By Richard Vedder
I think commencement should be a relatively big deal, even if it is only a ceremony. It is an opportunity for universities to display what they are all about amidst a celebration of accomplishment. This requires a good commencement speaker.
My university, Ohio University, selected a relatively unkown writer from Sports Illustrated to offer sage advice and inspiration to students at what should be an imposing rite signifying their transformation from children to adults. Couldn't they have found a distinguished academic leader, scholar, businessman, journalist or, God forbid, very high level politican? I could have gotten them a former university president, possibly an important U.S. senator, or someone of that stature. Why couldn't the president of the university, armed with the appeal of offering also an honorary degree, done at least as well? Even spend some money and bribe a former U.S. president to come? (I once talked Jimmy Carter into speaking for $15,000 --surely he would do a commencement talk today for, say, $30,000 or $40,000, chump change to the athletic department). Students transition into the alumni family, and it is that family that sustains and supports institutions over the long run in most instances, especially for private schools but increasingly public ones as well. Make the transition a memorable one.
Annoyed enough, I read today in INSIDE HIGHER ED of the trials and tribulations of my Alma Mater, Northwestern University. It has behaved downright dumb. First, for the law school graduation they picked a somewhat sleazeball television performer and sometime low level politician (who once resigned from office after it was revealed he used a prostitute --and paid by check!!)), Jerry Springer. To be sure, he has a law degree from Northwestern, but he is not one of the school's most distinguished legal scholars. So does John Paul Stevens --and he is a Justice of the U.S. Supreme Court.
Then they had the famous Rev. ("God Damn America") Wright slated for the main event. They disinvited him after he became something of a national joke and scandal. NU used to aim high --in 1999, they were slated to have the Secretary of State, Madeleine Albright speak, although she rudely and inappropriately cancelled at the last minute. Maybe that is why the school goes for lightweights who they know would never cancel. But a school of Northwestern's distinction can do better.
Aggravating the troubles, President Henry Bienem wrote a truly nasty and inappropriate email to a student criticizing the choice --an email exuding arrogance (I had had a discussion with the late Dan Searle, major Northwestern benefactor and trustee, on NU's arrogance and stupidity a few months prior to his death, and this reinforces some of the feelings emanating from that conversation). To borrow from President Bienem's email to the student, "Grow Up Henry."
*********************
Speaking of commencement, the heart and soul of CCAP in many ways is its Whiz Kids --the coterie of bright, enthusiastic college kids who work for us doing first rate work (and keeping me young). Several are graduating this June: Thomas (Gordy) Ruchti, Jim Coleman, Bob Villwock, and one, Daniel Bennett (with a master's degree) in August. I will miss them a lot. They are more than students or employees --they are friends. Jim and Daniel are joining CCAP in Washington. Bob has a few more courses to go, so his graduation is actually a tad premature. And Thomas (Gordy) is going to study in a very serious and top-flight Ph.D. program at Cal Tech. I wish them all well. Thank God my old standbys Matt Denhart and Jonathan Robe will continue. I wish them all well in life's great adventure --and I have no doubts all will be successful in every way imaginable. It is the transformation of students into productive, thoughtful, meaningful adults that universities are about --first and foremost, a point many university leaders have forgotten in their quest for high rankings from US News & World Report.
Friday, May 30, 2008
Thursday, May 29, 2008
Research or Lobbying?: Higher Ed Research Today
By Richard Vedder
This is a year of momentous policy changes in Congress, and the higher education establishment is using all the arguments at its disposal to push for more money and less regulation from the Feds. This all came back to me as I was sitting on a plane yesterday reading a book I should have read a year or two ago, namely What's Happening To Public Higher Education?, a book edited by Ron Ehrenberg, and originally published by Greenwood Press and then reissued by the Johns Hopkins University Press.
The book argues that public higher education is in crisis, that stagnant state government spending means more costs have to be absorbed by others, and that public colleges are declining relative to private ones in terms of the ability to pay good faculty, attract good students, etc. This is starting to have qualitative effects, as, for example, more adjunct and part-time faculty are being used instead of tenure track full-time instructors.
There is something to be said for these arguments. But there is almost no mention of the other side of the coin --the cost explosion in higher education. It takes vastly more staff to educate any given number of students than a generation ago while it takes vastly fewer staff to make a given number of automobiles. In autos, also, the quality of the goods is clearly rising over time --something that may, but may not, be happening in higher education. Incentives to innovate in higher ed are nearly nil. The lack of a good bottom line favors cost-enhancing strategies, such as schools trying to spend more money to improve their US News & World Report rankings. Real salaries of senior faculty have soared at top private schools (raising rankings), so arguably the problem is not that the public schools are raising salaries too slowly, but the private ones are raising them too much, in some cases encouraged by public policies. None of these possibilities is even acknowledged --in a 17 page list of references, my book on higher education costs is totally ignored.
What I dislike is the one-sidedness of the arguments-- so much for the dialogue, give and take, and intellectual diversity that colleges always wax eloquent about when they are trolling for dollars. Also, I abhor the inherent conflict of interest THAT IS NOT EVEN ACKNOWLEDGED TO EXIST of professors lamenting the lack of more government money. There is good empirical evidence that every new dollar of state appropriations means a dollar or two more in annual salary to senior faculty at state schools. Yet in the analysis of 10 state systems in the Ehrenberg book, in nine cases the work was done by employees in those systems who directly benefit in a pecuniary fashion from the remedies being proposed. In most fields, as a matter of good ethics, persons disclose their personal relationships and acknowledge the potential for conflict of interest. But not in higher education.
Now I think Ron Ehrenberg is both a good economist and a decent, honest person. He is just following industry practice. Why isn't research on American higher education done more by non-university persons, at think tanks like CCAP, or by professors in other nations without a pecuniary interest in the outcomes they are advocating?
Let me give one illustration, from the first essay by Michael Rizzo. We are told:
"Real ...expenditures per student (less dollars spent on sponsored research) in public education...grew by more than 3 percent a year (130 percent overall). As a result, although state appropriations in 1974 were generous enough to cover 78 percent of the cost of schooling, in 2000 this support had fallen to just 43 percent."
To Ehrenberg, Rizzo et al, the problem is that students (via tuition), private donors (through contributions) and others are picking up more of the tab. To me, the far bigger question is: why are costs per student more than doubling in real terms? Are their qualitative improvements justifying this? I doubt it. The cost explosion is a fact of life, a given, an immovable fact to the higher education establishment, leading to cries of "more" "more "more'. It is time to look at college finances differently. It is time for independent observers without vested interests to dispassionately look at the evidence --how U.S. spends far more per student than most other developed nations, how learning has stagnated (probably), etc. etc.
I am increasingly convinced that reform will have to be imposed from outside --the traditional not-for-profit higher education community is incapable of changing in ways that are consistent with both popular opinion and economic imperatives.
This is a year of momentous policy changes in Congress, and the higher education establishment is using all the arguments at its disposal to push for more money and less regulation from the Feds. This all came back to me as I was sitting on a plane yesterday reading a book I should have read a year or two ago, namely What's Happening To Public Higher Education?, a book edited by Ron Ehrenberg, and originally published by Greenwood Press and then reissued by the Johns Hopkins University Press.
The book argues that public higher education is in crisis, that stagnant state government spending means more costs have to be absorbed by others, and that public colleges are declining relative to private ones in terms of the ability to pay good faculty, attract good students, etc. This is starting to have qualitative effects, as, for example, more adjunct and part-time faculty are being used instead of tenure track full-time instructors.
There is something to be said for these arguments. But there is almost no mention of the other side of the coin --the cost explosion in higher education. It takes vastly more staff to educate any given number of students than a generation ago while it takes vastly fewer staff to make a given number of automobiles. In autos, also, the quality of the goods is clearly rising over time --something that may, but may not, be happening in higher education. Incentives to innovate in higher ed are nearly nil. The lack of a good bottom line favors cost-enhancing strategies, such as schools trying to spend more money to improve their US News & World Report rankings. Real salaries of senior faculty have soared at top private schools (raising rankings), so arguably the problem is not that the public schools are raising salaries too slowly, but the private ones are raising them too much, in some cases encouraged by public policies. None of these possibilities is even acknowledged --in a 17 page list of references, my book on higher education costs is totally ignored.
What I dislike is the one-sidedness of the arguments-- so much for the dialogue, give and take, and intellectual diversity that colleges always wax eloquent about when they are trolling for dollars. Also, I abhor the inherent conflict of interest THAT IS NOT EVEN ACKNOWLEDGED TO EXIST of professors lamenting the lack of more government money. There is good empirical evidence that every new dollar of state appropriations means a dollar or two more in annual salary to senior faculty at state schools. Yet in the analysis of 10 state systems in the Ehrenberg book, in nine cases the work was done by employees in those systems who directly benefit in a pecuniary fashion from the remedies being proposed. In most fields, as a matter of good ethics, persons disclose their personal relationships and acknowledge the potential for conflict of interest. But not in higher education.
Now I think Ron Ehrenberg is both a good economist and a decent, honest person. He is just following industry practice. Why isn't research on American higher education done more by non-university persons, at think tanks like CCAP, or by professors in other nations without a pecuniary interest in the outcomes they are advocating?
Let me give one illustration, from the first essay by Michael Rizzo. We are told:
"Real ...expenditures per student (less dollars spent on sponsored research) in public education...grew by more than 3 percent a year (130 percent overall). As a result, although state appropriations in 1974 were generous enough to cover 78 percent of the cost of schooling, in 2000 this support had fallen to just 43 percent."
To Ehrenberg, Rizzo et al, the problem is that students (via tuition), private donors (through contributions) and others are picking up more of the tab. To me, the far bigger question is: why are costs per student more than doubling in real terms? Are their qualitative improvements justifying this? I doubt it. The cost explosion is a fact of life, a given, an immovable fact to the higher education establishment, leading to cries of "more" "more "more'. It is time to look at college finances differently. It is time for independent observers without vested interests to dispassionately look at the evidence --how U.S. spends far more per student than most other developed nations, how learning has stagnated (probably), etc. etc.
I am increasingly convinced that reform will have to be imposed from outside --the traditional not-for-profit higher education community is incapable of changing in ways that are consistent with both popular opinion and economic imperatives.
Sunday, May 25, 2008
Quality Per Dollar: Does the U.S. Rate High?
By Richard Vedder
This is a sequel to Jonathan Robe's excellent blog showing that in "top universities" per capita, the U.S. really ranks fairly poorly, well below many European countries.
This may be a little unfair to America, since the Times Higher Education rankings are based in part on eccentric criteria that are strongly biased against U.S. universities. 40 percent of the rankings are based on academic peer review, and I suspect that European institutions have a large proportion of those doing the reviewing. Another 10 percent is based on "international staff", a criterion I view as positively bizarre. I could care less where the professors come from, as long as they are good. Little Switzerland naturally is going to have lots of staff from countries nearby, while the U.S. may not. The use of citations is more fair, but employer evaluations, while conceptually a great idea, is heavily regionally skewed, if for no other reason that in some nations (U.S. and Australia for example), employers outside these nations are unlikely to hire foreigners who are located mostly thousands of miles away.
In short, I think the Times rankings have a lot to be desired (ditto with the staff to student ratio criterion, which is a pure input measure). Offsetting this bias, however, is the fact that the U.S. spends tons more money per student than all other countries except Switzerland. If we did a "top universities per billion dollars spent", I suspect the U.S. would be even lower in the rankings than Jonathan indicated. Correcting both for the geographic bias and for resources used would be an interesting idea, and Jonathan and I will be pondering this in days and weeks ahead. But I am virtually sure we will conclude that many foreign universities do more with less --being less absorbed in the consumption-socialization dimensions of higher education, and more focused on the academic pursuits about which universities are supposed to represent.
This is a sequel to Jonathan Robe's excellent blog showing that in "top universities" per capita, the U.S. really ranks fairly poorly, well below many European countries.
This may be a little unfair to America, since the Times Higher Education rankings are based in part on eccentric criteria that are strongly biased against U.S. universities. 40 percent of the rankings are based on academic peer review, and I suspect that European institutions have a large proportion of those doing the reviewing. Another 10 percent is based on "international staff", a criterion I view as positively bizarre. I could care less where the professors come from, as long as they are good. Little Switzerland naturally is going to have lots of staff from countries nearby, while the U.S. may not. The use of citations is more fair, but employer evaluations, while conceptually a great idea, is heavily regionally skewed, if for no other reason that in some nations (U.S. and Australia for example), employers outside these nations are unlikely to hire foreigners who are located mostly thousands of miles away.
In short, I think the Times rankings have a lot to be desired (ditto with the staff to student ratio criterion, which is a pure input measure). Offsetting this bias, however, is the fact that the U.S. spends tons more money per student than all other countries except Switzerland. If we did a "top universities per billion dollars spent", I suspect the U.S. would be even lower in the rankings than Jonathan indicated. Correcting both for the geographic bias and for resources used would be an interesting idea, and Jonathan and I will be pondering this in days and weeks ahead. But I am virtually sure we will conclude that many foreign universities do more with less --being less absorbed in the consumption-socialization dimensions of higher education, and more focused on the academic pursuits about which universities are supposed to represent.
Friday, May 23, 2008
Are the Best Universities in America?
By Jonathan Robe
Conventional wisdom holds that, when it comes to higher education, the US is the world leader by far. After all, don’t US universities attract a vast number of foreign students? According to the US Census Bureau, 565,000 foreign, nonimmigrant students were enrolled in US colleges in 2006.
The conventional wisdom is revealed in the rankings of world universities. Of all the countries with the top schools, the US heads the list. Take for example, the world rankings published by the Times Higher Education, available here. In these rankings, 13 of the top 20 universities in the world are located in the US. The methodology THE uses for their rankings has some validity, but it is still riddled with several flaws by focusing on inputs rather than outputs. For instance, THE includes “peer assessment” to rank the schools (it accounts for 40% of the total score). However, THE does attempt to track outputs somewhat by including an “employer review” variable in their rankings, a step in the right direction. As we argued in an article recently published in Forbes magazine, university rankings should be concerned with outputs, i.e., the value added to the students.
Figure 1 shows some of the top countries, based on the raw number of top universities. This figure clearly illustrates the case for the conventional wisdom. The US has almost double the number of top schools the UK has and over five times as many schools as all the other countries except Australia. One of the primary reasons for such high performance on the part of the US is that US universities are ranked very high by their peers compared to schools in other countries.
Figure 1
However, we get a quite different picture if we weight the number of top schools by national population. As Figure 2 shows, the US places much lower if we use this measure, lower than many European countries including every single Scandinavian nation. This contrasts sharply with the high level of investment in higher education in the US as we mentioned in a previous post. For instance, even though the US spends roughly 60% more on higher education as percentage of GDP than does Sweden, Sweden has over twice as many top universities per capita.
Figure 2
The obvious question is “Is higher education in the US really superior to education available in other countries?” Figure 2 suggests that the US higher education system is not using its resources as efficiently as other nations, particularly the UK, Canada, and Australia. Perhaps the conventional wisdom is wrong and the US is not the world leader in higher education. After all, in terms of growth in educational attainment, the US in recent years has substantially lagged behind most of the world. From 2000 to 2005, most European countries saw growth of over 10% in the number of adults who have achieved a college education, according to data published by the Organisation for Economic Co-Operation and Development. During this same period, the US saw merely a quarter of a percent growth. Basically, as spending on higher education in the US grew by 19 percent (as a percentage of GDP), college attainment remained essentially flat.
The US may spend more on higher education, but it appears that the return on that investment is not as high as the return other countries have on their investments. By the measure of top universities per capita, the US is by no means the world leader.
Jonathan Robe is a research associate of CCAP and an undergraduate engineering student at Ohio University.
Conventional wisdom holds that, when it comes to higher education, the US is the world leader by far. After all, don’t US universities attract a vast number of foreign students? According to the US Census Bureau, 565,000 foreign, nonimmigrant students were enrolled in US colleges in 2006.
The conventional wisdom is revealed in the rankings of world universities. Of all the countries with the top schools, the US heads the list. Take for example, the world rankings published by the Times Higher Education, available here. In these rankings, 13 of the top 20 universities in the world are located in the US. The methodology THE uses for their rankings has some validity, but it is still riddled with several flaws by focusing on inputs rather than outputs. For instance, THE includes “peer assessment” to rank the schools (it accounts for 40% of the total score). However, THE does attempt to track outputs somewhat by including an “employer review” variable in their rankings, a step in the right direction. As we argued in an article recently published in Forbes magazine, university rankings should be concerned with outputs, i.e., the value added to the students.
Figure 1 shows some of the top countries, based on the raw number of top universities. This figure clearly illustrates the case for the conventional wisdom. The US has almost double the number of top schools the UK has and over five times as many schools as all the other countries except Australia. One of the primary reasons for such high performance on the part of the US is that US universities are ranked very high by their peers compared to schools in other countries.
Figure 1
However, we get a quite different picture if we weight the number of top schools by national population. As Figure 2 shows, the US places much lower if we use this measure, lower than many European countries including every single Scandinavian nation. This contrasts sharply with the high level of investment in higher education in the US as we mentioned in a previous post. For instance, even though the US spends roughly 60% more on higher education as percentage of GDP than does Sweden, Sweden has over twice as many top universities per capita.
Figure 2
The obvious question is “Is higher education in the US really superior to education available in other countries?” Figure 2 suggests that the US higher education system is not using its resources as efficiently as other nations, particularly the UK, Canada, and Australia. Perhaps the conventional wisdom is wrong and the US is not the world leader in higher education. After all, in terms of growth in educational attainment, the US in recent years has substantially lagged behind most of the world. From 2000 to 2005, most European countries saw growth of over 10% in the number of adults who have achieved a college education, according to data published by the Organisation for Economic Co-Operation and Development. During this same period, the US saw merely a quarter of a percent growth. Basically, as spending on higher education in the US grew by 19 percent (as a percentage of GDP), college attainment remained essentially flat.
The US may spend more on higher education, but it appears that the return on that investment is not as high as the return other countries have on their investments. By the measure of top universities per capita, the US is by no means the world leader.
Jonathan Robe is a research associate of CCAP and an undergraduate engineering student at Ohio University.
A New High Quality School?
By Richard Vedder
I was talking to John Katzman, the founder and long-time CEO of the Princeton Review, yesterday in Texas. John has done a fine job with Princeton Review, forming a company on the forefront of change in higher education. The Princeton Review rankings of colleges did something others (except CCAP) shunned --asking students what they thought, which I always viewed as a superior approach to asking university presidents what they thought, the US News and World Report approach.
John is taking a break from running the Princeton Review, contemplating entry into the for profit higher education market --but with a huge twist. Most entrepreneurs in this market are trying to get struggling, low to middle income adults who want a degree or certificate to further their career. They want no nonsense, low cost education.
Yet many Americans look at college as a consumption as much as an investment good, and want a high quality experience. Why not open a for profit university that will appeal to the high end of the market --a relatively high priced, high quality educational experience, I presume with some of the socialization dimensions (climbing walls, student unions, etc.) that go with educating yuppies today. Upper income kids are frustrated because their dollars won't always buy entrance to the schools they want to attend, so they go to "second best" options. By offering a good alternative, maybe Mr. Katzman is opening a new frontier and new competition for the elitist private schools. Execution is everything, but Katzman is a Princeton grad (and his brother went to Brown) who knows what quality education is all about, so I think we should look forward to his new venture.
*************
Speaking of Brown, I erred in a blog last week a bit when I said Brown had no professional schools --in fact, it has a medical school. The broader point made was correct --Brown emphasizes undergraduate education more than many well known schools, and that enhances their student satisfaction (and hence earned higher CCAP rankings).
I was talking to John Katzman, the founder and long-time CEO of the Princeton Review, yesterday in Texas. John has done a fine job with Princeton Review, forming a company on the forefront of change in higher education. The Princeton Review rankings of colleges did something others (except CCAP) shunned --asking students what they thought, which I always viewed as a superior approach to asking university presidents what they thought, the US News and World Report approach.
John is taking a break from running the Princeton Review, contemplating entry into the for profit higher education market --but with a huge twist. Most entrepreneurs in this market are trying to get struggling, low to middle income adults who want a degree or certificate to further their career. They want no nonsense, low cost education.
Yet many Americans look at college as a consumption as much as an investment good, and want a high quality experience. Why not open a for profit university that will appeal to the high end of the market --a relatively high priced, high quality educational experience, I presume with some of the socialization dimensions (climbing walls, student unions, etc.) that go with educating yuppies today. Upper income kids are frustrated because their dollars won't always buy entrance to the schools they want to attend, so they go to "second best" options. By offering a good alternative, maybe Mr. Katzman is opening a new frontier and new competition for the elitist private schools. Execution is everything, but Katzman is a Princeton grad (and his brother went to Brown) who knows what quality education is all about, so I think we should look forward to his new venture.
*************
Speaking of Brown, I erred in a blog last week a bit when I said Brown had no professional schools --in fact, it has a medical school. The broader point made was correct --Brown emphasizes undergraduate education more than many well known schools, and that enhances their student satisfaction (and hence earned higher CCAP rankings).
Thursday, May 22, 2008
The National Student Clearinghouse
By Richard Vedder
Kevin Carey is one of the best thinkers on higher education issues today. He is bright, reformist, with a genuine concern about making colleges more efficient, more affordable, and better. He wrote a wonderful column in today's INSIDE HIGHER ED, brought to my attention by Charles Miller, a kindred spirit who did a lot of wonderful things himself as chair of the Spellings Commission.
While I agree with the main point of Kevin's article, it is something he revealed that I simply did not know that caught my attention. Before getting to that, Kevin lamented the death of a great idea --integrating student records throughout the school years to allow us to gain greater insight into student performance, learning, migration patterns, etc. While some responsible and thoughtful university leaders welcomed it, the so-called independent colleges (translation of "independent": give us money but leave us alone to do whatever we darn well please) fought the idea tooth-and-nail, lead by their chief lobbyist, David Warren. David was forever blasting Spellings Commissions proposals on this and other things.
The Warren argument is that the proposal would be a fundamental intrusion into privacy. Kevin points out that most schools willingly and frequently share the Social Security numbers of their students through the National Student Clearinghouse in suburban Washington, D.C. with student loan providers. They are being hypocritical to argue "we must protect student privacy" while at the same time sharing numbers with loan providers and sending those numbers to a warehouse in Virginia.
How about doing three things:
1) Require colleges on the federal dole (taking federal grants, students taking Pell Grants or federal loans) to send their student's Social Security numbers to the National Clearinghouse, as most of them already do;
2) Require the National Clearinghouse to send to the Internal Revenue Service and/or the Social Security Administration (the IRS is preferred), the Social Security numbers of all students classified by college of attendance, from 10 years earlier (e.g., in 2008 the Clearinghouse would send the IRS the students attending in 1998);
3) Require the IRS (or Social Security) to publish the median and mean work related earnings of those students of a decade ago, by their college, along with the mean and median earnings of all students by Carnegie classification. Perhaps some additional statistical data would be provided --the earnings at the 25th and 75th percentile of the distribution of students, for example.
This would give the world evidence on how students going to College X are doing a decade later --presumably in most cases 5-9 years after graduation. This would be an important "outcomes" based metric that would help students and their parents pick colleges. This would allow us to truly revolutionize our knowledge about higher education.
And it would not involve invading privacy any more than already occurs, and the colleges themselves would not be privy to the earnings data at the individual level. It would be relatively cheap to implement, and the dissemination of the information to the public would come from any number of persons publishing guides to colleges, university rankings, etc. Yet try to do it!!! I predict David Warren would say that the world as we know it is coming to an end. He would be dead wrong.
Kevin Carey is one of the best thinkers on higher education issues today. He is bright, reformist, with a genuine concern about making colleges more efficient, more affordable, and better. He wrote a wonderful column in today's INSIDE HIGHER ED, brought to my attention by Charles Miller, a kindred spirit who did a lot of wonderful things himself as chair of the Spellings Commission.
While I agree with the main point of Kevin's article, it is something he revealed that I simply did not know that caught my attention. Before getting to that, Kevin lamented the death of a great idea --integrating student records throughout the school years to allow us to gain greater insight into student performance, learning, migration patterns, etc. While some responsible and thoughtful university leaders welcomed it, the so-called independent colleges (translation of "independent": give us money but leave us alone to do whatever we darn well please) fought the idea tooth-and-nail, lead by their chief lobbyist, David Warren. David was forever blasting Spellings Commissions proposals on this and other things.
The Warren argument is that the proposal would be a fundamental intrusion into privacy. Kevin points out that most schools willingly and frequently share the Social Security numbers of their students through the National Student Clearinghouse in suburban Washington, D.C. with student loan providers. They are being hypocritical to argue "we must protect student privacy" while at the same time sharing numbers with loan providers and sending those numbers to a warehouse in Virginia.
How about doing three things:
1) Require colleges on the federal dole (taking federal grants, students taking Pell Grants or federal loans) to send their student's Social Security numbers to the National Clearinghouse, as most of them already do;
2) Require the National Clearinghouse to send to the Internal Revenue Service and/or the Social Security Administration (the IRS is preferred), the Social Security numbers of all students classified by college of attendance, from 10 years earlier (e.g., in 2008 the Clearinghouse would send the IRS the students attending in 1998);
3) Require the IRS (or Social Security) to publish the median and mean work related earnings of those students of a decade ago, by their college, along with the mean and median earnings of all students by Carnegie classification. Perhaps some additional statistical data would be provided --the earnings at the 25th and 75th percentile of the distribution of students, for example.
This would give the world evidence on how students going to College X are doing a decade later --presumably in most cases 5-9 years after graduation. This would be an important "outcomes" based metric that would help students and their parents pick colleges. This would allow us to truly revolutionize our knowledge about higher education.
And it would not involve invading privacy any more than already occurs, and the colleges themselves would not be privy to the earnings data at the individual level. It would be relatively cheap to implement, and the dissemination of the information to the public would come from any number of persons publishing guides to colleges, university rankings, etc. Yet try to do it!!! I predict David Warren would say that the world as we know it is coming to an end. He would be dead wrong.
Transforming Higher Education Texas Style
By Richard Vedder
I attended a truly remarkable meeting yesterday with Whiz Kid Matt Denhart in Austin, Texas. Governor Rick Perry, in cooperation with the Texas Public Policy Foundation (TPPF) and one of its directors, Jeff Sandefer (the innovative head of the Acton Business School, on which I have previously blogged), called together the regents (trustees) of all the Texas public universities for a Higher Education Summit. There was 90 percent attendance from the boards, which officially went into simultaneous sessions to hear discussions and participate in dialogue.
Jeff presented a remarkable bunch of slides showing that higher education costs are high and rising, and outcomes are at best mediocre, and probably falling. Faculty members teach little, with loads falling over time. Adjunct faculty do much of the teaching --for little money. Most research shows up as articles in obscure journals --at a cost per article approaching $50,000 using average cost pricing. Only a small proportion of R and D in the U.S. goes on in universities, contrary to the claims of Establishment pleaders for funds. Former House Majority Leader and college professor Dick Armey reiterated a good bit of this in his trademark folksy (but effective) way at lunch.
Jeff suggested that the regents needed to tie compensation to performance, for example, paying professors bonuses based on how they satisfy the customer. Professors with low teaching loads, poor teaching evaluations and low research output need to be especially scrutinized. The Regents seemed sympathetic to many specific ideas presented, and there seemed to be a move afoot to have some united action on the part of all the boards to push greater efficiency, accountability, and results. The Governor was cheering the group on. I left to catch a plane before the meeting concluded, but it is actions like this that are needed if we are going to reform higher education. It is not going to come from within the academy --and, historically, regents and trustees are typically cheerleaders for university presidents. Still, with strong leadership (such as that provided by Perry and Sandefer), the trustees can and should be a leading force in changing the way the academy does business.
At the same time, Matt and I have authored a study, published by TPPF, that surveys Texas higher education (Texas' Higher Education System: Success or Failure?) Texas has horribly high attrition rates from college, rising costs, etc. We outline 18 things that can be done as solutions. All of this, however, takes energy, will, and a willingness to buck an establishment that resists change.
Every state needs a Jeff Sandefer -- a citizen willing to bite the bullet and take a leadership role in convincing the opinion makers and decision makers that all is not well in the higher education enterprise, and that reform can and should be made to allow us to continue to have one of the world's greatest systems of universities.
I attended a truly remarkable meeting yesterday with Whiz Kid Matt Denhart in Austin, Texas. Governor Rick Perry, in cooperation with the Texas Public Policy Foundation (TPPF) and one of its directors, Jeff Sandefer (the innovative head of the Acton Business School, on which I have previously blogged), called together the regents (trustees) of all the Texas public universities for a Higher Education Summit. There was 90 percent attendance from the boards, which officially went into simultaneous sessions to hear discussions and participate in dialogue.
Jeff presented a remarkable bunch of slides showing that higher education costs are high and rising, and outcomes are at best mediocre, and probably falling. Faculty members teach little, with loads falling over time. Adjunct faculty do much of the teaching --for little money. Most research shows up as articles in obscure journals --at a cost per article approaching $50,000 using average cost pricing. Only a small proportion of R and D in the U.S. goes on in universities, contrary to the claims of Establishment pleaders for funds. Former House Majority Leader and college professor Dick Armey reiterated a good bit of this in his trademark folksy (but effective) way at lunch.
Jeff suggested that the regents needed to tie compensation to performance, for example, paying professors bonuses based on how they satisfy the customer. Professors with low teaching loads, poor teaching evaluations and low research output need to be especially scrutinized. The Regents seemed sympathetic to many specific ideas presented, and there seemed to be a move afoot to have some united action on the part of all the boards to push greater efficiency, accountability, and results. The Governor was cheering the group on. I left to catch a plane before the meeting concluded, but it is actions like this that are needed if we are going to reform higher education. It is not going to come from within the academy --and, historically, regents and trustees are typically cheerleaders for university presidents. Still, with strong leadership (such as that provided by Perry and Sandefer), the trustees can and should be a leading force in changing the way the academy does business.
At the same time, Matt and I have authored a study, published by TPPF, that surveys Texas higher education (Texas' Higher Education System: Success or Failure?) Texas has horribly high attrition rates from college, rising costs, etc. We outline 18 things that can be done as solutions. All of this, however, takes energy, will, and a willingness to buck an establishment that resists change.
Every state needs a Jeff Sandefer -- a citizen willing to bite the bullet and take a leadership role in convincing the opinion makers and decision makers that all is not well in the higher education enterprise, and that reform can and should be made to allow us to continue to have one of the world's greatest systems of universities.
Tuesday, May 20, 2008
UNC Responds
by Andrew Gillen
The University of North Carolina has put together a thoughtful and informative response to our recent study on higher education in the state. One of the main goals of the study was to spark more conversation on issues dealing with higher education, especially among policy makers. This is certainly a step in the right direction.
A copy of their response is here.
Our original study is here.
The University of North Carolina has put together a thoughtful and informative response to our recent study on higher education in the state. One of the main goals of the study was to spark more conversation on issues dealing with higher education, especially among policy makers. This is certainly a step in the right direction.
A copy of their response is here.
Our original study is here.
Monday, May 19, 2008
Should You Need a B.A. to Work at Wal-Mart?
By Richard Vedder
I am a little late in reading one of my favorite monthly reads, POSTSECONDARY EDUCATION OPPORTUNITY, Tom Mortenson's data-laden commentary on higher education. Some interesting numbers are in the April 2008 issue, confirming my view (although certainly not Mr. Mortenson's, I suspect) that we are becoming over-credentialed as a nation --maybe even over invested in some dimensions of higher education.
In 1996, 16.5 percent of bachelor's degree holders worked as clerical or service workers --low paying jobs which historically have been dominated by persons with modest educational backgrounds. By 2004, that percentage had risen to 18.2 percent. Meanwhile, the proportion of bachelor's degree holders in the "managerial and professional" occupations fell from 57.9 percent to 54.5 percent. These are high paying jobs that often have been regarded as jobs requiring high level education and/or skills. In 1996, there were 3.51 college grads in the higher paying jobs historically (for the past two generations) viewed as "college" jobs for every college grad in one of the low paying historically jobs requiring low education. By 2004, that ratio had fallen to 2.99 --a pretty dramatic drop in just 8 years.
What I am wondering is: are we turning out far more college graduates than needed to fill jobs historically viewed as requiring college training, so there is more spillover into lower paying occupations? Even in production occupations (e.g., factory work) where even in 2004 over 60 percent of workers had a high school education or less, there has been a pretty sharp increase in employment of college educated persons. In 1996, only 7.4 percent of those workers had an associate, bachelor's or advanced degree ---by 2004, the proportion was 11.8 percent.
Now it is possible that the jobs within these various professions have required more education and skills, but the significant magnitudes of the shifts and other evidence makes me highly skeptical. It is true that as our K-12 education continues to perform in a mediocre fashion, employers seeking even minimally educated workers sometimes turn in despair to college educated persons. All of this, however, suggests there is a good bit of malinvestment --maybe overinvestment --in higher education. As the cost of college rises and graduates increasingly gravitate to low paying occupations, college is becoming a more problematic investment for more Americans, perhaps explaining the stagnation in college attainment rates in recent years. As Charles Miller has said to me, it may simply be rational behavior for some persons to just say no to college.
I am a little late in reading one of my favorite monthly reads, POSTSECONDARY EDUCATION OPPORTUNITY, Tom Mortenson's data-laden commentary on higher education. Some interesting numbers are in the April 2008 issue, confirming my view (although certainly not Mr. Mortenson's, I suspect) that we are becoming over-credentialed as a nation --maybe even over invested in some dimensions of higher education.
In 1996, 16.5 percent of bachelor's degree holders worked as clerical or service workers --low paying jobs which historically have been dominated by persons with modest educational backgrounds. By 2004, that percentage had risen to 18.2 percent. Meanwhile, the proportion of bachelor's degree holders in the "managerial and professional" occupations fell from 57.9 percent to 54.5 percent. These are high paying jobs that often have been regarded as jobs requiring high level education and/or skills. In 1996, there were 3.51 college grads in the higher paying jobs historically (for the past two generations) viewed as "college" jobs for every college grad in one of the low paying historically jobs requiring low education. By 2004, that ratio had fallen to 2.99 --a pretty dramatic drop in just 8 years.
What I am wondering is: are we turning out far more college graduates than needed to fill jobs historically viewed as requiring college training, so there is more spillover into lower paying occupations? Even in production occupations (e.g., factory work) where even in 2004 over 60 percent of workers had a high school education or less, there has been a pretty sharp increase in employment of college educated persons. In 1996, only 7.4 percent of those workers had an associate, bachelor's or advanced degree ---by 2004, the proportion was 11.8 percent.
Now it is possible that the jobs within these various professions have required more education and skills, but the significant magnitudes of the shifts and other evidence makes me highly skeptical. It is true that as our K-12 education continues to perform in a mediocre fashion, employers seeking even minimally educated workers sometimes turn in despair to college educated persons. All of this, however, suggests there is a good bit of malinvestment --maybe overinvestment --in higher education. As the cost of college rises and graduates increasingly gravitate to low paying occupations, college is becoming a more problematic investment for more Americans, perhaps explaining the stagnation in college attainment rates in recent years. As Charles Miller has said to me, it may simply be rational behavior for some persons to just say no to college.
Sunday, May 18, 2008
The Negative Spillover Effects of Graduate and Professional Education
By Richard Vedder
One byproduct of work we have done on finding new ways of assessing (ranking) colleges and universities is that we have obtained great data on student attitudes towards the courses and instructors they take. That data is susceptible to statistical analysis, and we have begun to do some --with fascinating results.
I asked Whiz Kid Jim Coleman the other day to statistically examine the relationship between the proportion of students at a university that are NOT undergraduates and the average rating of professors on ratemyprofessors.com. I hypothesized a negative relationship between the proportion of non-undergraduates (graduate and professional students) and the average rating of professors by undergraduate students. Jim obtained that relationship --with a vengeance. Where schools are predominantly undergraduates (liberal arts colleges, schools with small graduate or professional programs), the students are happier with their courses on average.
Why? At schools emphasizing graduate and professional education, the undergraduate student is the neglected "cash cow". Endowments and other resources are used to fund expensive graduate and professional programs. Graduate students are used to teach undergraduates -- often inexperienced, less knowledgeable about the subject matter, less motivated to do well and less likely to know the English language. The senior faculty fawn over their graduate students, and vice versa.
This all came home to me when Tim Forbes, of the magazine of the same name, asked me why Brown had done so well on the CCAP college rankings. I had a hunch the answer was that Brown had small graduate programs and no professional schools --medical and law schools, etc. Most teaching is done by Ph.D. holding faculty members. Thus Brown should have very high positive evaluations of students about their learning experience --and it did, ranking number one among national universities on the ratemyprofessors.com criterion.
Today, most aspiring second tier universities want to expand their graduate, professional and research dimensions, thinking that will improve their US News and World Report rankings (it might), gain it more resources (e.g., federal research grants), and please the faculty who want to do more esoteric research that might have professional payoffs, rather than teach survey courses to undergraduates. What our research is finding that this approach of neglecting undergraduate education has the probable and predictable effect of lowering the quality of the education experience of undergraduates. The new CCAP rankings, still being fully developed but discussed both in the May 19 issue of Forbes and on the Forbes.com web site, are more student friendly and tend to punish schools that neglect undergraduate education.
One byproduct of work we have done on finding new ways of assessing (ranking) colleges and universities is that we have obtained great data on student attitudes towards the courses and instructors they take. That data is susceptible to statistical analysis, and we have begun to do some --with fascinating results.
I asked Whiz Kid Jim Coleman the other day to statistically examine the relationship between the proportion of students at a university that are NOT undergraduates and the average rating of professors on ratemyprofessors.com. I hypothesized a negative relationship between the proportion of non-undergraduates (graduate and professional students) and the average rating of professors by undergraduate students. Jim obtained that relationship --with a vengeance. Where schools are predominantly undergraduates (liberal arts colleges, schools with small graduate or professional programs), the students are happier with their courses on average.
Why? At schools emphasizing graduate and professional education, the undergraduate student is the neglected "cash cow". Endowments and other resources are used to fund expensive graduate and professional programs. Graduate students are used to teach undergraduates -- often inexperienced, less knowledgeable about the subject matter, less motivated to do well and less likely to know the English language. The senior faculty fawn over their graduate students, and vice versa.
This all came home to me when Tim Forbes, of the magazine of the same name, asked me why Brown had done so well on the CCAP college rankings. I had a hunch the answer was that Brown had small graduate programs and no professional schools --medical and law schools, etc. Most teaching is done by Ph.D. holding faculty members. Thus Brown should have very high positive evaluations of students about their learning experience --and it did, ranking number one among national universities on the ratemyprofessors.com criterion.
Today, most aspiring second tier universities want to expand their graduate, professional and research dimensions, thinking that will improve their US News and World Report rankings (it might), gain it more resources (e.g., federal research grants), and please the faculty who want to do more esoteric research that might have professional payoffs, rather than teach survey courses to undergraduates. What our research is finding that this approach of neglecting undergraduate education has the probable and predictable effect of lowering the quality of the education experience of undergraduates. The new CCAP rankings, still being fully developed but discussed both in the May 19 issue of Forbes and on the Forbes.com web site, are more student friendly and tend to punish schools that neglect undergraduate education.
Friday, May 16, 2008
Intercollegiate Athletes: A Scandal Out of Control
By Richard Vedder
In the broader context, intercollegiate athletics are a relatively small operation, rarely consuming more than five percent of the resources of an institution. But they have enormous visibility, and are the face of higher education for millions of sports fans. At the highest (Division I) levels, they have long abandoned much pretense of being amateur sports financed by modest gate receipts and television revenues.
A new NCAA report on sport finances makes this point. It is a big improvement over earlier reports, and the NCAA is insisting on somewhat more honest accounting, and is having outsiders enforce uniformity in financial reporting. The report still has a long ways ago, however, before it is a truly transparent and honest accounting of intercollegiate athletics today. For example, there is no data reported by the name of institution. Capital outlays are not accounted for in an honest manner using conventional GAAP standards. "Generated revenues," thought to represent receipts for sport activities, include alumni donations --some of which would come to the universities anyhow --and maybe to serve the academic mission of the institution. In short, the report is still too secretive and too dishonest. But it is a big step forward, and it reveals plenty.
The data in the report are so depressing and so outrageous that I simply could not read more than small sections at one sitting for medical reasons --I might have a stroke (I am, unfortunately, being serious here). A typical Division I school --not the schools typically competing in BCS bowl games --loses minimally $8 million a year on their athletic programs --and probably at least $12 million if honest accounting were used. Revenues generated commercially (e.g., gate receipts, endorsements, TV income) have been rising far slower than outlays, so the athletic deficits are growing very rapidly --by double digit annual percentage amounts in many, many cases.
Football head coach salaries are rising at an annual average rate (2004 to 2006) of over 20 percent a year --while deficits before institutional subsidies are mounting. Put differently, taxpayers, philanthropists, and student tuition payers are footing the bill --usually unwittingly and unwillingly --for massive increases in salaries.
I am usually dead set against any price-fixing, cartel type arrangements. But this is a situation where competition fueled by tuition and taxpayer dollars is causing growing financial harm to academic programs. This is beside the fact that sport competitions interrupt academic schedules, not only for athletes but many others (including student fans who should be studying).
Here is what ought to happen. The Presidents of top universities in the major Division I conferences should get together, with special approval of the Anti-Trust Division of the Justice Department, with a goal of changing the rules of the game with respect to intercollegiate athletics. No athletic directors, coaches, gung ho alums (e.g., T. Boone Pickens who gave over $100 million for athletics at Oklahoma State) should be allowed near the meeting site.
Possible thing the university presidents might agree to:
1) No more than two percent of institutional revenues excluding auxiliary enterprises may be devoted to subsidies for intercollegiate athletics (at my school, that would free up more than $5 million annually for academics --or allow for a tuition reduction of at least 3 percent).
2) Over a five year transition period, the salaries of top coaches and athletic directors will be reduced to a maximum of three times the average academic year salary of full professors at that institution, but not in excess of that of the university president. A lower limit (e.g., two times full professor salaries) would be placed on top second tier coaches, like offensive and defensive coordinators, assistant basketball coaches, etc. Alumni "gifts" to coaches and other strategies to avoid these limits would be strictly prohibited --with extremely tough penalties for violations.
3) The length of regular season football shall be ten games, with up to a maximum of one post or pre season event (e.g, bowl game); basketball seasons shall be limited to 24 games plus up to four post season games; baseball teams cannot play more than 45 games or more than 28 game days.
3) Football teams shall be limited to 60 players. Red shirting and other practices designed to lengthen the college career of athletics artificially shall be prohibited.
4) No athletic competition will allowed during the final examinations week of an institution.
5) Bowing to commercial reality, athletes would be allowed to be paid up to an amount equal to 10 percent of the average salary of assistant professors in addition to other funds (tuition rebates, room, board, and books) provided. Student editors of school newspapers and those with other demanding extracurricular jobs are often paid, so this merely treats athletes the same, and reduces slightly the economic exploitation of them by uber-high paid coaches).
If the presidents of schools with good academic AND athletic reputations such as Michigan, Duke, Illinois, Southern California, Wisconsin, UCLA, Notre Dame, University of North Carolina, Texas, Cal Berkeley, Florida and Georgia got behind this --as well as the Ivy League and other prestige private schools (e.g., Northwestern and Stanford)--you probably have enough momentum to make it happen. If 20-25 premier universities with strong athletic and academic reputations say "enough is enough," perhaps the rest will go along. And, if they do not, perhaps we will shame the jock schools ultimately into submission.
I do not like price controls. I do not like competitors getting together. But when an activity is financed not by market forces but rather by taxpayer subsidies hidden from the public eye, this is the lesser of two evils. While there are other approaches (legislative mandates, accreditation withdrawal, Department of Education regulations), this would be the least intrusive way to proceed.
Would this kill college sports and ruin the Saturday afternoons of millions of sports fans? No. This would merely return us most the way back to the way sports were conducted a half a century ago --when we filled stadiums with tens of thousands of screaming fans just as we do today.
In the broader context, intercollegiate athletics are a relatively small operation, rarely consuming more than five percent of the resources of an institution. But they have enormous visibility, and are the face of higher education for millions of sports fans. At the highest (Division I) levels, they have long abandoned much pretense of being amateur sports financed by modest gate receipts and television revenues.
A new NCAA report on sport finances makes this point. It is a big improvement over earlier reports, and the NCAA is insisting on somewhat more honest accounting, and is having outsiders enforce uniformity in financial reporting. The report still has a long ways ago, however, before it is a truly transparent and honest accounting of intercollegiate athletics today. For example, there is no data reported by the name of institution. Capital outlays are not accounted for in an honest manner using conventional GAAP standards. "Generated revenues," thought to represent receipts for sport activities, include alumni donations --some of which would come to the universities anyhow --and maybe to serve the academic mission of the institution. In short, the report is still too secretive and too dishonest. But it is a big step forward, and it reveals plenty.
The data in the report are so depressing and so outrageous that I simply could not read more than small sections at one sitting for medical reasons --I might have a stroke (I am, unfortunately, being serious here). A typical Division I school --not the schools typically competing in BCS bowl games --loses minimally $8 million a year on their athletic programs --and probably at least $12 million if honest accounting were used. Revenues generated commercially (e.g., gate receipts, endorsements, TV income) have been rising far slower than outlays, so the athletic deficits are growing very rapidly --by double digit annual percentage amounts in many, many cases.
Football head coach salaries are rising at an annual average rate (2004 to 2006) of over 20 percent a year --while deficits before institutional subsidies are mounting. Put differently, taxpayers, philanthropists, and student tuition payers are footing the bill --usually unwittingly and unwillingly --for massive increases in salaries.
I am usually dead set against any price-fixing, cartel type arrangements. But this is a situation where competition fueled by tuition and taxpayer dollars is causing growing financial harm to academic programs. This is beside the fact that sport competitions interrupt academic schedules, not only for athletes but many others (including student fans who should be studying).
Here is what ought to happen. The Presidents of top universities in the major Division I conferences should get together, with special approval of the Anti-Trust Division of the Justice Department, with a goal of changing the rules of the game with respect to intercollegiate athletics. No athletic directors, coaches, gung ho alums (e.g., T. Boone Pickens who gave over $100 million for athletics at Oklahoma State) should be allowed near the meeting site.
Possible thing the university presidents might agree to:
1) No more than two percent of institutional revenues excluding auxiliary enterprises may be devoted to subsidies for intercollegiate athletics (at my school, that would free up more than $5 million annually for academics --or allow for a tuition reduction of at least 3 percent).
2) Over a five year transition period, the salaries of top coaches and athletic directors will be reduced to a maximum of three times the average academic year salary of full professors at that institution, but not in excess of that of the university president. A lower limit (e.g., two times full professor salaries) would be placed on top second tier coaches, like offensive and defensive coordinators, assistant basketball coaches, etc. Alumni "gifts" to coaches and other strategies to avoid these limits would be strictly prohibited --with extremely tough penalties for violations.
3) The length of regular season football shall be ten games, with up to a maximum of one post or pre season event (e.g, bowl game); basketball seasons shall be limited to 24 games plus up to four post season games; baseball teams cannot play more than 45 games or more than 28 game days.
3) Football teams shall be limited to 60 players. Red shirting and other practices designed to lengthen the college career of athletics artificially shall be prohibited.
4) No athletic competition will allowed during the final examinations week of an institution.
5) Bowing to commercial reality, athletes would be allowed to be paid up to an amount equal to 10 percent of the average salary of assistant professors in addition to other funds (tuition rebates, room, board, and books) provided. Student editors of school newspapers and those with other demanding extracurricular jobs are often paid, so this merely treats athletes the same, and reduces slightly the economic exploitation of them by uber-high paid coaches).
If the presidents of schools with good academic AND athletic reputations such as Michigan, Duke, Illinois, Southern California, Wisconsin, UCLA, Notre Dame, University of North Carolina, Texas, Cal Berkeley, Florida and Georgia got behind this --as well as the Ivy League and other prestige private schools (e.g., Northwestern and Stanford)--you probably have enough momentum to make it happen. If 20-25 premier universities with strong athletic and academic reputations say "enough is enough," perhaps the rest will go along. And, if they do not, perhaps we will shame the jock schools ultimately into submission.
I do not like price controls. I do not like competitors getting together. But when an activity is financed not by market forces but rather by taxpayer subsidies hidden from the public eye, this is the lesser of two evils. While there are other approaches (legislative mandates, accreditation withdrawal, Department of Education regulations), this would be the least intrusive way to proceed.
Would this kill college sports and ruin the Saturday afternoons of millions of sports fans? No. This would merely return us most the way back to the way sports were conducted a half a century ago --when we filled stadiums with tens of thousands of screaming fans just as we do today.
Thursday, May 15, 2008
Why Do Kids Go to Community Colleges?
By Richard Vedder
In California, Washington and Wyoming, nearly half the students attending institutions of higher education go to community colleges. By contrast, in Vermont, less than one postsecondary student in ten is enrolled in two year institutions? Why the difference?
Scott Jaschik reports on this in today's INSIDE HIGHER ED. I look at the top 10 community college-intensive states, and I see that the median tuition level as a percent of median family income is 2.5 percent. Looking at the lowest 10 states in terms of community college involvement, I see the median tuition level equals about 3.8 percent of median family income. States with lower participation charge higher tuition. Question: how important are tuition fees in determining enrollments?
There are regional patterns. Five of the six New England states are in the bottom 15 states in the proportion of postsecondary students in community colleges. By contrast, the West is overrepresented among the states with the highest community college participation, including all important California.
I have been pushing community colleges on cost grounds. But they have high attrition rates. And, I notice that some states with very high college attainment rates (percent of adults with college degrees) --Massachusetts, Colorado, New Hampshire --have low community college enrollments. An interesting question: do states with low community college participation have lower or higher attrition rates amongst their community college population?
One of my Whiz Kids, Bob Villwock, is a product of a community college. I am having him look into the question above, among others.
In California, Washington and Wyoming, nearly half the students attending institutions of higher education go to community colleges. By contrast, in Vermont, less than one postsecondary student in ten is enrolled in two year institutions? Why the difference?
Scott Jaschik reports on this in today's INSIDE HIGHER ED. I look at the top 10 community college-intensive states, and I see that the median tuition level as a percent of median family income is 2.5 percent. Looking at the lowest 10 states in terms of community college involvement, I see the median tuition level equals about 3.8 percent of median family income. States with lower participation charge higher tuition. Question: how important are tuition fees in determining enrollments?
There are regional patterns. Five of the six New England states are in the bottom 15 states in the proportion of postsecondary students in community colleges. By contrast, the West is overrepresented among the states with the highest community college participation, including all important California.
I have been pushing community colleges on cost grounds. But they have high attrition rates. And, I notice that some states with very high college attainment rates (percent of adults with college degrees) --Massachusetts, Colorado, New Hampshire --have low community college enrollments. An interesting question: do states with low community college participation have lower or higher attrition rates amongst their community college population?
One of my Whiz Kids, Bob Villwock, is a product of a community college. I am having him look into the question above, among others.
Bounty Hunting, University Style
By Richard Vedder
A few days ago, the New York Times had a story featuring my own university and, indeed, a friend of mine (Josep Rota). The story pointed out that more and more American universities are using recruiters in Asia to get them students --paying the recruiters an amount, say 10 percent of tuition, for each student enrolled. My university started using the practice a couple of years ago, and undergraduate foreign enrollments are soaring.
Actually, there are some very good aspects of this phenomenon. Students who completely lack knowledge of foreign universities get help, albeit sometimes rather biased help. The universities often get students who are qualitatively the equal or superior of the average undergraduate, and they gain some diversity in the student body. Moreover, economically, for many state schools it is a good deal. Ohio University charges about $18,000 out of state tuition for undergraduates --which probably exceeds the marginal cost of educating an undergraduate, particularly the first two years. Even after paying a thousands dollars or so to an agent, the students are actually more an asset than a liability to the university.
Yet there can be serious ethical problems. Many agents collect twice --once from the university, and a second time from the student. The agent is not a dispassionate, objective dispenser of information.
Moreover, some of the schools using agents are at least moderately selective in their admission practices. My university turns downs thousands of Ohio students annually prepared to pay the $9,000 or so in state tuition --and in part replaces them with out of state (and nation) students paying far more. The university claims it promotes diversity and excellence, but taxpayers subsidizing my university might claim that the practice discriminates against students from the place where taxpayers are footing perhaps one third or more of the bills.
In principle, I see nothing terribly wrong in using recruiters. They help make transactions occur. They provide information. They are compensated for their services. Instead of universities using their own employees, they use agents, which is often more cost effective. Schools out source part of admissions recruiting, consistent with pleas I have made for years about universities concentrating on those things they do well and relatively efficiently. At the same time, the agent taking payment from both the consumer and the provider is engaging in what Americans, but not Asians, view as dubious behavior. But compared with other problems facing universities, I think this is a relatively trivial one, at least at this point in time.
A few days ago, the New York Times had a story featuring my own university and, indeed, a friend of mine (Josep Rota). The story pointed out that more and more American universities are using recruiters in Asia to get them students --paying the recruiters an amount, say 10 percent of tuition, for each student enrolled. My university started using the practice a couple of years ago, and undergraduate foreign enrollments are soaring.
Actually, there are some very good aspects of this phenomenon. Students who completely lack knowledge of foreign universities get help, albeit sometimes rather biased help. The universities often get students who are qualitatively the equal or superior of the average undergraduate, and they gain some diversity in the student body. Moreover, economically, for many state schools it is a good deal. Ohio University charges about $18,000 out of state tuition for undergraduates --which probably exceeds the marginal cost of educating an undergraduate, particularly the first two years. Even after paying a thousands dollars or so to an agent, the students are actually more an asset than a liability to the university.
Yet there can be serious ethical problems. Many agents collect twice --once from the university, and a second time from the student. The agent is not a dispassionate, objective dispenser of information.
Moreover, some of the schools using agents are at least moderately selective in their admission practices. My university turns downs thousands of Ohio students annually prepared to pay the $9,000 or so in state tuition --and in part replaces them with out of state (and nation) students paying far more. The university claims it promotes diversity and excellence, but taxpayers subsidizing my university might claim that the practice discriminates against students from the place where taxpayers are footing perhaps one third or more of the bills.
In principle, I see nothing terribly wrong in using recruiters. They help make transactions occur. They provide information. They are compensated for their services. Instead of universities using their own employees, they use agents, which is often more cost effective. Schools out source part of admissions recruiting, consistent with pleas I have made for years about universities concentrating on those things they do well and relatively efficiently. At the same time, the agent taking payment from both the consumer and the provider is engaging in what Americans, but not Asians, view as dubious behavior. But compared with other problems facing universities, I think this is a relatively trivial one, at least at this point in time.
Sunday, May 11, 2008
Caesar's Gaul and the Modern Research University
By Richard Vedder
Like the Gaul of Julius Caesar, the modern research university is divided into three parts, often of roughly equal size. Universities are in the business of disseminating knowledge (teaching), creating knowledge (research), and public service and a variety of business activities ("auxiliary enterprises"). The proportions vary somewhat --at M.I.T., for example, the research component is, no doubt the largest, whereas as many medium quality state institutions (my own Ohio University is a good example), the instructional or auxiliary enterprise components are the largest. Auxiliary enterprises include feeding and housing people, caring for the sick (at university hospitals and clinics), entertaining (games where balls are thrown around, theatrical productions),etc.
The financing of these myriad activities is complex, and usually the public has no idea about the relative importance of the components of this trinity of functions or the amount of cross-subsidization that goes on between them. When university presidents tell parents "your tuition payments cover only 30 percent of the cost of running this institution," they neglect to tell them that the school may be only using 30 percent of the budget directly or indirectly on the dissemination of knowledge and that, in fact, they are paying 100 percent of the cost of educating their kids (in some cases, even more than 100 percent). At my university, the athletic department routinely overruns its budget and runs, in effect, a $12 million plus annual loss which is subsidized elsewhere --about 3 percent of the total university budget. While this is higher than average, it is not extraordinary. Rather than lower tuition by 6 percent and eliminating the subsidy, it continues to keep it to make alumni (who give trivial amounts to the institution) and a few noisy wannabe jocks happy. The students would vote resoundingly, I think, to lower the tuition and give up Division I football if given the opportunity.
I think we should have greater transparency about financing (I have a piece coming out shortly in the Chronicle of Higher Education on this point). The ratio of tuition payments to instructional costs, academic support, and a pro rata proportion of general administrative expenses is needed for every school --and it should be posted on a national web site. The issue arises: where do third party payments REALLY go --for the purpose for which they are intended, or elsewhere? I suspect most third party payments go for instructional or research purposes. But some money intended for "instruction" goes for "research." Does research pay for itself or is it heavily cross subsidized? Do state appropriations, probably designed mainly to improve student access, in reality promote very expensive graduate programs and esoteric research? Does 10 percent or so of my university's state appropriation in reality go to finance intercollegiate athletics instead of, say, creating lower tuition for students that would improve access to college?
CCAP is working on two ways to control costs. First, we are trying to offer alternatives to the cost-enhancing US News & World Report rankings, evaluating schools more on outcomes than inputs (resources used). We are also continuously promoting competition and transparency --both things that can only lead to some moderation in the excessive rise in college costs.
Like the Gaul of Julius Caesar, the modern research university is divided into three parts, often of roughly equal size. Universities are in the business of disseminating knowledge (teaching), creating knowledge (research), and public service and a variety of business activities ("auxiliary enterprises"). The proportions vary somewhat --at M.I.T., for example, the research component is, no doubt the largest, whereas as many medium quality state institutions (my own Ohio University is a good example), the instructional or auxiliary enterprise components are the largest. Auxiliary enterprises include feeding and housing people, caring for the sick (at university hospitals and clinics), entertaining (games where balls are thrown around, theatrical productions),etc.
The financing of these myriad activities is complex, and usually the public has no idea about the relative importance of the components of this trinity of functions or the amount of cross-subsidization that goes on between them. When university presidents tell parents "your tuition payments cover only 30 percent of the cost of running this institution," they neglect to tell them that the school may be only using 30 percent of the budget directly or indirectly on the dissemination of knowledge and that, in fact, they are paying 100 percent of the cost of educating their kids (in some cases, even more than 100 percent). At my university, the athletic department routinely overruns its budget and runs, in effect, a $12 million plus annual loss which is subsidized elsewhere --about 3 percent of the total university budget. While this is higher than average, it is not extraordinary. Rather than lower tuition by 6 percent and eliminating the subsidy, it continues to keep it to make alumni (who give trivial amounts to the institution) and a few noisy wannabe jocks happy. The students would vote resoundingly, I think, to lower the tuition and give up Division I football if given the opportunity.
I think we should have greater transparency about financing (I have a piece coming out shortly in the Chronicle of Higher Education on this point). The ratio of tuition payments to instructional costs, academic support, and a pro rata proportion of general administrative expenses is needed for every school --and it should be posted on a national web site. The issue arises: where do third party payments REALLY go --for the purpose for which they are intended, or elsewhere? I suspect most third party payments go for instructional or research purposes. But some money intended for "instruction" goes for "research." Does research pay for itself or is it heavily cross subsidized? Do state appropriations, probably designed mainly to improve student access, in reality promote very expensive graduate programs and esoteric research? Does 10 percent or so of my university's state appropriation in reality go to finance intercollegiate athletics instead of, say, creating lower tuition for students that would improve access to college?
CCAP is working on two ways to control costs. First, we are trying to offer alternatives to the cost-enhancing US News & World Report rankings, evaluating schools more on outcomes than inputs (resources used). We are also continuously promoting competition and transparency --both things that can only lead to some moderation in the excessive rise in college costs.
Saturday, May 10, 2008
Senator Grassley' s Queer Quixotic Quest
By Richard Vedder
I have known Senator Chuck Grassley, albeit not intimately, for many years. He is the quintessential Senator who has "grown" on the job, to use liberal parlance --meaning he makes most decisions based on trendy politically correct ideas of the moment and less based on bedrock principles. In short, he has moved to the left politically more than his pal Max Baucus (chair of the Finance Committee) has moved to the right.
The Wall Street Journal reports Grassley still is pushing colleges to spend five percent out of their endowment annually. It is an idea that I once thought had some merit, but, like the Journal, I increasingly think is a turkey of a proposal. I was convinced of that in part at an AEI conference that I presided over, where Charles Miller (former head of the Spellings Commission) and Terry Hartle (of the American Council of Education) made compelling arguments.
The irony of it is that the proposal to increase spending from endowments is coming as endowment returns are sharply declining. My guess is some endowment funds showed low single digit or even negative growth over the 10 month period in the current fiscal year (beginning for many colleges on July 1), after adjusting for inflation (which is increasing because of bad public policy). In other words, some of these schools are actually eating into principal after adjusting for inflation. Compelling higher spending in such an environment is not prudent financially.
However, this is not my major objection to this idea, which is articulated in a dialogue between Charles Miller and Lynne Munson in a study that CCAP is soon releasing. Universities are severely constrained by donor intent on the use of endowment funds, and an automatic payout rule in some cases is inconsistent with donor intent.
It is probably true that during the great endowment run-up between, say, 1982 and 2007, schools on average spent less out of endowment than necessary if the goal of treating different generations alike is accepted. Put differently, returns were so high that real endowments grew, benefiting future generations at the expense of current ones, and arguably in some cases violating donor intent to serve various missions now as well as in the future. But the reasons for this conservatism are understandable if one looks at the period from, say, 1960 to 1982, a period in which real per student endowments fell at many institutions during a period of very low returns on endowment investments (in large part a consequence of a crazy Keynesian-style macroeconomic policy that may be returning in this era of the Bernanke Fed and a Congress/President that believes in runaway spending).
The most frightening statements come from the IRS, which is talking about what kinds of spending IT will permit with tax exempt funds. I do think a very good case can be made for not allowing tax exempt contributions to essentially nonacademic purposes of universities --stadium sky boxes, luxury dormitories, etc. But that determination needs to be made by the Gang of 535 (Congress) and the president, following the provisions of the U.S. Constitution, not by power hungry tax collecting bureaucrats.
I have known Senator Chuck Grassley, albeit not intimately, for many years. He is the quintessential Senator who has "grown" on the job, to use liberal parlance --meaning he makes most decisions based on trendy politically correct ideas of the moment and less based on bedrock principles. In short, he has moved to the left politically more than his pal Max Baucus (chair of the Finance Committee) has moved to the right.
The Wall Street Journal reports Grassley still is pushing colleges to spend five percent out of their endowment annually. It is an idea that I once thought had some merit, but, like the Journal, I increasingly think is a turkey of a proposal. I was convinced of that in part at an AEI conference that I presided over, where Charles Miller (former head of the Spellings Commission) and Terry Hartle (of the American Council of Education) made compelling arguments.
The irony of it is that the proposal to increase spending from endowments is coming as endowment returns are sharply declining. My guess is some endowment funds showed low single digit or even negative growth over the 10 month period in the current fiscal year (beginning for many colleges on July 1), after adjusting for inflation (which is increasing because of bad public policy). In other words, some of these schools are actually eating into principal after adjusting for inflation. Compelling higher spending in such an environment is not prudent financially.
However, this is not my major objection to this idea, which is articulated in a dialogue between Charles Miller and Lynne Munson in a study that CCAP is soon releasing. Universities are severely constrained by donor intent on the use of endowment funds, and an automatic payout rule in some cases is inconsistent with donor intent.
It is probably true that during the great endowment run-up between, say, 1982 and 2007, schools on average spent less out of endowment than necessary if the goal of treating different generations alike is accepted. Put differently, returns were so high that real endowments grew, benefiting future generations at the expense of current ones, and arguably in some cases violating donor intent to serve various missions now as well as in the future. But the reasons for this conservatism are understandable if one looks at the period from, say, 1960 to 1982, a period in which real per student endowments fell at many institutions during a period of very low returns on endowment investments (in large part a consequence of a crazy Keynesian-style macroeconomic policy that may be returning in this era of the Bernanke Fed and a Congress/President that believes in runaway spending).
The most frightening statements come from the IRS, which is talking about what kinds of spending IT will permit with tax exempt funds. I do think a very good case can be made for not allowing tax exempt contributions to essentially nonacademic purposes of universities --stadium sky boxes, luxury dormitories, etc. But that determination needs to be made by the Gang of 535 (Congress) and the president, following the provisions of the U.S. Constitution, not by power hungry tax collecting bureaucrats.
Friday, May 09, 2008
More International Perspectives on the High Cost of College
By Richard Vedder and Jonathan Robe
Yesterday in this space the point was made that even if you believe the Baumol thesis that college is inherently highly costly because of the difficulty of improving productivity, why would that lead to much higher costs in the U.S. than in other roughly comparable industrial nations. Today we want to bolster that argument a bit.
Some relevant OECD data on college costs, etc. are in the table below. They show that the U.S. spends roughly double as much per student as such peer nations as Britain, Germany, France, Japan and Australia and considerably more than neighboring Canada.
Table 1
You might say, "Professional workers make more in the U.S. than in these other countries," thereby explaining the differences. Not so. We obtained data on senior secondary (high school) teacher salaries for some of these countries. Table 2 looks at the number of college students than can be educated for the equivalent of one year's employment of a long-time (15 year) high school teacher.
TABLE 2
For the non-U.S. nations you could educate three or four college students for what it cost to hire a high school teacher --whereas, in the U.S., the number is less than two.
As indicated in the earlier blog, all of this cries for explanation. If it is all explained by greater research efforts in the U.S., the cost of this research is greater than the costs of instruction --meaning it is an extremely expensive proposition. I suspect the socialization dimensions of higher education --the football teams, elaborate student services, etc., are a big contributing factor. But all of this bears more investigation.
Yesterday in this space the point was made that even if you believe the Baumol thesis that college is inherently highly costly because of the difficulty of improving productivity, why would that lead to much higher costs in the U.S. than in other roughly comparable industrial nations. Today we want to bolster that argument a bit.
Some relevant OECD data on college costs, etc. are in the table below. They show that the U.S. spends roughly double as much per student as such peer nations as Britain, Germany, France, Japan and Australia and considerably more than neighboring Canada.
Table 1
You might say, "Professional workers make more in the U.S. than in these other countries," thereby explaining the differences. Not so. We obtained data on senior secondary (high school) teacher salaries for some of these countries. Table 2 looks at the number of college students than can be educated for the equivalent of one year's employment of a long-time (15 year) high school teacher.
TABLE 2
For the non-U.S. nations you could educate three or four college students for what it cost to hire a high school teacher --whereas, in the U.S., the number is less than two.
As indicated in the earlier blog, all of this cries for explanation. If it is all explained by greater research efforts in the U.S., the cost of this research is greater than the costs of instruction --meaning it is an extremely expensive proposition. I suspect the socialization dimensions of higher education --the football teams, elaborate student services, etc., are a big contributing factor. But all of this bears more investigation.
Thursday, May 08, 2008
The Baumol Effect and Rising College Costs
By Richard Vedder
The Greentree Gazette has reprinted an article by William Baumol and an associate from 1995 that points out that the service nature of higher education makes it difficult to replace humans with capital equipment unlike in many goods producing industries. In this respect, higher education is just like the performing arts and health care services. Hence productivity growth lags behind other sectors, meaning over time the costs of inputs rise more in higher education per unit of output than in the overall economy.
Will Baumol is a world-class economist who should someday receive the Nobel Prize. I admire his work immensely. And his theory has more than a grain of truth to it. There are limits to the use of computerized or interactive television instruction, for example. Efforts to substitute capital (e.g., computerized instruction) for labor run the risk of lowering quality, as students respond better to direct interpersonal contact with live professors in most situations.
But the argument has a huge limitation --instructional costs are typically a small proportion of the cost of going to college. The ratio of faculty salaries to tuition payments is typically well below one, and as a percent of total academic expenditures, it is typically less than 25 percent. And there is nothing in the Baumol thesis that would explain, for example, the doubling in the number of professional non-instructional personnel per student over the past three decades.
Moreover, a look at international data is instructive. The ratio of college to high school costs per students is about 1.6 for the entire OECD (about 30 top industrial nations), but it is about 50 percent higher, 2.4, for the U.S. Why does it cost more than 20 percent more to educate a college student in the U.S. than in Canada, or nearly twice as much in the U.S. relative to Britain, France, or Germany? Not all of that is explained simply in terms of the Baumol effect (these are all high wage countries and professorial wages are not that dramatically different between those nations and the U.S.) (I am indebted to Jonathan Robe for this insight).
Of course, much of the explanation for these differentials may reflect research spending, and part of it may reflect genuine qualitative superiority of American universities. Nonetheless, the evidence is clear that some other nations with high quality higher education, such as Britain, seem to operate at dramatically lower costs. A closer examination of these international differences seems warranted.
The Greentree Gazette has reprinted an article by William Baumol and an associate from 1995 that points out that the service nature of higher education makes it difficult to replace humans with capital equipment unlike in many goods producing industries. In this respect, higher education is just like the performing arts and health care services. Hence productivity growth lags behind other sectors, meaning over time the costs of inputs rise more in higher education per unit of output than in the overall economy.
Will Baumol is a world-class economist who should someday receive the Nobel Prize. I admire his work immensely. And his theory has more than a grain of truth to it. There are limits to the use of computerized or interactive television instruction, for example. Efforts to substitute capital (e.g., computerized instruction) for labor run the risk of lowering quality, as students respond better to direct interpersonal contact with live professors in most situations.
But the argument has a huge limitation --instructional costs are typically a small proportion of the cost of going to college. The ratio of faculty salaries to tuition payments is typically well below one, and as a percent of total academic expenditures, it is typically less than 25 percent. And there is nothing in the Baumol thesis that would explain, for example, the doubling in the number of professional non-instructional personnel per student over the past three decades.
Moreover, a look at international data is instructive. The ratio of college to high school costs per students is about 1.6 for the entire OECD (about 30 top industrial nations), but it is about 50 percent higher, 2.4, for the U.S. Why does it cost more than 20 percent more to educate a college student in the U.S. than in Canada, or nearly twice as much in the U.S. relative to Britain, France, or Germany? Not all of that is explained simply in terms of the Baumol effect (these are all high wage countries and professorial wages are not that dramatically different between those nations and the U.S.) (I am indebted to Jonathan Robe for this insight).
Of course, much of the explanation for these differentials may reflect research spending, and part of it may reflect genuine qualitative superiority of American universities. Nonetheless, the evidence is clear that some other nations with high quality higher education, such as Britain, seem to operate at dramatically lower costs. A closer examination of these international differences seems warranted.
Wednesday, May 07, 2008
Two Follies
By Andrew Gillen
I recently stumbled across an old management classic: On the Folly of Rewarding A, While Hoping for B by Steven Kerr. It originally appeared in The Academy of Management Journal, Vol. 18, No. 4 (Dec., 1975), but an updated and ungated version is available here.
The title is a nice summary of the main point, but the section on universities caught my eye, especially two of the examples he gives. The first relates to how professors are rewarded.
The second relates to students.
I had been under the impression that these problems weren't as big back then as they are today. Of course, I didn't have much personal experience with higher ed in the last millennium (I was born after the article was written), but I'm curious as to what our readers think on this. Have these problems been getting better or worse?
I recently stumbled across an old management classic: On the Folly of Rewarding A, While Hoping for B by Steven Kerr. It originally appeared in The Academy of Management Journal, Vol. 18, No. 4 (Dec., 1975), but an updated and ungated version is available here.
The title is a nice summary of the main point, but the section on universities caught my eye, especially two of the examples he gives. The first relates to how professors are rewarded.
Society hopes that professors will not neglect their teaching responsibilities but rewards them almost entirely for research and publications.
The second relates to students.
[G]rades themselves have become much more important for entrance to graduate school, successful employment, tuition refunds, and parental respect, than the knowledge or lack of knowledge they are supposed to signify.
It therefore should come as no surprise that we find fraternity files for examinations, term paper writing services, and plagiarism. Such activities constitute a personally rational response to a reward system which pays off for grades rather than knowledge.
I had been under the impression that these problems weren't as big back then as they are today. Of course, I didn't have much personal experience with higher ed in the last millennium (I was born after the article was written), but I'm curious as to what our readers think on this. Have these problems been getting better or worse?
Tuesday, May 06, 2008
Giving Presidents Tenure
By Richard Vedder
Increasingly, universities are treating presidents as untouchable icons that must be kept in office no matter how egregious their behavior. In short, they are being given something close to tenure. That may be good for faculty, although even that is a very debatable, dubious proposition. But it makes zero sense for university presidents. I deplore the trend to long term contracts for presidents, thinking that agreements of more than three years in duration involve enormous financial commitments and lead to "imperial presidents" who may exercise leadership --but often at the expense of disastrous policies and poor morale.
West Virginia University's Faculty Senate has asked for the removal of their president in light of the granting of a degree to a relative of the governor. The Provost and business school dean were removed, but somehow the Trustees feel the President does not share responsibility, despite the fact that he apparently knew all about the incident (as an ex-lobbyist, I would not be surprised that he prompted giving her the degree).
At my university, the Board of Trustees ignored strong no confidence votes in the president from both the student body and faculty --and gave him a long term contract this year that extends until he reaches retirement age. At a community college up the road, a whole litany of scandals including dubiously awarded degrees, financial improprieties, etc., has led to no action on the part of the board to remove a president in his 40th year of leadership.
Where is the accountability? Where are the accreditation associations who are supposedly our protection from mediocrity and inappropriate conduct?
Increasingly, universities are treating presidents as untouchable icons that must be kept in office no matter how egregious their behavior. In short, they are being given something close to tenure. That may be good for faculty, although even that is a very debatable, dubious proposition. But it makes zero sense for university presidents. I deplore the trend to long term contracts for presidents, thinking that agreements of more than three years in duration involve enormous financial commitments and lead to "imperial presidents" who may exercise leadership --but often at the expense of disastrous policies and poor morale.
West Virginia University's Faculty Senate has asked for the removal of their president in light of the granting of a degree to a relative of the governor. The Provost and business school dean were removed, but somehow the Trustees feel the President does not share responsibility, despite the fact that he apparently knew all about the incident (as an ex-lobbyist, I would not be surprised that he prompted giving her the degree).
At my university, the Board of Trustees ignored strong no confidence votes in the president from both the student body and faculty --and gave him a long term contract this year that extends until he reaches retirement age. At a community college up the road, a whole litany of scandals including dubiously awarded degrees, financial improprieties, etc., has led to no action on the part of the board to remove a president in his 40th year of leadership.
Where is the accountability? Where are the accreditation associations who are supposedly our protection from mediocrity and inappropriate conduct?
Monday, May 05, 2008
Suing Students
By Richard Vedder
When I read last week that a professor was going to sue the students who were driving her nuts, I laughed and thought "I kind of understand that --students sometimes do stupid and irresponsible things."
After reading today's Wall Street Journal, however, I have concluded that Priya Venkatesan's suit is nasty, bad, and strikes at the heart of what the academy is all about--assuming the WSJ story is even half-correct.
Professor V apparently was upset that students "argue with your ideas" and have "subversive" thoughts --in other words, do not agree with the usual French claptrap that goes for literary theory these days. The students have created a "hostile working environment" for poor Prof V we are told. Naughty them. My students occasionally argue with me, disagree with me, and, rarely to be sure, even yell at me. I don't like all of it, but that is what a university is all about, even Dartmouth College, which on some days I think has undergone a big decline in the days since Daniel Webster extolled its virtues in one of the greatest cases in American constitutional history.
But I am less mad at Dartmouth then my own Alma Mater --Northwestern --that decided to hire Professor V. I love diversity of ideas (I championed hiring a Marxist in my own department a generation ago), but I do not like people who wish to intimidate those who disagree.
Fortunately, as crazy as courts can be this day, I have a feeling justice will prevail, and this attack on students will fail. I can only hope that Dartmouth is supporting its own students in this instance, and that the AAUP and other self-proclaimed monitors of academic freedom will strongly come into this case --on the side of the students.
When I read last week that a professor was going to sue the students who were driving her nuts, I laughed and thought "I kind of understand that --students sometimes do stupid and irresponsible things."
After reading today's Wall Street Journal, however, I have concluded that Priya Venkatesan's suit is nasty, bad, and strikes at the heart of what the academy is all about--assuming the WSJ story is even half-correct.
Professor V apparently was upset that students "argue with your ideas" and have "subversive" thoughts --in other words, do not agree with the usual French claptrap that goes for literary theory these days. The students have created a "hostile working environment" for poor Prof V we are told. Naughty them. My students occasionally argue with me, disagree with me, and, rarely to be sure, even yell at me. I don't like all of it, but that is what a university is all about, even Dartmouth College, which on some days I think has undergone a big decline in the days since Daniel Webster extolled its virtues in one of the greatest cases in American constitutional history.
But I am less mad at Dartmouth then my own Alma Mater --Northwestern --that decided to hire Professor V. I love diversity of ideas (I championed hiring a Marxist in my own department a generation ago), but I do not like people who wish to intimidate those who disagree.
Fortunately, as crazy as courts can be this day, I have a feeling justice will prevail, and this attack on students will fail. I can only hope that Dartmouth is supporting its own students in this instance, and that the AAUP and other self-proclaimed monitors of academic freedom will strongly come into this case --on the side of the students.
Ben, Two Georges and Teddy: Shame on Them All
By Richard Vedder
Today's Wall Street Journal editorial on student loans got me all riled up before the work week has really started. Washington got us into the huge housing credit mess, and has directly or indirectly created the student loan crisis as well. But it is a bipartisan, indeed, tripartisan mess --everyone in DC is to blame, with the possible exception of my sidekicks Bryan, Andy as well as myself (who am temporarily in our nation's capital --a place with some magnificent physical capital in the form of stately buildings designed in the past, but so bereft of human capital). It is a city of politicians who are either very stupid, very unwise, very uncourageous, or a combination of all the above.
Let us single out four culprits.
BEN BERNANKE -- No Alan Greenspan, Bernanke is proof positive that academicians should not be put in charge of something as important as the central bank. Friday he caved on putting fed money into the student loan mess. The Fed has gone from being Lender of Last Resort to banks to being Lender of First Resort to everyone. Greenspan is not entirely innocent, having been the architect of the easy money policies that contributed to the housing debacle, but I cannot see him getting the Fed into every kind of harebrained scheme to bailout people who should have been allowed to fail. He is destroying efficient market signals and causing all sorts of moral hazard problems. I opposed his appointment, and my opposition is vindicated.
GEORGE BUSH -- This is the President who can't say no --who goes along with every anti-market, anti-Reagan Republican scheme, from prescription drugs to, now, bailing out the student loan mess that Congress (see below) largely created. I like Bush on taxes and Supreme Court appointments, and in general for appointing good Ed people, but I am furious at this student loan bailout complicity.
GEORGE MILLER -- He successfully wanted to mandate smaller fees for private student loan providers, creating much of the current flight from that industry. Now, realizing the political liabilities of that boo-boo, he is trying to recoup by providing that hated (not by me) industry with subsidies. Blunder on top of blunders. Buck McKeon (his GOP counterpart) is only marginally better.
TEDDY KENNEDY -- I saved the best for last. Besides favoring bailing every one and their Mother out in order to keep loans flowing even to the most flimsy qualified students, Kennedy wants to expand direct federal lending to students --getting the government further into the banking business. If Teddy has his way, we will Sovietize an already inefficient system.
My view is contrarian. The Feds should get out of the student loan business--period, end of story. Credit should be extended based on economic fundamentals --is the student a good risk? Will she pay the loan back? Markets can and will evolve, providing new products (e.g., equity and well as debt based financing) to meeting growing needs over time. Wall Street is more responsible financially than the Government, which has tens of trillions of dollars in unfunded liabilities on top of a few trillion in explicit debt.
Today's Wall Street Journal editorial on student loans got me all riled up before the work week has really started. Washington got us into the huge housing credit mess, and has directly or indirectly created the student loan crisis as well. But it is a bipartisan, indeed, tripartisan mess --everyone in DC is to blame, with the possible exception of my sidekicks Bryan, Andy as well as myself (who am temporarily in our nation's capital --a place with some magnificent physical capital in the form of stately buildings designed in the past, but so bereft of human capital). It is a city of politicians who are either very stupid, very unwise, very uncourageous, or a combination of all the above.
Let us single out four culprits.
BEN BERNANKE -- No Alan Greenspan, Bernanke is proof positive that academicians should not be put in charge of something as important as the central bank. Friday he caved on putting fed money into the student loan mess. The Fed has gone from being Lender of Last Resort to banks to being Lender of First Resort to everyone. Greenspan is not entirely innocent, having been the architect of the easy money policies that contributed to the housing debacle, but I cannot see him getting the Fed into every kind of harebrained scheme to bailout people who should have been allowed to fail. He is destroying efficient market signals and causing all sorts of moral hazard problems. I opposed his appointment, and my opposition is vindicated.
GEORGE BUSH -- This is the President who can't say no --who goes along with every anti-market, anti-Reagan Republican scheme, from prescription drugs to, now, bailing out the student loan mess that Congress (see below) largely created. I like Bush on taxes and Supreme Court appointments, and in general for appointing good Ed people, but I am furious at this student loan bailout complicity.
GEORGE MILLER -- He successfully wanted to mandate smaller fees for private student loan providers, creating much of the current flight from that industry. Now, realizing the political liabilities of that boo-boo, he is trying to recoup by providing that hated (not by me) industry with subsidies. Blunder on top of blunders. Buck McKeon (his GOP counterpart) is only marginally better.
TEDDY KENNEDY -- I saved the best for last. Besides favoring bailing every one and their Mother out in order to keep loans flowing even to the most flimsy qualified students, Kennedy wants to expand direct federal lending to students --getting the government further into the banking business. If Teddy has his way, we will Sovietize an already inefficient system.
My view is contrarian. The Feds should get out of the student loan business--period, end of story. Credit should be extended based on economic fundamentals --is the student a good risk? Will she pay the loan back? Markets can and will evolve, providing new products (e.g., equity and well as debt based financing) to meeting growing needs over time. Wall Street is more responsible financially than the Government, which has tens of trillions of dollars in unfunded liabilities on top of a few trillion in explicit debt.
Friday, May 02, 2008
CCAP in INSIDE HIGHER ED
INSIDE HIGHER ED published a piece today that CCAP did on the approaching student loan bubble. The piece, authored by Richard Vedder and Andrew Gillen, on the approaching student loan crisis can be found here.
By drawing analogies to the housing crisis in the news of late, we at CCAP argue that, based on data from the College Board, the Department of Education and other sources, that the rising costs of college have forced more and more students and their families to pay for college by taking out student loans which they are unable to fully repay.
We argue that a real solution may be looking into new and innovative methods of financing rather than just bailing out student borrowers or the loan providers.
By drawing analogies to the housing crisis in the news of late, we at CCAP argue that, based on data from the College Board, the Department of Education and other sources, that the rising costs of college have forced more and more students and their families to pay for college by taking out student loans which they are unable to fully repay.
We argue that a real solution may be looking into new and innovative methods of financing rather than just bailing out student borrowers or the loan providers.
Thursday, May 01, 2008
Run, Do Not Walk, To Your Favorite Newstand
By Richard Vedder
The May 19 issue of Forbes is going on sale today. In it, I have an article, entitled "How to Choose a College," which introduces the CCAP rankings of colleges and universities. In the magazine story, we present our list of the top 10 schools for national universities, national public universities, and liberal arts colleges. The story compares them with their US News and World Report rankings.
We start with the premise that consumers want two things when they buy a good or service. First, they want to be satisfied using the good --it is easy to use, safe, etc. Second, they want it to do the job for which it is intended. We think ratings of colleges should reflect how colleges do in meeting those objectives. The US News (hereafter, USNWR) rankings are more based on resource or inputs used or on institutional reputation. The two sets of rankings are moderately highly correlated with one another, but there are important differences. Wabash College is 52nd on the USNWR rankings of liberal arts colleges, but 10th on our list, for example. The University of Alabama moves from 42nd on the USNWR national public university list to 7th on ours.
Our rankings are based on student perceptions of the quality of courses and instructors (based on the ratemyprofessors.com website), on alumni presence in Who's Who in America , on student success in winning nationally competitive awards like the Rhodes Scholarship, or on the probability of graduating from college in four years. If we obtain funding, we hope to further refine and expand our ratings, which are more outcomes than input based.
For the story, go to your newstand, and/or to forbes.com. The story on the Forbes website also includes the complete list of rankings (over 250 total) that we did for national universities, national public universities and liberal arts colleges.
The May 19 issue of Forbes is going on sale today. In it, I have an article, entitled "How to Choose a College," which introduces the CCAP rankings of colleges and universities. In the magazine story, we present our list of the top 10 schools for national universities, national public universities, and liberal arts colleges. The story compares them with their US News and World Report rankings.
We start with the premise that consumers want two things when they buy a good or service. First, they want to be satisfied using the good --it is easy to use, safe, etc. Second, they want it to do the job for which it is intended. We think ratings of colleges should reflect how colleges do in meeting those objectives. The US News (hereafter, USNWR) rankings are more based on resource or inputs used or on institutional reputation. The two sets of rankings are moderately highly correlated with one another, but there are important differences. Wabash College is 52nd on the USNWR rankings of liberal arts colleges, but 10th on our list, for example. The University of Alabama moves from 42nd on the USNWR national public university list to 7th on ours.
Our rankings are based on student perceptions of the quality of courses and instructors (based on the ratemyprofessors.com website), on alumni presence in Who's Who in America , on student success in winning nationally competitive awards like the Rhodes Scholarship, or on the probability of graduating from college in four years. If we obtain funding, we hope to further refine and expand our ratings, which are more outcomes than input based.
For the story, go to your newstand, and/or to forbes.com. The story on the Forbes website also includes the complete list of rankings (over 250 total) that we did for national universities, national public universities and liberal arts colleges.
Subscribe to:
Posts (Atom)
