightenment may be winding down, as the forces of secular faith overcome the forces of reason and science. If schools want to have a deliberate ideological bias (and there are such schools on the right, too, such as Hillsdale College), they should label themselves as such: "We are Elon University and we promote left-of-center policies as part of the curricular experience."
As Steve Hayward points out, of course, this is nothing new. Students were coerced to read Paul Ehrlich's screed The Population Bomb a generation ago, another alarmist book whose thesis today seems rather laughable, particularly in parts of the world where the chief demographic concern is depopulation. For everyone who read works by the late great Julian Simon in college on this issue, there were 50 students forced to read Ehrlich (I am guessing at that figure --it may be more or less). And these are not isolated examples: other faddish books have gained attention for a while (old-timers: remember The Greening of America?)
What do students and parents want from a college? For many, the prime interest is vocational --job preparation. But most of us believe colleges do prepare young Americans to become adults, to be good citizens, and that, in turn, requires some knowledge of our heritage, our culture, and, yes, issues perceived to be important in our times (of which global warming is one). And in asking students to read, we should not shelter them from polemical tracts, from strong points of view, etc., but we should aim for balance with respect to policy options and for truth with respect to evidence. I think that American colleges are not doing that very well based on the rudimentary evidence I have seen. Of course, we don't really know, since it is a deep dark secret what students actually learn in their postsecondary education, and colleges, by and large, want to keep it that way.
Tuesday, July 17, 2007
Completing the Doctorate: The Biggest Scandal in Higher Education
By Richard Vedder
What is the biggest single scandal in higher education? College complicity in ripping off students with respect to student loans? The dubious ethics and abandonment of educational purposes in intercollegiate athletics? The lack of intellectual diversity and tolerance on college campuses? The fact that colleges do not know or report on what students learn while in college? All of them are worthy candidates for the honor, and there are no doubt others.
However, probably the biggest scandal and scam of all relates to graduate education. A half century ago, it was common for persons to get their Ph.D. in four or five years and some, including myself, did it in under three years (at age 24 yet). Today, a majority of those entering graduate programs do not have their degrees in six years, and in the humanities, a majority of Ph.D. candidates have not completed their degree in TEN years!!! Of those who DO get their humanities Ph.D. within 10 years, a majority have not received the degree after six years. The dropout rates are about as high as for undergraduate education --but the resources used to unsuccessfully educate many students at the Ph.D. level are much greater per student than for undergraduates.
Educating Ph.D. students is damnably expensive. Moreover, the students are unusually bright and capable, and if they were not in Ph.D. programs most would be making good money at relatively productive jobs. Thus the resource wastage is unbelievably great.
The Council of Graduate Schools suggests part of this relates to financing, which may well be true. But part relates to the fact that universities love to have graduate students hang around, for at least three reasons. First, in some states, public university subsidies are enrollment-driven, and Ph.D. students are good for big subsidies. Second, university professors don't like teaching survey undergraduate courses, and force graduate students to do that dirty grubby work for them (which is doubly reprehensible, since those students are the raison d'etre of most universities to begin with). Lots of graduate students have meant lower teaching loads for tenure track faculty. Third, graduate students help them get research done, and provide them with intellectual synergies that stimulate their own research.
In one respect, of course, having a lot of graduate students around could be cost effective. Substituting cheap labor (grad students) for expensive workers (tenured faculty) can theoretically lower costs. But the reality of it is that the increase in the use of non-tenured faculty in the classroom, including both grad students and adjunct faculty, has been accompanied by falling teaching loads for regular faculty, so it takes more regular faculty to do a given amount of teaching than a generation ago.
Why state legislatures don't crack down on their research universities is beyond me. Deny any state subsidies for students in Ph.D. programs more than six years. Restrict tax exemptions for private schools which have lousy six year Ph.D. graduation rates. The Feds should deny loans to students after four or five years. Schools that do not have, say, 90 percent of those ultimately successful in getting Ph.D.s graduating within six years should lose their accreditation. If law and medical schools get students out extremely well trained in three to six years (including residency in the case of medical schools), why can't graduate schools? This is the Mother of all higher education scandals.
Part of the problem is that dissertation preparation has gotten out of hand. I have sat on Ph.D. committees where professors force students to do months of additional work of trivial worth in order to fine tune and extend some esoteric thought that the professor fancies. Academic Grad Student Molestation is at an all time high, I suspect. It is time to shake things up here in a big way.
What is the biggest single scandal in higher education? College complicity in ripping off students with respect to student loans? The dubious ethics and abandonment of educational purposes in intercollegiate athletics? The lack of intellectual diversity and tolerance on college campuses? The fact that colleges do not know or report on what students learn while in college? All of them are worthy candidates for the honor, and there are no doubt others.
However, probably the biggest scandal and scam of all relates to graduate education. A half century ago, it was common for persons to get their Ph.D. in four or five years and some, including myself, did it in under three years (at age 24 yet). Today, a majority of those entering graduate programs do not have their degrees in six years, and in the humanities, a majority of Ph.D. candidates have not completed their degree in TEN years!!! Of those who DO get their humanities Ph.D. within 10 years, a majority have not received the degree after six years. The dropout rates are about as high as for undergraduate education --but the resources used to unsuccessfully educate many students at the Ph.D. level are much greater per student than for undergraduates.
Educating Ph.D. students is damnably expensive. Moreover, the students are unusually bright and capable, and if they were not in Ph.D. programs most would be making good money at relatively productive jobs. Thus the resource wastage is unbelievably great.
The Council of Graduate Schools suggests part of this relates to financing, which may well be true. But part relates to the fact that universities love to have graduate students hang around, for at least three reasons. First, in some states, public university subsidies are enrollment-driven, and Ph.D. students are good for big subsidies. Second, university professors don't like teaching survey undergraduate courses, and force graduate students to do that dirty grubby work for them (which is doubly reprehensible, since those students are the raison d'etre of most universities to begin with). Lots of graduate students have meant lower teaching loads for tenure track faculty. Third, graduate students help them get research done, and provide them with intellectual synergies that stimulate their own research.
In one respect, of course, having a lot of graduate students around could be cost effective. Substituting cheap labor (grad students) for expensive workers (tenured faculty) can theoretically lower costs. But the reality of it is that the increase in the use of non-tenured faculty in the classroom, including both grad students and adjunct faculty, has been accompanied by falling teaching loads for regular faculty, so it takes more regular faculty to do a given amount of teaching than a generation ago.
Why state legislatures don't crack down on their research universities is beyond me. Deny any state subsidies for students in Ph.D. programs more than six years. Restrict tax exemptions for private schools which have lousy six year Ph.D. graduation rates. The Feds should deny loans to students after four or five years. Schools that do not have, say, 90 percent of those ultimately successful in getting Ph.D.s graduating within six years should lose their accreditation. If law and medical schools get students out extremely well trained in three to six years (including residency in the case of medical schools), why can't graduate schools? This is the Mother of all higher education scandals.
Part of the problem is that dissertation preparation has gotten out of hand. I have sat on Ph.D. committees where professors force students to do months of additional work of trivial worth in order to fine tune and extend some esoteric thought that the professor fancies. Academic Grad Student Molestation is at an all time high, I suspect. It is time to shake things up here in a big way.
Monday, July 16, 2007
To Gee or Not to Gee, That is the Question
By Richard Vedder
The Ohio State deal with Gordon Gee shows how far public colleges have strayed from an altruistic vision of modestly compensated civil servants laboring in the academic vineyards to serve the public good.
News accounts show that Gee has a $1 million plus contract good, minimally, for seven years but effectively for 10 (at which point, Gordon, if still alive, will be 73 years old). Why would any university make a commitment with a present value of at least $8 million to a single person? The best university president I ever knew, Charles Ping, always worked on a year to year contract. Contracts of more than 3 years are problematic in my opinion. Tenure causes enough problems amongst faculty --why effectively give it to university presidents and expensive football coaches? The answer, of course, is that "the market requires it." But the funds being used to fund most of this is not money earned in a competitive free enterprise market place, but government provided or subsidized funds. Should university presidents be given contracts guaranteeing them compensation at several times the level we guarantee Presidents of the United States --who work on a 4 year contract?
I live within 75 miles of Columbus, and the "bring back Gordon Gee" sentiment is typical of this university on the make, one that wants to "rise to the next level." (The same thing happens occasionally when this city with an inferiority complex tries to lure high level professional sports). The academic arms race is rooted in competition, which is good, but financed by public funds in a matter raising costs to ordinary kids going to school, which is very, very bad.
The Ohio State deal with Gordon Gee shows how far public colleges have strayed from an altruistic vision of modestly compensated civil servants laboring in the academic vineyards to serve the public good.
News accounts show that Gee has a $1 million plus contract good, minimally, for seven years but effectively for 10 (at which point, Gordon, if still alive, will be 73 years old). Why would any university make a commitment with a present value of at least $8 million to a single person? The best university president I ever knew, Charles Ping, always worked on a year to year contract. Contracts of more than 3 years are problematic in my opinion. Tenure causes enough problems amongst faculty --why effectively give it to university presidents and expensive football coaches? The answer, of course, is that "the market requires it." But the funds being used to fund most of this is not money earned in a competitive free enterprise market place, but government provided or subsidized funds. Should university presidents be given contracts guaranteeing them compensation at several times the level we guarantee Presidents of the United States --who work on a 4 year contract?
I live within 75 miles of Columbus, and the "bring back Gordon Gee" sentiment is typical of this university on the make, one that wants to "rise to the next level." (The same thing happens occasionally when this city with an inferiority complex tries to lure high level professional sports). The academic arms race is rooted in competition, which is good, but financed by public funds in a matter raising costs to ordinary kids going to school, which is very, very bad.
EduCap --Saint or Sinner?
By Richard Vedder
The Washington Post this morning has a huge story about Catherine Reynolds and her non-profit company EduCap. Full disclosure: I served on the Spellings Commission on the Future of Higher Education with Catherine, with whom I got along quite well. Also, she once bought me a nice dinner at a Commission meeting in Nashville, along with several others, including former Astronaut Sally Ride.
The Post story is filled with some interesting tidbits, which may be hard to explain given the nonprofit nature of EduCap. How can a head of a non-profit company have command over a $30 million Gulfstream jet, and be able to give $100 million away from the "Catherine Reynolds Foundation", which, in fact, is a division of EduCap? Why does EduCap not pay taxes when, say, Citibank, JP Morgan Chase, or other big lenders have to pay them? These are questions raised in the story, and I must say they are legitimate questions to ask.
At the same time, there appears to be some bashing going on that I think is based on the fact that some individuals do not believe the private sector should be giving out loans. Loans are good, have integrity, etc., if granted by governments or are least guaranteed by governments, but they are bad and dangerous if granted by private lenders without federal participation. That is a sweeping and unfair generalization. Are there loaning abuses going on? Absolutely. Are there college officials wined and dined by loan companies with whom they do business? Every day. Is the solution to ban private loans? No. No. No. The solution is to get college costs under control, to reduce massive payments by governments to individuals that accelerate the cost explosion (and hence the need for loans), and to let markets work. And get universities out of the loan business except with their own money (if they wish).
Rich schools like Harvard, Yale and Princeton should let students in for free in exchange for a share of student earnings beyond subsistence for X number of years after graduation. In other words, Harvard should buy equity in the "human capital" that it allegedly creates, include it as an asset in its endowment, and there should be no student loans. Alternatively, students should be given the option of paying tuition now with no future obligation. However, I see no reason why Harvard, Yale and Princeton charge any tuition at all given that they earn at the minimum $75,000 per student in sustainable endowment income annually. There is a fairly decent case that can be made that, given the huge value of tax exempt status to them, these should not be allowed to charge tuition, although I would not go that far. There are other variants on this equity scheme that are possible. Poorer schools should simply point students in the direction of loan providers but have no other connection whatsoever with them -- no preferred provider lists, no sharing of FAFSA information with them, etc., etc.
The Washington Post this morning has a huge story about Catherine Reynolds and her non-profit company EduCap. Full disclosure: I served on the Spellings Commission on the Future of Higher Education with Catherine, with whom I got along quite well. Also, she once bought me a nice dinner at a Commission meeting in Nashville, along with several others, including former Astronaut Sally Ride.
The Post story is filled with some interesting tidbits, which may be hard to explain given the nonprofit nature of EduCap. How can a head of a non-profit company have command over a $30 million Gulfstream jet, and be able to give $100 million away from the "Catherine Reynolds Foundation", which, in fact, is a division of EduCap? Why does EduCap not pay taxes when, say, Citibank, JP Morgan Chase, or other big lenders have to pay them? These are questions raised in the story, and I must say they are legitimate questions to ask.
At the same time, there appears to be some bashing going on that I think is based on the fact that some individuals do not believe the private sector should be giving out loans. Loans are good, have integrity, etc., if granted by governments or are least guaranteed by governments, but they are bad and dangerous if granted by private lenders without federal participation. That is a sweeping and unfair generalization. Are there loaning abuses going on? Absolutely. Are there college officials wined and dined by loan companies with whom they do business? Every day. Is the solution to ban private loans? No. No. No. The solution is to get college costs under control, to reduce massive payments by governments to individuals that accelerate the cost explosion (and hence the need for loans), and to let markets work. And get universities out of the loan business except with their own money (if they wish).
Rich schools like Harvard, Yale and Princeton should let students in for free in exchange for a share of student earnings beyond subsistence for X number of years after graduation. In other words, Harvard should buy equity in the "human capital" that it allegedly creates, include it as an asset in its endowment, and there should be no student loans. Alternatively, students should be given the option of paying tuition now with no future obligation. However, I see no reason why Harvard, Yale and Princeton charge any tuition at all given that they earn at the minimum $75,000 per student in sustainable endowment income annually. There is a fairly decent case that can be made that, given the huge value of tax exempt status to them, these should not be allowed to charge tuition, although I would not go that far. There are other variants on this equity scheme that are possible. Poorer schools should simply point students in the direction of loan providers but have no other connection whatsoever with them -- no preferred provider lists, no sharing of FAFSA information with them, etc., etc.
Thursday, July 12, 2007
A Good $7000 University
By Richard Vedder
Vance Fried of Oklahoma State University opined once for us that a good quality college education could be offered for a fraction of current cost. Texas entrepreneur extraordinaire Randy Best has told me that a good quality Internet based education could be offered world wide for under $2000 a year per student. I can see even a traditional (student-faculty personal interaction) university offer good quality instruction for $7000 a year. That is pretty close to costs at the good quality for profit schools. If we offered, say, $5000 maximum vouchers (Pell Grants?) to poorer students, they could finance an education without student loans. If we gave out 6 million of these vouchers averaging $4,000 apiece, the total cost, $24 billion would be vastly less than current public spending.
What would the university look like? Much like current for-profits.
1)Course offerings would be vastly more limited than at present. Professors would have much higher teaching loads. Libraries would be small and mostly internet-based.
2) Research would be financed separately at separate research institutes, as would graduate education. This would make transparent the enormous cross subsidization going on in higher education.
3) There would be a very small administrative staff of registrars, admissions people, etc., and no PR specialists, diversity coordinators, football coaches (there would be no intercollegiate athletics), or residence life people (no dorms).
4) Buildings would be clean, modern and utilitarian, but not luxurious and used 80-90 hours a week and year round. There would be no climbing walls, indoor running tracks, 50 seat Jacuzzis or the like (common in today's residential colleges).
5) Technology would be used to the hilt, with traditional teaching mixed with a lot of computer and television based instruction. Great lectures from superstar teachers, for example, would be used for years and replayed frequently, with the instructors paid handsomely, but with low per lecture costs per student.
6) There would be no tenure, no art galleries, no development office, etc.
7) Learning would be measured, outcomes reported and transparent.
8) There would be no Office of Student Financial Aid.
Students wanting socialization, country club like facilities, football teams, etc., could go to the high priced alternative, but would be expected to shoulder the extra cost of such institutions themselves. The government would otherwise get out of the undergraduate education business. I have nothing against Cadillac/Lexus quality education at yuppie residential schools (I went to one myself). But I question whether it is a public responsibility to pay for it. We do not pay for high school kids to go to Phillips Exeter or Groton (expensive private boarding schools) -- why do we pay for them to go to Harvard?
Such an idea would save money, improve access, lower the growth in college costs (vouchers would go up only with the rate of inflation). We would have more and better educated college graduates a generation from now. Why don't we do it? The Establishment of university folks, student loan providers, etc., do not want this. So we pay more for less, and suffer as a nation as a consequence.
Vance Fried of Oklahoma State University opined once for us that a good quality college education could be offered for a fraction of current cost. Texas entrepreneur extraordinaire Randy Best has told me that a good quality Internet based education could be offered world wide for under $2000 a year per student. I can see even a traditional (student-faculty personal interaction) university offer good quality instruction for $7000 a year. That is pretty close to costs at the good quality for profit schools. If we offered, say, $5000 maximum vouchers (Pell Grants?) to poorer students, they could finance an education without student loans. If we gave out 6 million of these vouchers averaging $4,000 apiece, the total cost, $24 billion would be vastly less than current public spending.
What would the university look like? Much like current for-profits.
1)Course offerings would be vastly more limited than at present. Professors would have much higher teaching loads. Libraries would be small and mostly internet-based.
2) Research would be financed separately at separate research institutes, as would graduate education. This would make transparent the enormous cross subsidization going on in higher education.
3) There would be a very small administrative staff of registrars, admissions people, etc., and no PR specialists, diversity coordinators, football coaches (there would be no intercollegiate athletics), or residence life people (no dorms).
4) Buildings would be clean, modern and utilitarian, but not luxurious and used 80-90 hours a week and year round. There would be no climbing walls, indoor running tracks, 50 seat Jacuzzis or the like (common in today's residential colleges).
5) Technology would be used to the hilt, with traditional teaching mixed with a lot of computer and television based instruction. Great lectures from superstar teachers, for example, would be used for years and replayed frequently, with the instructors paid handsomely, but with low per lecture costs per student.
6) There would be no tenure, no art galleries, no development office, etc.
7) Learning would be measured, outcomes reported and transparent.
8) There would be no Office of Student Financial Aid.
Students wanting socialization, country club like facilities, football teams, etc., could go to the high priced alternative, but would be expected to shoulder the extra cost of such institutions themselves. The government would otherwise get out of the undergraduate education business. I have nothing against Cadillac/Lexus quality education at yuppie residential schools (I went to one myself). But I question whether it is a public responsibility to pay for it. We do not pay for high school kids to go to Phillips Exeter or Groton (expensive private boarding schools) -- why do we pay for them to go to Harvard?
Such an idea would save money, improve access, lower the growth in college costs (vouchers would go up only with the rate of inflation). We would have more and better educated college graduates a generation from now. Why don't we do it? The Establishment of university folks, student loan providers, etc., do not want this. So we pay more for less, and suffer as a nation as a consequence.
A Follow-Up on the Zogby Poll
By Bryan O’Keefe
In a follow-up to Rich’s earlier post about the Zogby poll – I have my own hypothesis as to why those results came out the way that they did. The results, especially about the public’s feelings on tenure, do not surprise me in the least bit. I think that the masses feel this way because the very idea of tenure is completely foreign to nearly everybody else in the workforce. Almost everyone else has a boss to answer to and goals to reach and if they fail to obey their superiors or reach those goals, they are kindly (and sometimes not so kindly) shown the exit. It’s a tough world out there and people get fired, demoted, and downsized all the time. It’s just the way the world works these days for most people, right or wrong. The idea that after only working somewhere for five or six years and then you have a job for the rest of your life is a complete mirage outside of the Ivory Tower. People are going to be contemptuous of others who have this type of job security, especially if the job involves only working nine months out of the year and the work is perceived as being rather easy. (I actually give professors a lot of credit for what they do, but I don’t think everyone else feels the same way)
I think that the public backlash over tenure is only growing to grow too. As tuition continues to go through the roof, more Average Joe’s are going to become upset that their hard earned money is going to support faculty members that they believe have easier jobs than their own.
The conventional wisdom is that even though people complain about tenure a lot, not much is going to change about it anytime soon. It’s a sweet system and the people on the inside have an incentive to keep it going. That might be true, but I am not entirely convinced.
I say that because just last week I was reading a story in the Wall Street Journal about partners at law firms. In the old days, making partner was akin to getting tenure – once you were a member of the firm, you were basically a member for life. But that’s not the case at all with law firms these days. As the WSJ story pointed out, it’s not uncommon at all now for unproductive partners to be fired, demoted, or bought out. I have heard this same sentiment from some partners at law firms – partners are expected to work longer and harder now than ever before and without the type of job security that partners had years ago.
What changed? Competitive pressures. For better or worse, (and a lot of attorneys say it’s for the worse, but I am not trying to answer that question right now) firms are more like businesses now, not country clubs. They have their own version of US News and World Reports with the annual profit per partner rankings that the American Lawyer magazine releases. Firms can see exactly where they stack up against their peers.
Looking at universities in the same context, maybe some day a college or two will look at their faculty and think that trying to rid themselves of the unproductive professors and hiring fresh blood could help improve their USNWR rankings. The tenure train might be slowly derailed and university professors are not going to find any sympathy from the rest of the working world if that does in fact happen.
In a follow-up to Rich’s earlier post about the Zogby poll – I have my own hypothesis as to why those results came out the way that they did. The results, especially about the public’s feelings on tenure, do not surprise me in the least bit. I think that the masses feel this way because the very idea of tenure is completely foreign to nearly everybody else in the workforce. Almost everyone else has a boss to answer to and goals to reach and if they fail to obey their superiors or reach those goals, they are kindly (and sometimes not so kindly) shown the exit. It’s a tough world out there and people get fired, demoted, and downsized all the time. It’s just the way the world works these days for most people, right or wrong. The idea that after only working somewhere for five or six years and then you have a job for the rest of your life is a complete mirage outside of the Ivory Tower. People are going to be contemptuous of others who have this type of job security, especially if the job involves only working nine months out of the year and the work is perceived as being rather easy. (I actually give professors a lot of credit for what they do, but I don’t think everyone else feels the same way)
I think that the public backlash over tenure is only growing to grow too. As tuition continues to go through the roof, more Average Joe’s are going to become upset that their hard earned money is going to support faculty members that they believe have easier jobs than their own.
The conventional wisdom is that even though people complain about tenure a lot, not much is going to change about it anytime soon. It’s a sweet system and the people on the inside have an incentive to keep it going. That might be true, but I am not entirely convinced.
I say that because just last week I was reading a story in the Wall Street Journal about partners at law firms. In the old days, making partner was akin to getting tenure – once you were a member of the firm, you were basically a member for life. But that’s not the case at all with law firms these days. As the WSJ story pointed out, it’s not uncommon at all now for unproductive partners to be fired, demoted, or bought out. I have heard this same sentiment from some partners at law firms – partners are expected to work longer and harder now than ever before and without the type of job security that partners had years ago.
What changed? Competitive pressures. For better or worse, (and a lot of attorneys say it’s for the worse, but I am not trying to answer that question right now) firms are more like businesses now, not country clubs. They have their own version of US News and World Reports with the annual profit per partner rankings that the American Lawyer magazine releases. Firms can see exactly where they stack up against their peers.
Looking at universities in the same context, maybe some day a college or two will look at their faculty and think that trying to rid themselves of the unproductive professors and hiring fresh blood could help improve their USNWR rankings. The tenure train might be slowly derailed and university professors are not going to find any sympathy from the rest of the working world if that does in fact happen.
Universities: How Much Should They Prostitute Themselves?
By Richard Vedder
Economists like me often think that "everyone has their price." If you pay me enough money, I will do almost anything. A principled person is one who has a very high price before she will sell her soul (or even body) for some cause. A pragmatist is someone who will alter his position cheaply.
All of this came to mind as I read in Inside Higher Ed about a little brouhaha at the University of Iowa School of Public Health. Some dude wanted to give $15 million to name the school the Wellmark Blue Cross and Blue Shield School of Public Health. The faculty strenuously objected, as did the Dean, and the donor was told to keep his money. He was very, very annoyed.
I cheer the University of Iowa for its action. I think schools need to maintain independence from pressure groups, corporations, governments, and others who want to direct the way a school operates, and naming a school for a company or organization seemingly violates that independence.
Yet, I am troubled by my own view. For years, we have named professorships after individuals and occasionally businesses. We sell "naming rights" to buildings and especially sports facilities. And we don't seem to object if a school is named after an individual as opposed to a company. So, what is so different about the Blue Cross School of Public Health? And would the University of Iowa said "the hell with the faculty" if the gift had been for $50 million or $100 million? Where do you draw the line? Once you are a prostitute, does it matter whether the fee paid is $100 or $1 billion? Does it matter if you are renting yourself out to an individual or a company? On logical grounds, I find this a distinction of little real importance.
Economists like me often think that "everyone has their price." If you pay me enough money, I will do almost anything. A principled person is one who has a very high price before she will sell her soul (or even body) for some cause. A pragmatist is someone who will alter his position cheaply.
All of this came to mind as I read in Inside Higher Ed about a little brouhaha at the University of Iowa School of Public Health. Some dude wanted to give $15 million to name the school the Wellmark Blue Cross and Blue Shield School of Public Health. The faculty strenuously objected, as did the Dean, and the donor was told to keep his money. He was very, very annoyed.
I cheer the University of Iowa for its action. I think schools need to maintain independence from pressure groups, corporations, governments, and others who want to direct the way a school operates, and naming a school for a company or organization seemingly violates that independence.
Yet, I am troubled by my own view. For years, we have named professorships after individuals and occasionally businesses. We sell "naming rights" to buildings and especially sports facilities. And we don't seem to object if a school is named after an individual as opposed to a company. So, what is so different about the Blue Cross School of Public Health? And would the University of Iowa said "the hell with the faculty" if the gift had been for $50 million or $100 million? Where do you draw the line? Once you are a prostitute, does it matter whether the fee paid is $100 or $1 billion? Does it matter if you are renting yourself out to an individual or a company? On logical grounds, I find this a distinction of little real importance.
The States to the Rescue
By Richard Vedder
Among the most frustrating things as a member of the Spellings Commission on the Future of Higher Education was the absolute fanatical opposition of the colleges to any federal unit record system that would allow us to trace student performance from kindergarten through college. Failure to do this now deprives us of needed insights as to why students dropout and fail, as well as why students succeed.
The Bad Guys have won, and Secretary Spellings has thrown in the towel on a national unit record systems (which many conservatives opposed because of concerns of excessive federal power, a concern I often share; colleges, however, have prostituted themselves to the Feds already, and if Washington is going to drop money out of airplanes over campuses, the Feds certainly at least ought to know better what is happening to the persons supposedly benefiting from the funds).
We learn now that at the state level, major efforts are going forward to develop not only state unit record systems, but to make them compatible with one another and to trade information, dealing with the serious issue of interstate mobility of students over time. I think this is a constructive development worthy of our praise.
Among the most frustrating things as a member of the Spellings Commission on the Future of Higher Education was the absolute fanatical opposition of the colleges to any federal unit record system that would allow us to trace student performance from kindergarten through college. Failure to do this now deprives us of needed insights as to why students dropout and fail, as well as why students succeed.
The Bad Guys have won, and Secretary Spellings has thrown in the towel on a national unit record systems (which many conservatives opposed because of concerns of excessive federal power, a concern I often share; colleges, however, have prostituted themselves to the Feds already, and if Washington is going to drop money out of airplanes over campuses, the Feds certainly at least ought to know better what is happening to the persons supposedly benefiting from the funds).
We learn now that at the state level, major efforts are going forward to develop not only state unit record systems, but to make them compatible with one another and to trade information, dealing with the serious issue of interstate mobility of students over time. I think this is a constructive development worthy of our praise.
Zogby's New Poll: The Quest for True Diversity
By Richard Vedder
Zogby has performed a public service by quantifying something that many have complained about, but which is vehemently denied to be a problem by university presidents.
Zogby shows that most Americans believe that university professors are biased, that they present slanted views of material in the classroom, etc. Surveys have repeatedly shown that social science and humanities faculties (who teach courses where controversial ideas are discussed and evaluated) are overwhelmingly liberal, mostly registered Democrats. And there is a widespread perception that many use the classroom far too much to espouse personal views than objectively present the facts or multiple sides of an issue.
I was at a conference a couple of days ago where a roomful of wealthy Americans concerned about this problem (among others) were discussing solutions. It is clear that intellectual diversity means far less in the academy than fixation with skin color, religion, sexual orientation and other matters pretty distant from intellectual discovery and the quest for truth. In reality, the reverse should be the case: colleges should strive to present young minds with alternative perspectives on issues, while maintaining total neutrality institutionally on policy matters. They should evaluate student and job applicants on their qualifications with little or no regard for individual characteristics such as sexual preferences, skin color, religion, gender, etc.
Zogby also found that people think tenure erodes job performance, that it leads professors to become complacent and lazy. The public is, roughly speaking, right. I have said it for years: the more light that is shone on higher education, the greater will be the pressures to change the ways of the academy. I think the Zogby poll's results are broadly congruent with this view.
Zogby has performed a public service by quantifying something that many have complained about, but which is vehemently denied to be a problem by university presidents.
Zogby shows that most Americans believe that university professors are biased, that they present slanted views of material in the classroom, etc. Surveys have repeatedly shown that social science and humanities faculties (who teach courses where controversial ideas are discussed and evaluated) are overwhelmingly liberal, mostly registered Democrats. And there is a widespread perception that many use the classroom far too much to espouse personal views than objectively present the facts or multiple sides of an issue.
I was at a conference a couple of days ago where a roomful of wealthy Americans concerned about this problem (among others) were discussing solutions. It is clear that intellectual diversity means far less in the academy than fixation with skin color, religion, sexual orientation and other matters pretty distant from intellectual discovery and the quest for truth. In reality, the reverse should be the case: colleges should strive to present young minds with alternative perspectives on issues, while maintaining total neutrality institutionally on policy matters. They should evaluate student and job applicants on their qualifications with little or no regard for individual characteristics such as sexual preferences, skin color, religion, gender, etc.
Zogby also found that people think tenure erodes job performance, that it leads professors to become complacent and lazy. The public is, roughly speaking, right. I have said it for years: the more light that is shone on higher education, the greater will be the pressures to change the ways of the academy. I think the Zogby poll's results are broadly congruent with this view.
More of the Same -- Again
By Richard Vedder
It is a huge news day in higher ed. Rather than try to talk about everything in one blog, I will divide it into smaller pieces.
Yesterday's vote of the House of Representatives on the higher education bill was predictable, but it seems, fortunately, that it is not the end of the story.
While House Democrats were congratulating themselves on voting the most important improvement in higher education since the GI Bill, my early reading is that the bill is something of a disaster. It remains to be seen what happens from this point forward, and whether George Bush ultimately will have the guts to veto legislation that will do almost nothing to fundamentally improve access, accountability or transparency in higher education.
The Dems want to throw billions into subsidizing interest rates on student loans -- much more than on expanding Pell Grants. They want to finance this by cutting the fees of loan providers. One consequence of this bill came immediately apparent: an over $2 billion reduction in Sallie Mae's market valuation as a private equity buyer of the company has threatened to bail out. I don't think interest rates or loan fees should be set in law by administrative fiat, but should be determined by market forces, an idea supported by the moderate Democrat-leaning think tank Education Sector, among others. Spending taxpayer dollars to make it easier for persons to borrow more money just fuels the tuition cost explosion further, and is about the worse waste of public dollars I can imagine.
Actually, it is NOT the worse. An even more invidious provision in this abomination of a bill is the loan forgiveness provision for "public service." The idea seems to be that there are two types of jobs --ennobling altruistic good jobs, working for Government, and bad, crass, and greedy jobs, working in the private sector. If you work for General Motors or Microsoft, you repay your loan. If you become Nancy Pelosi's press secretary, you don't have to repay. That is terrible thinking, terrible policy, and I hope that it never becomes law.
As disorganized, demoralized and devoid of ideas that the Republicans are today (possibly excepting Newt Gingrich), and as rich and unified the Dems are, I think the Dems will be in trouble in 2008 for trying to make bills that are turkeys like this into law.
It is a huge news day in higher ed. Rather than try to talk about everything in one blog, I will divide it into smaller pieces.
Yesterday's vote of the House of Representatives on the higher education bill was predictable, but it seems, fortunately, that it is not the end of the story.
While House Democrats were congratulating themselves on voting the most important improvement in higher education since the GI Bill, my early reading is that the bill is something of a disaster. It remains to be seen what happens from this point forward, and whether George Bush ultimately will have the guts to veto legislation that will do almost nothing to fundamentally improve access, accountability or transparency in higher education.
The Dems want to throw billions into subsidizing interest rates on student loans -- much more than on expanding Pell Grants. They want to finance this by cutting the fees of loan providers. One consequence of this bill came immediately apparent: an over $2 billion reduction in Sallie Mae's market valuation as a private equity buyer of the company has threatened to bail out. I don't think interest rates or loan fees should be set in law by administrative fiat, but should be determined by market forces, an idea supported by the moderate Democrat-leaning think tank Education Sector, among others. Spending taxpayer dollars to make it easier for persons to borrow more money just fuels the tuition cost explosion further, and is about the worse waste of public dollars I can imagine.
Actually, it is NOT the worse. An even more invidious provision in this abomination of a bill is the loan forgiveness provision for "public service." The idea seems to be that there are two types of jobs --ennobling altruistic good jobs, working for Government, and bad, crass, and greedy jobs, working in the private sector. If you work for General Motors or Microsoft, you repay your loan. If you become Nancy Pelosi's press secretary, you don't have to repay. That is terrible thinking, terrible policy, and I hope that it never becomes law.
As disorganized, demoralized and devoid of ideas that the Republicans are today (possibly excepting Newt Gingrich), and as rich and unified the Dems are, I think the Dems will be in trouble in 2008 for trying to make bills that are turkeys like this into law.
Wednesday, July 11, 2007
Our dysfunctional student loan system revisited
By Richard Vedder
My greatest contribution to the Spellings Commission Report is getting the Commission to refer to our federal student financial aid system as "dysfunctional" (I used that term and chairman Charles Miller liked it as well, so it was put in the report).
Senior Whiz Kid Emeritus Jonathan Leirer called today and suggested I write a nasty blog, and after hearing his story I am inclined to agree. Then I told sidekick Bryan O'Keefe Jonathan's story, and he related he had a very similar experience.
Jonathan's (and my) beef: Jonathan works hard, pays all the money he owes to his university(Ohio University), gets excellent grades, and marches through a graduation ceremony. Then he goes to get his diploma, send transcripts to his grad school,etc., and he is told "you can't have your diploma" until you do an "Exit Interview' on the computer, where he is asked all sorts of intimate financial information about his parents, etc., that, in my opinion, is absolutely none of the University's or federal government's business at this point. Jonathan owes on a Perkins loan, but he just graduated, and is not scheduled to begin repayments for at least 9 months (and it will be deferred in his case for several years while he earns a Ph.D.) Still, a private company serving as loan collector for Ohio University apparently holds the power to deny this person a diploma that he has earned --until he provides intrusive family information that may have been appropriate to request in granting the loan, but not at this stage.
I think when a person has earned and paid for a degree, a University must give it to him or her period, without imposing non-academic criteria, including personal financial information that universities will have access to. Universities and the government are aggressive in gathering information from student customers, but loathed to provide basic information as to what the graduates learned, whether they obtained a job or went to graduate school, whether they liked the place, etc., etc. What do universities add to a student's moral character, critical thinking skills,knowledge of our historical heritage and culture, etc.? It is time to crack down on what economists would call an information asymetry.
Make it illegal for any university to use the FAFSA form or administer federal loan programs, unless it agrees to be as forthcoming about its teaching and financial operations. Curb their no doubt federally mandated aggressiveness in prying into the lives of their students and their familes. Better yet, the federal government should be ousted from the student loan market and regulation thereof.
My greatest contribution to the Spellings Commission Report is getting the Commission to refer to our federal student financial aid system as "dysfunctional" (I used that term and chairman Charles Miller liked it as well, so it was put in the report).
Senior Whiz Kid Emeritus Jonathan Leirer called today and suggested I write a nasty blog, and after hearing his story I am inclined to agree. Then I told sidekick Bryan O'Keefe Jonathan's story, and he related he had a very similar experience.
Jonathan's (and my) beef: Jonathan works hard, pays all the money he owes to his university(Ohio University), gets excellent grades, and marches through a graduation ceremony. Then he goes to get his diploma, send transcripts to his grad school,etc., and he is told "you can't have your diploma" until you do an "Exit Interview' on the computer, where he is asked all sorts of intimate financial information about his parents, etc., that, in my opinion, is absolutely none of the University's or federal government's business at this point. Jonathan owes on a Perkins loan, but he just graduated, and is not scheduled to begin repayments for at least 9 months (and it will be deferred in his case for several years while he earns a Ph.D.) Still, a private company serving as loan collector for Ohio University apparently holds the power to deny this person a diploma that he has earned --until he provides intrusive family information that may have been appropriate to request in granting the loan, but not at this stage.
I think when a person has earned and paid for a degree, a University must give it to him or her period, without imposing non-academic criteria, including personal financial information that universities will have access to. Universities and the government are aggressive in gathering information from student customers, but loathed to provide basic information as to what the graduates learned, whether they obtained a job or went to graduate school, whether they liked the place, etc., etc. What do universities add to a student's moral character, critical thinking skills,knowledge of our historical heritage and culture, etc.? It is time to crack down on what economists would call an information asymetry.
Make it illegal for any university to use the FAFSA form or administer federal loan programs, unless it agrees to be as forthcoming about its teaching and financial operations. Curb their no doubt federally mandated aggressiveness in prying into the lives of their students and their familes. Better yet, the federal government should be ousted from the student loan market and regulation thereof.
Gordon Gee: The Ultimate Presidential Vagabound
By Richard Vedder
The only university president who has entertained me in his presidential role on two campuses is Gordon Gee (once at Ohio State, once at Vanderbilt). Gordon Gee is the ultimate sign of the times, the university president who goes from job to job, moving up the pay schedule until now, at Vanderbilt, he is reputedly the nation's highest paid president. But the Columbus Dispatch is reporting on its web site that Gordon is returning home --or, rather, to one of his many previous homes, Columbus.
I lost track of how many schools President Gee has led. Some like Colorado and Ohio State, are well known public universities. Others, like Brown and Vanderbilt, are prestigious private ones. Gordon has a gift for gab, a penchant for fund raising, and sort of an engaging personality that is part intellectual, part redneck good ole boy. His salary at OSU will no doubt be in the seven digits.
How is President Gee in many ways the personification of American higher education today?
1) He is extremely mobile, showing none of the loyalty to an institution for life attitude that used to be prevalent in higher education but is now on the decline.
2) He has been at the forefront of developing the phenomenon of the highly paid academic entrepreneur, whose salary has escalated with every move and every large gift he snarls;
3) He personifies the notion of the "corporate university president," living more like a corporate executive, spending $6 million to renovate his home in Vanderbilt, and one willing to spend hundreds of thousands annually on lavish entertainment (I can personally attest that he throws a good party);
4) There is not a heck of lot of gravitas to Gee, no deeper philosophical moorings that are his compass; he is pragmatic more than intellectual. He is not writing the deep think pieces for the prestige press on the future of higher education, or the need (if any) of a core curriculum in universities.
5)However, he can do innovative things, such as when he forced the Vanderbilt athletic department to report to top university administrators like everyone else rather than running its own empire (commenting that if he had done that in Columbus, he would have ended up "pumping gas.")
The highest level administrators at the great universities I know alternatively despise, despair or are jealous of Gee, looking at him as a rube upstart without the cultivation and manners and dignity that a university president should have. But he delivers --raises schools in the US News and World Report rankings, builds pretty buildings, throws great parties, and raises tons of cash. Isn't that what higher education is all about these days?
The only university president who has entertained me in his presidential role on two campuses is Gordon Gee (once at Ohio State, once at Vanderbilt). Gordon Gee is the ultimate sign of the times, the university president who goes from job to job, moving up the pay schedule until now, at Vanderbilt, he is reputedly the nation's highest paid president. But the Columbus Dispatch is reporting on its web site that Gordon is returning home --or, rather, to one of his many previous homes, Columbus.
I lost track of how many schools President Gee has led. Some like Colorado and Ohio State, are well known public universities. Others, like Brown and Vanderbilt, are prestigious private ones. Gordon has a gift for gab, a penchant for fund raising, and sort of an engaging personality that is part intellectual, part redneck good ole boy. His salary at OSU will no doubt be in the seven digits.
How is President Gee in many ways the personification of American higher education today?
1) He is extremely mobile, showing none of the loyalty to an institution for life attitude that used to be prevalent in higher education but is now on the decline.
2) He has been at the forefront of developing the phenomenon of the highly paid academic entrepreneur, whose salary has escalated with every move and every large gift he snarls;
3) He personifies the notion of the "corporate university president," living more like a corporate executive, spending $6 million to renovate his home in Vanderbilt, and one willing to spend hundreds of thousands annually on lavish entertainment (I can personally attest that he throws a good party);
4) There is not a heck of lot of gravitas to Gee, no deeper philosophical moorings that are his compass; he is pragmatic more than intellectual. He is not writing the deep think pieces for the prestige press on the future of higher education, or the need (if any) of a core curriculum in universities.
5)However, he can do innovative things, such as when he forced the Vanderbilt athletic department to report to top university administrators like everyone else rather than running its own empire (commenting that if he had done that in Columbus, he would have ended up "pumping gas.")
The highest level administrators at the great universities I know alternatively despise, despair or are jealous of Gee, looking at him as a rube upstart without the cultivation and manners and dignity that a university president should have. But he delivers --raises schools in the US News and World Report rankings, builds pretty buildings, throws great parties, and raises tons of cash. Isn't that what higher education is all about these days?
Saturday, July 07, 2007
Harry stilles, Jackson Toby, and Charles Murray Are Right
By Richard Vedder
Whiz Kid Matt Denhart examined the four year college graduation rate for 100 public and 46 private research extensive universities, trying to explain the considerable variation in the rate around the mean value of 41 percent (less than one-half the students graduated in four years). (Matt actually did this a month or so ago; he is now teaching English and French to Ghanan orphans as part of his service to the broader community).
The evidence shows little impact from using part-time (as opposed to full-time) faculty, or from having a low student-faculty ratio to encourage one-on-one relationships between students and faculty. Spending per student was a relatively unimportant determinant of graduation success as well. In other words, financial resources devoted to instruction were of secondary importance. But two things DID matter. First, other factors equal, students graduated more in a timely manner from private schools than public ones. Dropout rates are higher in the public colleges. This suggests the cost differential between the two types of institutions is exaggerated (it takes more years to get through a public university on average), and may explain who private schools are flourishing, even gaining market share, despite being relatively costly.
Second, and more important, the higher the average ACT score of the top quartile of students, the larger the proportion of students who graduated in four years. Compare two schools, one with an minimum top quartile ACT score of 28, the other with a minimum of 23. If all other factors are the same, the statistical model predicts the graduation rate would be 24.5 percentage points higher (e.g., 60 vs. 35.5 percent) in the school with the higher admission standards. SAT scores are a relatively powerful predictor of graduation success, which makes the minor boomlet to do away with requiring the scores all the more puzzling and reprehensible.
This is consistent with the feelings of many of us. Harry Stilles, the determined former college professor and state legislator in South Carolina, has been developing analyses showing this sort of result for years. Jackson Toby, retired Rutgers University sociology professor, has completed a book length manuscript arguing that low college standards, in part reflecting non-selective admissions practices, has seriously detracted from not only higher education's performance, but also that of the K-12 system. Given the ease of getting into college, Jackson feels, almost certainly correctly, that younger kids coast through a non-rigorous secondary school curriculum. I like Jackson's work, and research director Andy Gillen, associate director Bryan O'Keefe, and I are trying to help him get it published. And, of course, my colleague at the American Enterprise Institute Charles Murray says students with limited cognitive abilities do not belong in colleges, but rather in vocational schools. Amen.
As the pool of 18 to 22 year old students starts declining in a few years, the temptation will be to lower standards still further, if possible. While some selective schools want to maximize their US News & World Report rankings by turning away kids, an even larger number are revenue maximizers, taking as many students as possible to increase the college's revenue stream and size, and maybe even the income, of both the colleges and the administrators who run them.
By taking intellectually challenged students, colleges play a cruel hoax on many of them, especially ones who borrow large sums for college only to drop out. Enormous resources are wasted. Maybe we need to be tougher in utilizing public funds (or tax-exempt private funds) to fund students whose mediocre academic background suggests they do not belong in college. Maybe we should give everyone a taxpayer subsidized chance at low cost two year colleges, in keeping with the American equalitarian ideal, but be hard nosed as to who can attend the more costly four year institutions.
In any case, hurray for Harry, Jackson and Charles for their heretical but almost certainly correct thoughts.
Whiz Kid Matt Denhart examined the four year college graduation rate for 100 public and 46 private research extensive universities, trying to explain the considerable variation in the rate around the mean value of 41 percent (less than one-half the students graduated in four years). (Matt actually did this a month or so ago; he is now teaching English and French to Ghanan orphans as part of his service to the broader community).
The evidence shows little impact from using part-time (as opposed to full-time) faculty, or from having a low student-faculty ratio to encourage one-on-one relationships between students and faculty. Spending per student was a relatively unimportant determinant of graduation success as well. In other words, financial resources devoted to instruction were of secondary importance. But two things DID matter. First, other factors equal, students graduated more in a timely manner from private schools than public ones. Dropout rates are higher in the public colleges. This suggests the cost differential between the two types of institutions is exaggerated (it takes more years to get through a public university on average), and may explain who private schools are flourishing, even gaining market share, despite being relatively costly.
Second, and more important, the higher the average ACT score of the top quartile of students, the larger the proportion of students who graduated in four years. Compare two schools, one with an minimum top quartile ACT score of 28, the other with a minimum of 23. If all other factors are the same, the statistical model predicts the graduation rate would be 24.5 percentage points higher (e.g., 60 vs. 35.5 percent) in the school with the higher admission standards. SAT scores are a relatively powerful predictor of graduation success, which makes the minor boomlet to do away with requiring the scores all the more puzzling and reprehensible.
This is consistent with the feelings of many of us. Harry Stilles, the determined former college professor and state legislator in South Carolina, has been developing analyses showing this sort of result for years. Jackson Toby, retired Rutgers University sociology professor, has completed a book length manuscript arguing that low college standards, in part reflecting non-selective admissions practices, has seriously detracted from not only higher education's performance, but also that of the K-12 system. Given the ease of getting into college, Jackson feels, almost certainly correctly, that younger kids coast through a non-rigorous secondary school curriculum. I like Jackson's work, and research director Andy Gillen, associate director Bryan O'Keefe, and I are trying to help him get it published. And, of course, my colleague at the American Enterprise Institute Charles Murray says students with limited cognitive abilities do not belong in colleges, but rather in vocational schools. Amen.
As the pool of 18 to 22 year old students starts declining in a few years, the temptation will be to lower standards still further, if possible. While some selective schools want to maximize their US News & World Report rankings by turning away kids, an even larger number are revenue maximizers, taking as many students as possible to increase the college's revenue stream and size, and maybe even the income, of both the colleges and the administrators who run them.
By taking intellectually challenged students, colleges play a cruel hoax on many of them, especially ones who borrow large sums for college only to drop out. Enormous resources are wasted. Maybe we need to be tougher in utilizing public funds (or tax-exempt private funds) to fund students whose mediocre academic background suggests they do not belong in college. Maybe we should give everyone a taxpayer subsidized chance at low cost two year colleges, in keeping with the American equalitarian ideal, but be hard nosed as to who can attend the more costly four year institutions.
In any case, hurray for Harry, Jackson and Charles for their heretical but almost certainly correct thoughts.
Thursday, July 05, 2007
Pennsylvania Union News
By Bryan O'Keefe
As somebody interested in labor issues and from the state of Pennsylvania, I have watched with some interest the recent contract negotiations in the Keystone state between the state faculty unions and the Commonwealth's higher ed system. Inside Higher Ed -- as is always the case -- has an excellent summary of the situation today.
Basically, there was a lot of smoke but not much fire. The faculty kept talking about strikes, walkouts, etc. but, in the end, both sides came to an agreement that avoided any major disruptions. While I am not familiar with all of the contract specifics, it seems at first glance that the professors have done quite well for themselves -- they will continue to receive raises, though it should be noted that these raises are not outrageous in any respect. They will also have to contribute a bit more for their health insurance, but I still think that most average Pennsylvania workers pay more in out-of-pocket costs for health coverage.
All in all, this probably is not a terrible deal for Pennsylvania taxpayers -- but the larger questions about faculty unions in general remains. Do they raise cost beyond what is necessary? Will their possible growth in the future mean higher college tuition for everyone else? In fact, I think it's critical to see if the Pennsylvania state schools raise tuition next year and, when asked for some reasons, point to this new contract.
As somebody interested in labor issues and from the state of Pennsylvania, I have watched with some interest the recent contract negotiations in the Keystone state between the state faculty unions and the Commonwealth's higher ed system. Inside Higher Ed -- as is always the case -- has an excellent summary of the situation today.
Basically, there was a lot of smoke but not much fire. The faculty kept talking about strikes, walkouts, etc. but, in the end, both sides came to an agreement that avoided any major disruptions. While I am not familiar with all of the contract specifics, it seems at first glance that the professors have done quite well for themselves -- they will continue to receive raises, though it should be noted that these raises are not outrageous in any respect. They will also have to contribute a bit more for their health insurance, but I still think that most average Pennsylvania workers pay more in out-of-pocket costs for health coverage.
All in all, this probably is not a terrible deal for Pennsylvania taxpayers -- but the larger questions about faculty unions in general remains. Do they raise cost beyond what is necessary? Will their possible growth in the future mean higher college tuition for everyone else? In fact, I think it's critical to see if the Pennsylvania state schools raise tuition next year and, when asked for some reasons, point to this new contract.
A Pet Peeve: The Higher Education Price Index
By Richard Vedder
Reports indicate that in the past year, the Higher Education Price Index rose less than in the previous year. But is this a valid indicator to use to correct for inflationary tendencies in the economy?
I despise this index. I think it should be a felony to make public policy decisions based on it. Schools that use it in grant applications should be denied funding unceremoniously. It is an abomination. I hope there is no ambiguity as to my feelings about this issue.
This index looks at costs of doing business in colleges, and tries to measure changes in them over time. There are the usual problems of weighting, shifting patterns of spending, qualitative changes, etc., that face any price index, including the venerable Consumer Price Index. These technical issues could lead to significant distortions of price changes from their true pattern. But this is not my beef with the index.
If institutions hire a lot of new administrators, pay bigger salaries, or expand fringe benefits, it raises the value of the index. "College costs are rising." Colleges then can go to legislators and other unsuspecting policymakers and say "We need a X Percent increase to keep up with inflation as measured by the Higher Education Price Index." In other words, by spending more, colleges increase the funding required to meet their definition of inflation. Since this index has risen more than the CPI over time, statistics on inflation-adjusted spending on higher ed using this index show less increase (or bigger decrease) than is the case using the inflation adjustments used by everyone else in our society --the CPI, the GDP price deflator, or the Producer Price Index. Big spending increases the index, which in turn increases the purported "needs" of schools to stay even with inflation.
This index is a con game to induce added governmental funding. At the very minimum, the Department of Education should ban its use in any publications they issue. I will testify any time, any where, before any legislative body wishing to rid itself of this statistical travesty. It is an instrument that ratifies and supports the peculiar tendencies of colleges and universities to engage in productivity reducing behavior designed to make life easier for people on campus.
Reports indicate that in the past year, the Higher Education Price Index rose less than in the previous year. But is this a valid indicator to use to correct for inflationary tendencies in the economy?
I despise this index. I think it should be a felony to make public policy decisions based on it. Schools that use it in grant applications should be denied funding unceremoniously. It is an abomination. I hope there is no ambiguity as to my feelings about this issue.
This index looks at costs of doing business in colleges, and tries to measure changes in them over time. There are the usual problems of weighting, shifting patterns of spending, qualitative changes, etc., that face any price index, including the venerable Consumer Price Index. These technical issues could lead to significant distortions of price changes from their true pattern. But this is not my beef with the index.
If institutions hire a lot of new administrators, pay bigger salaries, or expand fringe benefits, it raises the value of the index. "College costs are rising." Colleges then can go to legislators and other unsuspecting policymakers and say "We need a X Percent increase to keep up with inflation as measured by the Higher Education Price Index." In other words, by spending more, colleges increase the funding required to meet their definition of inflation. Since this index has risen more than the CPI over time, statistics on inflation-adjusted spending on higher ed using this index show less increase (or bigger decrease) than is the case using the inflation adjustments used by everyone else in our society --the CPI, the GDP price deflator, or the Producer Price Index. Big spending increases the index, which in turn increases the purported "needs" of schools to stay even with inflation.
This index is a con game to induce added governmental funding. At the very minimum, the Department of Education should ban its use in any publications they issue. I will testify any time, any where, before any legislative body wishing to rid itself of this statistical travesty. It is an instrument that ratifies and supports the peculiar tendencies of colleges and universities to engage in productivity reducing behavior designed to make life easier for people on campus.
Progress in the Artic
By Richard Vedder
A very old and dear friend, Rune Ryden, a distinguished semi-retired Swedish parliamentarian and academic administrator, called from Lund (Sweden) to wish my wife and me a happy Fourth of July yesterday, and in the course of a conversation reminded me of the useful work of the University of Artic, on whose board of trustees he serves.
The University of the Artic is a cooperative venture of all institutions of higher education north of the Artic Circle. Kids enroll in one school and typically do most of their work there, but also take courses via the University of the Artic at any of the dozens of other institutions in the region. Occasionally students will go to another institution within the consortium of schools to study for a term, earning University of Artic credit. Most of the coursework is Internet related, but not all. Roughly one-third of students come from Russia, one-third from the Nordic countries (Sweden, Norway, etc.) and one-third from North America (Canada and U.S. --Alaska). English and Russian are the languages of instruction, and considerable resources are devoted into translating materials into Russian, the area with the potential for greatest enrollment growth.
Enrollments are booming. I believe at the last report I gave to you, enrollments were around 3,000 in U. of Artic courses. Now it is 5,000 and growing rapidly. Indeed, the institution wants to restrain growth a bit to ensure quality does not suffer. Funding comes from the member institutions (which I believe exceed 60 in number), from the governments of the various countries, and, to a limited extent, from student fees.
There are lots of neat things about this institution which might provide lessons for Americans living south of the Artic Circle. First, of course, it allows for vast transfer of credit without hassle between institutions. It allows small schools that are geographically isolated to offer a more complete academic program at a fairly reasonable price. It promotes international understanding. It is a booming University -- even without a football team, its own library, etc. More inter-institutional arrangements like this would be desirable in the U.S. This approach would work especially well in thinly populated states like Montana, the Dakotas, Wyoming, and New Mexico.
A very old and dear friend, Rune Ryden, a distinguished semi-retired Swedish parliamentarian and academic administrator, called from Lund (Sweden) to wish my wife and me a happy Fourth of July yesterday, and in the course of a conversation reminded me of the useful work of the University of Artic, on whose board of trustees he serves.
The University of the Artic is a cooperative venture of all institutions of higher education north of the Artic Circle. Kids enroll in one school and typically do most of their work there, but also take courses via the University of the Artic at any of the dozens of other institutions in the region. Occasionally students will go to another institution within the consortium of schools to study for a term, earning University of Artic credit. Most of the coursework is Internet related, but not all. Roughly one-third of students come from Russia, one-third from the Nordic countries (Sweden, Norway, etc.) and one-third from North America (Canada and U.S. --Alaska). English and Russian are the languages of instruction, and considerable resources are devoted into translating materials into Russian, the area with the potential for greatest enrollment growth.
Enrollments are booming. I believe at the last report I gave to you, enrollments were around 3,000 in U. of Artic courses. Now it is 5,000 and growing rapidly. Indeed, the institution wants to restrain growth a bit to ensure quality does not suffer. Funding comes from the member institutions (which I believe exceed 60 in number), from the governments of the various countries, and, to a limited extent, from student fees.
There are lots of neat things about this institution which might provide lessons for Americans living south of the Artic Circle. First, of course, it allows for vast transfer of credit without hassle between institutions. It allows small schools that are geographically isolated to offer a more complete academic program at a fairly reasonable price. It promotes international understanding. It is a booming University -- even without a football team, its own library, etc. More inter-institutional arrangements like this would be desirable in the U.S. This approach would work especially well in thinly populated states like Montana, the Dakotas, Wyoming, and New Mexico.
Tuesday, July 03, 2007
Universities Have Lost Touch With Reality: A Case Study
By Richard Vedder
Universities have erected barriers to protect themselves from excessive outside interference, yet at the same time they expect the "real world" to finance their increasingly expensive operations. Their isolation from the real world sometimes leads to bizarre behavior, as the school's behave in a manner inconsistent with a competitive market economy, but consistent with the non-competitive sheltered and subsidized environment in which universities operate.
Earlier this year, Duke University condemned several lacrosse players, trashing their reputations and throwing them out of school --they were guilty until proved innocent, in complete violation of standards of American jurisprudence and a sense of fair play. Scores of faculty led an Inquisition to hang (figuratively) these kids. Not a word of apology came from the faculty after the kids were found innocent, the fabricated charges against them dropped. There were absolutely no consequences for their despicable behavior. Political correctness trumped fairness, decency and common sense. The incident showed that universities, who supposedly help improve the character of our youth, literally do not know right from wrong (or at least, Duke University does not).
A much more benign example of stupidity and arrogance occurred recently at my alma mater, Northwestern University (NU), as revealed to me in a conversation with a major donor to that institution who also serves on its Board of Trustees. The individual wanted to prepay two years of tuition for an individual. He did not ask for scholarship assistance for the student involved, but did suggest since he was giving NU the second year's tuition a year in advance, and since Northwestern would earn a good return on the money (its endowment return being something like 13 percent a year recently), he should get a discount on the second year's tuition. He was told no -- indeed, if anything he should pay more since tuition was bound to rise next year. After appealing to the President (Henry Bienem), my friend grudgingly received a small discount for the second year. (I had a similar, but less important, encounter, fighting with NU over less than $100 in library fines for books long since returned for my daughter at a time I was contributing more than that annually to NU).
Schools tend to be insensitive to the fact that they are dependent on outside support, and instead of expressing gratitude for such assistance, they often act surly and arrogantly. They want the world to provide for them, then behave by a different, and less civilized, set of rules than the rest of us have to live by.
Universities have erected barriers to protect themselves from excessive outside interference, yet at the same time they expect the "real world" to finance their increasingly expensive operations. Their isolation from the real world sometimes leads to bizarre behavior, as the school's behave in a manner inconsistent with a competitive market economy, but consistent with the non-competitive sheltered and subsidized environment in which universities operate.
Earlier this year, Duke University condemned several lacrosse players, trashing their reputations and throwing them out of school --they were guilty until proved innocent, in complete violation of standards of American jurisprudence and a sense of fair play. Scores of faculty led an Inquisition to hang (figuratively) these kids. Not a word of apology came from the faculty after the kids were found innocent, the fabricated charges against them dropped. There were absolutely no consequences for their despicable behavior. Political correctness trumped fairness, decency and common sense. The incident showed that universities, who supposedly help improve the character of our youth, literally do not know right from wrong (or at least, Duke University does not).
A much more benign example of stupidity and arrogance occurred recently at my alma mater, Northwestern University (NU), as revealed to me in a conversation with a major donor to that institution who also serves on its Board of Trustees. The individual wanted to prepay two years of tuition for an individual. He did not ask for scholarship assistance for the student involved, but did suggest since he was giving NU the second year's tuition a year in advance, and since Northwestern would earn a good return on the money (its endowment return being something like 13 percent a year recently), he should get a discount on the second year's tuition. He was told no -- indeed, if anything he should pay more since tuition was bound to rise next year. After appealing to the President (Henry Bienem), my friend grudgingly received a small discount for the second year. (I had a similar, but less important, encounter, fighting with NU over less than $100 in library fines for books long since returned for my daughter at a time I was contributing more than that annually to NU).
Schools tend to be insensitive to the fact that they are dependent on outside support, and instead of expressing gratitude for such assistance, they often act surly and arrogantly. They want the world to provide for them, then behave by a different, and less civilized, set of rules than the rest of us have to live by.
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