The Learning Cloud

Public Higher Education’s Grand Challenge: Improving and Accounting for Productivity

The academic performance challenges and the funding squeezes facing public higher education are neither short-term nor low stakes. For example, per-student-FTE funding for public institutions, averaged across the states, continues to hover at 27-year historic lows when adjusted for inflation (according to a FY 2007 report from the State Higher Education Executive Officers). Predicting a worsening financial storm for public higher education, a 2006 report from the National Center for Higher Education Management Systems projected structural revenue shortfalls for every state by 2013. One performance compromising implication of these troubling financial trends is that current levels of per-student-FTE state funding, when adjusted for inflation, are not likely to be available to public colleges and universities as they respond to pressing societal and economic development challenges requiring improvements in a) statewide college-going rates, b) enrolled-student graduation rates, and c) affordable access for the most financially and educationally needy populations in a state’s current and future demographic profile. Were public higher education to move forward in a business-as-usual modality, net tuition increases and/or enrollment caps would be the compromised results of the vise-like squeeze between downward pressure on per-student-FTE state funding rates and mounting societal expectations for affordable, equitable, successful access to quality academic programs.

Many institutions are trying to mitigate these compromises by actively identifying and implementing cost-containment strategies in order to reduce their operating costs. According to a recent survey conducted by the American Association of State Colleges and Universities (AASCU) and SunGard Higher Education (SGHE), however, today’s cost-containment strategies rely more on support and business functions than on core academic functions – as would be expected when protecting current academic operating models is a typical goal. Yet core academic functions account for much of annual operating costs. For example, direct instructional costs hover around 45-55 percent of annual E&G operating costs at most public institutions, while instructors and instructional support staffing account for 55-70 percent of annual E&G personnel costs. This “elephant-in-the-room” observation about the role of core academic costs in overall operating costs may account for the large majority of survey respondents who are willing to consider any operational area – even the core academic area – as a potential cost-containment opportunity.

The above observations reveal that public higher education’s most pressing challenge is to increase academic productivity – to reduce or stabilize per-student-FTE cost structures while simultaneously meeting societal demands for equitably increasing educational opportunity, affordable participation, and student academic success, all in the interest of regional and global competitiveness and the nation’s founding democratic principle of equal opportunity for all. The academic productivity challenge also will require developing both academic and financial metrics in order to track and report longitudinal progress publicly and transparently. This requirement for performance reporting aligns with the growing participation of public universities in the development of a “Voluntary System of Accountability” (VSA) and related public reporting template under the aegis of the AASCU and NASULGC membership. Both improving and accounting for academic productivity thus become for the foreseeable future the “grand productivity challenge” facing public universities and public community colleges in every state.

Learning from the Bologna Process

Clifford Adelman has written a report for the Institute for Higher Education Policy describing and analyzing Europe's Bologna Process. The Bologna Club: What U.S. Higher Education Can Learn from a Decade of European Reconstruction is timely and should be useful to those U.S. higher education systems and institutions working to improve upon and measurably account for their performance.

The inter-nation Bologna process was initiated in 1999 to foster greater "convergence" within European tertiary education in order to create a "European Higher Education Area." It's not a stretch to suggest that Secretary Spelling's Commission on the Future of Higher Education has recommended that U.S. higher education focus on "convergence" and common accountability practices in order to create a national understanding of the importance of higher education and how to navigate its opportunities most efficiently to greatest individual and national effect.

Anticipating and responding to many of the Commission's suggestions in Bologna's spirit of convergence, the Lumina Foundation's Making Opportunity Affordable grant program is initiating what appears to date to be the closest U.S. cousin to the Bologna Process, albeit at a statewide level, not at a national level. Eleven states have been competitively selected through a preliminary planning-grant process. Ultimately, up to five of these states will be selected for multi-year implementation grants. The hope is that the MOA states will find a way to converge on some level of common goals and effective practices.   

The eleven MOA states -- indeed, all U.S. postsecondary institutions -- would do well to study Adelman's report.  As he puts it, "Our primary story is about providing students with clear indications of what their paths through higher education look like, what levels of knowledge and skills will qualify them for degree awards, and what their degrees mean. These are road signs that are sorely lacking now. Student “success” does not mean merely that you have been awarded a degree, but that you have learned something substantial along the way and that the world knows what you have learned, what skills you have mastered, and that you have the momentum to meet the rising knowledge content of the global economy."

Does Econ 101 need attention?

Paul Baskin's May 5 (2008)  Chronicle article, "As Bush Prepares to Sign Bailout Bill, No Agreement on Whether 'Crisis' Has Ended," reminds me of how ignoranat I am of basic economics.  Even though I'm a quantitative guy -- retired math professor -- with a timely and deep interest in student financial aid, I find it difficult to penetrate Baskin's report on the complexity of opposing positions taken by the financial gurus within the student-loan economy. I suspect that I'm not alone in my frustration with my thin knowledge of global economics, the complexity of various "bubbles," and, yes, even the American student loan economy. Perhaps the time is right for American higher education to consider the role and effectiveness of "econ 101" in our collective understanding of the economic issues that we face daily -- such as the current issue about temporary relief from the federal tax on gasoline, a good or bad idea? 

Lessons from the University of Phoenix

I'm often prompted by news reports about the University of Phoenix to wonder why more traditional (nonprofit) colleges and universities do not take more seriously the obvious success of the UoP in assuring the quality of its academic program outcomes while simultaneously controlling its per-enrollment cost structures in order to maintain competitive tuition rates. Now we learn that UoP has created a University of Phoenix National Research Center (led and managed internally and advised externally) to advance its understanding of how best to ensure quality learning outcomes in adult-student markets (while controlling its unit costs).