Why are for-profits’ standards so high?

by Andrew Gillen

The Education Trust report lamenting the 22% graduation rate at for-profits is getting lots of attention. My main question is, why do for-profits have such high standards?

Think about it. When for-profits aren’t being attacked for having a low graduation rate, they are being attacked for being diploma mills selling unsuspecting students worthless degrees at inflated prices. If that is the business model, then why on earth would they only have a 22% graduation rate?

Richard Vedder on the French

Richard Vedder participated in The New York Times' "Room for Debate" discussion on the topic: Why French Scholars Love U.S. Colleges.

Here's what he had to say about why French scholars immigrate to the United States:

It is true that of the four leading nationality groups of Europe -- British, French, Germans and Russians – the French are the least prone to emigrate, perhaps because of heightened ethnocentric behavior. But love of country, language, culture and even fine indigenous wines only goes so far -- if the enticements are big enough, even the French will move.

You can read the whole thing here.

Links for 11/30/10

Ben Schiller

management thinker Peter Drucker wrote that “no greater damage could be done to our economy or to our society than to attempt to ‘professionalize’ management by ‘licensing’ managers … or by limiting access to management to people with a special academic degree”. At the time, Drucker was worried by what he saw as a new phenomenon for managers to be trained at business schools, rather than ‘learning on the job’, as they always had...

Despite his reputation, society has completely failed to take Drucker’s advice...

Arguably, say its critics, management education does more to benefit universities and students (through fees and higher salaries) than it does the wider fabric...

In the old days, young people would join companies from university and spend years acquiring what the Hoopers call domain knowledge of their chosen industry. With business school, graduates were licensed to practice management, without ever having done it, and without in-depth industry understanding. This change, in turn, led to an over-reliance on financial metrics (to compensate for other knowledge), and the rise of financial engineering at the expense of lasting value creation...

The result was “intellectual arrogance and managerial incompetence on a scale inconceivable in earlier generations”...

The problem with business schools is they tend to produce more financial whiz kids and consultants, than innovators and entrepreneurs...

Though they teach some useful skills, business schools feed a culture of credentialism, where what matters is the degree, rather than skills or experience. They have created the illusion of a profession, and the pretense of a scientific body of knowledge. And they have done this largely not for our benefit, but for their own...

Ralph A. Rossum via Doug Lederman

I think every accreditor should be really nervous…

Dean Dad

The only way I can imagine the “Provost as Dr. Evil” theory making any sense would be if you never looked beyond the confines of a single academic department. If your context is any broader than that, the theory quickly falls apart…

Lanny Davis

On April 26, 2010, Steven Eisman, famed short-seller, met secretly with two senior DOE officials, Deputy Undersecretary of DOE Robert Shireman and Acting Deputy Assistant for Policy and Budget, David Bergeron. Less than two months later, the Department issued its first batch of regulations targeting only for-profit colleges -- and stocks in ten-out-of-fourteen public companies in the for-profit sector and, presumably, Mr. Shireman made lots of money.

The Department didn't disclose this Eisman meeting with such top officials -- only an enterprising reporter at Fortune dug it out and wrote about it last month. Nor has the Department stated it required Mr. Eisman to disclose his short positions before meeting with him.

Some weeks ago Ann Manheimer, DOE's Director of Work Force Development, who used to work for Mr. Shireman in the Undersecretary's office, met with well-known short-seller in the for-profits sector, Ansal Desai of Dallas, Texas. According to an email, Ms. Manheimer, supposed to be an objective public official writing a fair regulation, was asking the short-seller for anecdotes and examples of abuses in the for-profit, career-college sector only…

As a liberal Democrat, I worry that something is very wrong here. This is bad policy, bad politics and bad process…

Richard Vedder on C-SPAN

Last week in a segment for C-SPAN's Washington Journal program, Richard Vedder argued that college costs continue to rise because universities lack the necessary incentives to control spending. He also took questions from callers, many of whom shared concerns regarding the value of their college degrees, student financial aid programs and the difficulty with putting one's children through college.

You can watch the video below:

New Education Trust Report Passes the Ideological Litmus Test: Profits Have No Place in Education

by Daniel L. Bennett

The Education Trust released a report last week entitled, Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities. The report is just another one of many recent loathing attacks on the for-profit sector of postsecondary education that offers virtually no new insight of the industry. It instead relies on the same recycled data points (high student loan default rates, low graduation rates, etc.) that critics, who are steadfast in their belief that profit has no place in education, use to paint an ugly picture of the sector. As my econometrics professor has often repeated, there are no truths in statistics. Since Neal McCluskey at Cato does an excellent job of pointing out the flaws in the report's use of data to make its case, I'll address a few other things about the report.

First of all, the author's ideology is pronounced early in the report, as they state:

the most vulnerable in society being harmed by underregulated for-profit colleges that value double-digit stock growth and shareholder returns over student success.

This statement reveals to me that the authors have a fundamental mistrust (and frankly misunderstanding) of capitalism, markets, and human nature and believe that government is the solution to all of society's problems. It also suggests that they will make no attempt to present a balanced case of the sector. As Richard Vedder, Adam Lucchesi and I indicated in our recent report on the sector:

Economics would suggest that for-profits can only make a profit by providing educational services that are in high demand. Those educational services would not likely be in high demand for long if they were of dubious quality or did little to increase a student’s employability. The track record of for-profit education is long enough at this point that if the industry were providing a product of little value, the customers would be aware of this and simply go away. They have not. Demand at for-profits is as strong as ever. If demand for a product is strong, the product must be providing something of value for the customer.

The ET report also reveals the author's misdiagnosis of the state of higher education in its entirety. As they unleash a wrath of condemnation on the for-profits, who admittedly do have some serious problems, they appear to have found the public and private non-profit sectors not-guilty of similar offenses. Consider the following statements:

Low-income students and students of color are getting access, but not much success. And access without success—without graduation, without employment—is something the nation cannot afford.

Students’ inability to pay back the debt strongly suggests that the credentials students are earning at these schools, with the intention of preparing themselves for lucrative jobs and careers, may not be worth the cost. Even if they graduate, it seems clear that they are not entering the jobs, and bringing home the income, they had planned for when they entered the institution.

I largely agree with the two statements as a public policy concern; however, the authors use them solely to describe the for-profit sector, completely ignoring the fact that both of these statements can be used to accurately describe the current state of public and non-profit higher ed as well. See past posts from my CCAP colleagues Christopher Matgouranis and Richard Vedder for empirical evidence of this.

Finally, the ET's report has a section titled "At What Cost?" in which it decries the so-called "high cost" of for-profit colleges by comparing tuition fees to those in the public and non-profit sectors. The authors make the same analytical error that many critics of for-profit education do in completely ignoring the fact that public colleges receive exorbitant amounts of public direct subsidies that are supposed to be used to defray the out-of-pocket cost for students (in reality, they are partially used to expand university bureaucracies and gentrify campuses). Once these and other indirect subsidies (e.g. tax exemptions) are considered, the for-profit colleges sell education at a total societal cost comparable (quite possibly lower) than the public sector.

Groups such as Education Trust continue to push for "enhanced regulatory techniques" to be imposed on the for-profit sector. While I agree that there are some serious issues in the sector, such as soaring debt loads and misuse of public funds, that need to be addressed, these issues are not endemic to the for-profit sector. As a public policy matter, we need to examine the weaknesses, as well as strengths, in all of higher education. This should not be limited to pointing out the flaws in one sector, while simultaneously ignoring its strengths, and overlooking the problems in another sector.

Going Fishin' with Archibald and Feldman

by Andrew Gillen

The Fish fiasco is getting weirder by the minute. After Felix Salmon, among others, offered critiques, Fish invited Archibald and Feldman to respond on his blog.

They basically reiterate the points Fish made but with better support. It is still not convincing though.

My biggest issue is with the Fish/Archibald/Feldman position that adopting technology is a major driver of higher costs combined with their preferred definition of affordability. To them

Something becomes less affordable over time if you cannot buy the same amount of it without spending less on other things.

They use this definition to argue that because the income left after paying net tuition is higher, college is more affordable than in the past. So if something, say IT, declines in price, wouldn’t that mean it is more affordable? Apparently not, since they also argue that technology is a major factor driving college costs higher.

So if I’ve got this straight the Fish/Archibald/Feldman position is that

1. Net tuition is going up, but college is more affordable.
2. The cost of adopting technology is going down, but increasingly unaffordable technology is making college more expensive.

I guess I’ll have to wait for my copy of the book to arrive to experience the rhetorical gymnastics required to simultaneously take those two positions.

Links for 11/29/10

Chester E. Finn, Jr.

The Coleman Report and its data have been exhaustively analyzed and reanalyzed. But this key finding has never been successfully challenged: School inputs—money, teachers, teacher credentials, etc.—have little correlation with pupil achievement and differences in achievement cannot be significantly accounted for by differences in school resources.

Pre-Coleman, the formula was simple. More money plus more teachers (and more whatever) made for better schools which yielded better results. Nearly everyone took this for granted. Yet Coleman showed that, by and large, it isn’t true. And of course that conclusion is why HEW found the report so awkward. For Lyndon Johnson was still president and had spent the previous two years persuading Congress that the way to end poverty and equalize achievement in America was to lavish federal dollars on the education system…

the single greatest change in American K-12 education these past four decades is that we now focus overwhelmingly on the results themselves—on measuring them, understanding them, comparing them, fretting about gaps in them, setting standards for them, creating assessment and accountability systems keyed to them, and devising new strategies to alter them…

That change can be traced pretty directly to the Coleman Report and its foremost interpreter, the late Daniel Patrick Moynihan…

Vivek Wadhwa

Build a magnificent technology park next to a research university; provide incentives for chosen businesses to locate there; add some venture capital. That is the common recipe for harnessing higher education and industry to spur economic growth as prescribed by management consultants touting the "cluster theory" developed by Harvard Business School's Michael E. Porter.

Hundreds of regions all over the world have spent billions on such efforts; practically all have failed…

All of those are well-intentioned efforts to build Silicon Valley-style technology hubs, but they are based on the same flawed assumptions: that government planners can pick industries they want to develop and, by erecting buildings and providing money to entrepreneurs and university researchers, make innovation happen.

It simply doesn't work that way…

Lisa M. Krieger

Cal State took the lead in 2008 becoming the first and only university system in the nation to publish its graduates’ salary data. It’s available on a website launched after a federal commission called on colleges to do a better job of measuring and publicizing students’ academic success. Now other public schools are following Cal State’s example. Within the next six months, 300 public universities will post salary information…

Is the Pen Mightier Than the Sword?

By Richard Vedder*

Books criticizing higher education are not new, but recently both the number of them and the intensity of criticism has been increasing, and a large portion of them are “inside jobs,” written by people who are intimately involved on a regular basis with the academy and the world of ideas.

Consider Jackson Toby’s The Lowering of Higher Education in America, or Andrew Hacker and Claudia Dreifus’s Higher Education: How Colleges are Wasting our Money and Failing Our Kids, Mark Bauerlein’s The Dumbest Generation, or Craig Brandon’s The Five Year Party: How Colleges Have Given Up on Educating Your Child and What You Can Do About It. All have been written in the last year or so, and this list is not exhaustive.

More are coming: I cannot wait to read Naomi Riley’s The Faculty Lounges…And Other Reasons That You Won’t Get the College Education You Pay For, forthcoming from Rowman and Littlefield. Moreover, other books are scathing about specific areas of the academy, notably intercollegiate athletics, with Kenneth Armstrong and Nick Perry’s Scoreboard, Baby: A Story of College Football, Crime and Complicity, or Mark Yost’s Varsity Green: A Behind the Scenes Look at Culture and Corruption in College Athletics, being but two good examples (I am indebted to the extraordinary Frank Splitt for bringing some of these works to my attention).

All of these books have come out, roughly, within a year. Two have provocative words like “crime” or corruption” in their titles, yet the authors are by and large a group of rather respected persons, one a distinguished English scholar at a major research university, for example; at least two of the books were published by university presses, including Stanford.

I don’t know if writings like this are a leading indicator of a forthcoming firestorm of public protest about higher education, but it is not a good sign. Economists like myself think at the margin. In this context, the storm of protest will manifest itself in real action only when the marginal benefits of complaining become so great that they exceed the marginal costs of engaging in protests.

Usually the “sword” of university political power is manifested in lobbying of politicians, who are almost all university graduates. That is enough typically to neutralize public anger. But some things have changed. Politicians saw in the last election that the people do not like to be ignored, and voters are restless. Also, budget reduction is a major activity at all governmental levels, and the governmental power of the purse over higher education is huge.

To be sure, I don’t think, for example, that we will clean up college sports overnight, or get the transparency and other things we need for better accountability real soon. But pressures are building that may become too large for the Dupont Circle crowd to overcome. But most important, more and more people are thinking college is a rip-off, a criticism seldom uttered in the past. Compounding the problem for colleges is a growing concern that a diploma is no longer a guaranteed ticket for entry into comfortable middle-class adulthood. We have some occupations where we have roughly as many workers with less than a high-school diploma doing the same thing as college graduates.

If news accounts are any indication of reality, even many of the more thoughtful leaders of the Higher Education Establishment are admitting the forces supporting big change are mounting. The exact contours of the changes are unknown, nor is the timing, but the “sword” of higher education lobbying may lose some of its clout fairly soon.

**This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on November 22, 2010.

The Cam Newton "Scandal"

by: Matthew Denhart

Rumors have swirled furiously that Auburn University's standout quarterback, Cam Newton, and his family solicited money from Mississippi State University during the recruiting battle between the two schools for his services. Accepting payments (beyond allowable tuition and room/board scholarship money) is of course prohibited by the NCAA, which is conducting an investigation and has even brought in the FBI to help.

This whole saga has missed the wider issue, namely to what extent rules baring players from being paid are themselves justified. As I argued in an Op Ed for the Wall Street Journal with Richard Vedder in 2009, athletes like Newton are grossly exploited by their colleges and should be allowed payment in the first place.

Sandy Baum and Michael McPherson, writing for the Chronicle's Innovations blog, are spot-on in their commentary on the contradictions surrounding the student athlete payment question. They point out that the NCAA's practice of setting salary caps for student athletes across member institutions should be an antitrust violation. Their criticism of Congress's free pass to the NCAA is sharp, saying:

"After considerable thought, we have been able to come up with only one persuasive explanation of the favoritism shown in allowing colleges to agree on limits to athletic merit awards, in contrast to non-athletic merit awards, where the free market is supposed to reign: the people who make, interpret, and enforce the laws in the U.S. really, really like high-end (dare we say semi-pro) college athletics."

Baum and McPherson continue and argue that the rules put in place by the NBA and NFL that place age restrictions on athletes to enter their drafts are "conspiracies in the restraint of trade." They are correct to suggest that these restrictions should be eliminated, giving athletes the decision whether college attendance is in their best interest. Doing so would be:

"unambiguously bad for university athletic departments’ bottom lines and coaches’ salaries, and unambiguously bad for professional teams (who might find themselves creating their own minor leagues and actually paying the players in training to learn the game)."

All the commotion over Cam Newton misses the larger point that the rule he has allegedly violated is unfair to student-athletes and potentially arguably illegal. The real scandal here is that the NCAA is allowed to violate anti-trust law to exploit the labors of young athletic talents, and that point needs more attention.

25 Ways to Reduce the Cost of College: Part 3

With the generous support of Lumina Foundation, CCAP is releasing today the third part of the five-part study 25 Ways to Reduce the Cost of College, a detailed analysis of different ways that college administrators and public policy leaders can cut college costs, with the goal of making colleges both more productive in their use of resources and also more affordable to students. The third part, which includes chapter 13-15, is titled "Efficiently Use Resources" and covers the following three topics:

13. Improve Facility Utilization: University facilities are vastly underutilized, remaining largely unoccupied during non-peak times. Institutions could create an internal market among the school’s various departments and charge rent for classroom and office facilities in a manner that would increase off-peak usage.

14. Increase Teaching Loads: Between 1988 and 2004, it is estimated that teaching loads fell 42 percent at research universities and 32 percent at liberal arts colleges. The root cause of the fall in teaching loads relates to incentives that primarily encourage research. Explicitly rewarding teaching financially and making teaching a more prominent component of faculty performance reviews would help shift the focus from research to teaching and allow fewer professors to teach more students.

15. Encourage Timely Degree Completion: The drop-out rate of college students is a national scandal. Huge amounts of resources are devoted to giving incomplete educations to students, who often incur large debts without gaining the skills necessary to obtain a well-paying job. Timely degree completion could be incentivized by rewarding students financially who graduate in four years, or alternatively by denying subsidy payments for any student with more than a certain percentage of the credit hours needed for graduation.

Each of these chapters is available for free download from our website (in pdf). The fourth part of 25 Ways is scheduled for release next Wednesday, December 1.

Links for 11/24/10

Doug Lederman

The last two years have seen the emergence of the closest thing in arguably 50 years to a national higher education agenda in the United States.

The convergence around the "college completion agenda" -- put simply, the now widely held view that the country must in the next 10-15 years significantly increase the number of Americans with a quality postsecondary credential -- has been driven by many factors… arguably even more important has been the fact that the country's highest-profile foundation, the Bill & Melinda Gates Foundation, and the most visible foundation focused primarily on higher education, the Lumina Foundation for Education, have both thrust college completion to the top of their agendas…

Michael S. McPherson, president of the Spencer Foundation, approached the same set of developments, but from the perspective of what he called a "professional skeptic," …

Foundations are "not supposed to be involved in politics," McPherson said… "it is in tension with the original spirit of what foundations are designed to do: go off and do their own thing," he said…
"It can lead to a 'ready, fire, aim' strategy," he said. "We have certainly seen that sometimes they act as if it is 'too urgent for us to stop and think about.' "

McPherson made clear that he was not casting his lot instead with what is often the preferred approach of higher education leaders and researchers (including "ours at Spencer"), when left to their own devices: "The 'ready, aim, aim, aim a little more, recheck your aim, fire' strategy."

Andrew J. Coulson

High school graduates are no better prepared today than they were in previous generations, despite the fact that we’re spending 3 times as much on their K-12 educations…

Perhaps government is not the best source of progress and innovation after all? Perhaps if we want to see progress and innovation in education we should allow it to participate in the free enterprise system that has been responsible for staggering productivity growth in every field not dominated by a government monopoly?

George J. Stigler’s deliciously nihilistic 1973 piece.

“It seems paradoxial beyond endurance to rule that a manufacturer of shampoos may not endanger a student's scalp but a premier educational institution is free to stuff his skull with nonsense."...

Trends in Net Tuition

by Andrew Gillen

Robert Martin and I have a piece over at Minding the Campus on net tuition. The two sentence version:

the College Board reports there was no upward trend in net tuition from 1995-2011. This conclusion is at odds with both a CCAP report (covering 2000-2001 to 2005-2006) as well as federal data (covering from 1987-2008). Thus, in spite of their titles, the College Board's reports appear to miss a real upward trend in net tuition.

Quotes I Wish I Had Two Months Ago

by Andrew Gillen

These quotes from this paper by Staci Provezis would have been great to have for our recent study on accreditation.

What is driving the assessment movement in American higher education?... Regional accreditation is among the most important of those forces. Chief academic officers at regionally accredited institutions across the U.S. cite accreditation as the primary reason their institutions assess student learning...

Douglas Bennett, president of Earlham College, said, "If we are going to stand behind accreditation as our quality assurance mechanism, we cannot hide that information; we have to make it available.”...

Each of the regional accreditors… appears to view outcomes assessment as a work-in-progress, treating assessment more as a means to improvement than as a narrowly defined approach to quality control and accountability.

Links for 11/23/10

David Glenn

Who should teach the nation's business students: scholars with research doctorates, or M.B.A.'s who have worked in business but have little academic grounding?

A current accreditation standard that, in essence, calls for half of the faculty at business schools to hold Ph.D.'s has long been a point of contention. Now the debate is heating up again…
the standard has also been criticized on three grounds. First, skeptics say that the rule has led business schools too far away from the practical professional skills that students require. Second, they say that the rule (together with a related AACSB standard that expects every faculty member to produce "intellectual contributions") has led to a proliferation of low-quality journals that few people read. Finally, skeptics note that there simply aren't that many people with doctorates who want to teach business…

The accreditor's emphasis on academic prestige and disciplinary research, Mr. O'Toole says, "neglects what I believe our primary task should be, which is preparing the next generation of managers and business leaders."…

Robert Martin

the commercialization hypothesis has been accepted, often without critical thought, by many members of the academy. They are not big fans of the business community to begin with, and it is convenient to assume our problems come from “outside agitators” like intrusive business people.

We in higher education do have major problems with cost and quality, and they need fixing. But commercial forces are not the problem – our own internal practices are...

Eric A. Hanushek on value-added

I see valid arguments on both sides.

That having been said, there has been little movement toward a more thorough evaluation system that incorporates broader measurement of teacher effectiveness. The union position is to argue that we need to develop reliable and accurate evaluation systems – but then to block any use of evaluation systems that focus on classroom performance…

I personally would not like to see personnel decisions made solely on the basis of value-added scores. But typical evaluations today are useless, because only a minuscule number of teachers are rated anything but great and because these ratings are never used in making personnel decisions…

The importance of improving our schools is too great simply to dismiss such information as imperfect. The current system of evaluations is completely broken. And, there is virtually no chance of improving schools without paying attention to which teachers are effective and which are ineffective.

Dean Dad

several reasons why we seem to be stuck in permanent austerity mode…

First, there's the basic open-endedness of mission. How much education is enough?...

With a mission like “meeting the educational and workforce needs of the area,” though, it's hard to say how much is enough. In practice, we tend to let the budget set the definition of enough…

Third, we've defined what we do in a way that defeats productivity improvements. We measure learning in units of time… Add seniority-driven raises to lifetime tenure to the lack of mandatory retirement, and you have a perfect inflationary spiral. Any industry without productivity improvements is in for a world of economic hurt sooner or later.

Richard Vedder to Appear on C-Span's Washington Journal

CCAP's Director, Richard Vedder, will appear on C-SPAN's Washington Journal this morning from 9:15-10:00 AM. The segment will be moderated by Robb Harleston and will discuss the issue of rising college costs, how the current political and economic climate is affecting higher education policy, and what types of savings plans exist to help families save for college. Viewers will also have the opportunity to phone-in to ask Dr. Vedder questions.

You can watch the segment live, by following this link. We hope you will join us.

Shrinking That (Canadian) Dollar

by Jonathan Robe

Question: When is "education" less than half of "education?" Answer: When you ask Statistics Canada, Canada’s central statistical agency. According to the official Canadian statistics, in 2009, only 49% of all "education" expenditures by Canadian universities and colleges actually went towards "education." The precise definitions used in the Canadian expenditure classification system elude me so far, so this was enough to elicit a little chuckle. I guess even Canadian bureaucrats can be short on creativity, too.

On Transparency (Or the Lack Thereof)

by Jonathan Robe

The other day Richard Vedder participated in a panel discussion at the University of Michigan on the topic of for-profit education. One of the other panelists, Thomas Howlett, a lawyer who has litigated claims on behalf of students against for-profit colleges, had some pointed criticisms for the sector. According to the U of M student newspaper, The Michigan Daily, Howlett

has noticed five crucial problems with for-profit institutions: accreditation, transfer of credits, program costs, the admissions process and enrollment. These five issues, he said, can be summed up as a “lack of transparency.” “These problems, while they exist, are not clear to the student who is making the decision to enroll and commit thousands, if not tens of thousands of dollars to these programs,” Howlett said.

The problem with what Howlett is quoted as saying isn't that it is not correct; it's that it's only half the story. The "lack of transparency" problem is by no means unique to for-profits; it is a systemic problem throughout all of higher education, non-profit and for-profit alike. Every single one of the five elements Howlett gave as problems in the for-profit sector can also be given as problems with both the not-for-profit private and the public sectors.

This last point was brought home recently by Jorge Klor de Alva, a former president of the University of Phoenix who is currently running the NEXUS Research & Policy Center. According to Doug Lederman at InsideHigherEd, Klor de Alva discussed the subject of higher ed transparency at a meeting of the Association for the Study of Higher Education. As Lederman puts it, there was

general agreement that for-profit colleges aren't the only ones that loathe relinquishing data about their performance ("If we were to rank who hoards information more, I'd begin with independent colleges, then for-profits, then publics -- but only because they're forced to" release it, Klor de Alva said).

It's hard to say at this point exactly what the final result will be of all the recent public scrutiny of the for-profits, but if our calls for more transparency from colleges focuses only on one single sector to the exclusion of the others, we're missing the mark.

Links for 11/22/10

Mike Antonucci

the U.S. Department of Education was needed, Sen. Ribicoff said, because “If there is one point on which most Americans will agree, it is that the U.S. Department of Health, Education, and Welfare is too large and too bureaucratic to effectively or efficiently manage the numerous programs under its jurisdiction.”

That’s fine, except the U.S. Department of Health, Education and Welfare was created in 1953 in order to correct the shortcomings of its predecessor – the Office of Education…

This also was fine, except the Office of Education was placed under the Federal Security Agency because of problems related to its previous association with the Department of the Interior…

when it was first established, in 1867, its sole purpose was to collect and disseminate education statistics. Oddly enough, there were a few people who questioned whether that limited mission might be expanded at a later date…

“If Congress has the right to establish an Educational Bureau here in this city for the purpose of collecting statistics and controlling the schools of the country, then, by the same parity of reason, a fortiori, Congress has the right to establish a bureau to supervise the education of all the children that are to be found in the thirty millions of the population of this country. You will not stop at simply establishing a bureau for the purpose of paying officers to collect and diffuse statistics in reference to education.”

Jay Mathews

Stephens, who teaches Precalculus and Geometry to mostly average kids, thinks his students are the opposite of too stressed. They don’t try very hard and know they will still graduate, so no problem.

“All I can do is beg my students to study. Ultimately, they know they don’t have to and don’t,” said Stephens, who has taught for 20 years. “I would guess fewer than a handful actually studied for their test last week. No joke.”…

Chad Aldeman

value-added is the worst form of teacher evaluation, but it’s better than everything else.

Rebecca Attwood

British students plan to launch a "consumer revolution" against a sector they see as unprepared for the consequences of marketization and high fees. The National Union of Students has demanded that sector-owned quasi-government entities be replaced by tough new regulators with the power to protect students from "collusion" on fee levels and to impose "genuine penalties" for malpractice and maladministration…

No Leadership from the NCAA on "Slimming Sports Spending"

by: Matthew Denhart

CCAP's "25 Ways to Reduce the Cost of College" report was highlighted last week in an Inside Higher Ed (IHE) article by David Moltz. In his article, Moltz nicely summarizes for readers the main points of our chapter calling on universities to "End the 'Athletics Arms Race'."

Some of the more prominent recommendations to cut athletic costs include: reigning in out-of-control coaches' salaries (especially in the sports of football and basketball), reducing the number of available scholarships, leasing out athletics facilities when not in use, and decreasing season lengths and travel distances. Many of the recommendations have been echoed by other groups, such as the Knight Commission in its latest report "Restoring the Balance: Dollars, Values and the Future of College Sports."

Many of these recommendations would require the cooperation and leadership of the National Collegiate Athletic Association (NCAA). However, the NCAA's initial reaction to our report is not encouraging. When asked for a reaction from Moltz, here's what NCAA spokeswoman Stacey Osburn had to say of the report:

"The overall context should be considered here... When looking at the median amount for FBS schools, approximately 1 percent of overall university budgets is allocated to athletics. For other Division I schools, the median was less than 4 percent of overall school budgets."

This comment reeks of indifference and is indicative of the NCAA's resistance to pursue necessary reforms. What's more, the figures cited to justify this indifference are very misleading. Sure, the median subsidy of athletics for all FBS schools is fairly small, around 1%. However, within the FBS, this percentage varies greatly by conference. As the graph below shows, in the Big 10 only 0.16% of university budgets go to subsidize athletics. Yet, in the poorer Mid American Conference (MAC), subsidies make up over 5% of the schools' overall budgets (see this CCAP study for more on the regressive athletics tax). At some schools this percentage is even larger. For example 10.5% of total core expenditures at SUNY Buffalo go to subsidize athletics. At another MAC school, Eastern Michigan, the figure is 7.9%.


The most important issue, of course, is how these subsidies--which the NCAA simply casts aside--affect students. The startling reality is that at many schools, students foot much of the athletics bill directly through student fees. Overcoming a serious lack of transparency, USA Today has gone to great lengths to show how massive these fees can be (see this table). The table below lists several institutions with the athletics fee each charges per year:

Longwood University	$2,022
Norfolk State	$1,440
College of William and Mary	$1,422
Virginia Military Institute	$1,362
Old Dominion University	$1,133
James Madison University	$1,114
Radford University	$1,077

Note that the schools above are not in FBS conferences. However, even many FBS schools charge high student fees to subsidize sports. Here are a few examples:

Ohio University	$765
University of Virginia	$657
Bowling Green State University	$650
SUNY Buffalo	$474
University of Northern Illinois	$453

Over the course of their 4+ years in college, students at many schools will have paid thousands of dollars to prop-up unprofitable athletics programs, regardless of their personal interest in sports. Our report laid out several realistic measures that could help save money while maintaining athletics. The NCAA arrogantly brushed it off, implying that there is no need to pursue cost-cutting measures. I think many students who are footing the bill would disagree. It's time the NCAA shows some real leadership for a change, but I'm not holding my breath.

CCAP on YouTube: Doing More with Less

In this YouTube video, Richard Vedder interviews Josh Hall, Assistant Professor at Beloit College, about the book Professor Hall edited for CCAP. The book is Doing More with Less: Making Colleges work Better and is available from Springer.

25 Ways to Do More With Less

By Richard Vedder*

While the Educational Establishment sees the biggest higher education problem to be an inadequate number of students receiving college degrees, I think the two biggest problems are, first, the lack of information about the quality of academic teaching and research and the accompanying worry that quality is mediocre and perhaps declining. Just as important, however, college is becoming ghastly expensive and productivity change in American universities has been somewhere between zero and negative.

But it is easy to criticize the status quo. What can be done to change it? My little think tank has sponsored two new works that offer lots of practical answers to the second of our big problems—namely excessive college costs.

In Doing More with Less: Making Colleges Work Better (edited by Joshua Hall and published by Springer), some 16 scholars offer suggestions on market-based approaches to reducing costs, ranging all the way from reforming intercollegiate athletics to more intelligent uses of master teachers.

An even more specific and cheaper, easy-to-access “electronic book” has been compiled by CCAP, entitled 25 Ways to Reduce the Cost of College. The ideas in the study are being released one section at a time over the next several weeks. Very few are terribly new or novel, but cumulatively, an adherence to the ideas could lead to powerful reductions in the per student cost of offering a college degree. We have already released chapters 1-5 of this report, and chapters 6-12 are coming out this Wednesday.
The ideas are:

1. Increase the proportion of students attending low cost schools, such as community colleges;
2. Promote dual enrollment programs (e.g., AP, the College Level Examination Program of the College Board, etc.);
3. Revisit tenure and reform academic employment practices;
4. Offer three-year Bachelor’s Degrees;
5. Outsource far more services (e.g., remedial education, maintenance, maybe even building ownership);
6. Reduce administrative staff—drastically;
7. Eliminate unnecessary, low enrollment or qualitatively suspect programs;
8. End the “athletics arms race,”
9. Complete the overhual of the FAFSA form;
10. Eliminate excessive academic research (e.g., publishing for the Journal of Last Resort or its equivalent);
11. Streamline redundant programs at the state level;
12. Promote more collaborative purchasing;
13. Improve facility utilization (use market approaches to allocate and more fully use space);
14. Increase teaching loads (the corollary to #10 above);
15. Incentivize the timely completion of degrees;
16. Move more classes online;
17. Reduce textbook costs using new technologies and approaches;
18. Digitize academic libraries, and reduce book acquisitions;
19. Outsource e-mail;
20. Utilize interactive course management tools using new technologies;
21. Ease credit transfer problems between public institutions;
22. Reform student aid programs at the federal and state levels;
23. Reform accreditation and reduce barriers to entry;
24. Subsidize students, not institutions and move to student-centered funding to a greater extent, and
25. Promote competition based on value, not reputation.

Many ideas above have been implemented at some schools, and others are controversial and require some thinking as to implementation. Some offer possibilities for long, not short run, cost reduction. All require more elaboration than the listing I gave above. Those interested can get more details at http://centerforcollegeaffordability.org.

The big problem, of course, is that there are forces at work at colleges that make implementation difficult for even these extensive but not radical structural reforms. But these ideas are mostly good ones, and it is worth some effort to fight reactionary forces opposed to real reform in higher education.

*This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on November 15, 2010.

Links for 11/19/10

Bill Tucker

many state data systems function as de facto data morgues, used more often in autopsies of failed programs than to help educators and policymakers improve existing ones…

Keith Hampson

Online Higher Education Up 21% v. 2% Overall Growth

John M. Ellis

The poverty of intellectual content was masked by an elaborate jargon...

MAÏA DE LA BAUME

A new French government survey that ranks public universities by graduate students’ employment rates after graduation has already earned both praise and criticism from academics…

Salmon v. Fish on College Affordability

by Andrew Gillen

Stanley Fish declares “There is no college cost crisis.”

Felix Salmon doesn’t agree.

Fish:

Archibald and Feldman prefer to “ask instead whether the amount left over after subtracting the cost of college is rising or falling over time.” The answer they give (buttressed by statistical tables) is “rising”

Archibald and Feldman allow us to say that at least in the area of costs the fault lies not in ourselves, but in the stars.

Salmon:

in general this approach to gauging affordability is absolutely bonkers: the percentage rise in price is completely ignored, and only the dollar rise in price matters. Using this technique, just about anything can be considered “more affordable than it was in the past.”…

What’s more, I haven’t read the book, but Fish’s take does seem to be at odds with its official blurb…

in order for Fish’s argument to hold water, IT costs at colleges would have to be rising faster than inflation year in and year out. Which strains credulity, in a world where IT is getting steadily cheaper and where a lot of IT services can now take place in the cloud. Even if the move into the cloud is only now beginning, I very much doubt that it’s ever going to result in a decrease in tuition fees.

The fact is that technology is a way of reducing the costs of education much more than it is a factor in their growth…

“Archibald and Feldman,” says Fish, “allow us to say that at least in the area of costs the fault lies not in ourselves, but in the stars.” Which I’m sure is convenient for Fish, who describes himself as a “dean who encountered the rising costs of personnel, laboratory equipment, security, compliance demands, information systems and much more every day.” But it’s not particularly believable.

Fish uses the words “bizarre and ignorant.” We’ll leave it to you to decide which side of this debate those words apply to.

CCAP on YouTube: Distance Education and the University of the Artic

In this YouTube video, CCAP Director Richard Vedder chats with Matthew Denhart, Rune Rydén (member of the Board of Governors for the University of the Artic), Joshua Hall (Assistant Professor at Beloit College, and Lowell Gallaway (Emeritus Distinguished Professor at Ohio University).



To subscribe to CCAP's YouTube channel, follow this link.

Nobody Likes a Tattletale

by Daniel L. Bennett

I was able to muster up a bit of a chuckle when reading this article in the Chronicle. Apparently, Kaplan CEO Andrew Rosen attended and spoke at the recent annual meeting of the Association of Public and Land-Grant Universities. Public university leaders appear to be upset that some of their faculty have taken part-time positions teaching at for-profit universities without first seeking the permission of their full-time employer and believe it is a conflict of interest for those doing so. As the Chronicle reports, a provost at Texas Tech University asked Mr. Rosen,

"When are you going to get your act together and start publishing that list [of public university faculty working for Kaplan]?"

While at first glance this is not "ha-ha" funny, it is somewhat humorous considering that the public (as well as private non-profit) institutions are quite cryptic with the information that they release to the public. In fact, it has generally taken government mandates, which they have fought viciously with their lobby, to get any information out of them. Yet, these same folks are haranguing the for-profit sector for not releasing information that would likely only be of use to the institutions whose employees are violating their employment contract by not seeking permission (or at least reporting) that they are considering a part-time job. This is akin to the IRS asking citizens to report their neighbors for cheating on their taxes.

While I certainly don't advocate that public university faculty violate their employment contracts by taking such positions, it is not the responsibility of Kaplan or any other college to publish a list of potential offenders. This would actually do more harm than good for the reporting institution, as it would likely have trouble recruiting qualified instructors if it did so. It could however, enforce a contract of its own that includes a provision that any instructors employed by another institution must verify that their existing employment contract allows them to seek outside work.

Links for 11/18/10

Doug Lederman

Even as budget deficits have mounted at both the federal and state levels, and governments have cut back to varying degrees on their spending on higher education, many college officials have held out hope that when the economy stabilizes, and eventually recovers, so too will the investment in colleges, allowing the institutions to go back to business as usual…

the business model for many higher education institutions is unsustainable, and that fundamental changes in how most colleges operate will be necessary…

George Leef on our Accreditation Study

Andrea Fuller

30 private college leaders who received more than $1-million in total compensation. In the previous year's report, 23 chief executives earned over $1-million…

As in years past, the top earners included presidents who received large payouts when they stepped down…

Brad DeLong

what we are living through is not the first but rather the fourth online-learning revolution…

the first online-learning revolution, the first adaptation of technology to higher education, came in 390 BC when to cut the costs of education and allow for more students Plato invented the philosophy book and substituted it for the in-person teacher, thus leveraging the words and thoughts of Socrates (or at least of Plato’s version of Socrates) over many more people and many more millennia than Socrates could himself teach in person…

Providing each would-be theologian and judge and canon lawyer and administrator with the books they needed to study was prohibitively expensive. They needed an alternative...

The solution that mid-medieval Europe hit upon was the system of the western university… Assemble all those who wished to learn a book in one place. Have somebody…read the book aloud to them as they sat before him in a group and took their notes… This was the second online-learning revolution.

Then came the third online-learning revolution: the printing press of Johann Gutenberg…

Today we are in the middle of a fourth online-learning revolution…

25 Ways to Reduce the Cost of College: Part 2

With the generous support of Lumina Foundation, CCAP is releasing today the second of five parts to 25 Ways to Reduce the Cost of College, a detailed analysis of 25 different ways that college administrators and public policy leaders can cut college costs in order to make colleges more productive with their resources and more affordable to their students. The second part, which includes chapter 6-12, is titled "Use Fewer Resources." The following topics are covered in this section:

6. Reduce Administrative Staff: Today on college campuses, administrators comprise nearly a quarter of all employees and it is not uncommon for schools to have more people working in an administrative capacity than serving as faculty members. This bureaucracy is not only expensive, but also contributes to slow and often non-innovative decision making.

7. Cut Unnecessary Programs: Although it is politically difficult, selective cuts that eliminate entire programs are necessary for serious cost reduction. When analyzing program viability, certain questions must be asked: Is the program critical? Is the program financially stable? Is there sufficient student demand and faculty interest? Does the program have a superior national academic reputation? The answer to all of these questions is rarely “yes.”

8. End the “Athletics Arms Race”: Intercollegiate athletics programs lose millions of dollars every year and require substantial subsidies from students to balance their budgets. Mutual cooperation across institutions is necessary to reduce costs through methods such as limiting coaches’ salaries, restricting excessive travel and shortening athletic seasons.

9. Overhaul the FAFSA: Estimates suggest that well over 1.5 million aid-eligible low income people fail to apply for financial assistance, in large part because of the complexity of the application process. Minor changes in law and the cooperation of other federal agencies would allow the FAFSA form to be completely abolished while still obtaining the truly vital information needed to assess an individual’s financial need.

10. Eliminate Excessive Academic Research: Faculty research is subject to the principle of diminishing returns. This is especially true in the social sciences and humanities where over 26,000 articles on William Shakespeare have been published since 1980. In many cases, increasing faculty teaching loads at the expense of research is a prudent re-allocation of resources that could save students money.

11. Streamline Redundant Programs at the State Level: The use of electronic means of communication can be used to allow faculty from multiple institutions to participate in joint degree programs. Merging two or three marginal programs into one of greater substance can save resources in the long run as a single integrated program is established.

12. Promote Collaborative Purchasing: Private companies like Wal-Mart use their enormous purchasing power to negotiate low prices from suppliers. For a large portion of purchases, colleges banding together as consortiums to buy goods in bulk is a worthwhile strategy to pursue.

Each of these chapters is available for free download from our website (in pdf). The third part of 25 Ways is scheduled for release next Wednesday, November 25.

Chart of the Week: Convergenge in Educational Attainment of Family Heads

by Daniel L. Bennett

As the chart below shows, the percentage of household heads (25+ years of age) with 4+ years of college education has risen steadily since the early 1960s (nearly tripling - a 176% increase - between 1963 and 2009). In the meantime, the percentage with a high school education or less has dropped steadily (nearly cut in half - a 49% decrease - since 1963). These data reveal a convergence in the educational attainment levels of family heads over time. We will explore the implications of these trends in future research.

Student Loans, Redux

by Jonathan Robe

The other day Sandy Baum and Michael McPherson, over at the Chronicle's "Innovations" blog, had this to say:

Students have little understanding of the difference between subsidized and unsubsidized loans (or, unfortunately, of the difference between federal and private loans). What they do understand is their payments once they leave school.

This quote isn't wholly dissimilar to a point I attempted to make around three weeks ago when I was bemoaning the classification of student loans as a type of "financial aid"(though Edububble does a better job than I at articulating it). Here's what I said then:

it is the Department of Education itself which classifies student loans, along with grants and work-study, as “aid.” But there is a fundamental distinction between grants (which don’t have to be repaid) and loans (which do, with interest). Of course, because some of the loans are subsidized by taxpayers (by delayed repayment, below-market interest rates, etc.), classifying these loans as “aid” is not a complete lie. It is, however, deeply misleading to students by giving them an incorrect picture of the true cost of their college education... the ED isn’t doing that much to help by continuing the mis-characterization of the nature of student loans.

Baum and McPherson seem to provide a corroboration to my point that the federal financial aid system is something of a mess, both confounding students with its complexity as well as fostering an atmosphere where students are misled about the true costs their education incurs. Of course, part of the challenge we face isn't only correctly identifying the problem with the current financial aid structure; we must articulate the right solutions as well. I am skeptical that pumping more subsidies (even if they are supposedly better targeted) is the proper course to take. Rather, we need more fundamental reform in higher ed where both schools and students are more sensitive and responsive to true costs. That is, I think, the key to ensuring that college is affordable.

Lessons for Higher Education From the American People

By Richard Vedder*

The 2010 elections sent a very clear message: On average, Americans think government is too big, spends to much, and intrudes too much in our lives. The Republican gains in the House (at least 60) were the largest in 74 years, and third-largest in the history of that political party, only behind the 1894 and 1938 experiences. While they lost the California governorship, they gained control of that office on net in more than a half dozen states (giving them at least 30 governorships), including several populous ones, such as Pennsylvania, Ohio, and Michigan. Several powerful Democratic committee chairs in the U.S. House of Representatives lost not only their chairmanships but also their seats, such as James Oberstar, John Spratt, and Ike Skelton.

Does this make any difference for higher education? In the past, the impact of such changes was often more rhetorical than real. Higher education was a secondary budgetary item and there was something resembling bipartisan support for most programs. I think that support has frayed considerably, partially because of budget pressures, but partly because of the arrogance of university leaders regarding the political process. Nonetheless, because of likely gridlock in Washington reflecting the division of power between the two parties, revolutionary changes are unlikely to occur at that level –the rhetoric will change more than the reality once again. Yet budget realities are so grim (independent of the election) that federal higher education subsidies are in peril. A similar situation exists in many states. I would observe the following:

1. While the Senate has those wanting to scrutinize and attack for-profit higher education more (e..g, Senators Harkin and Durbin), the GOP controlled House will push for greater accountability from all institutions, opposing the singling out of for-profit institutions. Presumptive speaker John Boehner likes the for-profits, for example, if his earlier experience as chair of the House Education committee is any guide.

2. Because of budget pressures, the expansion of Pell Grants and direct student loans may be stopped or even reversed. In particular, I think the GOP might start putting some accountability into the Pell Grant program, a program which, though apparently good at achieving its general goal, is excessively expensive. I am reasonably confident, for example, that more than 85 percent of Pell Grant recipients at the University of Texas at El Paso will never (at least not within six years) get bachelor’s degrees. Why should that institution (and many others like it) be allowed to continue in the Pell Grant program if the apparent success rate is so low? Isn’t that suggestion analogous to the Obama Administration’s proposal that for-profit schools whose students earnings from gainful employment are unacceptably low should lose the right to federal assistance?

3. The solid victory for legislation banning affirmative action in Arizona (joining similar laws in California, Michigan, Nebraska, and Washington) should further demonstrate the disconnect between the frequent call by university leaders for preferential treatment for people on the basic of group characteristics such as skin color or ethnicity, and the general view of the American people favoring an emphasis on meritocracy independent of racial, gender, or other status.

4. More generally, the political lesson this year is that “ignoring the people” has political consequences. Universities have been taking positions sharply out of tune with public opinion for decades. They ignore growing cries about rising tuition charges, for example. Could this contempt for public opinion lead to the further defunding of the universities?

5. I expect the defunding of higher education to accelerate a bit. Take my state of Ohio. The voters threw out a loyal Obama supporting liberal Democrat governor (Ted Strickland) for a rather conservative Republican (John Kasich) who has vowed to not raise taxes, at precisely the time the state faces the need for huge budget cuts, and at a time that Gov. Chris Christie of New Jersey has proven that tough budget cutting can actually be highly politically popular. Therefore, in Ohio, I expect universities are in for a painful retrenchment of public financial support. My guess is the situation in Michigan is very similar, as it is in probably quite a few other states.

Higher education is very good at pleading, but not so good at listening, especially to those outside the Ivory Tower. Yet it is ordinary folks who provide the third-party payments that have allowed higher education to grow so much—too much in my judgment. Direct subsidies to institutions and individuals by the government are supplemented by tax-sheltered giving from private donors. The general attitude in the Academy when the nation moves to the right is: “Be patient, this too will pass.” But the fiscal imperatives of dealing with trillion-dollar federal budget deficits, and similar fiscal stress in many states may lead desperate political leaders to consider more radical changes in policies regarding those institutions so dependent on public support.

This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on November 3, 2010.

Links for 11/16/10

Ed Dante

I'm a hired gun, a doctor of everything, an academic mercenary…

You would be amazed by the incompetence of your students' writing… They couldn't write a convincing grocery list, yet they are in graduate school…

I live well on the desperation, misery, and incompetence that your educational system has created…

From my experience, three demographic groups seek out my services: the English-as-second-language student; the hopelessly deficient student; and the lazy rich kid…

maintaining the front of competence from some invisible location far beneath the ivory tower…

Penelope Blake

In my thirty years as a professor in upper education, I have never witnessed nor participated in a more extremist, agenda-driven, revisionist conference, nearly devoid of rhetorical balance and historical context for the arguments presented…

I honestly felt ashamed of my profession and my government for sponsoring this travesty…

The NEH is requesting an operating budget of 161 million dollars for 2011, including over 71 million to support conferences like the one I have described. I ask that you do everything in your power to delay approval of this request…

Jake

1. the cost of many / most private school undergraduate educations are (insanely) over-inflated relative to their intrinsic value; simply compare the cost to similar, yet more affordable alternatives (i.e. schools that don't cost more per year than GDP per capita)
2. the perceived benefit of these schools is in many cases focused on the resale value of the education (i.e. the value a corporation may perceive of that brand, which may be re-sold in the form of higher compensation, rather than what was actually learned)
Based on the above, I am comfortable claiming that private school tuitions are now in a bubble.

Amazing (to me) is that these schools have not only been able to raise the price of tuition / room / board to levels that are ridiculous in both absolute ($50k a year x 4 = $200k!!!) and relative (the national average is a still unreal $21k / year) terms, but they have done it in the years directly following the worst economic downturn since the Great Depression.

D.D. GUTTENPLAN

news that Alexandria University in Egypt had placed 147th…

Alexandria’s surprising prominence was actually due to “the high output from one scholar in one journal” — soon identified on various blogs as Mohamed El Naschie, an Egyptian academic who published over 320 of his own articles in a scientific journal of which he was also the editor…

Now Here's an Idea I Fully Support!

by Jonathan Robe

Over at the Quick and the Ed, Ben Miller has had a couple of very good posts (here and here) on the subject of Pell Grants and the effect they have (or rather don't have) on college affordability. I highly encourage you to read both of them, if you have not already.

An excerpt from his second post (my emphasis):

Providing several thousand dollars annually to students is a very expensive undertaking... If advocates want to strenuously argue for keeping Pell, then other options should be on the table—things like tax credits that are less effective public policy anyway. And schools need to do a better job highlighting why Pell matters. Colleges need to publish graduation rates of Pell students, there needs to be better documentation of why it matters at a personal level. Just continuing to say we need to spend money on Pell to spend money on Pell won’t work anymore.

Now there's an idea which I can fully embrace! We can tell how much money the Pell program is pumping into schools and how many students receive Pell funding, but we can tell precious little about whether the taxpayer investment in Pell Grants is actually worth all that colleges would make it out to be. Take City College of CUNY as an example (albeit an extreme one). According to the NCES, a majority of City College undergraduates (55%) receive Pell Grants, yet only 6% actually graduate within four years! If we extend the window to six years, still only 35% of students graduate from City College. Thus, at a school where the majority of students receive Pell Grants, a majority of students don't even graduate within six years. (Of course, I suppose I should add here the obligatory caveat about difficulties with the report graduation figures, but the point I'm making here is, I think, largely correct.)

How many of those students who don't graduate are the same ones receiving Pell Grants? We don't know, but we ought to know. Colleges owe it to taxpayers to be accountable for how they use all of the tax funds they receive, particularly from the Pell program. And Miller is right; colleges should do this on their own and with gusto, not dragging their feet until they are required to do so.

Links for 11/15/10

Robert Dickeson via Doug Lederman

"The price of program bloat for all is impoverishment for each," he said.

"If you do across the board cuts, shame on you," Dickeson said…

Robert E. Martin

Archibald and Feldman conclude, the true villain in the higher education cost story is productivity growth in the rest of the economy. Faculty wages have to go up to keep professors from looking for better-paying jobs in other fields, but since productivity in higher education is stable, that means its costs must rise.

There are, however, some factual problems with that argument.
average real faculty wages hardly increased at all from 1970 to 2008…

Faculty wage costs per student did increase significantly after 1980, but the reason the wage component went up is because faculty productivity went down…

most of the cost increases since 1970 come from “administrative bloat.”…

Anne D. Neal

Congress shouldn’t blame accreditors: it should blame itself. The existing accreditation system has neither ensured quality nor ferreted out fraud. Why? Because Congress didn’t want it to. If Congress truly wants to protect the public interest, it needs to create a system that ensures real accountability…

A gatekeeping system using peer review is like a penal system that uses inmates to evaluate eligibility for parole. The conflicts of interest are everywhere -- and, surprise, virtually everyone is eligible!...

accreditors sought to demand more evidence of student achievement to ensure “educational quality.” But Congress wouldn’t let them. Rather than welcoming accreditors’ efforts to enhance their public oversight role, Congress told accreditors to back off and let nonprofit colleges and universities set their own standards for educational quality…

Andrew J. Rotherham

Today there is an almost $500 billion shortfall for funding teacher pensions, and that gap is growing. Why should you care? Because ultimately taxpayers are on the hook for that money…

Friday Cleanup

The Daily Mail (UK) with the pic of the day.





Not higher ed related, but this is one great hook by Jon Hamilton

But this is not your typical story of environmental action — the toad owes its comeback to an unlikely coalition that includes ranchers, miners, off-road racers, opponents of big government and the local brothel…

How can you not read a story that starts like that?

Encouraging Colleges to Cut Costs

by Jonathan Robe

On Wednesday we released Part 1 ("Using Lower Cost Alternatives") of the CCAP report 25 Ways to Reduce the Cost of College. Several outlets, including the Chronicle, picked up on some of our themes, particularly our call for colleges and universities to revisit academic employment policies including tenure (I guess at this point I must say goodbye to any readers from the Ivory Tower who would be aghast at the very thought of even broaching the subject). But this is a topic which is likely to grow in importance over time. A book, written by our good friend Naomi Schaeffer Riley, which is sure to spawn even more discussions in the near future on tenure, is coming out in the spring; I'm very much looking forward to it.

However, what really caught my attention over the past several days were other stories in the news which recapitulated (albeit entirely independent of our release of 25 Ways) some of the very ideas which we proffered in our report. For instance, Los Angeles Times ran a great editorial on Wednesday about the very large increases in tuition over the past couple of years at the state universities in California, increases in costs which are sure to hit middle-income families disproportionately harder than others. An excerpt from their editorial sounds almost like the first chapter of our report:

As painful as it is, the universities should consider reducing enrollment for a couple of years, pushing more students to start their college careers in the less-expensive community college system. And the Legislature should finally get up the nerve to impose significant fee increases — with waivers for those who cannot afford the added cost — at the community colleges, the one place in the state's higher-education system where fees are too low, by far the lowest in the nation. Middle-class families can easily afford an increase, which would fund more classes as well as fee waivers for low-income students. At a time when every penny counts, this would provide higher education for the most students at the lowest cost.

Also, what struck me about the ideas we included in our report is that we really aren't the first ones to come up with them. For example, the American Council of Trustees and Alumni has a neat guide on steps to take to cut college costs, including taking a look at tenure. Some of their other ideas we talk about as well in Part 1 of 25 Ways, and others we will discuss in the other four sections of 25 Ways which we will be releasing in the next several weeks. In other words, what we're offering isn't necessarily anything novel or earth-shattering; rather we're putting forth a renewed call for colleges and policy leaders to take concrete actions to lower costs and increase productivity instead of giving college a free pass for just paying lip service to those goals.

Update: In my original post, I forgot to include a link to this new study which purports to show that the cost of educating students is actually lower at 4-year master's universities than at community colleges. I'll have more to say about this paper in the coming days.

The 2010 Election Results and Higher Education

By Richard Vedder*

Do the 2010 congressional elections really matter? I suspect the answer is yes, and I am probably a fool for speculating about them right before they take place, but tenured professors usually don’t care much about whether they are foolish or not, as it has little impact on their material lives.

Like everyone else, I think the Republicans are going to make big gains, likely taking over the House. I sense that Democratic last-minute actions to avert disaster have had a small amount of success, but not enough to prevent a bloodbath. Dozens of sitting Democrats in the House who want to continue will lose their jobs, perhaps exceeding the postwar high for that statistic. Nancy Pelosi is in her last weeks as Speaker.

John Boehner was the former chair of the House Education and Work Force Committee, and has a far more sympathetic view towards things like private provision of student loans and for-profit education. In the Senate, I think the GOP gains will solidify their ability to block Democratic initiatives, but not big enough to successfully put forward an alternative agenda. Remember, Barack Obama is still president, and I doubt he is temperamentally capable of bending and compromising in a pragmatic way with the GOP, so he would veto moderate, middle-of-the-road proposals that are inconsistent with his socialist and collectivist way of thinking.

What that might mean is gridlock. Now, gridlock is not all bad. In the mid-1990s, there was a period of divided power (Clinton in the White House, GOP controlling the House of Representatives) and our nation, more or less, flourished. Sometimes gridlock forces compromises that the increasingly partisan and ideologically oriented Congress could not otherwise deliver.

Yet some of the Obama plans need to be modified. The attack on the for-profit universities while ignoring poor performance of traditional institutions is both unfair and bad policy. Either hold everyone accountable by the same standards or turn quality control over to the states, where it originally resided and, arguably, where it belongs. The continued increase in federal financial aid without systematic reform of the system is fiscally irresponsible and contributes to the rising problem of the low-wage college dropout or even college graduate. Why shouldn’t Pell Grants, for example, be tied at least somewhat to expectations of success? Why shouldn’t academic excellence be rewarded and mediocrity punished, at least modestly?

I hope the House Republicans, if they assume control, push on these issues, even if they face a dubious future in the Senate and a potential Obama veto. Basically, the notion of federal college grants as an entitlement no matter how bleak the prospects of academic success are is extremely expensive, often debilitating, to the students involved, and arguably morally suspect.

The idea of requiring schools that want to operate throughout the U.S. online offerings to get licensing in every single state is anti-competitive, anti-consumer, anti-small business, anti-capitalist, and otherwise just dumb. It has been 186 years since the U.S. Supreme Court in Gibbons v. Ogden decided that New York State could not use its licensing powers to keep steamboat companies from operating in multiple jurisdictions. Individual state licensing of essentially interstate activities was condemned. It was a good decision during the Administration of James Monroe, and it is a good principle in the Administration of Barack Obama.

There are many other reforms of higher education that need to be addressed, but I doubt very much that Washington will be the impetus of these changes, at least for now.

In short, this election will make a difference, arguably not a transcendental difference owing to the likelihood of divided government, but a difference nonetheless.

This post originally appeared on the "Innovations" blog of The Chronicle of Higher Education on November 1, 2010.

Upcoming Speaking Engagements featuring Richard Vedder

Next week CCAP director Richard Vedder will be presenting at a couple of schools, touching on several topics at issue in higher education today, including the regulation of for-profit colleges and universities.

First, on November 17 at 7:30 pm, he will be speaking at Saint Vincent College in Pennsylvania on the topic: "America’s Strengths and Weaknesses: Facing the Next Generation," as part of the Alex G. McKenna’s Economic Education Series of lectures. This event is free and no registration is required. More details are available here.

Second, on November 18 at 4:30 pm, Richard Vedder will be participating in a panel discussion, along with Thomas H. Howlett, Andy Jacob, and Christopher Mullin, at the Gerald R. Ford School of Public Policy at the University of Michigan. The topic of discussion is: "For-Profit Colleges: Education or Exploitation?" This event is free and open to the public. More details are available here.

Chart of the Week: Degree Granting Institutions

This week CCAP examines how the number of degree granting institutions has increased during the last thirty-five years. Including branch campuses, in 1975 there were approximately 3,000 schools. By 2008 the number had grown to over 4,400.

Links for 11/11/10

Junia Yearwood

The Boston school system is churning out illiterate students whose only skills are to pass predictable standard tests…

We instituted tests and assessments, such as the MCAS, that required little exercise in critical thinking, for which most of the students were carefully coached to “pass.’’ Teachers, instructors, and administrators made the test the curriculum, taught to the test, drilled for the test, coached for the test, taught strategies to take the test, and gave generous rewards (pizza parties) for passing the test. Students practiced, studied for, and passed the test — but remained illiterate…

Joanne Jacobs

Only 31 percent of high school teachers think their school’s graduates are ready for college, reports the Deloitte 2010 Education Survey. But 68 percent of current college students say they were “prepared” or “very prepared” for college coursework…

George Wood

the Department of Education was a payoff by President Jimmy Carter to teacher unions for their support. Before that, education was part of the Department of Health, Education and Welfare.

That’s where I propose returning it…

Edububble

Now used car dealers may not be the most honest people in the world, but at least they don’t use the word “aid” to describe the loans they provide to help you buy a car over time. They might have their own euphemisms like “financing”, but they don’t suggest that they’re helping you out…

Heritage Foundation publishes "Federal Overreach into American Higher Education"

by: Matthew Denhart

Last week the Heritage Foundation published an analysis I wrote entitled Federal Overreach into American Higher Education (you can also download the pdf here). The study analyzes several of the U.S. Department of Education's (ED) proposed regulations of higher education, focusing specifically on state authorization, gainful employment and ED's federal definition of a credit hour.

Requiring state authorization of all postsecondary institutions wishing to remain eligible for Title IV funds would be a move-away from the current ineffective system of accreditation (see CCAP's recent study on the topic here). However, the proposal would simply shift power to state governments while still allowing them to rely on accrediting agencies to monitor institutional quality.Thus, although quality would not improve, this proposal would increase costs by requiring colleges to navigate another bureaucratic process. Furthermore, it would be a serious impediment to online institutions which would be forced to obtain separate authorization from each state in which they operate. Finally, and perhaps most troubling, this regulation would effectively give state governments the ultimate authority to determine which institutions have the right to operate.

ED's gainful employment proposal seeks to introduce outcomes-based accountability to higher education. However, it targets only for-profit and vocational based programs, giving the traditional higher education sector more or less a free pass. There are certainly bad actors in the higher education industry, yet the industry as a whole provides a valuable service to student populations that have thus-far been poorly served by the traditional sector. The current proposal would serve as a de facto price control on for-profit institutions, reducing competition, increasing costs, and limiting educational options for students.

The credit hour proposal defines a credit hour of academic time as one hour of classroom instruction plus two hours of out-of-class work per week. The main benefit from a standardized definition is to make it easier for students to transfer credits between institutions. Standardizing credit hours, however, does nothing to standardize educational quality. Indeed, one professor may deliver highly informative one-hour lectures while another teaches students nothing during class. Like the others, this proposal adds more layers of bureaucracy without doing anything to enhance student learning outcomes.

The ED insists on pushing forward with these proposals, despite their problems. All only give lip service to improving educational quality while really focusing on increasing the federal regulation of higher education, and the for-profit industry in particular. This would be a step in the wrong direction. Higher education desperately needs thoughtful approaches to improving quality and measuring student outcomes, not more regulations from Washington bureaucrats.