HESA

Higher Education Strategy Associates

Author Archives: Alex Usher

July 22

Summer Updates from Abroad (1): England’s Demented Student Loans Policies

You’ll recall that the UK had an election in early May in which the Conservative Party, contrary to most polling, won a majority of seats, and thus was able to form a government without need for a coalition.  On July 8, the new government delivered its first budget, which contained a lot of policies that – to put it mildly – had not exactly been fully outlined to the electorate eight weeks earlier. In student aid, what that meant was the outright abolition of maintenance grants, and their replacement with student loans of slightly higher value.

Rewind a little bit here for some history: before 1992, the UK was a free-tuition, all-grant system.  In that year a student loan program was set up because the government felt it couldn’t continue to increase maintenance grants.  In 1998, means-tested tuition of up to £1,000 was introduced, and maintenance grants were abolished in favour of an all-loans system.  After 2006, when tuition was effectively hiked to £3,000, maintenance grants of up to £2,900 were re-introduced, alongside loans for fees, and maintenance loans of up to (roughly) £4,000 pounds (amounts were indexed).  The maintenance loan and grant system remained unchanged when fees were effectively raised to £9,000 in 2012 – that is, unchanged until now.

With means-tested grants being replaced by loans, and those loans being placed on top of the £27,000 (C$54,000) in fees that a three-year degree will bring, there are a lot of lurid headlines (like this one) about how the poorest students are now facing the largest debts – possibly over £52,000 (C$104,000) at the end of their education.  That figure is, strictly speaking, accurate – but it doesn’t quite capture the weirdness of what’s going on.

As I explained back here, there’s a certain fantasy element to student loans in England.  Repayment occurs in strict income-contingent fashion, with no payments on the first £21,000 (C$42,000) of income, and 9% of any income on top of that.  At the end of thirty years, any outstanding balance will be forgiven.  This creates some odd incentives: if you expect to pay back your loan at some point, there is a reason to accelerate payment because the loans are (barely) interest-bearing; on the other hand, if you don’t think the minimum payments will end up repaying your loan, there’s absolutely no incentive to try to repay the loan, since it will eventually be forgiven anyway.  In essence, for people in the latter group, these aren’t loans, but rather a 9% surtax on income over £21,000, which stays in place for 30 years.

Depending on whose estimates you’re using, it turns out that anywhere from 60 to 80% of present-day students are not expected to repay their loans (the range exists because, frankly, predicting repayment rates 30-years out is a bit tricky, and depends a lot on initial assumptions).  As a matter of logic then, if you load more debt onto these people by replacing grants with loans, it simply isn’t going to be repaid – it’s going to wind up as forgiven debt sometime in the late 2040s.  True, very poor students who end up among the wealthiest quartile of graduates will end up paying more, but for the most part this is just an accounting trick: the government is lending money to students now with the full intention of forgiving most it (with interest) in thirty years time.

Here’s the central dilemma: under the English loan system, raising student contributions is almost impossible unless you either change the repayment threshold, or you change the repayment rate.  The problem is the Tories initially promised they wouldn’t do either of these things, so now they’re “examining” the weasel option of raising real contributions over time by de-indexing the £21,000 threshold.  That will bring in more money, but it doesn’t change the reality that, in the main, this is just exchanging grants now, for loan forgiveness later.

A decent accounting scheme or auditor-general wouldn’t allow it.

For those want to know more, here’s the Institute of Fiscal Studies’ take on the budget changes; more reasonably, have a look at the excellent Andrew McGettigan’s summary thereof.

July 16

Student Debt in Canada: Sorry, Still no Crisis

If you’re in the looking-at-student-debt business in Canada, your data sources are limited.  Provinces could publish their debt figures annually, but they don’t.  Canada Student Loans does publish its debt numbers annually, but it includes nothing on provincial debt, so it’s not very useful.  Statistics Canada surveys graduating students every five years, but only three years out from graduation, so the most recent data we have from that source is now five years old.  Kinda sucks.

But there is one other source of data, at least for university graduates.  That’s the triennial survey of graduating students from the Canadian University Survey Consortium, which just released its report on their 2015 data (Hey, Statscan!  17,000 responses, and a turnaround time of under four months!).  This gives us a chance to see what’s been going on the last few years by comparing the 2102 and 2015 results.

Before I get into the results, a small caveat about the data.  As its name implies, the consortium doesn’t have a fixed membership, and so comparability of results between surveys isn’t perfect.  In 2012, 37 institutions participated (n= 15,111 students), and 34 in 2015 (n=18,114).  Twenty-nine institutions did both surveys, but there was some churn.  In terms of student numbers, the 2015 survey is biased slightly more heavily towards the Atlantic (17% vs. 13%), and less heavily towards Ontario (39% vs. 42%).  Since the latter has been seeing lower average student debt of late because of its 30% tuition rebate program, one would expect a slight bias towards higher debt numbers in the 2015 survey.  In both periods, the survey sample as a whole is overweight in the Atlantic, Saskatchewan, and Manitoba, and underweight in Quebec and Ontario.

Onwards.  Here’s what happened to student debt incidence:

Figure 1: Percentage of Graduating Students With Debt, By Type of Debt

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Not to beat around the bush: incidence is down.  By four percentage points for family debt, three each for private bank debt and government debt, and a whopping nine percent for “any debt” (and, recall, this is with a population shift that is slightly more likely to have debt). For a three-year period, that’s a simply massive change, and one heading in the right direction.

Now, how about average debt levels?

Figure 2: Average Debt Levels (Among Those with Debt), by Source of Debt, in $2015

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Here, we have trends going in different directions.  Students are borrowing substantially less from family (for what that’s worth: in all likelihood, a substantial portion of these get forgiven), and marginally less from banks.  But government borrowing is up 6% in real dollars, which more than offsets those changes.  That’s a change for the worse, but it’s at least partially a product of a shifting survey base (my guess is that this accounts for about a quarter of this change).  CUSC does not release data by region, but I think it’s pretty safe to say that the big increases will be found in Alberta, BC, and the Maritimes.

In other words, we’re mostly seeing a continuation of trends that NGS has been showing for a decade now: average debt is rising slightly, but debt incidence is falling (while enrolments are rising, which is counter-intuitive).

Takeaway: As inconvenient as this may be for the hell-in-a-handbasket crowd, there is still no student debt crisis.

June 18

Truth and Reconciliation

Earlier this month, Justice Murray Sinclair released the final report of the Truth and Reconciliation Commission (TRC).  There are some elements of it that make for interesting reading from a post-secondary perspective.

(To international readers: for a period of roughly a century, the Government of Canada provided education to First Nations Students through a series of “residential schools”, which were mostly run by one of the main churches.  These places were horrific; over that century, or so, tens of thousands of Aboriginal children were separated – often forcibly – from their families, and over 4,000 died while in the care of these residential schools.  If you think of Canadians as being a polite, peaceable, and a threat to no one, do read the full TRC report for a healthy corrective.)

In any case, while there has been a lot of media focus on the report, specifically with respect to its use of the term “cultural genocide”, and its accuracy, much less attention has been paid to its recommendations.  In point of fact, these are framed as “Calls to Action”, because while the federal government created the Commission, the changes the Commission recommended require action on the part of a range of different societal actors.  One reason this section may have received comparatively less attention is that there are so many recommendations (92), and one can get lost amidst them.  I’ve extracted the ones that relate to higher education, which I think will be important to monitor and track.

The first is Call to Action 11, which suggests that the federal government increase the amount of funding for post-secondary education.  That’s fine, but upping the number of direct program dollars (for instance through the Post-Secondary Student Support Program, which sends $300 million+ to bands each year) doesn’t go nearly far enough.  There are some significant changes needed in the way need assessment works, as well as a better understanding at the band level of how to use the Canada Student Grants program to stretch their budgets (most bands are leaving $2,000 per year, per student, on the table because of this – see my 2009 paper on funding options for Aboriginal post-secondary students here).

Call to Action 16 asks colleges and universities to create more degree diploma programs in Aboriginal languages.  This is an interesting one.  The main reason more institutions don’t do this is that enrolment in these programs – even in institutions where you’d think there would be substantial demand, like First Nations University – are usually too low to be self-supporting.  Put simply, Aboriginal leaders are a lot keener on language programming than are Aboriginal students.  That doesn’t mean it’s not worth doing, but it’s an area where outside money would be necessary to make something happen.

Call to Action 62 (ii) asks governments to provide necessary funding to post-secondary education institutions to educate teachers on how to integrate Indigeneous Knowledge (IK) into classroom teaching methods.  Now, if there’s one thing you can’t do in Canadian higher education, it’s tell professors how to teach in their own classrooms; and IK is still pretty controversial, even though some universities – such as Trent – have gone some way to bringing it into the curriculum.  My guess is that universities will be wary of doing too much here; the saw-off will be for institutions to ask for pools of money, which can be used by faculty who who wish to adopt these changes.  In truth, institution-wide initiatives along these lines are quite unlikely.

Calls to Action 24 and 28.  These are – I think – the big ones.  They ask all the country’s law and medical/nursing faculties to introduce mandatory courses on Aboriginal law and health.  If you’re going to be a lawyer in this country, you should know about the Treaties and Aboriginal-Crown relations.  If you’re going to be a doctor, you should know about specific health risks to Aboriginal people, and their own conceptions of health and healing.  Such things are not entirely new to the sector; I believe several nursing schools already make such courses mandatory, but can we expect all professional programs to accommodate new mandatory courses – especially rich, prestigious programs in urban areas, where Aboriginal numbers are low (e.g. Toronto, Montreal)?  These are conservative academic cultures that aren’t obviously fertile soil for such ideas.  It will be very interesting to see how they react.

The real issue, of course, is whether individuals in the PSE sector will react at all.  There is nothing that binds institutions to react to these calls, let alone implement them.  But it would behoove both Universities Canada and Colleges and Institutes Canada to provide a public response to the TRC, and to declare publicly what our higher education institutions are, and are not, prepared to do in order to further reconciliation.  As a sector, it’s the very least we can do.

Meanwhile, as individual institutions announce their own reactions to the Commission, and announce changes to programming, I’ll be keeping track and posting periodic updates on the blog.  More – I hope much more – to come on this file.

June 12

Quitting Time

So, it’s that time of year again, when we all quit the routine of work, and pretend to be on vacation, but are in fact secretly working our tails off on writing/research projects (I’ve got three this summer), which will make us even more burned-out and miserable come September.  Don’t you just love it?  But the arrival of something resembling summer (climate change is not doing us any favours in Toronto) does mean putting this blog on hiatus for a few weeks.  Normal service to be resumed on August 24th… or maybe the 17th if some really interesting stuff happens.  We’ll see.

In previous summers, I’ve kept up a regular blogging schedule, under which y’all get something from me every Monday.  I’m not going to do that this summer.  Instead, I’ve decided to adopt a policy of publishing “whenever I feel like it”.  I’m guessing that’ll be about once a week, but it won’t be on a regular day.  This will afford me a slightly saner schedule, while also giving me flexibility to write about the odd crisis that crops up, in a more timely manner.

When the blog returns in the fall, it will be with one slight change.  HESA Towers is starting to focus a little more on issues of internationalization.  We’ll actually be starting a separate blog just for that (not a royal “we” – I will have co-authors); the title and launch date are TBA, but it will be sometime in the fall.  We will be cross-posting that blog here; so expect Friday posts next year to all be on the subject of internationalization.

But with respect to this past year, I’d like to trouble you good folks for some feedback. I’m always interested in your thoughts on the blog, and what (if anything) I should do differently.  I’m also curious about your reaction to two specific changes in this past year.  The first is the decision to lengthen individual posts.  Until this year, I had a pretty rigid 450-word limit, to keep posts to a good, bite-size morning piece.  However, I found it slightly easier, and less time-consuming, not to spend so much time editing for length (I do enough of that on twitter).  I think they mostly read better now (extra words allow for a little more exposition), but I worry that people are less likely to read as a result.  What do you all think – have you noticed a difference? And if so, is it for better or worse?

The second change was to put a little more focus on events and trends outside Canada (Chile and Australia, in particular).  I find international comparative stuff endlessly fascinating because it helps me understand the constraints of our own policy set-up, but I don’t know how exciting you guys find it.  Should I do more of this stuff?  Less? Are there any other countries you’re interested in?

Anyways, have a great summer.  Rest Up.  There’s lots of work to do next year.  I’m looking forward to it.

June 11

Universities: It’s Not All About You

I just finished reading quite a good little book, Universities and Regional Development, edited by (among others) OISE’s Glen Jones.  Analytically, it’s useful for a couple of reasons: first, it gets beyond universities as single-entity black boxes when it comes to engaging with external stakeholders; also, it does a good job of emphasizing history and path-dependence as under-analyzed variables in explaining change (or lack thereof) in higher education.

One thing that struck me, however, was the tone of some of these pieces.  It’s possible that I’m imagining some of this, but I identified an undercurrent running throughout a few of the articles: having explained how particular university initiatives failed as a result of “historical particularities”, or by ignoring “institutions’ entrepreneurial architecture”, the argument just seemed to end.  The implication here being that, to ensure smoother outcomes in the future, everybody needs to adjust to the particularities of higher education institutions.

The question most policy-makers would ask here is: “why”?   Why should everyone else adapt to universities, rather than universities adapt to the needs of government and other stakeholders?  It’s a question that too many people inside the higher education bubble can’t even grasp, let alone answer.  The idea that other people’s agendas sometimes matter doesn’t get much of a hearing in higher ed.

Why am I bringing this up?  Well, it has to do with a post the other day on the Ontario Council of University Faculty Associations (OCUFA)’s blog.  Signed by “Graeme” (presumably Graeme Stewart, OCUFA’s comms manager), it asks why all the speakers at big higher ed conference panels (presumably excluding those at OCUFA’s own conferences) are all cut from the same cloth – namely, why are they “single-mindedly practical”, but inside-the-box, thinkers?  Where are the radicals opposed to “technocratic, metrics-obsessed discourse”, he asks?  Why aren’t they being heard from?

Fair question, but I think the answer is pretty simple.  The critical higher education scholars have a lot of useful things to say (particularly around gender), but frankly they add almost nothing to the debate when it comes to issues of finance and accountability, which are what most conference panels are designed to discuss.  Among the “alternative voices” in higher education, there is an astounding reluctance to acknowledge the fact that Canada spends more than pretty much any other country on higher education, a near-complete absence of serious discussion about the underlying reasons for cost-inflation in the sector (indeed, there instead seems to be a preference for wholly phantasmagoric discussions about fund accounting), and a general attitude that the only thing that matters when it comes to money is: MOAR! MOAR!! MOAR!!!

As for accountability, “sod off and leave us alone” covers way more of the discussion spectrum than it should.  Measure outputs?  Report on them? Heaven forfend such metrics-obsessed behaviour.

It doesn’t have to be this way, of course.  American critical scholars such as Chris Newfield or Robert Samuels actually do talk about finances, and the latter at least is prepared to see huge cost reductions in universities through a shift in focus from research to teaching.  You can agree or disagree with that solution, but at least it’s an acknowledgement that cost (as opposed to price) is a problem – something I have yet to see in Canada.

Too often, what we hear from the “critical scholars” crowd is: “how can we make life better/prevent life from getting worse for people working in higher education?”  While there are lots of important topics in this area – the issue of sessionals comes to mind – it’s still a remarkably self-centred discussion.  It’s not about what higher education can, or should, do for society and the economy, it’s what everybody else should do to make academia a happy place.

It’s fine for OCUFA to want to broaden the discussion on higher education.  But it’s terminally self-serving to suggest that this goal is achieved simply by including more people who will emphasize universities’ particularist nature.  Listening more attentively to what external stakeholders think of universities – good or ill – would surely be a more rewarding path.

June 10

Will Things Change if Harper Goes?

There is a strain of thinking in higher education that goes something like this: “everything bad in higher education funding is the fault of neo-liberals [this being a general term of abuse rather than an actual ideological signifier].  Once neo-liberals are out of office, we can get back to the good old days, and not worry about austerity”.

It seems to me that the evidence for this point-of-view is pretty thin.  Near as I can tell, neither of the main opposition parties give two hoots about higher education.  Neither of them has released any policy statements around higher education in the past year.  Trudeau occasionally makes a speech about how important it is that attainment rates hit 70% (a demographically questionable promise, which I examined here, but has yet to utter a word about how he will achieve this.

Then there’s the fact that neither party’s post-secondary critic actually seems to care very much about post-secondary education.  For yuks, I looked at the Hansard record for the New Democrats’ Dan Harris (Scarborough Southwest) and the Liberals’ Ted Hsu (Kingston and the Islands) over the past 14 months.  I could have gone back a bit further, I suppose, but that’s about the point at which I got bored with the exercise.  It was dispiriting, to say the least.

Dan Harris has spoken four times on the subject of post-secondary education in the House in the last 14 months.  Two of these were on the same day, and on the same subject (the Canada Student Loans Program’s vehicle cost exemption rules), back in April 2014.  Since then, he has spoken once to support the striking University of Toronto teaching assistants, and once to castigate the Tories for not doing more to bring international students into the country at a faster pace.  Ted Hsu has spoken a couple of times on the subject of Science & Technology funding, generally, and specifically on the subject of the Thirty Meter Telescope, which received funding in the last budget.  But on the subject of post-secondary education, I could find nothing at all.

It’s not that either man is silent in the House.  Both men – properly – devote much of their time to local matters.  But they speak widely on other issues, as well.  Harris has risen to talk about Bill C-51, childcare, government advertising policy, and banking.  Ted Hsu has spent much of his Commons time chastising the government on the issue of the National Household Survey, and calling for a reinstatement of the long-form census.  What all of these things have in common is that they have nothing to do with post-secondary education.

So, post-secondary critics don’t talk about post-secondary education.  Presumably that’s partly a matter of personal choice and interest.  But partly, as well, it’s a reflection of how their parties see post-secondary education as a vote-winner.  If they thought there were votes to be had by speaking on this subject, they’d be talking about it.  But they don’t, so they aren’t.

And it’s not just the votes – there simply isn’t much money available to promise anything.  Both opposition parties having essentially forsworn significant tax increases, dollars for new priorities are scarce.  The Liberals have more or less blown whatever fiscal room their program might have had on a revision of child benefits; the New Democrats have made a costly promise with respect to childcare.  Economic growth is slow, and stock markets are flat, which means there will be no big windfalls to fund much by way of expansion.  New funds for PSE are going to have to come from cuts elsewhere – never a pleasant thought for a government.

None of this means that a New Democrat or Liberal government (or, horror of horrors, a coalition government) will sit pat on higher ed.  After all, the Tories never promise much on higher education, and yet always manage to find something for the sector each year, even if it’s not entirely adequate, and/or is wrong-headed.   

What this means is that there may not be as much of a change in substance and tone as some imagine.  And this isn’t because “all parties are the same”; rather, it’s that they’re all reacting to the same external stimuli.  Simply put, higher education has lost its place in the policy spotlight, and there are few rewards for spending political capital on it.

June 09

STEM and STEAM: The “Two Cultures” and Academic Incentives

About a month ago, I wrote about whether institutions would adjust their program mix if it would help improve economic growth.  Nearly everyone that wrote me implicitly assumed that the “right” mix for economic growth implied a switch to a more STEM-heavy system, before going on to say something like “but what about the humanities?”  I found this kind of amusing, because I actually don’t automatically assume that STEM (Science, Technology, Engineering, and Mathematics) degrees are where it’s at in terms of growth, and there are a couple of quite high-powered papers out that support this view.

The first, Revisiting the STEM Workforcecomes from the National Science Board in the US.  This publication makes a couple of sensible points, the most important being that STEM skills and STEM degrees are not the same thing.   Lots of STEM graduates end up in non-STEM employment; conversely, many STEM-field jobs are held by people who are not themselves STEM graduates (Steve Jobs, famously, went to Reed College and was self-taught as far as computers went).  Basically, the link between higher education credentials and labour market skills is nowhere near as tight as people tend to assume.

The second new STEM report, from the Canadian Council of Academies, makes an even more important point: namely, that STEM skills are a necessary condition for innovation, but not a sufficient one.  The panel that wrote the report (led by former Bank of Canada Governor David Dodge) did not go quite as far as Don Tapscott did in his plea to replace a focus on STEM degrees with a focus on STEAM degrees (i.e. STEM + Arts).  They did, however, point to a number of other types of skills, such as communication, team work, leadership, creativity, and adaptability, which they felt were at least as important as narrow STEM skills.  The panel also made the point that the best way to meet future human resource challenges is to focus more broadly on skill acquisition from pre-primary to higher education, across a range of subjects – because, frankly, you never know what kind of labour market you’re going to need.

Both reports say we need to get over our obsession with STEM, a conclusion that typically brings cheers from the humanities’ defenders.  But be careful here: even if you buy the “more STEAM” conclusion, it says nothing about the number of Arts degrees that should be produced.  Companies are not dying to hire more Arts grads so they can add that little something of creativity and communication to existing teams of STEM workers.  What they are looking for are individuals who can integrate all of those skills.  It’s a call for more crossover degrees involving both Arts and STEM.  It’s a call to get beyond C.P. Snow’s Two Cultures.

The real problem is that universities genuinely do not know how to deliver programs like this.  Fundamentally, they are designed to focus on degrees rather than skills. Sure, programs can cross departmental lines; however, programs that cross faculty lines are the red-headed step-children of higher education.  As a result, “real” programs – read: prestigious programs – more or less follow disciplinary lines.  Within universities, faculties count success by how many students are “theirs”, but cross-faculty programs exist in a kind of no-man’s-land: they simultaneously belong to everyone and no one.  With no incentives, there’s simply no pressure from below – that is, from faculty – to embark on the arduous journey of creating a curriculum, and working it through the academic approval process.  In other words, STEAM only works for Arts at a resource level (and hence a political level) if it means more Arts degrees; if not, then forget it.

It would all be so much easier if institutions were built around what we wanted students to learn; instead, they are organized by academic disciplines that are necessary guardians of research quality, but in many respects actively hinder the development of balanced graduates who can succeed in work and society.  Finding ways to mitigate this problem is one of the most important questions facing higher education, but we can’t seem to talk about it openly.  That’s a problem that needs solving.

June 08

The Ongoing Goings-On in Saskatchewan

On Wednesday, former University of Saskatchewan President Ilene Busch-Vishniac filed an $8.5 million dollar wrongful-dismissal/defamation lawsuit against Saskatchewan Premier Brad Wall, former Advanced Education Minister Rob Norris, and a half-dozen members of the University’s Board of Governors.  Yeah, really, $8.5 million.  And if you read her affidavit (available here) she has a decent case.  Not an open-and-shut one, but a case nonetheless.

What’s new in this affidavit?  Three things:

1)      There was a communication gap between then-provost Brett Fairbairn and Busch-Vishniac.   We already knew the two spoke on the Tuesday night of the affair, agreeing that School of Public Health (SPH) Dean Robert Buckingham should be relieved of his position, though they remained undecided as to whether additional measures should be taken.  Busch-Vishniac empowered Fairbairn to decide, promising she would back whatever decision he made.  Later that evening, on the colossally stupid advice of the HR department, Fairbairn decided to dismiss Buckingham from the university, altogether.

We already knew that Fairbarin updated Busch-Vishniac by email on Tuesday night, and sent another email the next morning following Buckingham’s dismissal.  However, Busch-Vishniac claims that despite these two emails, it was not until late the following afternoon, hours after the story had broken, that she understood Fairbairn had dismissed Buckingham outright.

This point is central to Busch-Vishniac’s claim that there was no cause to dismiss her, because, according to her, she was never in favour of outright dismissal, and she moved to reverse the “blunder” (her words) as soon as she discovered it.  However, the only way she could have moved as quickly as possible was if Fairbairn’s two emails had both been unclear.  But this is not what she says, specifically; rather, she claims she “did not understand” that this was the decision, which suggests that Busch-Vishniac simply skimmed the emails, and didn’t grasp or process their full content.

Truthfully, this seems a bit weak as a defence.  Fairbairn’s account of the Tuesday meeting is clear: at that meeting, the possibility of dismissing Buckingham outright was discussed, and there is no indication in either his or Bush-Vishniac’s account that this option was ruled-out.  In other words, a priori, she doesn’t seem to have had a problem with the idea of firing Buckingham outright.

2)      Busch-Vishniac really dislikes the MacKinnons.  It’s no secret that Busch-Vishniac’s predecessor, Peter MacKinnon, preferred Richard Florizone (now President at Dalhousie) as his successor, and it’s no secret that the transition between MacKinnon and Busch-Vishniac was slightly less than serene.  It is also a matter of public record that Janice MacKinnon, the province’s former finance minister, who held an academic position in the SPH, was pretty much first-out-of-the-gate to defend Buckingham, and blast Busch-Vishniac, on the Wednesday, after the story broke. 

However, Busch-Vishniac’s affidavit accuses the pair of something far more sinister: namely, the affidavit claims that the MacKinnons co-wrote Buckingham’s “Silence of the Deans” document, which instigated the move to dismiss him, and that they also instructed him on the timing of the document’s release, and its distribution list.  All of this was – and I quote – “specifically intended to undermine Dr. Busch-Vishniac”.   No evidence for this claim is offered, and both MacKinnons fervently deny the allegation.

Thing is, neither of the MacKinnons is listed as a defendant, and the actual authorship of “Silence of the Deans” is immaterial to the case. There was simply no reason for Busch-Vishniac to place these accusations before the court, other than to give a two-fingered salute to a couple she doesn’t like.  Weird.

3)      Brad Wall and Rob Norris may have some ‘splainin’ to do.  Busch-Vishniac claims that Advanced Education Minister Rob Norris and Premier Brad Wall pressured the board to do some things that were hasty and rash: such as pressuring the Board to hold a meeting with inadequate notice (this is already a matter of public record), as well as – allegedly – asking for a second meeting that day, and excluding the President from it, or indeed firing her without cause.  Whatever you think of Busch-Vishniac’s handling of the affair, she makes a decent case in the affidavit that she did not receive due process.  One might argue that this is also true of Buckingham, but in law two wrongs don’t make a right.  And of course, it should be worrying to everyone if – as she alleges – a theoretically independent board bent to government demands so quickly and completely.

There is one final, related note: the genesis of this whole mess was Buckingham’s claim that SPH shouldn’t be merged into another faculty as part of the TransformUS prioritization process.  Many people at U of S backed this claim, while having no intelligent view on the matter because, hey, everybody hated prioritization, and supporting Buckingham was a way to stick it to The Man.

Post-affair, the University called in an external panel of experts to advise on the fate of the School.  They reported back last month, saying SPH wasn’t fulfilling its mission, and needed to be merged with another unit, pronto.  In other words, it turns out the TransformUS process (not to mention Busch-Vishniac and Fairbairn) was right about SPH all along.  How embarrassing.

June 05

Random Crazy Thoughts About Funding Formulas

A few days ago, I attended a meeting of an advisory group on the review of the Ontario University Funding Formula. I can’t of course tell you what went on inside the meeting, but I thought I would share with you some of the (creative? crazy?) ideas that I had while inside them.

One issue which has popped up both in Ontario and in some meetings I had in DC last week, was the problems created by having money automatically fund enrolments. Now obviously money has to track enrolments to some degree – big universities need more money than little ones, expensive programs need more money than cheap programs, etc, etc. But on the other hand making the relationship direct creates an institutional incentive to deal with every cost problem by just chasing more students, which may not be socially optimal. Indeed, it leaves institutions open to the charge (not always entirely fairly) that they care more about getting people in the door than making sure they graduate.

So here’s an idea: since tuition fees rise directly with enrolment, institutions already have an incentive to chase bodies. Why not switch the funding formula incentive entirely to completion as Denmark does with its “taximeter” system? Completions are probably correlated about .75 or .8 with enrolments, which means that it wouldn’t cause a massive dislocation; you could probably up that to .9 or so if you funded based on an “expected completion metric” which took into account the quality of the incoming students (so, for instance, Queen’s would have to show much higher completion rates than Algoma to get the same money because the entrance averages of its students is higher).

Compounding the money-follows-enrolment problem is the fact that no formula I’ve ever been able to locate ever makes a distinction between the cost of an average student and the cost of a marginal student. This is on the face of it ridiculous: the 15,000th student at any institution is a heck of a lot cheaper to educate than the first or even the 5000th. And while yes, actually calculating marginal costs is a mug’s game and you certainly wouldn’t want to try to work that out in a funding formula, it’s not impossible to include a taper in the funding mechanism. That is, the first 100 in a particular field of study might be worth X, the next 100 might be worth .9x, the next 100 .8x, and so on and so forth. Easy enough. Why not do it?

One other interesting discussion to be had around funding models is the extent to which they can make systems “sustainable” (by which government means “not cost too much”). The Government of Ontario is very keen on the idea of using the funding formula to promote “sustainability” in Ontario universities. My first thought was that this was kind of nutty since a) the funding formula discussion is entirely allocative (ie. it is about how to divide the money not how much to give) and b) as I understand it, this funding formula review is not allowed to touch i) tuition, ii) collective agreements and iii) pensions. Frankly it’s pretty difficult to address sustainability if the formula can’t really take into account the largest components of revenue or costs. And yet, the central problem in institutions is getting cost increases back in line with revenue increases (see here and here).

As I’ve argued previously, there are good reasons why we might want to link total compensation to a particular percentage of total income, in much the same way that teams in professional sports do: it keeps the lid on costs when times are tight and it gives everyone in the institution an incentive to raise net revenues. Now, this particular provincial government won’t countenance doing that by interfering with collective bargaining (a problem since universities on their own don’t seem to be able to control costs very well) or by implementing the “BC solution”  where the government sets out sector-wide guidelines about the extent to which aggregate pay can rise.

But then I thought of a way around this: what if the funding formula actually fixed the proportion of compensation costs to non-compensation costs? What if the formula contained a dollar-for-dollar clawback as compensation rises above 75% of total income? Of course, there’d be all sorts of screaming, and the devil would be in the details as to how to define compensation (circumventing the limit by hiring people as contractors would be the obvious loophole to close), but I think it might actually be a very effective tool for to help institutions become more sustainable.

Food for thought, anyway.

June 04

University Endowments in a Global Context

Every once in awhile, when politicians of a certain mindset get going on the subject of how much money is being wasted in higher education, they fall back on a line about “why can’t universities be more self-sufficient”, or better yet, “why can’t they just fundraise more, like American universities do”?

Easier said than done. Here are the top ten Canadian universities, by endowment.

Top ten Canadian Universities by Endowment (in C$ Billion)


So you’ve got Toronto at about $2 billion in total endowments, McGill and UBC hovering at about $1.5 billion and Alberta just scraping $1 billion. After that it starts to fall off quickly. Queen’s clocks in at three-quarters of a billion while Calgary, McMaster and Western at just over half a billion (which, for comparative purposes, is somewhat less than U of T’s medical faculties alone) and then on down from there. Only twenty universities in Canada have endowments as large as $100 million. To put that another way, given the way endowments work, that means there are only 20 institutions in the country which receive as much as $4 million annually from endowment returns. Spread $4 million over, say 20,000 students and you’re looking at a grand total of about $200 per student in endowment income, which at most universities is basically a rounding error.

Now, let’s look at the top ten in the United States.

Top ten US Universities by Endowment (in C$ Billion)

6.4.2

Clearly, the US is a whole different ballgame here. All of the top six institutions in the US have larger endowments than all Canadian institutions combined: Harvard’s endowment alone is over three times Canada’s. (In fact, this week Harvard got its largest ever single donation, worth $400M US – which is almost exactly equal to Dalhousie’s endowment. One Donation. Seriously.)

Though the US list is mostly made up of private institutions, two publics make the top ten: Michigan and Texas-Austin. The Texas endowment story is frankly insane and too long to recount here: suffice to say that technically UT Austin doesn’t specifically have a $11.5 billion in endowments; however, the UT system as a whole has about $26 billion (not counting another $13 billion or so for Texas A&M) thanks to various funds setup by the state, and Austin seems to end up getting about 45% of that, the $11.5 figure seems like a decent estimate of Austin’s implicit claim on funds.

In some ways, it’s not even the big-endowment schools that are the craziest. The US has five Liberal Arts colleges (Pomona, Swarthmore, Amherst, Grinnell and Williams) with 2,000 students or less which have per-student endowments of over $1 million. That means these schools have per student endowment income of over $40,000 – or, about twice what a school like Bishop’s has per student from all income sources. These schools actually don’t need to charge tuition – they do so only because to do otherwise would make their programs look cheap and common.

What about the rest of the world? Well, once you get outside North America, the data on endowments gets pretty thin. Wikipedia claims to list endowment values of major universities in Europe, Asia and Australia, but for reasons that are quite baffling, on closer inspection these figures often turn out represent the institution’s annual budgets. Plus the meaning of terms like “university foundation” and “endowments” seem to mean slightly different things in different places. Top three Australian universities have Foundations which manage $1 billion or more in “long-term funds”, but not all of these funds appear to be externally endowed in the way we think of the term (the balance would appear to be funds invested by the universities themselves). Similarly, Tokyo University Foundation lists $24.8 billion yen ($250 million) in cash “and pledges” which could mean just about anything.

European universities seem not to advertise or explain their endowments, possibly because they haven’t got many of them. ETH Zurich is described on a number of websites as have a billion euros in endowments, but the most recent ETH Foundation annual report puts the figure at closer to 400 million euros. The only other continental university with a major endowment is the Central European University in Budapest, which apparently has an endowment of roughly $1 billion thanks mostly to its principal benefactor, George Soros. The UK, of course, is a different story. Oxford and Cambridge are handsomely funded but the gap between these two and everyone else is enormous – the third-best endowed school has less than a tenth of what the second-best school has.

The only two Asian universities where we have definite evidence of serious wealth are The King Abdullah University of Science and Technology (KAUST) and the National University of Singapore (NUS). The former, of course, was famously endowed to the tune of USD $20 Billion by its founder; the latter seems to have built up its formidable $2.3 Billion (Cdn) endowment in a more traditional (from a North American perspective) way, though gifts of many individual benefactors.

Major University Endowments, Selected non-North American Institutions (in C$ Billion)

6.4.3

Not shown: KAUST and its $20 Billion US endowment because that would make the graph look ridiculous.

All of which is to say that Canada actually does well compared to most of the world in terms of private funding raising. Our top three schools are probably in the top ten in the world outside the US in terms of total endowment size, and in terms of total university endowments, we probably come fourth in the world after the US, the UK and Saudi Arabia. The problem is simply that due to proximity we compare ourselves to the US, which is sui generis in so many ways. KAUST aside, there simply isn’t a university in the world which can support itself through donations the way American schools can. We need to stop using them as a yardstick.

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