On Tuition Flexibility

This Wednesday the Wisconsin Special Task Force on UW Restructuring and Operational Flexibilities will hear from the chancellors of Madison and Milwaukee on several issues, including flexibility for tuition-setting.

I'm on the record as having numerous concerns about the unintended consequences of giving institutional administrators more say over tuition, since they operate under intense local and political pressures to generate more resources which lead them to raise tuition even when it comes at the expense of access commitments. The latter are far more difficult to uphold, since even when people feel strongly about supporting college opportunities for disadvantaged families, the fact is that those families are quite distant from the lives of decision-makers, and thus easy to neglect.

A new paper from the National Bureau of Economic Research by Columbia economist Judith Scott-Clayton offers important reminders for this task force and the chancellors.  The access commitment is easy to make in theory, and much harder to fulfill in practice.  Sure, we like to believe that we can simply meet it by redistributing tuition revenue from middle and upper-class families to poorer families via financial aid (discounting).  But this relies on a set of assumptions, including that (a) poorer families will know the discount is coming and ignore the sticker price, (b) they will know and believe this information early enough to ensure their kids are prepared for college (as researchers put it, “potential college students cannot respond to a price subsidy if they do not know it exists"), (c) that this redistribution strategy will survive significant political push-back from the middle and upper-class families, (d) that the unintended divisiveness of the policy won't cause many consequences to campus climate and educational opportunities for the poorer students, and (e) that the access commitment will last even as campus administrations change.

I'm skeptical that these assumptions will be met by the kinds of tuition flexibility proposals we've seen in this country.  Short of a flat-out widely advertised and legislated promise to all Wisconsin residents under $80,000 (or some other income cutoff) that the full costs of attending college will be FREE, I don't think (a) and/or (b) will actually happen.  I don't think anyone knows about (c) or (d) and as for (e), get real-- no one puts this stuff in writing like they ought to.

Back to the NBER paper by Scott- Clayton-- here are key takeaways:

1. The chances are good that the market failure known as incomplete information has become more consequential in recent years as pricing of college has become much more individualized.  Despite decades of informational interventions, misinformation remains widespread-- as Scott-Clayton puts it,  "while many students appear well aware of the benefits of postsecondary education—in some cases even overestimating expected earnings gains—they persistently overestimate costs and are uninformed about sources of potential aid."

2. Creating a more complex system in which costs are higher and more variable, and more discounting is utilized, is unlikely to be offset by purely informational amendments.  In other words, an awareness campaign like that proposed by Biddy Martin last year likely won't even partially solve the problem creating by more tuition complexity.

3.  Informational contraints "can potentially undermine the effectiveness of even very large investments in financial aid."  In other words, we could spend a lot of money without creating much access--and we have to keep that in mind. It's a subject deserving of widespread and thorough public debate.

The lesson from this National Bureau of Economic Research paper for Wisconsin is this:  it's imperative that whatever tuition policy we move towards, it should not exacerbate students’ confusion about cost.   In my estimation, tuition "flexibility" at the institutional rather than System level will create more harm than good from those already left out and left behind by Wisconsin and its universities.

Postscript:  I want to clarify that the hearing on Wednesday will include discussion of two different tuition issues. First, whether the legislature should have granted the Regents flexibility to set tuition and then capped tuition.  I concur with Chancellor Ward that this is inappropriate-- the Legislature has much on its plate, and should allow the UW System Board of Regents the opportunity to convene a full discussion of tuition issues and make its own policies.  There are many ways for various constituencies to make their case to the Regents for keeping tuition very reasonable for Wisconsin residents, and the outcome will have more political legitimacy if done this way. Second, I understand that some chancellors want to have the flexibility to set tuition devolved to their own campus-- rather than have the Regents set it. This is not something Chancellor Ward is arguing for-- in contrast to his predecessor, and to the chancellors of Milwaukee and Stevens Point, he concurs that tuition-setting is an important function of university systems.  Finally, one last point-- anyone who claims that an access agenda is antithetical to an educational quality agenda is caught in the old Iron Triangle rhetoric, and needs to get up to speed.  Access (including diversity) is a key element of quality, and providing quality without access is no way to secure our children's future.

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Affordability and Attainment in Wisconsin Public Higher Education

As I noted in a prior post, last week the Wisconsin Scholars Longitudinal Study (which I co-direct) hosted a statewide conference on the issues of affordability and attainment in Wisconsin Public Higher Education.

The research released became part of this morning's UW Regents discussion (start around 1:03).

In case you missed the event, which was attended by more than 150 leaders from all over Wisconsin, you can watch most of it on Wisconsin Eye. The main presentation of findings is here (see part1).

We will also be posting conference materials on the WSLS website soon.

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Reforming Wisconsin Public Higher Education

As we move into the closing months of debate over Governor Scott Walker's budget bill, it is becoming clear that there's little appetite for the New Badger Partnership outside of Madison. That's not to say that the Wisconsin Idea Partnership is likely to succeed either.

Instead, the state has begun a very important discussion about the future of public higher education. No one--whether pro or con-NBP-- seems to think what we're doing right now is working terribly well. And the metrics would seem to bear that out --our degree completion rates, access rates, affordability rates-- all are essentially mediocre. We can and must do better, and it's in that spirit that I will begin to propose some principles and prospects for reform.

My proposals are grounded in the spirit of the Morrill Land-Grant College Act of 1862 that helped create the University of Wisconsin, and the Wisconsin Idea that helped sustain it. They are also grounded in decades of empirical research on undergraduate education and the actual experiences of today's college students. Finally, please note that they are primarily meant to stimulate discussion and debate-- not to preclude it. Wisconsin needs so badly to engage in a series of frank, fearless conversations about higher education with a much wider representation of opinions and ideas than it has before. Now is the time, and here are some thoughts to get us started.

(1) In the 21st century, the two systems of Wisconsin public higher education could work together to meet the needs for undergraduate and graduate education throughout the state. Right now, they are systems divided, competing for scarce resources. While they enjoy different missions they are in many ways complementary and their work needs to be coordinated. Therefore, I call for serious discussion about creating a central, comprehensive governance board overseeing the work of all of Wisconsin's public colleges and universities. In other words, that board would be charged with the future of both the University of Wisconsin System and the Wisconsin Technical College System. The creation of this kind of governing body should be aimed at elevating the educational missions of our institutions and protecting them from the inappropriate incursion of politics (e.g. intrusions from both the governor's office and the Legislature). Given that both parties have, at various times, objected to the involvement of political actors in the work of these schools, this approach could (eventually) garner bipartisan support. That's not to say it will be without pain-- the move would nearly undoubtedly result in the discovery of some mission overlap or creep and/or redundancy in some services that could results in closures and/or job loss. These are hard truths, but not ones that should be avoided.

(2) To ensure cost-effective operations, all institutions of higher education in Wisconsin need to be treated as the schools they are. In other words, they require greater autonomy from state government in a key set of domains. They are unlike other state agencies in terms of their work, their personnel, and their ways of operating. Schools are not businesses, and will not run effectively (and therefore efficiently) as such. Serious consideration needs to be given to finding the means with which to free them from red tape with regards to (a) personnel issues including hiring and compensation, (b) procurement, and (c) construction.

(3) Just like many other not-for-profit institutions, going forward the Wisconsin higher education system should be allowed to retain the revenues it generates as long as it uses them solely for educational purposes-- in other words to satisfy its mission. The state should not be allowed to "sweep" said revenues from the System for non-educational purposes. The possible exception might be to take them for use in funding the state need-based financial aid program -- but ideally that program should be administered by a board that coordinates the work of both UW System and WTCS. Notice that I am suggesting that individual institutions may still have to give up some revenues to the System; that sort of tax facilitates redistributive activities that benefit the common good as long as the revenues are used for educational purposes.

(4) Ensuring the accessibility and affordability of Wisconsin public higher education in the 21st century requires strong oversight of tuition and financial aid policies. Left to their own devices, colleges and universities have significant impetus to act to maximize the opportunities for their employees rather than their students. To control this tendency, a central board needs to coordinate these policies across institutions-- this is an important part of what makes them part of a system. It is also what makes degree completion possible for students who--for a wide variety of reasons-- attend multiple institutions en route to a degree (today that includes more than 1 in 2 undergraduates).

There are four ideas. Let's have at 'em- and let's develop more. Please join the conversation.

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Let's Develop Solutions

Tired of the rhetoric? Want to take a stab at cutting costs in Wisconsin public higher education yourself-- or even try increasing productivity?

The Lumina Foundation has supported the development of an amazing interactive tool that helps you do just that.

Here's one result I generated:

Let's say we need to close the 2025 budget gap for Wisconsin public research universities to maintain current spending per FTE student. We can do that by increasing student/faculty ratio from 13:1 to 17:1. Period. Gap closed. No increases in tuition or state & local revenues necessary. And research suggests that such an increase will come at no significant cost to degree completion rates. If you want to suggest it will hurt instructional quality, you'll need to provide hard causal evidence to support that case-- I'd love to see it--email it to me!

Better yet, let's first increase faculty salaries per FTE to the 75th percentile (which means an increase of about $1,000 from a starting point of about $6,300) and do the same for student support services too. Let's further commit to no tuition increases, and assume no increase in state or local revenues either. We can do ALL that and still have no budget gap if we increase student/faculty ratio from 13:1 to 19:1.

What is required to increase student/faculty ratio? Obviously we either enroll more students, retain more students, or reduce the size of the faculty. Here are the two main challenges:

(1) There is a widely held belief that student/faculty ratio is THE measure of quality in higher education, despite an overwhelming dearth of evidence to support that belief. It's no coincidence that rankings systems rely so heavily on that measure--and that all this talk of being competitive seems to set aside any possible changes to the student/faculty ratio. In fact, since the ratio is actually interpreted to mean "commitment to teaching" that effectively precludes any real re-consideration, lest we come across as not committed to education! But come on-- what evidence is there that the number of faculty allocated to students is the best indicator of commitment? How about the number of highly-trained faculty? The amount of professional development offered? The valuation of teaching in tenure decisions? This reeks of a system that responds to the needs of faculty more than students (for more, see my next point). There are alternative ways to measure quality.

(2) Faculty. Faculty at research universities tend to strive for as little student interaction as possible. Yep, I said it. There are some exceptions, but generally we spend our time vying for smaller classes and less advising. Could we learn to teach bigger classes and do it well? Could we be required to do so at least semi-regularly? Could the advising load for undergrads be spread across a wider range of faculty (including those in departments that don't teach undergrads)? Sure. But you'll face resistance.

So let's stop pretending that there's only one way to skin this cat. We don't have to break from UW System, hike tuition, and/or become semi-private in order to solve our fiscal crisis. We have to have tough conversations about the best ways to deliver higher education in the 21st Century. Sure, that's a tall order-- but it's one that the smart communities of Wisconsin's public universities can no doubt handle.

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More Hard Conversations We Need to Have

As we think about ways to cope with proposed cuts to the UW System budget, here are a few more facts to ponder:

1. Costs-per-student are remarkably unequal throughout Wisconsin public higher education.

According to the Legislative Fiscal Bureau, "The cost per student calculation is based on standard accounting procedures that identify direct and indirect student-related costs funded by GPR and student fees. The calculation includes the direct costs of instruction, student services, and academic support. Other activity costs, such as physical plant, institutional support, and fringe benefits, are included in the cost per student calculation with the costs allocated based on the teaching mission's share of those costs. In those instances where a faculty or staff member performs research as part of his or her educational responsibilities, only those costs directly related to instruction are included in the cost pool for setting tuition."

The disparities by universities are nothing short of enormous: "Systemwide, the average instructional cost per undergraduate student is $9,910. The cost of educating an undergraduate student ranges from $8,289 at La Crosse and Whitewater to $12,747 at Madison, a difference of more than 50%." Overall, there is a variance of 42% in instructional costs across campuses!

Moreover, there are enormous disparities in the proportion of their instructional costs students and their families are being asked to cover: "Students at the campuses where instructional costs are the lowest, such as Whitewater, La Crosse, and Oshkosh, are paying a greater share of their educational costs than students at campuses with the highest instructional costs, including Superior and Parkside. For example, while upper level (Junior/Senior) students at Parkside paid 36% of the cost of their education, lower level (Freshmen/Sophomore) students at La Crosse paid 90%."

Here is the real kicker: "Despite paying a higher amount of tuition, students at UW-Madison pay a lower percentage of their instructional costs than the average for students at the comprehensive campuses. By contrast, students at Milwaukee pay a greater share of their instructional costs than students at the comprehensive campuses. This is due to both lower than average instructional costs and the tuition premium students pay for attending a doctoral institution."

Students at UW-Madison are from wealthier families compared to students at the other institutions, and enter with higher test scores-- so why is it that they cost more to educate and chip in a smaller share of those costs????

2. We have two different types of two year colleges-- the UW Colleges (branch campuses of the 4-year universities) and the Wisconsin Technical College System. In some parts of the state, a UW College and a technical college exist within a mile of one another! Many students have no idea what the difference is between these schools. The UW College students benefit from established articulation agreements within the UW System, while the technical colleges are constrained to only having transfer as an explicit mission at a very few campuses. Why is this? Who benefits?

The analysis by the LFB reveals that the UW Colleges spend more per student than most of the universities spend on their freshman and sophomores. Those freshman and sophomores also contribute a lower percentage of their instructional costs. Why is this? Are the retention rates higher at UW Colleges than at universities? In other words, is this higher spending cost-effective?

This are tough questions and these difficult times demand answers. In a recent paper Doug Harris and I argued for a new approach to considering how scarce resources in higher education should be spent. The data needed to estimate the effects of different strategies (including number of campuses, spending, program coordination etc) should be made available so that the public and the administrations can begin to consider costs relative to effects.

You have read this article Carolyn "Biddy" Martin / higher education / New Badger Partnership / University of Wisconsin / UW System / UW-Madison / Wisconsin Idea Partnership with the title University of Wisconsin. You can bookmark this page URL https://apt3e.blogspot.com/2011/03/more-hard-conversations-we-need-to-have.html. Thanks!

Pick Your Poison

This is a strange new horrible world we live in. I have no idea what happen to democracy, but it's clearly left the station.

So, let me try to apply a little "pragmatic idealism" to the current moment regarding the New Badger Partnership. Today the UW System put the WIP on the table-- the Wisconsin Idea Partnership. It looks a lot like the NBP except it's for the whole System and it comes with real performance accountability measures. That means the most horrific part of the NBP--the splintering of System into a million selfish little pieces-- goes away. That's good-- that split wasn't Biddy's idea, it was Walker's-- and so it's something we ought to be awfully suspicious about.

That doesn't mean the WIP is great, or even good. The question is whether it's better than the alternatives.

I think the NBP is untenable. Even if it currently includes Chapter 37, it may not when the day is finally done. You simply can't trust this guy. It sets Madison up to be hated even more than it already is by the rest of the state, and it will come with great costs to equity--if not diversity.

So here are what I see as the best alternatives to supporting the NBP right now:

(1) Fight both the NBP and the WIP in the name of protecting public higher education--meaning holding the state accountable for paying its share, and doing everything we can to keep corporate interests at bay. In the short term this means taking a godawful cut and working really hard across institutions to find efficiency gains, which could involve, for example, closing an entire campus. I'm not saying I want that to happen but it might be one of the only viable ways to go.

(2) Support the WIP and work hard to ensure that it includes the following elements: (1) One board. Not 13. 13 is insane, and if Walker appoints 11 people on each of 13 boards, lord help us. If it's a 21 person board, and the governor gets 11, make sure that of our 10 ALL of them have vested interests in the INSTRUCTIONAL FUNCTION of Wisconsin higher education-- not the research or corporate functions. (2) Maintain tuition setting authority with that board-- do not give each campus tuition flexibility. They can have flexibility in procurement, compensation and construction, but tuition setting needs to be done by a coordinating body that has the interests of ALL STUDENTS at heart. Individual institutions do not-- they protect their own.

I'm inclined to support the WIP as I've described it above. I remain deeply worried about the invasion of corporate interests and I am scared to death of a board with a majority appointed by Walker, and I understand that Chapter 37 could be revoked from WIP as well. But I hear unanimous support from all sides for the need for flexibilities, and at some point even us idealists have to be pragmatic. I want the System to work together on its common educational mission.

I'm still thinking this through, as I'm sure you all are too. I want to hear your thoughts. Please share.

You have read this article higher education / New Badger Partnership / University of Wisconsin / University of Wisconsin-Madison / UW System / UW-Madison / Wisconsin Idea Partnership with the title University of Wisconsin. You can bookmark this page URL https://apt3e.blogspot.com/2011/03/pick-your-poison.html. Thanks!

Taking Democracy For Granted

When citizens take democracy for granted, Wisconsin happens.

The current Republican leadership of this state -- who a majority of the people elected, sad to say -- is not worthy of a banana republic, let alone a state with a progressive reputation. If any one of them had any pride, he or she would stand up and say "This is wrong!" or even resign. But they are cowards and cheaters, the lot of them. They have trampled upon democracy, poisoned the idea of public service and brought shame upon the state of Wisconsin. Tonight, it isn't just about what they did, but how they went about doing it ... secretly, furtively, in violation of the state's public meeting laws.

Governor Walker "praised" the move, which tells you all you need to know. So, apparently, killing collective bargaining wasn't so intrinsically related to balancing the state budget after all, now was it?

This is NOT what democracy looks like!

Media Coverage:
Milwaukee Journal Sentinel
Wisconsin State Journal
Slate
MSNBC
Crooked Timber

Statute:
Wisconsin Open Meetings Law

"Public notice of every meeting of a governmental body shall be given at least 24 hours prior to the commencement of such meeting unless for good cause such notice is impossible or impractical, in which case shorter notice may be given, but in no case may the notice be provided less than 2 hours in advance of the meeting."

Photo credit: Jeff Pertl

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Sunshine on Salaries

Ah, the joys of being a state employee -- our salary info is readily available to the public! Despite the UW System's efforts to keep that information quiet (salaries are very low, making it easy for other universities to lure us away), the Wisconsin State Journal put it online to ensure transparency. Here are some interesting tidbits:

• 9 of the 10 best-paid employees in the UW System are men
• 5 of the top 12 best-paid employees in the UW System are in athletic departments. Director Barry Alvarez earns $500,000 a year-- $85,000 more than Kevin Reilly (System president) and $63,000 more than Biddy Martin (UW-Madison chancellor). An assistant football coach earns five times more than yours truly.
  
• The deans of Madison's law and business schools outearn the deans of letters & science and education by approximately 25%.
• The chair of economics at UW-Madison earns nearly 2.5 times what the chair of economics at UW-Milwaukee earns.

I'm sure you can find more-- have at it!

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