By Richard Vedder
In the wake of the tragedy at Virginia Tech, what should we do as a policy response at the national level? Nothing. Instituting rashly new federal laws would not bring the victims at Virginia Tech back to life and probably would have little impact on the probability of future such happenings.
What should college presidents and other college leaders do? Pray -- that it does not happen on their campus.
The tragedy was huge, almost unthinkable, and is one of those occasional horrific mass murders which afflicts a society where some people have trouble understanding the difference between right and wrong.
Residential campuses are typically huge and spread out, with dozens if not hundreds of buildings. Providing tight security would be extremely expensive, and would detract from the freedom of expression that characterizes campus life and makes it so vibrant and joyous. Virginia Tech was not negligent in their protection of their students, or so it would seem to me at a distance.
To be sure, perhaps colleges should be more concerned about some students who have some probability of violent behavior based on profiling. But doing this can be very expensive and, of course, raise concerns from civil libertarians.
The publication of crime statistics, already mandated, is a good thing, as it helps informed parents in their attempts to minimize their children being put in harm's way. Virginia Tech is a distinguished and fine institution, with generally first rate students who are decent, honorable people who do not deserve to die so young or be so traumatized by senseless horror.
Having said that, however, it is easy to criticize President Steger and his staff after the fact. I think the decision he and his administrators made was not an unreasonable one, if in retrospect it was possibly very tragic (I don't know if notifying students earlier or even trying to cancel classes would have made a difference; a premeditated murderer may well have found a time and place to commit such a heinous crime). Removing President Steger will not bring persons back to life.
It is all so sad.
Wednesday, April 18, 2007
Tuesday, April 17, 2007
Student Loans: $25 Billion
By Bryan O'Keefe
In some non-scandalous student loan news, we see yesterday that the loan giant Sallie Mae is being bought out and will go private sometime in the near future (private in this sense means no longer being a public company; Sallie Mae already went private in another sense about ten years ago when it decided that it would no longer be controlled by the government). There are lots of interesting questions that this deal brings up, which I unfortunately do not have time to talk about now. Rich will be discussing some of these issues in the next couple of days. But for now, just consider this: the consortium of private equity firms/investment banks that are taking over Sallie Mae, are going to pay $25 billon dollars for the company -- that's truly a magnificent sum of money for a student loan company and gives you some indication as to how incredibly vast our student loan industry really is.
In some non-scandalous student loan news, we see yesterday that the loan giant Sallie Mae is being bought out and will go private sometime in the near future (private in this sense means no longer being a public company; Sallie Mae already went private in another sense about ten years ago when it decided that it would no longer be controlled by the government). There are lots of interesting questions that this deal brings up, which I unfortunately do not have time to talk about now. Rich will be discussing some of these issues in the next couple of days. But for now, just consider this: the consortium of private equity firms/investment banks that are taking over Sallie Mae, are going to pay $25 billon dollars for the company -- that's truly a magnificent sum of money for a student loan company and gives you some indication as to how incredibly vast our student loan industry really is.
Monday, April 16, 2007
A New Student Loan Scandal
By Bryan O'Keefe
The latest salvo in the student loan scandal comes from yesterday’s Washington Post. The Post detailed how private student lenders are supposedly illegally accessing a government database on student borrowers and using the information obtained through the access to market their loan products to students. There seems to be some disagreement as to how prevalent the practice is – at one point the story says that security has been tightened, but it also claims that the information is still being accessed and that the department is considering shutting down access altogether.
This is one student loan scandal where the author has some personal experience. Just about every other day, I receive in the mail a new advertisement from Student Loan Company XYZ asking me to transfer all of my private loans to their service, that they offer the best interest rates, blah blah. What’s interesting is that the letters have continued pretty much non-stop even after I recently moved to a new address – while most of my other junk-mail has tapered off a bit.
Now, I have no evidence that private lenders have accessed my information in the Ed department database, but it wouldn’t surprise me. They are obviously getting addresses and loan information from some source and the Post’s story seems to make a strong case for the government database as being the culprit.
What’s befuddling to me is that if the government recognizes that this shouldn’t be going on, how hard is it to really stop it? For a department with such a large budget, you would think that they could easily design a database and ensure that only the right people have access to it. Perhaps that is asking too much of government, unfortunately.
This development is also bad news because it casts some doubts on other data collection ideas that would probably be of tremendous value. From the get-go, some folks have said that we should not gather more data on student performance in higher education because of privacy concerns. I thought that it wasn’t a false choice and that the government could collect more data but also make sure that it was used appropriately. But when you read the Washington Post story, you see that might not be the case, at least with our current security procedures.
Here's hoping that the Department of Education can find out a way to stop this invasion or privacy and better protect sensitive student data.
The latest salvo in the student loan scandal comes from yesterday’s Washington Post. The Post detailed how private student lenders are supposedly illegally accessing a government database on student borrowers and using the information obtained through the access to market their loan products to students. There seems to be some disagreement as to how prevalent the practice is – at one point the story says that security has been tightened, but it also claims that the information is still being accessed and that the department is considering shutting down access altogether.
This is one student loan scandal where the author has some personal experience. Just about every other day, I receive in the mail a new advertisement from Student Loan Company XYZ asking me to transfer all of my private loans to their service, that they offer the best interest rates, blah blah. What’s interesting is that the letters have continued pretty much non-stop even after I recently moved to a new address – while most of my other junk-mail has tapered off a bit.
Now, I have no evidence that private lenders have accessed my information in the Ed department database, but it wouldn’t surprise me. They are obviously getting addresses and loan information from some source and the Post’s story seems to make a strong case for the government database as being the culprit.
What’s befuddling to me is that if the government recognizes that this shouldn’t be going on, how hard is it to really stop it? For a department with such a large budget, you would think that they could easily design a database and ensure that only the right people have access to it. Perhaps that is asking too much of government, unfortunately.
This development is also bad news because it casts some doubts on other data collection ideas that would probably be of tremendous value. From the get-go, some folks have said that we should not gather more data on student performance in higher education because of privacy concerns. I thought that it wasn’t a false choice and that the government could collect more data but also make sure that it was used appropriately. But when you read the Washington Post story, you see that might not be the case, at least with our current security procedures.
Here's hoping that the Department of Education can find out a way to stop this invasion or privacy and better protect sensitive student data.
Saturday, April 14, 2007
Academic Entrepreneurship In Action
By Richard Vedder
Charles Koch and the folks at the Koch Foundation are on a mission to make American universities do more to spread market based management, an excellent and noble mission. But, as we have been saying for the past year, part of the problem is that entrepreneurship has to begin at home --within the universities themselves. By and large, established institutions in the not-for-profit sector are slow to innovate, to take risks, and to respond to market forces. This has contributed importantly to rising costs and falling productivity.
There are, however, exceptions to this rule. Private enrollment is rising faster than public enrollment in U.S. higher education, and some of the so-called independent colleges are actually extremely dynamic and entrepreneurial. That was brought home again to me the past two days. Bob Maginn, CEO of Jenzabar, a private company that provides services to colleges and universities, hosted a President's Summit of a dozen or so presidents of institutions, mostly private and relatively small. I attended and made a presentation. By the way, while Jenzabar no doubt hopes to get good will and business from doing this, the Summit was in no way a blatant bribe like we have been hearing about recently in the student loan business, but a no nonsense meeting in a pleasant but not overly luxurious setting (admittedly in Palm Beach), and the college presidents paid their own way there.
Let me today talk of just one of the innovative colleges, Palm Beach Atlantic University. It is a school that during the day caters to a growing population of affluent kids living in the West Palm Beach area, and it gives them what they want --very nice facilities (fancy library, a new rec center under construction) --in a conservative, faith-based learning environment. All students must take a course in the free enterprise system, for example, a marked contrast to the vaguely anti-capitalist, anti-Christian "multi-cultural" emphasis often found on campuses. None of the faculty have tenure. From the 2000-01 to 2005-06 years, the budget over doubled, implying a more than 14 percent annual growth. Enrollment was up close to 40 percent.
Yet, as President David Clark tells me, this "Yuppie U" with rising test scores and increasingly affluent families in its daytime programs, also runs a distinctly different program at night --thereby using facilities more --reaching out to part-time working adult students of modest means. A satellite operation is growing in Orlando and more are planned. The lack of tenure allows the institution to expand in new and different directions from what its faculty, mostly long-term adjuncts, might choose on its own. Dr. Clark, I suspect, has a great deal more authority to move the school in new directions than the president of a typical Ivy League school has. Contributions from wealthy business persons are booming, including a big gift last year from the estate of a legendary General Electric executive, the late Lemuel Boulware (whose approach to labor relations was both innovative and controversial).
It is schools like Palm Beach Atlantic and the quite different but equally if not more innovative Cambridge College that are showing growth and change these days --not the Harvards, Berkeleys, or Williams. They are entrepreneurial and student-oriented, with high teaching loads and moderate ($10,000 to $20,000) tuition levels by private school standards. They do not face the resource rigidities of the traditional institutions, and thus are continuing to gain market share and prominence.
By giving students and their parents what they want, by sticking to the core mission of teaching mostly undergraduates, and by utilizing resources intensively and in a flexible way, Palm Beach Atlantic is one reason that American higher education is slowly but surely being privatized.
Charles Koch and the folks at the Koch Foundation are on a mission to make American universities do more to spread market based management, an excellent and noble mission. But, as we have been saying for the past year, part of the problem is that entrepreneurship has to begin at home --within the universities themselves. By and large, established institutions in the not-for-profit sector are slow to innovate, to take risks, and to respond to market forces. This has contributed importantly to rising costs and falling productivity.
There are, however, exceptions to this rule. Private enrollment is rising faster than public enrollment in U.S. higher education, and some of the so-called independent colleges are actually extremely dynamic and entrepreneurial. That was brought home again to me the past two days. Bob Maginn, CEO of Jenzabar, a private company that provides services to colleges and universities, hosted a President's Summit of a dozen or so presidents of institutions, mostly private and relatively small. I attended and made a presentation. By the way, while Jenzabar no doubt hopes to get good will and business from doing this, the Summit was in no way a blatant bribe like we have been hearing about recently in the student loan business, but a no nonsense meeting in a pleasant but not overly luxurious setting (admittedly in Palm Beach), and the college presidents paid their own way there.
Let me today talk of just one of the innovative colleges, Palm Beach Atlantic University. It is a school that during the day caters to a growing population of affluent kids living in the West Palm Beach area, and it gives them what they want --very nice facilities (fancy library, a new rec center under construction) --in a conservative, faith-based learning environment. All students must take a course in the free enterprise system, for example, a marked contrast to the vaguely anti-capitalist, anti-Christian "multi-cultural" emphasis often found on campuses. None of the faculty have tenure. From the 2000-01 to 2005-06 years, the budget over doubled, implying a more than 14 percent annual growth. Enrollment was up close to 40 percent.
Yet, as President David Clark tells me, this "Yuppie U" with rising test scores and increasingly affluent families in its daytime programs, also runs a distinctly different program at night --thereby using facilities more --reaching out to part-time working adult students of modest means. A satellite operation is growing in Orlando and more are planned. The lack of tenure allows the institution to expand in new and different directions from what its faculty, mostly long-term adjuncts, might choose on its own. Dr. Clark, I suspect, has a great deal more authority to move the school in new directions than the president of a typical Ivy League school has. Contributions from wealthy business persons are booming, including a big gift last year from the estate of a legendary General Electric executive, the late Lemuel Boulware (whose approach to labor relations was both innovative and controversial).
It is schools like Palm Beach Atlantic and the quite different but equally if not more innovative Cambridge College that are showing growth and change these days --not the Harvards, Berkeleys, or Williams. They are entrepreneurial and student-oriented, with high teaching loads and moderate ($10,000 to $20,000) tuition levels by private school standards. They do not face the resource rigidities of the traditional institutions, and thus are continuing to gain market share and prominence.
By giving students and their parents what they want, by sticking to the core mission of teaching mostly undergraduates, and by utilizing resources intensively and in a flexible way, Palm Beach Atlantic is one reason that American higher education is slowly but surely being privatized.
Friday, April 13, 2007
Finger Pointing
By Bryan O'Keefe
Time for another update on the student loan scandal. Now that the scandal is blowing up into quite possibly one of the biggest embarrassments for higher education in quite some time, the media is starting to point fingers at who is to blame – the colleges, the lenders, the Department of Education, all three?
The Wall Street Journal seems to shift the focus today onto the latter of that trinity, with a story detailing numerous connections between Department of Ed folks and the student loan industry. The story seems to imply that because some people from the Ed Department either previously or eventually worked for a private lender, there was relaxed oversight. Despite this insinuation, I didn’t think a lot of the specific examples were too damning. Yes, some people who used to work at the Department of Education received jobs at private student lenders after they left government service. Just as some people who used to work at the Department of Defense go and work for defense contractors, and so on and so forth. This same game of musical chairs between government service and the private sector happens literally every day in the nation’s capital (apologies in advance if I am ruining an idealistic notion of Washington that some readers might have). It’s entirely possible that maybe something more sinister was going on, but we need much stronger evidence to conclude the worst case scenarios.
I think that the broader problem – and the real way to avoid more scandals of this type – is what Rich wrote about earlier this week – decoupling the connection between higher education itself and its funding. There is an embedded connection between the two and until that is changed, it will be impossible to really get to the heart of the issue.
Unfortunately, very little that I have read so far touches on this. We are becoming consumed now with trying to “blame” somebody and while there is probably some role for that, we also need to start looking forward and figuring out how to fundamentally change the way that things are done. Perhaps, in an ironic way, this scandal even opens the doors to other private sector companies that might have a fresh perspective on how to both provide loans to students and avoid ethical problems between universities and the lenders themselves. Out of this rubble, maybe a new model can emerge.
The more likely result however is that there will be a renewed call for more government regulation and greater private sector “oversight” from agencies like the Department of Education. This will not accomplish anything substantial. I suppose that's the status quo in Washington, DC.
Time for another update on the student loan scandal. Now that the scandal is blowing up into quite possibly one of the biggest embarrassments for higher education in quite some time, the media is starting to point fingers at who is to blame – the colleges, the lenders, the Department of Education, all three?
The Wall Street Journal seems to shift the focus today onto the latter of that trinity, with a story detailing numerous connections between Department of Ed folks and the student loan industry. The story seems to imply that because some people from the Ed Department either previously or eventually worked for a private lender, there was relaxed oversight. Despite this insinuation, I didn’t think a lot of the specific examples were too damning. Yes, some people who used to work at the Department of Education received jobs at private student lenders after they left government service. Just as some people who used to work at the Department of Defense go and work for defense contractors, and so on and so forth. This same game of musical chairs between government service and the private sector happens literally every day in the nation’s capital (apologies in advance if I am ruining an idealistic notion of Washington that some readers might have). It’s entirely possible that maybe something more sinister was going on, but we need much stronger evidence to conclude the worst case scenarios.
I think that the broader problem – and the real way to avoid more scandals of this type – is what Rich wrote about earlier this week – decoupling the connection between higher education itself and its funding. There is an embedded connection between the two and until that is changed, it will be impossible to really get to the heart of the issue.
Unfortunately, very little that I have read so far touches on this. We are becoming consumed now with trying to “blame” somebody and while there is probably some role for that, we also need to start looking forward and figuring out how to fundamentally change the way that things are done. Perhaps, in an ironic way, this scandal even opens the doors to other private sector companies that might have a fresh perspective on how to both provide loans to students and avoid ethical problems between universities and the lenders themselves. Out of this rubble, maybe a new model can emerge.
The more likely result however is that there will be a renewed call for more government regulation and greater private sector “oversight” from agencies like the Department of Education. This will not accomplish anything substantial. I suppose that's the status quo in Washington, DC.
Thursday, April 12, 2007
The School of the Future? Acton Business School
By Richard Vedder
I have long admired Jeff Sanderfer, the highly successful Texas entrepreneur who is fed up with the poor quality of business schools in the U.S. He has tried to get me to help him study some higher ed issues in the past, but lamentably other commitments have forced me to decline, and I feel somewhat sad about that. However, I heard him give a great speech a couple of days ago to a group of academics (the Association for Private Enterprise Education) in that great citadel of learning, Cancun, Mexico (us marginalized academics sometimes engage in rent-seeking behavior about which the public knows little).
After teaching at the University of Texas at Austin for a number of years, Jeff started his own business school, the Acton School of Business, offering a one year M.B.A. program. It is innovative in many ways.
The students work intensely, putting in 100 hour weeks (6 a.m. to midnight is a typical week day schedule) for a full year, condensing a two year M.B.A. into one. Each student must pay the first semester tuition of $17,500 up front, and they lose it all if they drop out early. If, however, they get through the first semester okay, they get the second semester's tuition paid for by Jeff or one of his friends (e.g., Charles Koch, T. Boone Pickens). If the student completes the second semester (and the degree), she gets the original $17,500 back --an incentive system to work hard and complete the degree. It sounds like most of the learning revolves around case studies, mostly ones prepared at Harvard Business School.
The students and the faculty all sign contracts, not only with the institution but with one another, outlining what they agree to do. Professors are mostly entrepreneurs, not academics, and are paid $5,000 a course --but up to a $30,000 bonus if they do well on student evaluations. The professor with the worst evaluations annually is dropped from the faculty --no tenure here. Instructors cannot game student evaluations by giving high grades --there are limits placed on "A"s, and all students are also ranked relative to other students (e.g., 10 out of 31, etc.). That is an idea that needs expanding, and I plan on using it in my classes this fall. If I could find a way to have myself ranked relative to others, I would do that too. When I become a below average teacher in the eyes of the students, I should either quit (the humane solution) or be shot (the inhumane one).
Jeff believes accreditation is merely a cost-rising barrier to entry that has nothing to do with the quality of education, and he has apparently no interest in securing AACSB (the business school accrediting agency) accreditation. Good for him. Students have a financial objective, but Jeff says his school also stresses moral and ethical implications of business behavior, which, to put it mildly, is much needed in a society that reeks of moral relativism.
The higher education world needs more Jeff Sanderfers--people who passionately want to improve the quality of higher education at an affordable price, introducing stronger incentives for excellence on the part of students and faculty alike. Jeff is expanding his model to other cooperating schools, and much of what he is doing has applications for other disciplines, including the traditional liberal arts. Adam Smith said professors were much better when they were directly paid by students, and the Sanderfer faculty pay plan is a step back to improving teaching and putting students front and center again in American higher education. To be sure, there may be flaws in the plan -- but my guess is the finished product at the Acton school compares favorably with most conventional, and more expensive, MBA programs.
I have long admired Jeff Sanderfer, the highly successful Texas entrepreneur who is fed up with the poor quality of business schools in the U.S. He has tried to get me to help him study some higher ed issues in the past, but lamentably other commitments have forced me to decline, and I feel somewhat sad about that. However, I heard him give a great speech a couple of days ago to a group of academics (the Association for Private Enterprise Education) in that great citadel of learning, Cancun, Mexico (us marginalized academics sometimes engage in rent-seeking behavior about which the public knows little).
After teaching at the University of Texas at Austin for a number of years, Jeff started his own business school, the Acton School of Business, offering a one year M.B.A. program. It is innovative in many ways.
The students work intensely, putting in 100 hour weeks (6 a.m. to midnight is a typical week day schedule) for a full year, condensing a two year M.B.A. into one. Each student must pay the first semester tuition of $17,500 up front, and they lose it all if they drop out early. If, however, they get through the first semester okay, they get the second semester's tuition paid for by Jeff or one of his friends (e.g., Charles Koch, T. Boone Pickens). If the student completes the second semester (and the degree), she gets the original $17,500 back --an incentive system to work hard and complete the degree. It sounds like most of the learning revolves around case studies, mostly ones prepared at Harvard Business School.
The students and the faculty all sign contracts, not only with the institution but with one another, outlining what they agree to do. Professors are mostly entrepreneurs, not academics, and are paid $5,000 a course --but up to a $30,000 bonus if they do well on student evaluations. The professor with the worst evaluations annually is dropped from the faculty --no tenure here. Instructors cannot game student evaluations by giving high grades --there are limits placed on "A"s, and all students are also ranked relative to other students (e.g., 10 out of 31, etc.). That is an idea that needs expanding, and I plan on using it in my classes this fall. If I could find a way to have myself ranked relative to others, I would do that too. When I become a below average teacher in the eyes of the students, I should either quit (the humane solution) or be shot (the inhumane one).
Jeff believes accreditation is merely a cost-rising barrier to entry that has nothing to do with the quality of education, and he has apparently no interest in securing AACSB (the business school accrediting agency) accreditation. Good for him. Students have a financial objective, but Jeff says his school also stresses moral and ethical implications of business behavior, which, to put it mildly, is much needed in a society that reeks of moral relativism.
The higher education world needs more Jeff Sanderfers--people who passionately want to improve the quality of higher education at an affordable price, introducing stronger incentives for excellence on the part of students and faculty alike. Jeff is expanding his model to other cooperating schools, and much of what he is doing has applications for other disciplines, including the traditional liberal arts. Adam Smith said professors were much better when they were directly paid by students, and the Sanderfer faculty pay plan is a step back to improving teaching and putting students front and center again in American higher education. To be sure, there may be flaws in the plan -- but my guess is the finished product at the Acton school compares favorably with most conventional, and more expensive, MBA programs.
Wednesday, April 11, 2007
Expecting More
By Bryan O'Keefe
The scandal surrounding financial aid administrators and the student lenders themselves continues to make headlines in the media. Just when we think the final damaging news has been discovered, more damning revelations are found. As I am sure many of you already saw, the NY Attorney General’s office has now unearthed evidence that some administrators were being paid directly as “consultants” to the lenders, and one person even had part of her graduate school education paid for by a student loan company. A financial aid administrator at an online university also became embroiled in the hoopla this week with evidence coming out that he too accepted payments as a consultant for the student lender in question.
What I think is unfortunate from this whole mess is that private student lenders and, with the latest round of news, an online university, behaved so badly. People who have followed CCAP for awhile know that we have advocated for some alternative higher education models which, if correctly implemented, could lower costs. For example, We have supported the expansion of more private lending in higher education, with the premise that if we can finance million dollar homes, yachts, cars, and everything else on the planet through private loans, why not higher education too? It’s an idea that still needs to be studied more, but we thought it was an interesting proposition none the less. The same goes with online courses and universities. There is no illusion that students who want to go to Harvard are suddenly going to enroll in the University of Phoenix, but for non-traditional students, low-income students, etc. online classes might make great financial sense.
But what’s critical is that both private lenders and online universities have to gain the public’s trust and have unquestionable integrity. The process can’t seem rigged in any way, shape, or form. And unfortunately if you read all of the news stories, it seems like the process was, in fact, being rigged, or, at, the very least, the process was not entirely transparent. Columbia, the University of Texas, and the other schools implicated might take a PR hit, but they will survive. Thousands and thousands of students will still submit applications. That’s because they have a historic track record as being good universities and one bad episode – albeit on a major scale – will not suddenly change all of that.
But private lenders and online universities are the new kids on the block and have to be held to different standards. I would even venture to guess that this scandal is the first time that some people have even heard of the student lending company involved – and any parent or student would be justified in not wanting to do business with them.
There is a very good chance that the Democrats in Congress could use this episode as ammunition for even greater regulations on the private student lending industry – and as evidence that government loans are the only way to go. That would be bad public policy, but private student lenders would only have themselves to blame.
The scandal surrounding financial aid administrators and the student lenders themselves continues to make headlines in the media. Just when we think the final damaging news has been discovered, more damning revelations are found. As I am sure many of you already saw, the NY Attorney General’s office has now unearthed evidence that some administrators were being paid directly as “consultants” to the lenders, and one person even had part of her graduate school education paid for by a student loan company. A financial aid administrator at an online university also became embroiled in the hoopla this week with evidence coming out that he too accepted payments as a consultant for the student lender in question.
What I think is unfortunate from this whole mess is that private student lenders and, with the latest round of news, an online university, behaved so badly. People who have followed CCAP for awhile know that we have advocated for some alternative higher education models which, if correctly implemented, could lower costs. For example, We have supported the expansion of more private lending in higher education, with the premise that if we can finance million dollar homes, yachts, cars, and everything else on the planet through private loans, why not higher education too? It’s an idea that still needs to be studied more, but we thought it was an interesting proposition none the less. The same goes with online courses and universities. There is no illusion that students who want to go to Harvard are suddenly going to enroll in the University of Phoenix, but for non-traditional students, low-income students, etc. online classes might make great financial sense.
But what’s critical is that both private lenders and online universities have to gain the public’s trust and have unquestionable integrity. The process can’t seem rigged in any way, shape, or form. And unfortunately if you read all of the news stories, it seems like the process was, in fact, being rigged, or, at, the very least, the process was not entirely transparent. Columbia, the University of Texas, and the other schools implicated might take a PR hit, but they will survive. Thousands and thousands of students will still submit applications. That’s because they have a historic track record as being good universities and one bad episode – albeit on a major scale – will not suddenly change all of that.
But private lenders and online universities are the new kids on the block and have to be held to different standards. I would even venture to guess that this scandal is the first time that some people have even heard of the student lending company involved – and any parent or student would be justified in not wanting to do business with them.
There is a very good chance that the Democrats in Congress could use this episode as ammunition for even greater regulations on the private student lending industry – and as evidence that government loans are the only way to go. That would be bad public policy, but private student lenders would only have themselves to blame.
Monday, April 09, 2007
Textbooks 101
By Bryan O'Keefe
The Boston Globe has an interesting story this morning about Harvard Deans asking faculty members to help reduce student expenditures on textbooks. The story claims that the Deans have asked professors to put more classroom materials online and to also decide earlier if they plan to use textbooks in subsequent semesters.
The whole issue of college textbooks is a double-edged sword. On the one hand, I don’t always have a lot of sympathy for students who complain about the high costs of textbooks. I remember back in my undergrad days, I would hear people moan and groan and then run into them a couple nights later at a local watering hole, spending lots of money on things other than their Chemistry textbook. In some ways, textbook expenditures are just like anything purchase – you prioritize and budget accordingly. Some students unfortunately just choose to spend their money elsewhere.
But students are not completely to blame. I remember a few professors assigning books simply because they or another faculty member they were friends with wrote the textbook. Occasionally, the book would not even be used in class, which was positively outrageous. Any book that a professor asks a student to buy should at least be incorporated in some way into the class, or the professor should make it clear on day one that buying that textbook is really optional.
I have also heard from some professors on this issue and I understand their viewpoint too – namely that with the internet and Amazon.com, they simply do not get the type of royalties they used to. As a result, there is even greater pressure to come up with a new edition of a textbook in order to make money.
I think the easiest solution for all three groups is for college administrators to watch professors very carefully. If the professors really are using the textbooks and the material can not be found online, then the students should just buy the darn thing. But if professors are clearly abusing the textbook buying process, they should be held accountable too. I suppose that the new Harvard policy is a step in that direction, but it would be much better if the University and Deans looked at things on a more individual basis.
Better yet, why doesn’t an enterprising Harvard undergrad conduct surveys of students and figure out which professors really use their textbooks and which don’t? The results of the survey could be posted on a website, which would surely bring in advertising revenue once people started clicking on it to figure out if they really need to buy that new textbook. There has to be a goldmine for this type of information. Here’s hoping that somebody runs with this idea!
The Boston Globe has an interesting story this morning about Harvard Deans asking faculty members to help reduce student expenditures on textbooks. The story claims that the Deans have asked professors to put more classroom materials online and to also decide earlier if they plan to use textbooks in subsequent semesters.
The whole issue of college textbooks is a double-edged sword. On the one hand, I don’t always have a lot of sympathy for students who complain about the high costs of textbooks. I remember back in my undergrad days, I would hear people moan and groan and then run into them a couple nights later at a local watering hole, spending lots of money on things other than their Chemistry textbook. In some ways, textbook expenditures are just like anything purchase – you prioritize and budget accordingly. Some students unfortunately just choose to spend their money elsewhere.
But students are not completely to blame. I remember a few professors assigning books simply because they or another faculty member they were friends with wrote the textbook. Occasionally, the book would not even be used in class, which was positively outrageous. Any book that a professor asks a student to buy should at least be incorporated in some way into the class, or the professor should make it clear on day one that buying that textbook is really optional.
I have also heard from some professors on this issue and I understand their viewpoint too – namely that with the internet and Amazon.com, they simply do not get the type of royalties they used to. As a result, there is even greater pressure to come up with a new edition of a textbook in order to make money.
I think the easiest solution for all three groups is for college administrators to watch professors very carefully. If the professors really are using the textbooks and the material can not be found online, then the students should just buy the darn thing. But if professors are clearly abusing the textbook buying process, they should be held accountable too. I suppose that the new Harvard policy is a step in that direction, but it would be much better if the University and Deans looked at things on a more individual basis.
Better yet, why doesn’t an enterprising Harvard undergrad conduct surveys of students and figure out which professors really use their textbooks and which don’t? The results of the survey could be posted on a website, which would surely bring in advertising revenue once people started clicking on it to figure out if they really need to buy that new textbook. There has to be a goldmine for this type of information. Here’s hoping that somebody runs with this idea!
Root of All Evil
By Richard Vedder
The papers are full of stories the past couple of days about the growing student financial aid scandal in American higher education. Financial aid officers at some schools (including ones as prestigious as Columbia) have had large stock investments in companies that are on the "preferred list" for student loans. Students are encouraged to borrow from companies in which the person doing the encouraging has a direct financial interest, or at least that is what New York Attorney General Andrew Cuomo and others say is happening. If true, this is truly a scandal of monumental importance, particularly if more than a few isolated cases are involved.
It is not surprising. We have a system almost designed to promote corruption. Kickbacks to schools are of a highly dubious ethical nature, while stock options and other devices to reward individuals are, if not outwardly criminal, at least very unethical. Greed trumps integrity, as it so often does in an era where all values are relative, where many think there are no moral absolutes, where most colleges cannot even agree on what good citizens should know in common about life and our world -- if anything.
The problem would not exist if there were not an unholy alliance between the provision of higher education and its funding. These are distinctly different functions, and should be provided by separate individuals. In the 1930s we separated investment banking from commercial banking because of possible conflicts of interest (however, this legislation has been largely reversed in the past decade or so), and maybe in the 2000s we should separate the provision of higher education from its funding, at least for institutions receiving government monies (nearly all of them).
It is my hunch that colleges use inside information to tailor their own financial aid to fit their institutional objectives, not the best interests of individual students. The colleges know that Student A has a $3000 Pell Grant, a $5000 Stafford Loan, a $1000 scholarship from a small local foundation, etc., and it tailors the price it charges the student (the rebate from sticker price) to meet this inside information. Thus the positive impact of the Pell Grant on the student's access may be completely offset by a $3000 reduction in institutional financial support. The student is no better off than she would have been without the Pell Grant, and the school uses the $3000 it saved from insider information to reward someone else, perhaps a rich kid who is also smart, but for whom public policy would not approve favoring with financial aid. Before this scandal erupted big, I argued for moving towards separating the financing functions from the educational ones. I have argued for the federal government getting out of the loan business, and for universities getting out of the business of loan provision completely, excepting institutional loans financed out of school endowments.
This scandal could have a positive or a negative conclusion, depending on what is done. If Congress passes heavy handed regulation that merely raises the costs of doing business, it will be a failure. However, there are some sensible things that can be done. Short term, it seems to me that financial aid officials should not have investments in financial service companies if the institution serves in an active role of a financial intermediary, bringing together students with lenders. Pell Grants should be given directly by the government to students in the form of vouchers usable at any accredited institution, with zero institutional involvement. No "preferred lender" lists should be made available to students, as that implies some form of institutional endorsement. Longer term, we should probably promote complete separation of the provision of academic services from the funding of them, except for the use of institutional funds themselves. Universities should be prohibited from asking students about non-institutional grants and loans provided. I suspect that institutions use their inside information to raise, not lower, the net tuition charge paid by students.
The papers are full of stories the past couple of days about the growing student financial aid scandal in American higher education. Financial aid officers at some schools (including ones as prestigious as Columbia) have had large stock investments in companies that are on the "preferred list" for student loans. Students are encouraged to borrow from companies in which the person doing the encouraging has a direct financial interest, or at least that is what New York Attorney General Andrew Cuomo and others say is happening. If true, this is truly a scandal of monumental importance, particularly if more than a few isolated cases are involved.
It is not surprising. We have a system almost designed to promote corruption. Kickbacks to schools are of a highly dubious ethical nature, while stock options and other devices to reward individuals are, if not outwardly criminal, at least very unethical. Greed trumps integrity, as it so often does in an era where all values are relative, where many think there are no moral absolutes, where most colleges cannot even agree on what good citizens should know in common about life and our world -- if anything.
The problem would not exist if there were not an unholy alliance between the provision of higher education and its funding. These are distinctly different functions, and should be provided by separate individuals. In the 1930s we separated investment banking from commercial banking because of possible conflicts of interest (however, this legislation has been largely reversed in the past decade or so), and maybe in the 2000s we should separate the provision of higher education from its funding, at least for institutions receiving government monies (nearly all of them).
It is my hunch that colleges use inside information to tailor their own financial aid to fit their institutional objectives, not the best interests of individual students. The colleges know that Student A has a $3000 Pell Grant, a $5000 Stafford Loan, a $1000 scholarship from a small local foundation, etc., and it tailors the price it charges the student (the rebate from sticker price) to meet this inside information. Thus the positive impact of the Pell Grant on the student's access may be completely offset by a $3000 reduction in institutional financial support. The student is no better off than she would have been without the Pell Grant, and the school uses the $3000 it saved from insider information to reward someone else, perhaps a rich kid who is also smart, but for whom public policy would not approve favoring with financial aid. Before this scandal erupted big, I argued for moving towards separating the financing functions from the educational ones. I have argued for the federal government getting out of the loan business, and for universities getting out of the business of loan provision completely, excepting institutional loans financed out of school endowments.
This scandal could have a positive or a negative conclusion, depending on what is done. If Congress passes heavy handed regulation that merely raises the costs of doing business, it will be a failure. However, there are some sensible things that can be done. Short term, it seems to me that financial aid officials should not have investments in financial service companies if the institution serves in an active role of a financial intermediary, bringing together students with lenders. Pell Grants should be given directly by the government to students in the form of vouchers usable at any accredited institution, with zero institutional involvement. No "preferred lender" lists should be made available to students, as that implies some form of institutional endorsement. Longer term, we should probably promote complete separation of the provision of academic services from the funding of them, except for the use of institutional funds themselves. Universities should be prohibited from asking students about non-institutional grants and loans provided. I suspect that institutions use their inside information to raise, not lower, the net tuition charge paid by students.
Wednesday, April 04, 2007
Gated University Communities
By Richard Vedder
Tom Mortenson provides some of the greatest data on higher education issues, and in the March issue of Postsecondary Education Opportunity, he shows that there are vast numbers of prestigious four year institutions that are vastly underrepresented with respect to low income students, as measured by the proportion of students receiving Pell Grants. He aptly calls them "gated communities of higher education."
What is particularly interesting is that there are many flagship state universities where the proportion of those receiving Pells is less than one-half the national average of 36.8 percent. That is true in the Northeast (Connecticut, Vermont, New Hampshire), the South (Virginia, North Carolina, Georgia), the Midwest (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Ohio, Wisconsin), and the Far West (Alaska, Colorado, Nevada). The University of Virginia, for example has a lower proportion of Pell grant recipients (7.9 percent) than does Harvard, Yale or Princeton, the epitome of elitist private education. Similarly its cross state rival, the College of Wiliam and Mary, has a lower proportion than, say, Northwestern, the University of Pennsylvania or Duke.
The original motivation behind most state universities was a desire to provide low cost education for the masses. Yet the flagship universities are very often almost contemptuous of this mission. While Marie Antoinette may have said to the French peasants who could not afford bread, "let them eat cake," today's state university president confronted with the fact that few poor go to his or her school say "let them go to a community college."
The question is, then: why do we use state government funds to support universities? Is it exclusively to fund research missions? Are universities subsidized because they are vehicles for economic development? If so, the evidence is that the subsidies are mis-directed, because the preponderance of evidence I have observed shows that we must reject the notion that "more higher education spending promotes economic growth."
Why not just privatize the schools? The mission the institutions want to pursue is widely at variance from the notion that they open doors for economic opportunity for students otherwise unable to afford them.
Having said all of that, I believe a truly private school, one not taking federal assistance, should have the right to take any student they want, on any criterion. And that may mean they wish to discriminate on the basis of money -- those who can afford sky high tuition rates get in, those who cannot, do not get admitted. There may be room for Yuppie University, catering to the rich. But if the general taxpaying public directly or indirectly is asked to subsidize the enterprise, the American equalitarian tradition casts some suspicion on the legitimacy of the policies prevailing at many of our great public universities. Gated communities are okay, just don't ask me to help pay for them with my taxes.
Tom Mortenson provides some of the greatest data on higher education issues, and in the March issue of Postsecondary Education Opportunity, he shows that there are vast numbers of prestigious four year institutions that are vastly underrepresented with respect to low income students, as measured by the proportion of students receiving Pell Grants. He aptly calls them "gated communities of higher education."
What is particularly interesting is that there are many flagship state universities where the proportion of those receiving Pells is less than one-half the national average of 36.8 percent. That is true in the Northeast (Connecticut, Vermont, New Hampshire), the South (Virginia, North Carolina, Georgia), the Midwest (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Ohio, Wisconsin), and the Far West (Alaska, Colorado, Nevada). The University of Virginia, for example has a lower proportion of Pell grant recipients (7.9 percent) than does Harvard, Yale or Princeton, the epitome of elitist private education. Similarly its cross state rival, the College of Wiliam and Mary, has a lower proportion than, say, Northwestern, the University of Pennsylvania or Duke.
The original motivation behind most state universities was a desire to provide low cost education for the masses. Yet the flagship universities are very often almost contemptuous of this mission. While Marie Antoinette may have said to the French peasants who could not afford bread, "let them eat cake," today's state university president confronted with the fact that few poor go to his or her school say "let them go to a community college."
The question is, then: why do we use state government funds to support universities? Is it exclusively to fund research missions? Are universities subsidized because they are vehicles for economic development? If so, the evidence is that the subsidies are mis-directed, because the preponderance of evidence I have observed shows that we must reject the notion that "more higher education spending promotes economic growth."
Why not just privatize the schools? The mission the institutions want to pursue is widely at variance from the notion that they open doors for economic opportunity for students otherwise unable to afford them.
Having said all of that, I believe a truly private school, one not taking federal assistance, should have the right to take any student they want, on any criterion. And that may mean they wish to discriminate on the basis of money -- those who can afford sky high tuition rates get in, those who cannot, do not get admitted. There may be room for Yuppie University, catering to the rich. But if the general taxpaying public directly or indirectly is asked to subsidize the enterprise, the American equalitarian tradition casts some suspicion on the legitimacy of the policies prevailing at many of our great public universities. Gated communities are okay, just don't ask me to help pay for them with my taxes.
US News and World Report Rankings Strike Again
By Bryan O’Keefe
The Wall Street Journal ran a very interesting piece (subscription required) yesterday on the rise of applications and lower admission rates at America’s colleges and universities. This means that more and more students are applying to colleges while at the same time fewer and fewer colleges – especially of the highly selective variety – are actually accepting students.
The story mentions a couple different reasons for this dynamic, including more students graduating from high school, more foreign students applying to American universities, and greater acceptance of the “common application” which allows students to apply to many colleges all at once, instead of filling out individual applications for each place.
There is no doubt that all of these are factors in this equation, but one piece that they did not discuss is, again, the role of the US News and World Report rankings. I have no firm evidence on this point, but I strongly suspect that the rankings are also playing some role in driving this admissions bonanza.
That’s because part of the rankings are based on the number of applications that a school receives and either admits or rejects (with the more selective schools almost always getting the higher rankings). So, pretty much every school and admissions office has an incentive to tell prospective students to go ahead and apply, even if their scores aren’t particularly strong. The school really doesn’t lose out – when you are rejecting tens of thousands of applications anyway, what’s a couple hundred more on the pile? It’s especially easy to do this if the applicant’s scores are very low because it will be an easy decision to send them the rejection letter.
I don’t think there are any real negative effects from this, per se. I suppose that some high school students probably get their hopes up and think that Yale or Harvard or wherever is interested in them when, in reality, they aren’t. That’s a sad story, but it’s also partially the student’s own fault. Instead of listening to every admissions department about how wonderful they are and how they would fit right in on campus XYZ, students should be realistic, carefully research their options, and base their applications for the most part on whether or not their scores really meet the admissions criteria set forth by the school. That strategy might take some humble pie, but will ultimately lead to less disappointment in the end. It’s probably best to take what the actual school tells you with a grain of salt.
The Wall Street Journal ran a very interesting piece (subscription required) yesterday on the rise of applications and lower admission rates at America’s colleges and universities. This means that more and more students are applying to colleges while at the same time fewer and fewer colleges – especially of the highly selective variety – are actually accepting students.
The story mentions a couple different reasons for this dynamic, including more students graduating from high school, more foreign students applying to American universities, and greater acceptance of the “common application” which allows students to apply to many colleges all at once, instead of filling out individual applications for each place.
There is no doubt that all of these are factors in this equation, but one piece that they did not discuss is, again, the role of the US News and World Report rankings. I have no firm evidence on this point, but I strongly suspect that the rankings are also playing some role in driving this admissions bonanza.
That’s because part of the rankings are based on the number of applications that a school receives and either admits or rejects (with the more selective schools almost always getting the higher rankings). So, pretty much every school and admissions office has an incentive to tell prospective students to go ahead and apply, even if their scores aren’t particularly strong. The school really doesn’t lose out – when you are rejecting tens of thousands of applications anyway, what’s a couple hundred more on the pile? It’s especially easy to do this if the applicant’s scores are very low because it will be an easy decision to send them the rejection letter.
I don’t think there are any real negative effects from this, per se. I suppose that some high school students probably get their hopes up and think that Yale or Harvard or wherever is interested in them when, in reality, they aren’t. That’s a sad story, but it’s also partially the student’s own fault. Instead of listening to every admissions department about how wonderful they are and how they would fit right in on campus XYZ, students should be realistic, carefully research their options, and base their applications for the most part on whether or not their scores really meet the admissions criteria set forth by the school. That strategy might take some humble pie, but will ultimately lead to less disappointment in the end. It’s probably best to take what the actual school tells you with a grain of salt.
Tuesday, April 03, 2007
Key to Reform: "I" Words Not "A" Words
By Richard Vedder
At meetings of higher education leaders, much talk occurs about the three "A"s: accessibility, affordability, and accountability. These topics are all important, but true reform requires more emphasis on three "I" words:
* Incentives
* Integrity
* Interrogation
Incentives
As someone said at the so-called higher education summit a couple of weeks ago, "no reform is going to happen without the faculty's support." And, basically, there are few if any incentives for faculty to change their ways. Why teach in new ways that are uncomfortable and potentially could reduce faculty jobs? Why conduct research on promising teaching practices, when salary increases are largely publication-driven? Why cut administrative staff when the current bloated bureaucracy reduces the work load on some high level decision-makers, isolate the leaders from some thorny problems, and increases the administrator's sense of power? Why teach more hours per week when teaching is not valued much? Why spend time with undergraduate students, when only graduate students and fellow faculty can help get more research published to advance one's career? Why teach (and utilize buildings) in the summer, when that is when faculty and staff like to work short days and take long vacations? Why teach at 8:00 a.m. in the morning or on Fridays, when I like to sleep in and take long weekends?
Faculty and staff have to be given incentives to change. If innovation A will save the institution X number of dollars, perhaps 0.4 X (40 percent of the savings) need to be devoted to providing incentives for faculty and staff to actively work to implement the innovation. Incentives could take several forms, including salary increments.
Integrity
Providers of funds to universities, both public and private, are often becoming more skeptical about what colleges tell them. Money too often gets misused, as the huge confrontation over the Robertson gift at Princeton suggests. Universities bury embarrassing news, such as rising attrition rates, and even campus crimes. If universities showed extremely high level of honesty and integrity, people would believe and support them more.
Interrogation
Education is about asking and answering questions. An active, lively mind is an inquisitive and imaginative (other "I" words) one. Those in university governance and providers of funds need to ask universities more questions, probe more about how resources are really being used. Have incremental funds supported more teaching or rather narrow research interests of faculty? Have new funds meant generous salary increases to faculty and staff more than new positions, more scholarship aid to students, etc.? Trustees and others need, on average, to question academic leaders more, and usually need their own "eyes and ears" within the university community to report to them on what is going on campus.
At meetings of higher education leaders, much talk occurs about the three "A"s: accessibility, affordability, and accountability. These topics are all important, but true reform requires more emphasis on three "I" words:
* Incentives
* Integrity
* Interrogation
Incentives
As someone said at the so-called higher education summit a couple of weeks ago, "no reform is going to happen without the faculty's support." And, basically, there are few if any incentives for faculty to change their ways. Why teach in new ways that are uncomfortable and potentially could reduce faculty jobs? Why conduct research on promising teaching practices, when salary increases are largely publication-driven? Why cut administrative staff when the current bloated bureaucracy reduces the work load on some high level decision-makers, isolate the leaders from some thorny problems, and increases the administrator's sense of power? Why teach more hours per week when teaching is not valued much? Why spend time with undergraduate students, when only graduate students and fellow faculty can help get more research published to advance one's career? Why teach (and utilize buildings) in the summer, when that is when faculty and staff like to work short days and take long vacations? Why teach at 8:00 a.m. in the morning or on Fridays, when I like to sleep in and take long weekends?
Faculty and staff have to be given incentives to change. If innovation A will save the institution X number of dollars, perhaps 0.4 X (40 percent of the savings) need to be devoted to providing incentives for faculty and staff to actively work to implement the innovation. Incentives could take several forms, including salary increments.
Integrity
Providers of funds to universities, both public and private, are often becoming more skeptical about what colleges tell them. Money too often gets misused, as the huge confrontation over the Robertson gift at Princeton suggests. Universities bury embarrassing news, such as rising attrition rates, and even campus crimes. If universities showed extremely high level of honesty and integrity, people would believe and support them more.
Interrogation
Education is about asking and answering questions. An active, lively mind is an inquisitive and imaginative (other "I" words) one. Those in university governance and providers of funds need to ask universities more questions, probe more about how resources are really being used. Have incremental funds supported more teaching or rather narrow research interests of faculty? Have new funds meant generous salary increases to faculty and staff more than new positions, more scholarship aid to students, etc.? Trustees and others need, on average, to question academic leaders more, and usually need their own "eyes and ears" within the university community to report to them on what is going on campus.
Friday, March 30, 2007
Tyler's Lament
By Richard Vedder
While doing my interview for last night's ABC nightly news special, one of my Whiz Kids, Matt Denhart, got his roommate Tyler McDaniel to give me a hand. I had a nice chat with Tyler, a freshman from a middle class family attending a typical, fairly high quality state university (Ohio University), where he is doing well academically.
Tyler had just received FAFSA based financial information for next year. We started talking a bit about his financial situation, which I will not share with you because of privacy concerns, but I was struck by Tyler's main point: his family was responsible and saved for college, and as a consequence receives little financial aid. Other kids from families with similar financial circumstances get more assistance -- often because their families were less responsible, spending more through the years and doing less saving for college for their children. Tyler, in effect, said, "my parents are being punished for being responsible." Tyler, of course, is right.
I have generally championed the concept of need-based aid, although I have been critical of excessive federal involvement and an overabundence of financial aid funding. I am beginning, however, to shift my position a bit, becoming more skeptical of much need-based aid on several grounds. First, Tyler's point is well taken, and there is a huge implicit tax on people who have saved for college. This is bad in terms of promoting economic behaviors detrimental to the nation. On macroeconomic grounds, current aid policies are suspect. Second, I am beginning to wonder if much so-called need-based aid is used to fund either submarginal students who have very high college attrition rates, or students from families that could have paid for college for their kids if they had been more responsible. Third, perhaps the best way to enhance parental responsibility is to administer tough love, that is to slowly but surely reduce the financial assistance commitments made by third parties to students, usually with government funds.
While doing my interview for last night's ABC nightly news special, one of my Whiz Kids, Matt Denhart, got his roommate Tyler McDaniel to give me a hand. I had a nice chat with Tyler, a freshman from a middle class family attending a typical, fairly high quality state university (Ohio University), where he is doing well academically.
Tyler had just received FAFSA based financial information for next year. We started talking a bit about his financial situation, which I will not share with you because of privacy concerns, but I was struck by Tyler's main point: his family was responsible and saved for college, and as a consequence receives little financial aid. Other kids from families with similar financial circumstances get more assistance -- often because their families were less responsible, spending more through the years and doing less saving for college for their children. Tyler, in effect, said, "my parents are being punished for being responsible." Tyler, of course, is right.
I have generally championed the concept of need-based aid, although I have been critical of excessive federal involvement and an overabundence of financial aid funding. I am beginning, however, to shift my position a bit, becoming more skeptical of much need-based aid on several grounds. First, Tyler's point is well taken, and there is a huge implicit tax on people who have saved for college. This is bad in terms of promoting economic behaviors detrimental to the nation. On macroeconomic grounds, current aid policies are suspect. Second, I am beginning to wonder if much so-called need-based aid is used to fund either submarginal students who have very high college attrition rates, or students from families that could have paid for college for their kids if they had been more responsible. Third, perhaps the best way to enhance parental responsibility is to administer tough love, that is to slowly but surely reduce the financial assistance commitments made by third parties to students, usually with government funds.
The MLA and the Spellings Commission
By Richard Vedder
The nation's best known group of academics, the Modern Language Association (MLA) is issuing a report on the Spellings Commission. The good news is that, if news reports are correct, the report appears to be on the whole moderately supportive of much of what the Commission said.
The biggest complaint is that the Spellings Commission ignored the humanities. I would agree with that, and as a Commission member I did make some efforts to instill some greater balance in the discussions, to no avail. I was insistent that Anne Neal be given a chance to speak, and she argued forcibly for a core curriculum, one that included some history, and probably other courses dear to the hearts of MLA members, such as literature offerings (although not of the kind of literature that many MLA members these days like to teach). I openly said that there were non-vocational dimensions of higher education, and that inculcating values, educating students in the things that bind us together as peoples, and analyzing the eternal questions that all adults must face are worthy in and of themselves. While a few others agreed, little of that nature was instilled in the report. The MLA criticism here is largely justified.
I was most delighted to read, however, that in principle the MLA accepts the notion that assessment of learning is desirable. To me, this is an absolutely critical recommendation of the Commission, combined with the twin objective of making transparent and readily available the results of assessments. We need to know: are students learning anything? In what ways are they better prepared as they reach graduation than they were when they matriculated? The MLA wants faculty involvement in assessment, which I accept in principle but in fact I suspect that independent (outside the university) measures of learning and competency have the most credibility, allow for more accurate inter-university comparisons, and lead to more informed customers evaluating colleges.
I do not expect much common sense to come from the MLA, a group given to rantings and ravings over the years on a variety of issues, often in a manner that shows how far that group, and many faculty, are isolated from the real world and hostile to mainstream values. Yet in this case, the MLA appears to be having taken a responsible, reasonable stand on the leading assessment of higher education in modern times.
The nation's best known group of academics, the Modern Language Association (MLA) is issuing a report on the Spellings Commission. The good news is that, if news reports are correct, the report appears to be on the whole moderately supportive of much of what the Commission said.
The biggest complaint is that the Spellings Commission ignored the humanities. I would agree with that, and as a Commission member I did make some efforts to instill some greater balance in the discussions, to no avail. I was insistent that Anne Neal be given a chance to speak, and she argued forcibly for a core curriculum, one that included some history, and probably other courses dear to the hearts of MLA members, such as literature offerings (although not of the kind of literature that many MLA members these days like to teach). I openly said that there were non-vocational dimensions of higher education, and that inculcating values, educating students in the things that bind us together as peoples, and analyzing the eternal questions that all adults must face are worthy in and of themselves. While a few others agreed, little of that nature was instilled in the report. The MLA criticism here is largely justified.
I was most delighted to read, however, that in principle the MLA accepts the notion that assessment of learning is desirable. To me, this is an absolutely critical recommendation of the Commission, combined with the twin objective of making transparent and readily available the results of assessments. We need to know: are students learning anything? In what ways are they better prepared as they reach graduation than they were when they matriculated? The MLA wants faculty involvement in assessment, which I accept in principle but in fact I suspect that independent (outside the university) measures of learning and competency have the most credibility, allow for more accurate inter-university comparisons, and lead to more informed customers evaluating colleges.
I do not expect much common sense to come from the MLA, a group given to rantings and ravings over the years on a variety of issues, often in a manner that shows how far that group, and many faculty, are isolated from the real world and hostile to mainstream values. Yet in this case, the MLA appears to be having taken a responsible, reasonable stand on the leading assessment of higher education in modern times.
Thursday, March 29, 2007
Fixing Accreditation
By Richard Vedder
In talking the other day to a great educational entrepreneur, Randy Best, he said that the two magic words in reducing costs in higher education are "competition" and "transparency." I cannot disagree. He went on to say the major impediment to competition is accreditation. His efforts at inexpensive on-line education are impeded by geographic limitations imposed by accreditors that strike me as ridiculous, and by the amount of time and money it takes to meet the whims of the Tsars that control the gateways to being in the industry. Great economies of scale are being thwarted by mindless regulation.
Competition, accreditation and transparency are all interrelated. If all universities do what Randy is doing, namely having an external examiner evaluate each student to see if credit is justified, and if all the information on passage rates, attrition rates, tuition rates, etc., were public knowledge easily available on the Internet, why would we need accreditation at all? The Department of Education could simply say that it refuses to provide assistance to students attending schools performing very badly by these highly transparent criteria, and let it go at that.
The bar associations "accredit" new lawyers, and the accountants examine potential new CPAs. Underwriters Laboratories "accredits" electrical gadgets. Why can we not move to an examination form of "accreditation", supplemented by such useful information as student vocational success in the first five years after graduation, the percent that drop out of school, campus crime rates, tuition levels, and the like? Why can we not have a Consumer Reports annual analysis of colleges and universities that provides the quality control that accreditation is supposed to perform, meanwhile increasing competition between institutions?
The only reason it does not happen is that the higher education community does not want it to happen. This is where reformers should take to the barricades and start the revolution so sorely needed in American higher education.
In talking the other day to a great educational entrepreneur, Randy Best, he said that the two magic words in reducing costs in higher education are "competition" and "transparency." I cannot disagree. He went on to say the major impediment to competition is accreditation. His efforts at inexpensive on-line education are impeded by geographic limitations imposed by accreditors that strike me as ridiculous, and by the amount of time and money it takes to meet the whims of the Tsars that control the gateways to being in the industry. Great economies of scale are being thwarted by mindless regulation.
Competition, accreditation and transparency are all interrelated. If all universities do what Randy is doing, namely having an external examiner evaluate each student to see if credit is justified, and if all the information on passage rates, attrition rates, tuition rates, etc., were public knowledge easily available on the Internet, why would we need accreditation at all? The Department of Education could simply say that it refuses to provide assistance to students attending schools performing very badly by these highly transparent criteria, and let it go at that.
The bar associations "accredit" new lawyers, and the accountants examine potential new CPAs. Underwriters Laboratories "accredits" electrical gadgets. Why can we not move to an examination form of "accreditation", supplemented by such useful information as student vocational success in the first five years after graduation, the percent that drop out of school, campus crime rates, tuition levels, and the like? Why can we not have a Consumer Reports annual analysis of colleges and universities that provides the quality control that accreditation is supposed to perform, meanwhile increasing competition between institutions?
The only reason it does not happen is that the higher education community does not want it to happen. This is where reformers should take to the barricades and start the revolution so sorely needed in American higher education.
Wednesday, March 28, 2007
ABC News To Highlight College Costs
By Richard Vedder
ABC nightly news with Charles Gibson (6:30 p.m. EDT) on Thursday, March 29, is planning to feature a segment on college costs, including interviews with the president of the University of Connecticut and with yours truly. Angst over rising college costs is not dissipating indeed is increasing, and ABC will offer a look at the issue. My guess is it will necessarily be a somewhat superficial look of the problem given time limitations, but a useful one nonetheless, calling more attention to the issue that is the focus of our professional lives at CCAP. Join us in watching the show.
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Speaking of CCAP, we are on the verge of some expansion and the beginning of several new initiatives to intensify the debate over American universities and the way they operate. I prefer do things rather than talk about doing them, so I am not going to give you a list of all we hope to accomplish. Nonetheless, we are taking steps to enhance what we at CCAP do. Stay tuned.
ABC nightly news with Charles Gibson (6:30 p.m. EDT) on Thursday, March 29, is planning to feature a segment on college costs, including interviews with the president of the University of Connecticut and with yours truly. Angst over rising college costs is not dissipating indeed is increasing, and ABC will offer a look at the issue. My guess is it will necessarily be a somewhat superficial look of the problem given time limitations, but a useful one nonetheless, calling more attention to the issue that is the focus of our professional lives at CCAP. Join us in watching the show.
***************
Speaking of CCAP, we are on the verge of some expansion and the beginning of several new initiatives to intensify the debate over American universities and the way they operate. I prefer do things rather than talk about doing them, so I am not going to give you a list of all we hope to accomplish. Nonetheless, we are taking steps to enhance what we at CCAP do. Stay tuned.
Grade Inflation and Princeton: A Report
By Richard Vedder
Of the Ivy League schools, it seems to me that Princeton has shown the most willingness to change in recent years. It decided to expand its student body by a few hundred --increasing access, a notion unheard of in the Ivies in recent times. It froze tuition levels for next fall for the first time in 40 years, although by sharply raising room and board rates, it made that innovation more symbolic than real. Most important, it has taken a tangible effort to reduce grade inflation, putting a limit on the number of "A" grades academic units can reward.
The latter was a brave move and a needed one. While the otherwise saintly Harry Lewis is partly right in saying increased grading rigor may lead students to avoid tough courses, the continued move away from distinguishing between student performance levels has reduced incentives for students to work. National data show students study embarrassingly little. When most students get "A"s in class, there is difficultly in assessing student performance, there is less effort put in by students to distinguish themselves, and we implicitly send a message that excellence is not something that needs real rewards.
A story in today's USA TODAY suggests that Princeton has had increases, not decreases, in applications as it has raised grading standards. Its graduates are not worried about getting into graduate schools or obtaining work. The public looking at grades of students realizes that an "A" at Princeton is more meaningful than an "A" at Harvard, and that a 3.5 GPA at Princeton might be the equal of, say, a 3.65 GPA at Yale or Penn. Others are still afraid to follow the Princeton example, but the evidence to date seems to suggest their fears of adverse consequences of intentional deflationary grade policies are grossly exaggerated.
Of the Ivy League schools, it seems to me that Princeton has shown the most willingness to change in recent years. It decided to expand its student body by a few hundred --increasing access, a notion unheard of in the Ivies in recent times. It froze tuition levels for next fall for the first time in 40 years, although by sharply raising room and board rates, it made that innovation more symbolic than real. Most important, it has taken a tangible effort to reduce grade inflation, putting a limit on the number of "A" grades academic units can reward.
The latter was a brave move and a needed one. While the otherwise saintly Harry Lewis is partly right in saying increased grading rigor may lead students to avoid tough courses, the continued move away from distinguishing between student performance levels has reduced incentives for students to work. National data show students study embarrassingly little. When most students get "A"s in class, there is difficultly in assessing student performance, there is less effort put in by students to distinguish themselves, and we implicitly send a message that excellence is not something that needs real rewards.
A story in today's USA TODAY suggests that Princeton has had increases, not decreases, in applications as it has raised grading standards. Its graduates are not worried about getting into graduate schools or obtaining work. The public looking at grades of students realizes that an "A" at Princeton is more meaningful than an "A" at Harvard, and that a 3.5 GPA at Princeton might be the equal of, say, a 3.65 GPA at Yale or Penn. Others are still afraid to follow the Princeton example, but the evidence to date seems to suggest their fears of adverse consequences of intentional deflationary grade policies are grossly exaggerated.
Retreat at Illinois: Stifling Innovation
By Richard Vedder
Last summer, in the early days of CCAP, I wrote enthusiastically about a new program at one of my alma maters, the University of Illinois. Energetic new president Joe White proposed starting a for-profit on-line university to better fulfill the historic "extension" mission given to land grant schools like the U of I under the Morrill Act. In the long run, profits from the venture could subsidize other educational activities on the university, or so it was argued. The for-profit status of a separate corporation would allow the new venture to avoid all the hassles, the long delays, the administrative morass, etc., that pervades modern university life. It would be unique for a major state university to experiment aggressively with the for-profit model. I was impressed that White proposed the idea.
Fast forward a few months. The faculty at the University have mobilized strongly against the idea. They want to control curriculum, the staffing of courses, etc., etc. They are furious at the for profit idea --what a nasty notion, trying to behave like the greedy capitalists whose efforts have funded the U of I, but who are viewed with contempt by many faculty. Joe White, facing campus turmoil, is forced to back down. Now the program will no longer be a for profit model. The faculty and some trustees have won --and what might have been a novel approach (called Global Campus) to offer a high quality international on-line program at very low cost is likely to end up resembling other programs of taxpayer subsidized institutions. The faculty do not want competition, do not want to have cheaper labor outperform them and make them look bad, etc. So they have fought, and won.
There is a lesson in all of this. Changing the culture of existing institutions is nearly impossible. While I am all for strategies, such as bribing faculty, to try to effect a culture of innovation and receptivity to change, I think most of the dramatic new innovations will come from institutions created from scratch outside the rubric of existing universities, private or public. We should spend some more of our effort deciding what such institutions might look like, how they can be financed, and how we can remove inane barriers to entry that prevent their growth. New competition from the outside might force institutions like the U of I to begin to change their ways. We now teach the same way Socrates did -- but with Power Point. We need to consider new paradigms -- separating teaching and research functions, perhaps separating the socialization and learning functions of universities, changing the funding mechanism, etc. Joe White had a great idea. Perhaps others unfettered by the conventions of a 13th century model will pick up on President White's good idea.
Last summer, in the early days of CCAP, I wrote enthusiastically about a new program at one of my alma maters, the University of Illinois. Energetic new president Joe White proposed starting a for-profit on-line university to better fulfill the historic "extension" mission given to land grant schools like the U of I under the Morrill Act. In the long run, profits from the venture could subsidize other educational activities on the university, or so it was argued. The for-profit status of a separate corporation would allow the new venture to avoid all the hassles, the long delays, the administrative morass, etc., that pervades modern university life. It would be unique for a major state university to experiment aggressively with the for-profit model. I was impressed that White proposed the idea.
Fast forward a few months. The faculty at the University have mobilized strongly against the idea. They want to control curriculum, the staffing of courses, etc., etc. They are furious at the for profit idea --what a nasty notion, trying to behave like the greedy capitalists whose efforts have funded the U of I, but who are viewed with contempt by many faculty. Joe White, facing campus turmoil, is forced to back down. Now the program will no longer be a for profit model. The faculty and some trustees have won --and what might have been a novel approach (called Global Campus) to offer a high quality international on-line program at very low cost is likely to end up resembling other programs of taxpayer subsidized institutions. The faculty do not want competition, do not want to have cheaper labor outperform them and make them look bad, etc. So they have fought, and won.
There is a lesson in all of this. Changing the culture of existing institutions is nearly impossible. While I am all for strategies, such as bribing faculty, to try to effect a culture of innovation and receptivity to change, I think most of the dramatic new innovations will come from institutions created from scratch outside the rubric of existing universities, private or public. We should spend some more of our effort deciding what such institutions might look like, how they can be financed, and how we can remove inane barriers to entry that prevent their growth. New competition from the outside might force institutions like the U of I to begin to change their ways. We now teach the same way Socrates did -- but with Power Point. We need to consider new paradigms -- separating teaching and research functions, perhaps separating the socialization and learning functions of universities, changing the funding mechanism, etc. Joe White had a great idea. Perhaps others unfettered by the conventions of a 13th century model will pick up on President White's good idea.
Tuesday, March 27, 2007
Best Advice
By Richard Vedder
One of America's smartest entrepreneurs --a risk-taker in the great American tradition -- is Randy Best, a Texan who is on a mission to offer low cost college education to the masses throughout the world. He called yesterday, and offered some good advice, as he almost always does (full disclosure: I did some work for Mr. Best a few years ago, and have a minuscule investment in his ventures).
Randy made the same point that Craig Barrett of Intel, Erskine Bowles of the University of North Carolina and others made at the follow-up to the education summit in DC last week -- keep recommendations for reform simple, promoting one or two "big ideas" instead of a laundry list of smaller changes that will not stir the emotions of the American people.
Randy says affordable education will come to America, prices will tumble, and traditional universities will reform like crazy, if just two conditions are met. First, get rid of maddening barriers to entry, especially via accreditation. Second, make higher education transparent -- give parents and students full information on the performance of colleges, how they spend their money, attrition rates, success of graduates after college, etc. If those conditions are met, you will have private entrepreneurs like Randy swarm the market, competing mightily for students and offering increasingly high quality education at reasonable prices.
I think Randy is right. To be sure, the education Randy would offer trains people for vocations, and provides information, but does little to instill values or perform the socialization dimensions of college. But the vocational/knowledge dimensions of education are most critical, and his big ideas are the right ones. On accreditation: regional associations often limit the geographic scope of colleges, in effect preventing them from operating over the entire country or the world. Randy tells me, as a consequence, other nations are surging ahead of us in innovative use of technology. We need to reform, and along the lines Randy is suggesting.
One of America's smartest entrepreneurs --a risk-taker in the great American tradition -- is Randy Best, a Texan who is on a mission to offer low cost college education to the masses throughout the world. He called yesterday, and offered some good advice, as he almost always does (full disclosure: I did some work for Mr. Best a few years ago, and have a minuscule investment in his ventures).
Randy made the same point that Craig Barrett of Intel, Erskine Bowles of the University of North Carolina and others made at the follow-up to the education summit in DC last week -- keep recommendations for reform simple, promoting one or two "big ideas" instead of a laundry list of smaller changes that will not stir the emotions of the American people.
Randy says affordable education will come to America, prices will tumble, and traditional universities will reform like crazy, if just two conditions are met. First, get rid of maddening barriers to entry, especially via accreditation. Second, make higher education transparent -- give parents and students full information on the performance of colleges, how they spend their money, attrition rates, success of graduates after college, etc. If those conditions are met, you will have private entrepreneurs like Randy swarm the market, competing mightily for students and offering increasingly high quality education at reasonable prices.
I think Randy is right. To be sure, the education Randy would offer trains people for vocations, and provides information, but does little to instill values or perform the socialization dimensions of college. But the vocational/knowledge dimensions of education are most critical, and his big ideas are the right ones. On accreditation: regional associations often limit the geographic scope of colleges, in effect preventing them from operating over the entire country or the world. Randy tells me, as a consequence, other nations are surging ahead of us in innovative use of technology. We need to reform, and along the lines Randy is suggesting.
Unholy Alliance
By Richard Vedder
I have long been uncomfortable with the power concentrated in student financial aid offices as a consequence of our massive and excessively complex system of financial aid. Power corrupts, and absolute power corrupts absolutely, or so said Lord Acton. By administering aid financed by others, financial aid officers have the ability to tailor institutional aid offers to fit their desires, not that of donors. If donor A wants to help student B a lot, she makes a gift to the institution to support student B. If the financial aid officer, however, does not much like student B, he gives far less institutional support to B than would normally would be the case, leaving total aid no greater than if donor A had given nothing at all. So the donor's wishes are thwarted.
My sidekick Bryan reminds me, however, that Andrew Cuomo, Attorney General of New York, is investigating financial aid offices and private loan firms for unsavory practices. Make it clear: we favor private student loans, indeed vastly prefer them to government ones. But we don't like the fact that students are guided to them by the same folks who give out all other types of loans and grants. There are huge incentives for private loan providers to try to get the edge over competitors by offering bribes, either directly to the aid officers (e.g., through trips to exotic resorts for sham financial aid conferences), or to the institutions through kickbacks. Cuomo claims that is happening and he is going after the participants. Good for him (and for me to praise crusading attorneys general is very rare). Universities are losing some of their moral authority and respect for them for their role in imparting values is declining, and appropriately so. This is another example of a practice eroding confidence in universities and reducing their case for considerable institutional autonomy.
The ultimate solution is not to crack down on private lending. Rather, it is to separate the counseling and funding of student financial aid offices from the awarding of aid. Indeed, I think I would limit student financial aid offices to giving institutional aid, and any federal aid (e.g., Pell Grants) should be awarded directly by the Feds to the students. Better yet, if the government got out of giving aid through institutions altogether, the problem would go away. In a true free academic market, private lenders would advertise their wares in such a way that students could readily learn of alternative aid possibilities, just the way banks do it today with home equity and car loans. Indeed, a case can be made to criminalize university's requesting information from students on how they intend to finance college -- other than the assistance provided by the institutions themselves.
I have long been uncomfortable with the power concentrated in student financial aid offices as a consequence of our massive and excessively complex system of financial aid. Power corrupts, and absolute power corrupts absolutely, or so said Lord Acton. By administering aid financed by others, financial aid officers have the ability to tailor institutional aid offers to fit their desires, not that of donors. If donor A wants to help student B a lot, she makes a gift to the institution to support student B. If the financial aid officer, however, does not much like student B, he gives far less institutional support to B than would normally would be the case, leaving total aid no greater than if donor A had given nothing at all. So the donor's wishes are thwarted.
My sidekick Bryan reminds me, however, that Andrew Cuomo, Attorney General of New York, is investigating financial aid offices and private loan firms for unsavory practices. Make it clear: we favor private student loans, indeed vastly prefer them to government ones. But we don't like the fact that students are guided to them by the same folks who give out all other types of loans and grants. There are huge incentives for private loan providers to try to get the edge over competitors by offering bribes, either directly to the aid officers (e.g., through trips to exotic resorts for sham financial aid conferences), or to the institutions through kickbacks. Cuomo claims that is happening and he is going after the participants. Good for him (and for me to praise crusading attorneys general is very rare). Universities are losing some of their moral authority and respect for them for their role in imparting values is declining, and appropriately so. This is another example of a practice eroding confidence in universities and reducing their case for considerable institutional autonomy.
The ultimate solution is not to crack down on private lending. Rather, it is to separate the counseling and funding of student financial aid offices from the awarding of aid. Indeed, I think I would limit student financial aid offices to giving institutional aid, and any federal aid (e.g., Pell Grants) should be awarded directly by the Feds to the students. Better yet, if the government got out of giving aid through institutions altogether, the problem would go away. In a true free academic market, private lenders would advertise their wares in such a way that students could readily learn of alternative aid possibilities, just the way banks do it today with home equity and car loans. Indeed, a case can be made to criminalize university's requesting information from students on how they intend to finance college -- other than the assistance provided by the institutions themselves.
Monday, March 26, 2007
Bribing the Faculty to Change
By Richard Vedder
Sitting in the affordability discussions at last week's education summit, on several occasions, individuals said, "that is a great idea, but it will go no where given faculty opposition," or "unless you have the faculty on your side, nothing much happens in universities." Senior faculty have life-time appointments, they teach the students and do the research -- they are the core of the university. However, they are notoriously conservative in terms of workplace change (even while very liberal politically), and use their powers of "shared governance" often to stifle innovation and change. How do you change that? Bribe them.
I have said previously that the faculty will do almost anything for money. Give them a share of the gains from a productivity-enhancing idea, and they will likely go along. For example, suppose research shows that a combination of repetitive Internet instruction, interactive TV, and small group discussions can reach students at a lower per student cost without any loss of average student comprehension relative to the traditional lecture-discussion model. Suppose the immediate marginal costs of teaching a survey course are $1000 per student by the new approach, and $1500 by the old approach, but the faculty are resistant to the new approach. Solution? Give the department in question some amount, say $200 per student, as an addition to their budget in return for giving up the instructional resources previously used to teach the lectures. And allow that money to be distributed, at least in part, to faculty in the form of added compensation.
To be sure, tenure rules, traditions, a difficulty in measuring classroom effectiveness, etc., make it easier to propose this approach rather than implement it. But it deserves consideration. And, fortunately, the recommendations of the education summit to Secretary Spellings included wording supporting efforts to provide incentives to faculty to change. This is, in part, how the old Soviet Communist bureaucracy became reconciled to capitalism -- they went from being bureaucrats to being "oligarchs" -- getting shares in the businesses that owned the factories that they ran. A similar form of bribery might be necessary to effect needed changes in higher education.
Sitting in the affordability discussions at last week's education summit, on several occasions, individuals said, "that is a great idea, but it will go no where given faculty opposition," or "unless you have the faculty on your side, nothing much happens in universities." Senior faculty have life-time appointments, they teach the students and do the research -- they are the core of the university. However, they are notoriously conservative in terms of workplace change (even while very liberal politically), and use their powers of "shared governance" often to stifle innovation and change. How do you change that? Bribe them.
I have said previously that the faculty will do almost anything for money. Give them a share of the gains from a productivity-enhancing idea, and they will likely go along. For example, suppose research shows that a combination of repetitive Internet instruction, interactive TV, and small group discussions can reach students at a lower per student cost without any loss of average student comprehension relative to the traditional lecture-discussion model. Suppose the immediate marginal costs of teaching a survey course are $1000 per student by the new approach, and $1500 by the old approach, but the faculty are resistant to the new approach. Solution? Give the department in question some amount, say $200 per student, as an addition to their budget in return for giving up the instructional resources previously used to teach the lectures. And allow that money to be distributed, at least in part, to faculty in the form of added compensation.
To be sure, tenure rules, traditions, a difficulty in measuring classroom effectiveness, etc., make it easier to propose this approach rather than implement it. But it deserves consideration. And, fortunately, the recommendations of the education summit to Secretary Spellings included wording supporting efforts to provide incentives to faculty to change. This is, in part, how the old Soviet Communist bureaucracy became reconciled to capitalism -- they went from being bureaucrats to being "oligarchs" -- getting shares in the businesses that owned the factories that they ran. A similar form of bribery might be necessary to effect needed changes in higher education.
Variable Tuition Rates: Good or Bad?
By Richard Vedder
INSIDE HIGHER ED today discusses an emerging trend. Within universities, the tuition rate is increasingly varying with program. Critics argue this is a disguised way of raising tuition -- the institutional tuition rate goes up by, say, 5 percent, but then individual units add supplemental fees to make the real tuition increase larger.
While the overall rise in tuition costs that is aggravated by this move to differential pricing may seem excessive to many, the principle of varying the tuition between academic units is a sound one. In a non-selective institution, tuition fees are set where demand equals supply, and the supply for college services at any given price varies with the costs of providing them, absent cross-subsidies between units. Also, the demand for services can vary as well. Thus engineering and business programs might be expected to cost more -- salaries are higher for faculty in those areas, and the demand for the programs is relatively high. If universities want to obtain more usage of underutilized fixed expenses (including tenured professors), they should lower tuition charges in those areas, while increasing them in the areas where resources are strained to capacity. Thus the principle of differential tuition charges is a legitimate one, indeed one that I advocated in my book Going Broke By Degree.
At the same time, however, the rise in differential tuition fees has probably aggravated the overall rise in resources going to higher education, and may well have contributed to a short-run decline in productivity. If, for example, after a university announces a 5 percent tuition increase, the business school is allowed to tack on another 5 percent and use the money to hire a couple more assistant deans, and decides to give uber raises to some senior faculty, the differential tuition may be funding falling productivity and institutional rent-seeking more than allocative efficiency.
If market-based management (to borrow from Charles Koch and his new book) principles are going to come to higher education, individual units within institutions need to be given more autonomy with respect to their budgets, including the right to set their own tuition. Indeed, we may be moving towards a model where each major academic unit sets its own tuition fees, and pays a certain amount to the central administration to fund central administration (e.g., registration), the library, student services, and the football team. Units then control their own budgets, and can rent space to other units who are space short, and buy services from units within the university as well. While the pure market model has some imperfections, it can help lead to a more rational utilization of resources. For example, charge rent for space. Charge high rents for use of space (e.g., classrooms and labs) on Mondays through Thursday, 9 am. to 4 pm, but low rents other times --- and give away the space in the summer. Departments might start teaching more classes at odd hours and in the summer months when space is vastly underutilized. Market principles should play an ever bigger role in higher education. Charge tuition by the class, not the course, and vary it from class to class, by time of day, by the popularity of the professor, etc. And allow the productive resources to share some of the additional resources that come in as a result of being productive and efficient.
INSIDE HIGHER ED today discusses an emerging trend. Within universities, the tuition rate is increasingly varying with program. Critics argue this is a disguised way of raising tuition -- the institutional tuition rate goes up by, say, 5 percent, but then individual units add supplemental fees to make the real tuition increase larger.
While the overall rise in tuition costs that is aggravated by this move to differential pricing may seem excessive to many, the principle of varying the tuition between academic units is a sound one. In a non-selective institution, tuition fees are set where demand equals supply, and the supply for college services at any given price varies with the costs of providing them, absent cross-subsidies between units. Also, the demand for services can vary as well. Thus engineering and business programs might be expected to cost more -- salaries are higher for faculty in those areas, and the demand for the programs is relatively high. If universities want to obtain more usage of underutilized fixed expenses (including tenured professors), they should lower tuition charges in those areas, while increasing them in the areas where resources are strained to capacity. Thus the principle of differential tuition charges is a legitimate one, indeed one that I advocated in my book Going Broke By Degree.
At the same time, however, the rise in differential tuition fees has probably aggravated the overall rise in resources going to higher education, and may well have contributed to a short-run decline in productivity. If, for example, after a university announces a 5 percent tuition increase, the business school is allowed to tack on another 5 percent and use the money to hire a couple more assistant deans, and decides to give uber raises to some senior faculty, the differential tuition may be funding falling productivity and institutional rent-seeking more than allocative efficiency.
If market-based management (to borrow from Charles Koch and his new book) principles are going to come to higher education, individual units within institutions need to be given more autonomy with respect to their budgets, including the right to set their own tuition. Indeed, we may be moving towards a model where each major academic unit sets its own tuition fees, and pays a certain amount to the central administration to fund central administration (e.g., registration), the library, student services, and the football team. Units then control their own budgets, and can rent space to other units who are space short, and buy services from units within the university as well. While the pure market model has some imperfections, it can help lead to a more rational utilization of resources. For example, charge rent for space. Charge high rents for use of space (e.g., classrooms and labs) on Mondays through Thursday, 9 am. to 4 pm, but low rents other times --- and give away the space in the summer. Departments might start teaching more classes at odd hours and in the summer months when space is vastly underutilized. Market principles should play an ever bigger role in higher education. Charge tuition by the class, not the course, and vary it from class to class, by time of day, by the popularity of the professor, etc. And allow the productive resources to share some of the additional resources that come in as a result of being productive and efficient.
Friday, March 23, 2007
Higher Education Summit II: Costs
By Richard Vedder
Before the task force on "Enhancing Affordability, Decreasing Costs, and Promoting Productivity" even got started talking at the Education Summit yesterday at the Willard Hotel in DC, Eric (Rick) Hanushek, one of America's foremost educational researchers, made the important point: affordability and cost reduction are not at all closely related. The costs to students and the costs to society of an education diverge dramatically, and these are simply separate issues. Rick, as always, had a good point, but that did not deter the group from proceeding.
Lots of good, if not revolutionary, things came out of the conversation. We favored aligning K-12 and college education much more, promoting dual enrollment courses, advanced placement and the like. The senior year in high school is not very productive academically, particularly for gifted students. Another good idea is to work for common course design in survey courses, trying to reduce duplicative costs in teaching the basics. The problem, of course, is that faculty members resist such ideas. Therefore, another great idea (which I promoted) proposed changing incentives. For example, if Professor X teaches all Principles of Economics students in state universities in Illinois by interactive television/Internet, and that saves X dollars, that a fraction of X be given to promote faculty interests (maybe in the form of salary) amongst the impacted faculty. It was also emphasized that cost reduction does not equate necessarily with efficiency. Productivity improvement requires cost reduction per unit of outcomes of comparable (or better) quality -- there is both a qualitative and quantitative dimension that requires consideration.
Not everything suggested appealed to me. Both Rick and I were concerned about ideas of suspending anti-trust laws for universities, ostensibly to allow them to work together to cut costs. Both of us still believe that competition at arms length between varying providers is far more likely to serve consumer welfare than colluding at professional meetings. Yet there was a statement about suspending anti-trust laws in the document going forwarded to the Secretary of Education.
Before the task force on "Enhancing Affordability, Decreasing Costs, and Promoting Productivity" even got started talking at the Education Summit yesterday at the Willard Hotel in DC, Eric (Rick) Hanushek, one of America's foremost educational researchers, made the important point: affordability and cost reduction are not at all closely related. The costs to students and the costs to society of an education diverge dramatically, and these are simply separate issues. Rick, as always, had a good point, but that did not deter the group from proceeding.
Lots of good, if not revolutionary, things came out of the conversation. We favored aligning K-12 and college education much more, promoting dual enrollment courses, advanced placement and the like. The senior year in high school is not very productive academically, particularly for gifted students. Another good idea is to work for common course design in survey courses, trying to reduce duplicative costs in teaching the basics. The problem, of course, is that faculty members resist such ideas. Therefore, another great idea (which I promoted) proposed changing incentives. For example, if Professor X teaches all Principles of Economics students in state universities in Illinois by interactive television/Internet, and that saves X dollars, that a fraction of X be given to promote faculty interests (maybe in the form of salary) amongst the impacted faculty. It was also emphasized that cost reduction does not equate necessarily with efficiency. Productivity improvement requires cost reduction per unit of outcomes of comparable (or better) quality -- there is both a qualitative and quantitative dimension that requires consideration.
Not everything suggested appealed to me. Both Rick and I were concerned about ideas of suspending anti-trust laws for universities, ostensibly to allow them to work together to cut costs. Both of us still believe that competition at arms length between varying providers is far more likely to serve consumer welfare than colluding at professional meetings. Yet there was a statement about suspending anti-trust laws in the document going forwarded to the Secretary of Education.
The Higher Education Summit
By Richard Vedder
I have a ton of things to say about the Higher Education Summit, over several blogs, I suspect. Let me give you the bottom line: the summit was a clear success, if the criterion used to evaluate success is: "Is Higher Education likely to be better in America relative to what it would have been in the absence of the summit?"
Some, of course, would ask the follow up questions: HOW much better will higher ed be? Or, did anything come out of the summit that will profoundly and importantly change higher education for the good in the foreseeable future? Using those criteria, the results were more ambiguous. Certainly no Big Ideas (to use Charlie Reed's, czar of the Cal State University system, phrase) came up -- or at least were adopted. The proposed changes were incremental things. Neal McCluskey of Cato, for example, would no doubt think it was tinkering at the edges, rearranging deck chairs on the Titanic, and, in a way, he would be right. But in dealing with government, I accept small, slight incremental improvements as better than none at all. And Spellings is to be commended for being determined to change the culture of universities for the better. She certainly has got their attention, and that is good.
I am off to breakfast with Secretary Spellings to discuss (along with, no doubt, 25 others), "where do we go from here?" I may know more after that meeting. And in future blogs I will add some specifics as to what went on.
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One little incident occurred that was both unfortunate and so unnecessary. Doug Lederman, the aggressive but superb reporter/editor of INSIDE HIGHER ED, attended work sessions to discuss action items. He sat in on the session I was involved in on affordability for a good hour, then moved on to one of the four other groups --but was told to leave, that he was not permitted to attend. I don't know what the federal open meetings laws say specifically, but all of these meetings SHOULD have been open to the press. I wish the press had, in a unified fashion, demanded the right to attend. This is the people's business, and lots of $$$ were being spent on fancy receptions (including one at the White House for selected attendees, including yours truly), customized notebooks, etc., and the deliberations should have been a public forum. Period.
Speaking of the White House, I am enormously amused by the fact that it is far easier to go through security at the White House than it is at the Department of Education, where they seize your driver's license while in the building.
I have a ton of things to say about the Higher Education Summit, over several blogs, I suspect. Let me give you the bottom line: the summit was a clear success, if the criterion used to evaluate success is: "Is Higher Education likely to be better in America relative to what it would have been in the absence of the summit?"
Some, of course, would ask the follow up questions: HOW much better will higher ed be? Or, did anything come out of the summit that will profoundly and importantly change higher education for the good in the foreseeable future? Using those criteria, the results were more ambiguous. Certainly no Big Ideas (to use Charlie Reed's, czar of the Cal State University system, phrase) came up -- or at least were adopted. The proposed changes were incremental things. Neal McCluskey of Cato, for example, would no doubt think it was tinkering at the edges, rearranging deck chairs on the Titanic, and, in a way, he would be right. But in dealing with government, I accept small, slight incremental improvements as better than none at all. And Spellings is to be commended for being determined to change the culture of universities for the better. She certainly has got their attention, and that is good.
I am off to breakfast with Secretary Spellings to discuss (along with, no doubt, 25 others), "where do we go from here?" I may know more after that meeting. And in future blogs I will add some specifics as to what went on.
******************
One little incident occurred that was both unfortunate and so unnecessary. Doug Lederman, the aggressive but superb reporter/editor of INSIDE HIGHER ED, attended work sessions to discuss action items. He sat in on the session I was involved in on affordability for a good hour, then moved on to one of the four other groups --but was told to leave, that he was not permitted to attend. I don't know what the federal open meetings laws say specifically, but all of these meetings SHOULD have been open to the press. I wish the press had, in a unified fashion, demanded the right to attend. This is the people's business, and lots of $$$ were being spent on fancy receptions (including one at the White House for selected attendees, including yours truly), customized notebooks, etc., and the deliberations should have been a public forum. Period.
Speaking of the White House, I am enormously amused by the fact that it is far easier to go through security at the White House than it is at the Department of Education, where they seize your driver's license while in the building.
Thursday, March 22, 2007
FAFSA News
By Bryan O’Keefe
While CCAP’s fearless leader is off attending the Department of Education’s summit today on higher education reform, I wanted to briefly note an interesting development related to the FAFSA form. As readers might remember, it has long been the view of this blog that the FAFSA form is an absolute mess and should be whittled down significantly. Some private consultants that we are friends with have even suggested that most of the information that the FAFSA provides can be found in other federal documents such as tax filings.
That’s why it’s good news that legislation has been formally introduced in Congress that would greatly simplify the FAFSA form and that the Department of Ed is going to put online a new calculator that will allow families to figure out ahead of time what their FAFSA forms will probably tell them.
Now, I am not familiar with the specifics of the legislation shortening the FAFSA, nor do I know much about whether this proposed calculator will work, be effective, etc. But at face value, both proposals seem to be steps in the right direction and address concerns that we have had about the FAFSA form being overly complex, cumbersome, and a stumbling block for the people that it is intended to help. It’s refreshing to see our political leaders in both the Legislative and Executive branches enacting reforms that will make life easier for real people.
That all being said, these are still baby steps. Reforming the FAFSA and allowing parents more information about the form are both solid policy proposals. But let’s not kid ourselves. These are not broad, imaginative, or daring reforms of higher education. For that, we will have to wait for another day.
While CCAP’s fearless leader is off attending the Department of Education’s summit today on higher education reform, I wanted to briefly note an interesting development related to the FAFSA form. As readers might remember, it has long been the view of this blog that the FAFSA form is an absolute mess and should be whittled down significantly. Some private consultants that we are friends with have even suggested that most of the information that the FAFSA provides can be found in other federal documents such as tax filings.
That’s why it’s good news that legislation has been formally introduced in Congress that would greatly simplify the FAFSA form and that the Department of Ed is going to put online a new calculator that will allow families to figure out ahead of time what their FAFSA forms will probably tell them.
Now, I am not familiar with the specifics of the legislation shortening the FAFSA, nor do I know much about whether this proposed calculator will work, be effective, etc. But at face value, both proposals seem to be steps in the right direction and address concerns that we have had about the FAFSA form being overly complex, cumbersome, and a stumbling block for the people that it is intended to help. It’s refreshing to see our political leaders in both the Legislative and Executive branches enacting reforms that will make life easier for real people.
That all being said, these are still baby steps. Reforming the FAFSA and allowing parents more information about the form are both solid policy proposals. But let’s not kid ourselves. These are not broad, imaginative, or daring reforms of higher education. For that, we will have to wait for another day.
Tuesday, March 20, 2007
Big Labor vs The Higher Ed Establishment
By Bryan O’Keefe
The intrepid reporters over at Inside Higher Ed have a very interesting story this morning about colleges' and universities' reaction to the Employee Free Choice Act. In another hat that I wear, I have written about the EFCA, which would fundamentally change labor laws to favor unions and their leaders. For example, the bill would eliminate secret ballot elections for unionization votes and would also allow government officials, through binding arbitration, to determine wages and benefits for employees in first contracts. With its allies now running Congress, the bill passed the House last month and will probably come up for a vote sometime this spring in the Senate. President Bush has already said he will veto it, but passing both chambers of Congress would be a success for labor leaders. If we have President Obama or Hilary in 2008, you can bet the farm that the bill will become law.
The Inside Higher Ed piece is fascinating because hardly anyone from the college/university side wants to talk about the issue. That’s because privately schools oppose the bill and fear the effects that it would have on their workforce. But they also know that labor has a foothold on college campuses, especially amongst the left-leaning faculty and students, and coming out against the bill would probably do some PR damage.
Here’s hoping that some colleges and universities however decide to stand up and fight for what’s right. There is nothing wrong with colleges and universities supporting democracy via secret ballot elections and also advocating for negotiating contracts with their employees without government intervention. Having worked in public relations for a short time, I understand their concerns, but this is an issue where having some members of the higher education establishment take a more public role might actually help derail the legislation – which even colleges and universities agree would be a good thing.
The intrepid reporters over at Inside Higher Ed have a very interesting story this morning about colleges' and universities' reaction to the Employee Free Choice Act. In another hat that I wear, I have written about the EFCA, which would fundamentally change labor laws to favor unions and their leaders. For example, the bill would eliminate secret ballot elections for unionization votes and would also allow government officials, through binding arbitration, to determine wages and benefits for employees in first contracts. With its allies now running Congress, the bill passed the House last month and will probably come up for a vote sometime this spring in the Senate. President Bush has already said he will veto it, but passing both chambers of Congress would be a success for labor leaders. If we have President Obama or Hilary in 2008, you can bet the farm that the bill will become law.
The Inside Higher Ed piece is fascinating because hardly anyone from the college/university side wants to talk about the issue. That’s because privately schools oppose the bill and fear the effects that it would have on their workforce. But they also know that labor has a foothold on college campuses, especially amongst the left-leaning faculty and students, and coming out against the bill would probably do some PR damage.
Here’s hoping that some colleges and universities however decide to stand up and fight for what’s right. There is nothing wrong with colleges and universities supporting democracy via secret ballot elections and also advocating for negotiating contracts with their employees without government intervention. Having worked in public relations for a short time, I understand their concerns, but this is an issue where having some members of the higher education establishment take a more public role might actually help derail the legislation – which even colleges and universities agree would be a good thing.
Sunday, March 18, 2007
Arthur Beroz
By Richard Vedder
I was greatly saddened when Marc Beroz, son of Arthur Beroz, sent me the obituary of the passing on March 9 of Arthur at the age of 80. Over the past year and one-half, I had continued contact with Arthur as he pushed me to promote his "grant/loan" proposal to revamp the college lending program.
Arthur was a pioneer in promoting a rational college lending program. He told me how, in the mid-1960s, he had seemingly convinced Joe Califano, then Lyndon Johnson's Secretary of Health Education and Welfare, that we needed something akin to his grant/loan program, and that Califano indicated he was going to testify before Congress in favor of it, but was relieved of his responsibilities by LBJ the day before he was scheduled to testify. Arthur continued to promote the plan, most recently on his web site, and through cajoling persons such as myself, fellow members of the Secretary of Education's Commission on the Future of Higher Education, and no doubt others.
Arthur had a good idea, and we at CCAP gave it some publicity on our web site and through this blog. He believed there was a way that the loan/grant system could be made more affordable to college students, that loan repayments could be tailored to the ability of loan recipients to repay, and he was indefatigable in promoting the scheme. I hooked him up with our very good friend and ally George Leef as well.
Arthur had severe handicaps that we did not know about until late in our relationship. He was legally blind. He literally worked his way through Harvard. He worked and provided for a family while going to school. He worked hard and promoted his ideas despite his great disability. As I calculate it, he was nearly 40 years old when he graduated from Harvard, and made his living by working at upholstering and as a public assistance bureaucrat, carrying on his real love for economics on the side.
I tried to get Arthur to testify at a field hearing of the Spellings Commission in Boston last year, when he first revealed to me that he had a disability that made it difficult for him to appear. When I offered to come visit him, he politely suggested I not come, ostensibly to maintain a pure professional relationship between us, but I suspect also because he did not want me to see him in frail health and with limited functionality. He called me briefly while out of the hospital a few months ago, and I sensed his health was very precarious. I grew to admire and respect Arthur a great deal, as a person who deeply wanted to help people realize their potential, and who pursued his objective with integrity, shrewdness and determination. He will be missed.
I was greatly saddened when Marc Beroz, son of Arthur Beroz, sent me the obituary of the passing on March 9 of Arthur at the age of 80. Over the past year and one-half, I had continued contact with Arthur as he pushed me to promote his "grant/loan" proposal to revamp the college lending program.
Arthur was a pioneer in promoting a rational college lending program. He told me how, in the mid-1960s, he had seemingly convinced Joe Califano, then Lyndon Johnson's Secretary of Health Education and Welfare, that we needed something akin to his grant/loan program, and that Califano indicated he was going to testify before Congress in favor of it, but was relieved of his responsibilities by LBJ the day before he was scheduled to testify. Arthur continued to promote the plan, most recently on his web site, and through cajoling persons such as myself, fellow members of the Secretary of Education's Commission on the Future of Higher Education, and no doubt others.
Arthur had a good idea, and we at CCAP gave it some publicity on our web site and through this blog. He believed there was a way that the loan/grant system could be made more affordable to college students, that loan repayments could be tailored to the ability of loan recipients to repay, and he was indefatigable in promoting the scheme. I hooked him up with our very good friend and ally George Leef as well.
Arthur had severe handicaps that we did not know about until late in our relationship. He was legally blind. He literally worked his way through Harvard. He worked and provided for a family while going to school. He worked hard and promoted his ideas despite his great disability. As I calculate it, he was nearly 40 years old when he graduated from Harvard, and made his living by working at upholstering and as a public assistance bureaucrat, carrying on his real love for economics on the side.
I tried to get Arthur to testify at a field hearing of the Spellings Commission in Boston last year, when he first revealed to me that he had a disability that made it difficult for him to appear. When I offered to come visit him, he politely suggested I not come, ostensibly to maintain a pure professional relationship between us, but I suspect also because he did not want me to see him in frail health and with limited functionality. He called me briefly while out of the hospital a few months ago, and I sensed his health was very precarious. I grew to admire and respect Arthur a great deal, as a person who deeply wanted to help people realize their potential, and who pursued his objective with integrity, shrewdness and determination. He will be missed.
Thursday, March 15, 2007
Take the High Out of Higher Education
By Richard Vedder
A new study by the National Center on Addiction and Substance Abuse shows that a very significant minority of college students are drug and/or alcohol dependent. Almost half have a substance abuse problem. The drinking culture has expanded everywhere, but is now increasingly supplemented with other forms of abuse. Harvard now tells its students to obey the laws and drink moderately --but then opens a pub so it can be "with it" and soften its hard core academic image. My university in the past year saw nearly 20 football players arrested on alcohol related charges, not to mention the football coach --who was not punished by the university for his actions. Similar things are happening elsewhere. Yet when Ben Wildavsky appropriately pointed this out in his landmark first draft of the Spellings Commission report, it was met with a firestorm of protest. When a prominent American (former Notre Dame President Rev. Edward Malloy or former Health, Education and Welfare Secretary Joe Califano, depending on which news account you believe) said that college presidents are acting like Pontius Pilate, he was savagely attacked by one of the leaders of the Higher Education Establishment, Peter McPherson. But Father Malloy and Joe Califano are right.
The facts are a lot of our students have a substance abuse problem of varying proportions, that they study typically vastly less than 20 hours a week, and that the academic duties of students therefore rarely take more than 1,000 hours a year or so to perform (compared with close to 2,000 hours for adult workers). With grade inflation, expectations of professors are modest. Kids have tons of time on their hands, and often a lot of money, some of it borrowed from taxpayers at low interest rates.
Residential colleges, despite their high costs, exist in part because there is a legitimate non-academic dimension to higher education -- learning to be mature, to lead, to be disciplined and develop interpersonal communication skills. College is a somewhat protected sanctuary where kids grow to be adults and to learn right from wrong. They go to college to learn the business of life, and a lot of that business cannot be learned inside the classroom or in books. Yet colleges have some obligation --arguably a major one -- to temper the passions of students, to provide them with limits on their behavior, and to encourage good moral and ethical standards. Yet schools seem to want to subsidize hedonism, giving the kids bars, hot tubs, and, proposed for Carnegie Mellon university --co-ed roommates. College is a place to get drunk, to fornicate, to get high --and, occasionally, to study. At most campuses, students have to pay for textbooks, but get "free" condoms. Why should taxpayer dollars be used to buy condoms for affluent oversexed college kids who do little studying? Why should tax exempt dollars and government subsidies be used to promote hedonism? Why don't universities teach students values such as honesty, moderation, and tolerance? And, mostly, why does the public put up with it? Is it because Americans are going the way of 4th and 5th century Romans, wallowing in moral decay and making their civilization vulnerable to conquest by the barbarians at the gates?
A new study by the National Center on Addiction and Substance Abuse shows that a very significant minority of college students are drug and/or alcohol dependent. Almost half have a substance abuse problem. The drinking culture has expanded everywhere, but is now increasingly supplemented with other forms of abuse. Harvard now tells its students to obey the laws and drink moderately --but then opens a pub so it can be "with it" and soften its hard core academic image. My university in the past year saw nearly 20 football players arrested on alcohol related charges, not to mention the football coach --who was not punished by the university for his actions. Similar things are happening elsewhere. Yet when Ben Wildavsky appropriately pointed this out in his landmark first draft of the Spellings Commission report, it was met with a firestorm of protest. When a prominent American (former Notre Dame President Rev. Edward Malloy or former Health, Education and Welfare Secretary Joe Califano, depending on which news account you believe) said that college presidents are acting like Pontius Pilate, he was savagely attacked by one of the leaders of the Higher Education Establishment, Peter McPherson. But Father Malloy and Joe Califano are right.
The facts are a lot of our students have a substance abuse problem of varying proportions, that they study typically vastly less than 20 hours a week, and that the academic duties of students therefore rarely take more than 1,000 hours a year or so to perform (compared with close to 2,000 hours for adult workers). With grade inflation, expectations of professors are modest. Kids have tons of time on their hands, and often a lot of money, some of it borrowed from taxpayers at low interest rates.
Residential colleges, despite their high costs, exist in part because there is a legitimate non-academic dimension to higher education -- learning to be mature, to lead, to be disciplined and develop interpersonal communication skills. College is a somewhat protected sanctuary where kids grow to be adults and to learn right from wrong. They go to college to learn the business of life, and a lot of that business cannot be learned inside the classroom or in books. Yet colleges have some obligation --arguably a major one -- to temper the passions of students, to provide them with limits on their behavior, and to encourage good moral and ethical standards. Yet schools seem to want to subsidize hedonism, giving the kids bars, hot tubs, and, proposed for Carnegie Mellon university --co-ed roommates. College is a place to get drunk, to fornicate, to get high --and, occasionally, to study. At most campuses, students have to pay for textbooks, but get "free" condoms. Why should taxpayer dollars be used to buy condoms for affluent oversexed college kids who do little studying? Why should tax exempt dollars and government subsidies be used to promote hedonism? Why don't universities teach students values such as honesty, moderation, and tolerance? And, mostly, why does the public put up with it? Is it because Americans are going the way of 4th and 5th century Romans, wallowing in moral decay and making their civilization vulnerable to conquest by the barbarians at the gates?
Should Academics Have The Right to Strike?
By Bryan O’Keefe
Our friends over at Inside Higher Ed wrote a story the other day about the most recent labor dispute to shut down a college campus, this time at the Community College of Philadelphia. I just checked out their website which shows a big message reading “Classes Have Been Suspended Until Further Notice” which I suppose means that the strike is still ongoing.
First and foremost, this strike and others like it are an absolute travesty for students. At the school in question, students pay about $3,500 for a years worth of instruction, a cost which is significantly higher than most other two-year colleges. The bare minimum that these students should expect is to at least have a teacher in the classroom. The problem becomes even greater when you take into consideration that many students at two-year colleges are hoping to transfer to four-year colleges someday and pursue other academic endeavors. I am not quite sure what the college is going to do to fix this in the short-term, but suffice it to say that the spring semester is officially a mess and many students may have to reevaluate some of their plans, through no fault of their own.
Having done a great amount of research and writing myself on labor issues, I fully understand that labor disputes often times boil down to a he said/she said situation. It’s usually hard to figure out who exactly is telling the truth and who’s bluffing, and most of the time the disputes are solved by splitting the difference.
That being said, if Inside Higher Ed’s story is accurate (and I have no reason to think that it’s not), it’s very clear that the faculty, staff, and labor union are the ones being unreasonable in this instance. It’s true that the university has offered pay increases which are only slightly below the rate of inflation. But the school has also said that the employees can receive health care at no cost to themselves. Given that health care premiums and cost continue to rise, far above the rate of inflation, this translates into an economic benefit of several thousand dollars a year. In fact, this type of benefit is nearly unheard of in the private sector, especially for rank and file employees. It’s hard to see how the university is in the wrong when they are offering these types of packages.
This whole situation brings me back to an earlier point I made some time ago when another faculty labor brouhaha was in the news – should faculty have the right to strike at all? For the most part, we do not allow firefighters, police officers, transit workers and other important public servants to strike. While the work itself is not exactly critical or life threatening, academics are being paid by students to perform a task. This is not simply an employer/labor union fight – there is a critical third party (students) and they are the ones who are primarily footing the bill. If we are going to ask students to continue to stretch themselves and take out student loans and the like, perhaps we should also ask faculty members to give up certain privileges too – like the right to strike. At the very least, students should know that their faculty will show up for work.
Our friends over at Inside Higher Ed wrote a story the other day about the most recent labor dispute to shut down a college campus, this time at the Community College of Philadelphia. I just checked out their website which shows a big message reading “Classes Have Been Suspended Until Further Notice” which I suppose means that the strike is still ongoing.
First and foremost, this strike and others like it are an absolute travesty for students. At the school in question, students pay about $3,500 for a years worth of instruction, a cost which is significantly higher than most other two-year colleges. The bare minimum that these students should expect is to at least have a teacher in the classroom. The problem becomes even greater when you take into consideration that many students at two-year colleges are hoping to transfer to four-year colleges someday and pursue other academic endeavors. I am not quite sure what the college is going to do to fix this in the short-term, but suffice it to say that the spring semester is officially a mess and many students may have to reevaluate some of their plans, through no fault of their own.
Having done a great amount of research and writing myself on labor issues, I fully understand that labor disputes often times boil down to a he said/she said situation. It’s usually hard to figure out who exactly is telling the truth and who’s bluffing, and most of the time the disputes are solved by splitting the difference.
That being said, if Inside Higher Ed’s story is accurate (and I have no reason to think that it’s not), it’s very clear that the faculty, staff, and labor union are the ones being unreasonable in this instance. It’s true that the university has offered pay increases which are only slightly below the rate of inflation. But the school has also said that the employees can receive health care at no cost to themselves. Given that health care premiums and cost continue to rise, far above the rate of inflation, this translates into an economic benefit of several thousand dollars a year. In fact, this type of benefit is nearly unheard of in the private sector, especially for rank and file employees. It’s hard to see how the university is in the wrong when they are offering these types of packages.
This whole situation brings me back to an earlier point I made some time ago when another faculty labor brouhaha was in the news – should faculty have the right to strike at all? For the most part, we do not allow firefighters, police officers, transit workers and other important public servants to strike. While the work itself is not exactly critical or life threatening, academics are being paid by students to perform a task. This is not simply an employer/labor union fight – there is a critical third party (students) and they are the ones who are primarily footing the bill. If we are going to ask students to continue to stretch themselves and take out student loans and the like, perhaps we should also ask faculty members to give up certain privileges too – like the right to strike. At the very least, students should know that their faculty will show up for work.
Tuesday, March 13, 2007
War Against US News & World Report
By Richard Vedder
I read that Sarah Lawrence College is declaring war against US News & World Report (USNWR). I have somewhat mixed feelings about this, but am more on the side of USNWR than against them. I do not think Sarah Lawrence will win its battle in any case.
Sarah Lawrence is mad because, when it announced it was dropping requiring the SAT exam, it led USNWR to announce that it would have to estimate a student quality of Sarah Lawrence's students, and it would have to be cautious in the evaluation of them, with the implication that the rankings may fall. Sarah Lawrence doesn't like standardized tests, apparently, and doesn't want people ranking it. While clearly they have the right to do what they wish, they are trying to shut down one of the few "bottom lines" in higher ed. They are taking a step against transparency, full information, etc., showing an arrogance and contempt for consumers and donors which is commonplace these days in the academy.
On the other hand, the USNWR rankings are based on dubious criteria and contribute to the rise in college costs. So the one side of me is sort of happy that USNWR is being taken on. But what we need are more rankings, not fewer. We need evaluations based on what students learn in college, on student success rates in getting jobs, on their ability to get through college in a timely manner, etc.
I also worry about this tendency of some schools to abandon the SAT. I think it is a reasonably reliable predictor of student academic success, and not considering it leads to subjective evaluations of students that may lead to less emphasis on academic quality and merit, and more on meeting whatever the fashionable thing of the moment is in terms of the nature of student bodies.
I read that Sarah Lawrence College is declaring war against US News & World Report (USNWR). I have somewhat mixed feelings about this, but am more on the side of USNWR than against them. I do not think Sarah Lawrence will win its battle in any case.
Sarah Lawrence is mad because, when it announced it was dropping requiring the SAT exam, it led USNWR to announce that it would have to estimate a student quality of Sarah Lawrence's students, and it would have to be cautious in the evaluation of them, with the implication that the rankings may fall. Sarah Lawrence doesn't like standardized tests, apparently, and doesn't want people ranking it. While clearly they have the right to do what they wish, they are trying to shut down one of the few "bottom lines" in higher ed. They are taking a step against transparency, full information, etc., showing an arrogance and contempt for consumers and donors which is commonplace these days in the academy.
On the other hand, the USNWR rankings are based on dubious criteria and contribute to the rise in college costs. So the one side of me is sort of happy that USNWR is being taken on. But what we need are more rankings, not fewer. We need evaluations based on what students learn in college, on student success rates in getting jobs, on their ability to get through college in a timely manner, etc.
I also worry about this tendency of some schools to abandon the SAT. I think it is a reasonably reliable predictor of student academic success, and not considering it leads to subjective evaluations of students that may lead to less emphasis on academic quality and merit, and more on meeting whatever the fashionable thing of the moment is in terms of the nature of student bodies.
Monday, March 12, 2007
Blog 200: Pay for Performance
By Richard Vedder
Yesterday, it was revealed that one of America's largest corporations is going to be making a very large ($100 million +) commitment to supporting the Advanced Placement Test. Part of the money will go to reward good performance on the tests, with checks cut to those kids who, for example, get a grade of "5" on math tests.
Some people have been critical of this. They think it is perverse to pay people to do well, and note, correctly in some cases, that good performance would have come without the payment. In economist’s parlance, economic rent will be distributed to some good students.
So what? Our society is one of rewarding excellence, and giving rewards for superior academic performance strikes me in general as a good thing. Good students are rewarded by admission to Harvard, poor ones are turned down -- and that is the way it should be (although, perhaps we go too far in denying access). Moreover, more aggressive use of Advanced Placement makes college far more affordable. Training more teachers to teach Advanced Placement (and bribing them to do so) is a great idea, even though the teachers unions are nervous if -- God forbid --some teachers making a few more bucks than others. The crazy way we pay K-12 teachers, on which I have previously written in a pre-CCAP life, is a major factor in explaining the poor quality science and math instruction in U.S. high schools, turning kids off to these subjects. Exxon Mobil deserves credit for its move, which, by giving funds more to individuals than institutions, is a move towards more rational use of educational funds. High schools can offer learning for far less per credit hour than our bloated universities, and where the capability exists on the part of teacher and student, why shouldn't they?
**********************
Blogger.com tells us this is blog number 200. CCAP has come a long way from our primitive beginnings last summer, and we are poised for new breakthroughs, not only in blogs but in other ways. We hope to do more state-specific analysis, beginning with North Carolina (thanks to the Pope Foundation) but hopefully other states as well (we are doing some work on Michigan as we speak). We hope to focus more on entrepreneurship in higher education (I have been reading with interest Charles Koch's new book on that subject, and thinking about how Charles's ideas can mesh with the higher education milieu). We hope also to expand our web site capabilities, which are now severely constrained by a lack of in-house web expertise. Finally, working with the American Enterprise Institute, we plan to do conferences -starting tomorrow-- on higher education topics. Bryan and I have great hopes for the future. Stay tuned.
Yesterday, it was revealed that one of America's largest corporations is going to be making a very large ($100 million +) commitment to supporting the Advanced Placement Test. Part of the money will go to reward good performance on the tests, with checks cut to those kids who, for example, get a grade of "5" on math tests.
Some people have been critical of this. They think it is perverse to pay people to do well, and note, correctly in some cases, that good performance would have come without the payment. In economist’s parlance, economic rent will be distributed to some good students.
So what? Our society is one of rewarding excellence, and giving rewards for superior academic performance strikes me in general as a good thing. Good students are rewarded by admission to Harvard, poor ones are turned down -- and that is the way it should be (although, perhaps we go too far in denying access). Moreover, more aggressive use of Advanced Placement makes college far more affordable. Training more teachers to teach Advanced Placement (and bribing them to do so) is a great idea, even though the teachers unions are nervous if -- God forbid --some teachers making a few more bucks than others. The crazy way we pay K-12 teachers, on which I have previously written in a pre-CCAP life, is a major factor in explaining the poor quality science and math instruction in U.S. high schools, turning kids off to these subjects. Exxon Mobil deserves credit for its move, which, by giving funds more to individuals than institutions, is a move towards more rational use of educational funds. High schools can offer learning for far less per credit hour than our bloated universities, and where the capability exists on the part of teacher and student, why shouldn't they?
**********************
Blogger.com tells us this is blog number 200. CCAP has come a long way from our primitive beginnings last summer, and we are poised for new breakthroughs, not only in blogs but in other ways. We hope to do more state-specific analysis, beginning with North Carolina (thanks to the Pope Foundation) but hopefully other states as well (we are doing some work on Michigan as we speak). We hope to focus more on entrepreneurship in higher education (I have been reading with interest Charles Koch's new book on that subject, and thinking about how Charles's ideas can mesh with the higher education milieu). We hope also to expand our web site capabilities, which are now severely constrained by a lack of in-house web expertise. Finally, working with the American Enterprise Institute, we plan to do conferences -starting tomorrow-- on higher education topics. Bryan and I have great hopes for the future. Stay tuned.
Colleges and the Business of Life
By Richard Vedder
Tomorrow, an important higher education mini-conference is taking place at the American Enterprise Institute in Washington, keynoted by Secretary of Education Margaret Spellings, in which I am playing a role as organizer (with sidekick Bryan O'Keefe and friend Anne Neal of the American Council of Trustees and Alumni). One of the many great speakers is Harry Lewis, former Dean of the College at Harvard, whose book Excellence Without a Soul is one of the great higher education reads of modern times.
Beyond teaching facts, ideas, and, hopefully, universal values, residential colleges, if they are doing their job well, help students become good citizens, and serve in an extra-parental role of advising them regarding the problems that accompany the transition from childhood to adulthood. Students need honest, mature, and wise advice on matters of vocational and graduate school selection, with issues relating to family and friends, even sometimes with dealing with romances and sexual feelings, and more broadly, with issues relating to right and wrong. As Lewis points out, many faculty members are so absorbed in their professional research specialties that they are disinclined and maybe even unequipped to advise youth on the broader business of the adult life to come. But many faculty members with years of working with youth and good life experiences of their own can serve as role models and advisers to students. Yet as Lewis emphasizes, the "system" does not promote that. Untenured assistant professors are not rewarded for talking to students. A paper given at an obscure professional meeting is worth more than 1,000 hours of advising kids about their future. That is wrong, it is a shame, and Harry Lewis has done a great job of exposing the problem as it has evolved at Harvard.
At a policy level, we need to change the system of rewards and incentives. The biggest problem, as I see it, is that research is measurable and recognition is national or even international in scope, while good advising (and to a lesser extent, good teaching) is much harder to measure and define, and recognition is merely local in nature. Therefore, national labor markets get information on research quickly and reasonably accurately, but much less on teaching. That may be one reason why the teaching/advising role in comparatively neglected, but not the only one. Nonetheless, we need to seek to evaluate professors more imaginatively and comprehensively than we do now. Why not ask graduating seniors, for example, to tell us "what professors have made the most positive difference in your life, either through their teaching, advising or other contact?" Why not reward teachers who are highly regarded more? Why does not rateyourprofessor.com or other Web-based site develop a national instrument that might provide national recognition for superstar professors in terms of helping students? It is not a perfect solution to the problem, but it may be a start.
Tomorrow, an important higher education mini-conference is taking place at the American Enterprise Institute in Washington, keynoted by Secretary of Education Margaret Spellings, in which I am playing a role as organizer (with sidekick Bryan O'Keefe and friend Anne Neal of the American Council of Trustees and Alumni). One of the many great speakers is Harry Lewis, former Dean of the College at Harvard, whose book Excellence Without a Soul is one of the great higher education reads of modern times.
Beyond teaching facts, ideas, and, hopefully, universal values, residential colleges, if they are doing their job well, help students become good citizens, and serve in an extra-parental role of advising them regarding the problems that accompany the transition from childhood to adulthood. Students need honest, mature, and wise advice on matters of vocational and graduate school selection, with issues relating to family and friends, even sometimes with dealing with romances and sexual feelings, and more broadly, with issues relating to right and wrong. As Lewis points out, many faculty members are so absorbed in their professional research specialties that they are disinclined and maybe even unequipped to advise youth on the broader business of the adult life to come. But many faculty members with years of working with youth and good life experiences of their own can serve as role models and advisers to students. Yet as Lewis emphasizes, the "system" does not promote that. Untenured assistant professors are not rewarded for talking to students. A paper given at an obscure professional meeting is worth more than 1,000 hours of advising kids about their future. That is wrong, it is a shame, and Harry Lewis has done a great job of exposing the problem as it has evolved at Harvard.
At a policy level, we need to change the system of rewards and incentives. The biggest problem, as I see it, is that research is measurable and recognition is national or even international in scope, while good advising (and to a lesser extent, good teaching) is much harder to measure and define, and recognition is merely local in nature. Therefore, national labor markets get information on research quickly and reasonably accurately, but much less on teaching. That may be one reason why the teaching/advising role in comparatively neglected, but not the only one. Nonetheless, we need to seek to evaluate professors more imaginatively and comprehensively than we do now. Why not ask graduating seniors, for example, to tell us "what professors have made the most positive difference in your life, either through their teaching, advising or other contact?" Why not reward teachers who are highly regarded more? Why does not rateyourprofessor.com or other Web-based site develop a national instrument that might provide national recognition for superstar professors in terms of helping students? It is not a perfect solution to the problem, but it may be a start.
Thursday, March 08, 2007
Who Needs Universities?
By Richard Vedder
The great universities of our nation have largely neglected undergraduate teaching while emphasizing research instead. This is an extension of the German university model developed in the 19th century that took over U.S. higher education in the 20th century.
But there are other models of research that also work, as the great research labs and occasional university-based, quasi-independent research centers (e.g., the Hoover Institution at Stanford, the Institute of Advanced Study at Princeton) demonstrate. To me, the most exciting development has been the growth of truly independent think tanks, particularly in the social sciences.
Yesterday, I was in DC for the American Enterprise Institute's (AEI's) annual dinner, and also attended a luncheon. I heard absolutely brilliant, riveting talks by Charles Murray and Bernard Lewis. To be sure, Lewis, the West's foremost scholar and interpreter of Islam, is Princeton-based, but AEI sponsored a marvelously illuminating lecture bringing to light a historical perspective on the challenges of future conflicts of religions and civilizations. And Charles Murray offered startling and controversial remarks on the future of liberty -- profound, provocative, and stimulating.
Two things strike me. First, it is not altogether clear that the university is always the best setting to do high level research and thinking. By trying to force most persons into a combined teaching-research role, we may not be doing justice to either important mission. Think tanks aside, the private sector is doing much cutting edge research, including basic research, and I suspect they are doing this with at least the same efficiency of universities. Second, in this day of political correctness, some things are difficult to say at a university. Murray is an absolutely world-class scholar, a political scientist educated at the best schools (i.e., a Ph.D. from M.I.T.), but I doubt any of the great universities would hire him -- he is controversial, and not a member of the fashionably left-wing establishment. Universities achieved their greatness by challenging conventions, by saying the unsayable, by using creativity and ingenuity to change the status quo for the social good. Some of that is gone now, as intellectual diversity is shunned while skin color diversity is praised. It is a shame. Thank God for competition and institutional diversity. Thank God for think tanks. Thank God for AEI
The great universities of our nation have largely neglected undergraduate teaching while emphasizing research instead. This is an extension of the German university model developed in the 19th century that took over U.S. higher education in the 20th century.
But there are other models of research that also work, as the great research labs and occasional university-based, quasi-independent research centers (e.g., the Hoover Institution at Stanford, the Institute of Advanced Study at Princeton) demonstrate. To me, the most exciting development has been the growth of truly independent think tanks, particularly in the social sciences.
Yesterday, I was in DC for the American Enterprise Institute's (AEI's) annual dinner, and also attended a luncheon. I heard absolutely brilliant, riveting talks by Charles Murray and Bernard Lewis. To be sure, Lewis, the West's foremost scholar and interpreter of Islam, is Princeton-based, but AEI sponsored a marvelously illuminating lecture bringing to light a historical perspective on the challenges of future conflicts of religions and civilizations. And Charles Murray offered startling and controversial remarks on the future of liberty -- profound, provocative, and stimulating.
Two things strike me. First, it is not altogether clear that the university is always the best setting to do high level research and thinking. By trying to force most persons into a combined teaching-research role, we may not be doing justice to either important mission. Think tanks aside, the private sector is doing much cutting edge research, including basic research, and I suspect they are doing this with at least the same efficiency of universities. Second, in this day of political correctness, some things are difficult to say at a university. Murray is an absolutely world-class scholar, a political scientist educated at the best schools (i.e., a Ph.D. from M.I.T.), but I doubt any of the great universities would hire him -- he is controversial, and not a member of the fashionably left-wing establishment. Universities achieved their greatness by challenging conventions, by saying the unsayable, by using creativity and ingenuity to change the status quo for the social good. Some of that is gone now, as intellectual diversity is shunned while skin color diversity is praised. It is a shame. Thank God for competition and institutional diversity. Thank God for think tanks. Thank God for AEI
Wednesday, March 07, 2007
R and R for Faculty
By Richard Vedder
A recent experience I had reminds me of the waste and inefficiency of academia, not to mention what us economists call rent-seeking--which in this context means taking dollars provided by governments and private sector "sugar daddies" and using them for conspicuous consumption.
I was asked to give a paper before a group of free market academics at their annual convention. The whole idea of people traveling hundreds or thousands of miles to hear a paper is terribly antiquated, in an era when we email papers or put them on the Web in nano seconds upon completing them. To be sure, there are personal interactions at meetings of an intellectual nature that are sometimes rewarding, but the very rationale of academic gatherings has diminished sharply in the computer age. Except for one thing: we have a lot of fun at these meetings, at cocktail parties where we trade gossip and hatch up new ways of ripping off taxpayers and other donors further. At some meetings, there is the added legitimate function of interviewing and recruiting new faculty.
The group I am speaking before next month, the Association of Private Enterprise Economics (APEE), goes a step further than most groups. It schedules most of its meetings in, should we say, academically challenged locales, usually resorts where there is gambling, golf, or the beach. This year's gig is in Cancun, Mexico. Registration fees are literally in the hundreds of dollars (partially to pay for a party and some meals), and most people are going for 3-5 days for what is essentially a meeting that could be conducted in a day and a half. I am going because a great friend of rational, efficient higher education, Art Pope (a supporter of CCAP) is receiving an award, and I will also be speaking about the research vs. teaching issue in a panel with several friends, especially Florida State's Jim Gwartney. But the issue is: why should third parties, especially governments, spend probably $1,500 each for scores, maybe hundreds of individuals to attend the conference? It is great R and R, a nice tax sheltered way to increase the income of faculty, but is it an efficient way of disbursing higher education resources?
A recent experience I had reminds me of the waste and inefficiency of academia, not to mention what us economists call rent-seeking--which in this context means taking dollars provided by governments and private sector "sugar daddies" and using them for conspicuous consumption.
I was asked to give a paper before a group of free market academics at their annual convention. The whole idea of people traveling hundreds or thousands of miles to hear a paper is terribly antiquated, in an era when we email papers or put them on the Web in nano seconds upon completing them. To be sure, there are personal interactions at meetings of an intellectual nature that are sometimes rewarding, but the very rationale of academic gatherings has diminished sharply in the computer age. Except for one thing: we have a lot of fun at these meetings, at cocktail parties where we trade gossip and hatch up new ways of ripping off taxpayers and other donors further. At some meetings, there is the added legitimate function of interviewing and recruiting new faculty.
The group I am speaking before next month, the Association of Private Enterprise Economics (APEE), goes a step further than most groups. It schedules most of its meetings in, should we say, academically challenged locales, usually resorts where there is gambling, golf, or the beach. This year's gig is in Cancun, Mexico. Registration fees are literally in the hundreds of dollars (partially to pay for a party and some meals), and most people are going for 3-5 days for what is essentially a meeting that could be conducted in a day and a half. I am going because a great friend of rational, efficient higher education, Art Pope (a supporter of CCAP) is receiving an award, and I will also be speaking about the research vs. teaching issue in a panel with several friends, especially Florida State's Jim Gwartney. But the issue is: why should third parties, especially governments, spend probably $1,500 each for scores, maybe hundreds of individuals to attend the conference? It is great R and R, a nice tax sheltered way to increase the income of faculty, but is it an efficient way of disbursing higher education resources?
Monday, March 05, 2007
Saint Kathy of Las Vegas
By Richard Vedder
My wife Karen and I have a good friend named Kathy who is a veteran high school English teacher in Las Vegas. She is of the old school, expecting students to follow rules, learn material, and be evaluated rigorously on it. She has been fighting a losing battle to maintain standards in her school, and therein lies one of the major problems for higher education.
Kathy told my wife yesterday that her boss effectively told the teachers to not be too demanding of the kids, not to give low grades copiously, etc. The boss (who was upset with this herself)in effect said the central office did not want too many calls from irate parents, and that virtually all parents think their kids are wonderful students who should not be reprimanded, ordered to do a lot of work, or given low grades.
The recent reports of high school grade inflation are consistent with this, as are the results showing declining literacy amongst both high school and college graduates. We are dumbing down the curriculum in many cases, lowering our expectations, and getting the expected results. The American public basically does not want high standards or too much homework for their kids -- it might lower their self esteem and interfere with sports.
All of this strengthens my conviction that maybe we should NOT be educating so many kids in college. Too many college kids enter unprepared, partially through no fault of their own. But why should we waste additional resources trying to educated ill-prepared kids with little sense of academic discipline? Of course, we need to whip our high schools into shape, perhaps, but given parental, teacher union and administrative attitudes, that is easier said than done.
To be sure, my own children (including daughter-in-law) who teach at the public secondary level are less pessimistic about the future than Saint Kathy of Las Vegas. I fear, however, that Kathy's lament has much truth to it in many school systems around our country.
My wife Karen and I have a good friend named Kathy who is a veteran high school English teacher in Las Vegas. She is of the old school, expecting students to follow rules, learn material, and be evaluated rigorously on it. She has been fighting a losing battle to maintain standards in her school, and therein lies one of the major problems for higher education.
Kathy told my wife yesterday that her boss effectively told the teachers to not be too demanding of the kids, not to give low grades copiously, etc. The boss (who was upset with this herself)in effect said the central office did not want too many calls from irate parents, and that virtually all parents think their kids are wonderful students who should not be reprimanded, ordered to do a lot of work, or given low grades.
The recent reports of high school grade inflation are consistent with this, as are the results showing declining literacy amongst both high school and college graduates. We are dumbing down the curriculum in many cases, lowering our expectations, and getting the expected results. The American public basically does not want high standards or too much homework for their kids -- it might lower their self esteem and interfere with sports.
All of this strengthens my conviction that maybe we should NOT be educating so many kids in college. Too many college kids enter unprepared, partially through no fault of their own. But why should we waste additional resources trying to educated ill-prepared kids with little sense of academic discipline? Of course, we need to whip our high schools into shape, perhaps, but given parental, teacher union and administrative attitudes, that is easier said than done.
To be sure, my own children (including daughter-in-law) who teach at the public secondary level are less pessimistic about the future than Saint Kathy of Las Vegas. I fear, however, that Kathy's lament has much truth to it in many school systems around our country.
Friday, March 02, 2007
Rethinking Higher Ed: A Conference for You
By Richard Vedder
I recently blogged about a day-long conference the Department of Education is putting on for 300 members of the Higher Education Establishment and their most intimate friends, the so-called Higher Education Summit, being held in Washington March 22. It is by invitation only. However, a shorter and more user-friendly conference is going on in our nation's capital on March 13, and I am inviting you -- at less than a zero cost (a free lunch is being provided).
On March 13, the American Enterprise Institute is sponsoring a conference entitled Higher Education After the Spellings Commission. It takes place at the American Enterprise Institute (AEI) on March 13 at 12:30 p.m. Secretary of Education Margaret Spellings will start things off, followed by a panel on the Spellings Commission results including Bob Zemsky of Penn, a Commission member skeptical of the group's accomplishments; Judith Eaton, the head of CHEA, the organization of accreditors (a topic on which the Spellings Commission devoted a fair amount of time) and Gene Hickok, former Undersecretary of Education, former Pennsylvania education commissioner, and now a reform-minded scholar at the Heritage Foundation.
Sparks may fly in the second panel. Author of two books on rising tuition, Ron Ehrenberg of Cornell and myself (of the Center for College Affordability and Productivity, AEI and Ohio University) will each make what I expect will be rather different presentations. Discussing our remarks and adding some of their own will be Sandy Baum of the College Board and AEI's Charles Murray, who has written provocatively suggesting too many kids go to college (Charles, co-author of the Bell Curve, has undergone more controversy in his lifetime than the rest of us on the various panels combined).
The third panel will get into curricular content and the role of governing boards. Moderated by CCAP's good friend Anne Neal, panelists include Mark Bauerlin, an Emory University English professor; SUNY Trustee Ed Cox, a New York lawyer known to many as Richard Nixon's son-in-law, and Harry Lewis of Harvard (and former Dean of the College), whose great book last year on higher education is must reading for all concerned about the undergraduate educational experience in America. Click here to register for this event. Attendance is limited, so get your reservation in now.
I recently blogged about a day-long conference the Department of Education is putting on for 300 members of the Higher Education Establishment and their most intimate friends, the so-called Higher Education Summit, being held in Washington March 22. It is by invitation only. However, a shorter and more user-friendly conference is going on in our nation's capital on March 13, and I am inviting you -- at less than a zero cost (a free lunch is being provided).
On March 13, the American Enterprise Institute is sponsoring a conference entitled Higher Education After the Spellings Commission. It takes place at the American Enterprise Institute (AEI) on March 13 at 12:30 p.m. Secretary of Education Margaret Spellings will start things off, followed by a panel on the Spellings Commission results including Bob Zemsky of Penn, a Commission member skeptical of the group's accomplishments; Judith Eaton, the head of CHEA, the organization of accreditors (a topic on which the Spellings Commission devoted a fair amount of time) and Gene Hickok, former Undersecretary of Education, former Pennsylvania education commissioner, and now a reform-minded scholar at the Heritage Foundation.
Sparks may fly in the second panel. Author of two books on rising tuition, Ron Ehrenberg of Cornell and myself (of the Center for College Affordability and Productivity, AEI and Ohio University) will each make what I expect will be rather different presentations. Discussing our remarks and adding some of their own will be Sandy Baum of the College Board and AEI's Charles Murray, who has written provocatively suggesting too many kids go to college (Charles, co-author of the Bell Curve, has undergone more controversy in his lifetime than the rest of us on the various panels combined).
The third panel will get into curricular content and the role of governing boards. Moderated by CCAP's good friend Anne Neal, panelists include Mark Bauerlin, an Emory University English professor; SUNY Trustee Ed Cox, a New York lawyer known to many as Richard Nixon's son-in-law, and Harry Lewis of Harvard (and former Dean of the College), whose great book last year on higher education is must reading for all concerned about the undergraduate educational experience in America. Click here to register for this event. Attendance is limited, so get your reservation in now.
The Higher Education Summit
By Richard Vedder
Margaret Spellings, our Secretary of Education, has on balance been a very positive force in higher education, and her efforts to push reform have been welcomed. My regard for her has strengthened, not weakened with time. She is now bringing together a good sized (around 300, I think) group to DC on March 22 to discuss the next steps in higher education reform, how the recommendations of the Spellings Commission can be implemented, etc. I will be there, both for the full meetings and a couple more intimate meetings of a smaller number of persons with the Secretary.
While I favor radical reform, including the privatization of higher education and the reduction of the government's role, realistically her summit is likely to focus on smaller, less fundamental changes. Two are worthy of special attention. First, colleges need to be pressured to provide more information to consumers and policymakers in an easy to use, transparent manner. Some indicators of student progress while in school should be available to consumers readily - information from the National Survey of Student Engagement, Collegiate Learning Assessment, or other instruments.
Second, we need to get more specific about how to reform student aid. If I were czar, I would simply go to one program --an augmented Pell Grant program, doing away with 15-18 other forms of assistance, including such popular middle class "entitlements" as 529 Savings plans. I would get the government out of the student loan business (I bet Sallie Mae would love that idea!!) I would also give grants directly to the students, and cut off the student financial aid offices of individual colleges from administering the aid. But there are less radical options that might make sense:
1) Radically simplify the FAFSA form;
2) Reduce upper middle class support in the form of tax credits, etc. as a way of funding expanding Pell Grants
3) Make Pell Grants into vouchers issued to students directly
There may be other things that could be agreed upon by nearly everyone. With 300 in the room, even with the use of task forces and committees, I am not expecting any tangible immediate outcomes, but I might be surprised. I am going to be trying to push for more far-reaching solutions than the Establishment wants, I am sure. Stay tuned.
Margaret Spellings, our Secretary of Education, has on balance been a very positive force in higher education, and her efforts to push reform have been welcomed. My regard for her has strengthened, not weakened with time. She is now bringing together a good sized (around 300, I think) group to DC on March 22 to discuss the next steps in higher education reform, how the recommendations of the Spellings Commission can be implemented, etc. I will be there, both for the full meetings and a couple more intimate meetings of a smaller number of persons with the Secretary.
While I favor radical reform, including the privatization of higher education and the reduction of the government's role, realistically her summit is likely to focus on smaller, less fundamental changes. Two are worthy of special attention. First, colleges need to be pressured to provide more information to consumers and policymakers in an easy to use, transparent manner. Some indicators of student progress while in school should be available to consumers readily - information from the National Survey of Student Engagement, Collegiate Learning Assessment, or other instruments.
Second, we need to get more specific about how to reform student aid. If I were czar, I would simply go to one program --an augmented Pell Grant program, doing away with 15-18 other forms of assistance, including such popular middle class "entitlements" as 529 Savings plans. I would get the government out of the student loan business (I bet Sallie Mae would love that idea!!) I would also give grants directly to the students, and cut off the student financial aid offices of individual colleges from administering the aid. But there are less radical options that might make sense:
1) Radically simplify the FAFSA form;
2) Reduce upper middle class support in the form of tax credits, etc. as a way of funding expanding Pell Grants
3) Make Pell Grants into vouchers issued to students directly
There may be other things that could be agreed upon by nearly everyone. With 300 in the room, even with the use of task forces and committees, I am not expecting any tangible immediate outcomes, but I might be surprised. I am going to be trying to push for more far-reaching solutions than the Establishment wants, I am sure. Stay tuned.
Would You Buy A Used Car from a University President?
By Richard Vedder
While University presidents, like all humans, vary enormously in terms of honesty and integrity, increasingly they condone deceptive and unethical practices in order to advance their university's mission. Aside from being morally wrong, in the long run, I think it contributes to declining public support for higher education.
That was driven home to me twice in the past 24 hours. A prominent editorial person at a major American newspaper recounted to me in an email how he had met with several university presidents recently, and had asked them if they were familiar with my book Going Broke By Degree. They all professed ignorance of the book. In reality, I had seen copies of the book on the office bookshelf of one of the attending presidents and am almost certain that I had talked about it with a second president present. They simply lied to the newspaper -- because they did not want to discuss what Al Gore would call "inconvenient truths" raised in the book. This may be what the Catholic Church once called (and probably still does) a "venial sin."
Daniel Golden, my favorite investigative reporter on higher education issues, raises another scam in today's Wall Street Journal that might come closer to what the church would call a "cardinal sin." Colleges lie and distort numbers to raise the reported percent of alumni who contribute to the institution. Using Albion College as the main example, Golden shows how graduating seniors who give, say, $25, to the school, see their gift spread out in $5 annual increments over five years for book-keeping purposes, all to raise the giving rate for those five years, years in which the graduating student is still in grad school and desperately worrying about accumulating student loans. Why bother to engage in this deception? The alumni giving rate is a factor in the all-important US News & World Report (hereafter, USNWR) rankings. Nationwide, alumni donor giving rates have surprisingly not declined a good deal over time, but you wouldn't believe it reading the numbers reported in USNWR.
All of this is doubly upsetting. It is bad that the college lies. Their defense is that they are following "industry standards" (translation: all of us lie), or standards created by CASE, a trade association (cartel?) of university money hustlers. It is morally bankrupt, and helps explain why Americans are increasingly failing to see the distinction between universities and used car dealers. We subsidize the former, and tax the latter -- why, when both have similar ethical standards regarding the goods and services that they sell?
Beyond that, however, is the other issue --why is giving money --a resource --considered a measure of how good a college is, or whether it is performing its missions? Colleges do not give us information on what kids learn in schools, so USNWR and others reach out for other data, but data that really measures inputs, not outcomes. We are engaging in a silly, expensive, and morally degrading game to distort alumni giving rates, when there is not a scintilla of evidence that those rates mean anything with respect to whether universities prepare our youth for better citizenship, make them economically more productive, make them more knowledgeable about the world in which we live, or even make them happier consumers while in school.
By the way, Dan Golden has a long career ahead, as there are many other scams he has not touched. One big scam he has missed is the tendency for universities to grossly overstate the amount donated in their major capital campaigns. For example, I recall that my university's last campaign bragged about raising $221 million, when the actual cash received, I am told by inside sources, was somewhat less than 20 percent of that amount. I suspect, to varying degrees that too is "industry standards," counting as a gift every vaguely promised penny pledged by alums, and then using some of the phantom money to hustle real dollar matching gifts.
Should we throw the liars in jail? Probably not. Governmental policing of university morality is a cure worse than the disease. However, should we remove special tax status and government subsidies for universities engaging in such deceptive practices? That is an idea whose time may have come.
While University presidents, like all humans, vary enormously in terms of honesty and integrity, increasingly they condone deceptive and unethical practices in order to advance their university's mission. Aside from being morally wrong, in the long run, I think it contributes to declining public support for higher education.
That was driven home to me twice in the past 24 hours. A prominent editorial person at a major American newspaper recounted to me in an email how he had met with several university presidents recently, and had asked them if they were familiar with my book Going Broke By Degree. They all professed ignorance of the book. In reality, I had seen copies of the book on the office bookshelf of one of the attending presidents and am almost certain that I had talked about it with a second president present. They simply lied to the newspaper -- because they did not want to discuss what Al Gore would call "inconvenient truths" raised in the book. This may be what the Catholic Church once called (and probably still does) a "venial sin."
Daniel Golden, my favorite investigative reporter on higher education issues, raises another scam in today's Wall Street Journal that might come closer to what the church would call a "cardinal sin." Colleges lie and distort numbers to raise the reported percent of alumni who contribute to the institution. Using Albion College as the main example, Golden shows how graduating seniors who give, say, $25, to the school, see their gift spread out in $5 annual increments over five years for book-keeping purposes, all to raise the giving rate for those five years, years in which the graduating student is still in grad school and desperately worrying about accumulating student loans. Why bother to engage in this deception? The alumni giving rate is a factor in the all-important US News & World Report (hereafter, USNWR) rankings. Nationwide, alumni donor giving rates have surprisingly not declined a good deal over time, but you wouldn't believe it reading the numbers reported in USNWR.
All of this is doubly upsetting. It is bad that the college lies. Their defense is that they are following "industry standards" (translation: all of us lie), or standards created by CASE, a trade association (cartel?) of university money hustlers. It is morally bankrupt, and helps explain why Americans are increasingly failing to see the distinction between universities and used car dealers. We subsidize the former, and tax the latter -- why, when both have similar ethical standards regarding the goods and services that they sell?
Beyond that, however, is the other issue --why is giving money --a resource --considered a measure of how good a college is, or whether it is performing its missions? Colleges do not give us information on what kids learn in schools, so USNWR and others reach out for other data, but data that really measures inputs, not outcomes. We are engaging in a silly, expensive, and morally degrading game to distort alumni giving rates, when there is not a scintilla of evidence that those rates mean anything with respect to whether universities prepare our youth for better citizenship, make them economically more productive, make them more knowledgeable about the world in which we live, or even make them happier consumers while in school.
By the way, Dan Golden has a long career ahead, as there are many other scams he has not touched. One big scam he has missed is the tendency for universities to grossly overstate the amount donated in their major capital campaigns. For example, I recall that my university's last campaign bragged about raising $221 million, when the actual cash received, I am told by inside sources, was somewhat less than 20 percent of that amount. I suspect, to varying degrees that too is "industry standards," counting as a gift every vaguely promised penny pledged by alums, and then using some of the phantom money to hustle real dollar matching gifts.
Should we throw the liars in jail? Probably not. Governmental policing of university morality is a cure worse than the disease. However, should we remove special tax status and government subsidies for universities engaging in such deceptive practices? That is an idea whose time may have come.
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