HESA

Higher Education Strategy Associates

April 29

Free Harvard Fair Harvard

Harvard has a unique Governance structure.  Basically, it has two boards and no Senate.  One of the two boards – the Board of Overseers – is composed entirely of Harvard alumni.  It has thirty members and the membership turns over a bit each year with annual elections.  This year’s annual election is a bit of a doozy.

Back in January, an alumni and businessman by the name of Ron Unz submitted a slate of candidates – which included consumer activist and former Green Party presidential candidate Ralph Nader – on a “Free Harvard/Fair Harvard” platform.  His double-barreled manifesto, as its name implies, is to get Harvard first use some of its vast endowment to reduce tuition and second to move to a system of race-blind admissions.

What should we make of this?

Well, the first demand is ludicrous.  75% of Harvard graduates end up with no debt, either because they come from wealth and can afford the fees or have income sufficiently low that they received something close to a full ride (technically, Harvard doesn’t give a full-ride in the sense that a student will be expected to work a few hours a week no matter what, but it’s awfully close).   In practice, for a family of 3 with no assets outside of housing and retirement funds, income needs to be about $150,000/year before the aid package drops below the level of tuition (you can play with Harvard’s net price calculator here.  Pretty clearly then, making Harvard “free” genuinely would only benefit those with very high family income.  And frankly why would anyone want to do that?

The second demand is trickier.  The slate is making quite a bit of hay out of data that Asian-American students are being discriminated against in the application process.  Unz himself wrote quite a fierce piece on this in 2012, which suggested that as far as Ivy League admissions are concerned, Asians are the “new Jews” – a reference to the fact that Ivies imposed much higher entrance requirements on Jews than gentiles prior to WWII so that the former did not swamp the latter and drive away all those nice WASPs to whom the Ivies were in fact beholden for fund raising (this story is told in excellent detail in Jerome Karabel’s The Chosen, which is a history of admissions and the concept of merit at Ivy League schools).  Unz in effect argues – and it is difficult to disagree with him, based on the evidence – that increasingly the group that is “paying” for affirmative action (that is, policies which give Black and Hispanic students preferential access to spots at Ivy League schools) is Asian-Americans, not whites.

There’s no doubt that Unz’s narrative is troubling (though it should be noted not all his claims appear to be factually correct).  That said, his solution here is effectively to end affirmative action.  Given the extent to which Harvard graduates dominate public life in the United States, ending affirmative action would have an enormous effect on the ability of Blacks and Hispanics to access some of the upper corridors of American society.  Add that to the fact that Unz has in the past funded groups with some fairly unpleasant white supremacist associations, as well as sponsoring ballot initiatives against bilingual education, and you can see why some people think that behind Unz’ pre-occupation with fairness for Asian-Americans lie some much nastier anti-Black and anti-Hispanic prejudices.

The presence of the Unz slate has prompted the formation of an opposing “Coalition for a Diverse Harvard” slate, which is vigorously defending the current admissions system.   The balloting is by mail, and results will be announced on May 26th.  The results will be closely watched, particularly in a Presidential election year.  If Harvard’s own alumni – a group which you’d think would be in the tank for the Democrats – votes against affirmative action and for spending more endowment money on the richest of the rich, it will cause some interesting ripples in the campaign.  For that reason, I think it’s quite unlikely to come about, but then again I wouldn’t have guessed Ralph Nader would ally himself with this set of ideas, either.

April 28

Two Theories About University Governance

I recently had a chat with a colleague about a piece I wrote a few years ago called “Time for a New Duff-Berdahl”.  And over the course of the conversation we came up with two theories about university governance in Canada (and elsewhere I suppose).

Theory #1 is that we have a governance problem because we have lost the culture of informal engagement within universities.  Back when universities were smaller, and when faculty spent a whole heck of a lot more time on campus, they would sit and talk together in coffee lounges.  There were also faculty clubs where Deans, and vice-presidents were easily accessible.  Basically, there were a lot of places you could have low-stakes discussions about the direction of the university outside of formal bodies like Senate and Board, and that was to the good for four reasons.  One, people knew each other better and that reduced the tendency towards demonization of opponents; two, low-stakes discussions (as opposed to formal ones in decision-making bodies) tend to lead to a more open exchange of ideas and hopefully coming to a little bit more common ground; three, in practice a whole lot more people got to participate in these discussions and as a result; four, institutional culture was more cohesive and so there was a lot less petulant foot-stamping all around.

What follows from theory #1 is that somehow, we have to find ways to re-create that kind of engagement.  It’s a tricky one because you can’t just re-open all those faculty clubs that were shut in the 90s, and you can’t force people to spend more time on campus because God only knows the fuss that would create and you can’t go out directly and do something like an “engagement exercise” because faculty would smell a rat and you can’t hold town halls because “OMG More Meetings”?  But presumably some creative types could imagine ways to create a little more common culture in the name of creating a better shared campus culture.

Theory #2 accepts the basic premise of Theory #1 – not enough shared culture – but basically says any attempt to try and reform it is doomed to failure.  As research has taken on a prominent role in our universities, the culture of academia has made academics care a whole lot more about their discipline than their university.  More to the point, profs are much more likely to be collaborating with colleagues at other universities than inside their own.  So, frankly, why should they care about better institutional governance?

It’s a collective action problem, really.  Pretty much everyone cares about shared, collegial governance, but almost no one cares enough to put in the hours necessary to make it work.  So profs in effect outsource the tough work to administrators, who they find irritating in many ways, but not quite irritating enough to make profs do the work on their own.  For good measure they unionize, which is arguably a way of outsourcing the task of sticking it to administrators when something goes wrong.  Hedging, you see.  And so, effectively in the name of professorial convenience, you get an administration/union dynamic which dominates what used to be a Board/Senate dynamic.

Yet what I found interesting about what has happened at UBC over the last four months is that when faculty decided to start engaging with university governance (which I wrote about back here), they didn’t do so primarily through their faculty union (not that UBCFA was indifferent, just that it was not always taking the lead).  Come crisis time, faculty sometimes still have the old collective-governance instinct.  The question is: is there a way to make that ethos come through even in the absence of a crisis?  Theory #1 says there is, theory #2 says Good Luck With That.

Curious what you readers think: have a go in the comments section, I’d be interested to hear your views.

 

April 27

Comparing Per-Student University Expenditures by Category (2)

This is part 2 of a two-parter on how Canadian universities spend their money.  All the stuff about what data I’m using, caveats thereto, etc., are available in yesterday’s post.  If you missed yesterday, go catch up here.

First, two small mea culpas from yesterday.  First, due to a cut/paste error, part of the data on student services that went out yesterday was slightly off, but has now been corrected on the website.  Second, I neglected to mention that the student services figures included money from operating budgets for grants and bursaries, which accounts for some of the wide differences between institutions.  Sorry.

OK, onwards.  Let’s focus first on the two spending categories we didn’t take a look at yesterday; namely, “Administration” (meaning, mostly, central administration) and “External Relations” (meaning mostly government relations and fund raising).  This is shown below in table 1.

Table 1: Per-Student Expenditure, Selected Categories of Non-Academic Activity

2016-04-27-1

A couple of obvious points here:

  • Compared to the spending categories we looked at yesterday, the gaps between 75th and 25th percentile are smaller (in other areas, the gap was usually 2:1; in these categories it is closer to 3:2).  This suggests that on the whole, institutional spending patterns vary less in these central admin functions that they do in areas like libraries and ICT.
  • On the other hand, the institutions at the top and bottom of the range seem to be much more outliers.  At the high-cost end, there are probably two things going on.   First, some tasks are pretty common and have to be done no matter what the size of the university, so small institutions  tend to look expensive on a per-student basis (for example: a $400,000 p.a President at a school with 40,000 students is $10/student; a $200,000 p.a President at a university with 2,000 students is $100/student).  Second, recall that the “central administration” category does vary a bit from school-to-school, and so some of this may be about oddities in reporting.
  • Most of the schools that spend small on “external relations” are part of the UQ system.   Basically, when you’re so close to being 100% government-funded and controlled, you don’t lobby or look for external money, hence your costs go down.

Figure 2 puts together all the data from the different expenditure categories.

Table 2: Per-Student Expenditure, all non-academic categories

2016-04-27-2

Three major points here:

  • The per-student costs at very small universities is really stratospheric.  Universities clearly have some fixed base costs that require large student numbers in order to make them bearable.  From a public policy perspective, that either makes it important to ensure institutions are a minimum size, or that funding formulas provide a base amount for fixed costs in addition to per-student funding.
  • Keeping a rein on non-academic costs matters.  The difference in costs between an institution at the 75th percentile of overall non-academic costs and a 25th percentile institution is $2,950 or pretty close to half a year’s worth of average tuition at a Canadian university.  That’s a lot of money which could be used for other purposes (or cut in order to provide cheaper education, though that wouldn’t be my choice.
  • Actually, it’s even more than that.  If an institution could emulate the spending of the 25th percentile institution in each individual category – that is, a library cost like UQAM’s ($509/student), an ICT cost like Carleton’s ($508/student), physical plant costs like Laval’s ($1,331/student), Student Services costs like Winnipeg’s ($958/student), administration costs like St. Thomas’ ($1,604/student) and external relations’ costs like Manitoba’s ($285/student), you’d have total non-academic costs of just $5,195 – that is, $3,800 less than the 75th percentile institution and $2,200 less than the median one.

But of course, one might protest: does anyone really want to be in the 25th percentile of spending on this stuff?  Don’t great universities spend a lot of money on this stuff?  Isn’t spending more money on things like Libraries and ICTs a sign of quality?

Well, maybe.  To some extent, you get what you pay for.  But welcome to the central paradox of university management: you can’t simultaneously demand prudence and excellence if the only indicator of greatness is how much money you spend.  It’s why outcome metrics matter; and why those who oppose them, in the end, simply promote waste.

April 26

Comparing Per-Student University Expenditures by Category (1)

Just for giggles the other day, I took a look at Canadian university expenditures in 2013-14 using (as usual) the CAUBO/Statscan Financial Information of Universities and Colleges Survey.  I looked at operating expenditures by category.  Then I normalized them per FTE student.  And I got some very weird results which I thought I would share with y’all.

What I am going to do in this series is show you the results for the main categories of expenditure which are “non-academic”.  I am not going to look at the categories known as “instruction and non-sponsored research” or “non-credit instruction”, because those vary significantly according to the mix of disciplines offered at an institution.  Instead, today I am going to restrict myself just to the categories “Library”, “Computing”, “Physical plant”, and “Student Services”; tomorrow I will  look at the more complicated cases of “Administration” (meaning central administration), and “External Relations” (meaning both government/public affairs and fundraising/alumni relations).

(btw – the data is from 2011-12 because we haven’t updated our PSIS file lately.  The numbers presented here are a bit dated, but the basic picture hasn’t changed.)

The following table shows the key elements of the comparison.  The intriguing thing here is that institutions actually seem to have very different patterns of spending.  In all four categories, the difference in per-student spending between an institution at the 75th percentile is twice what it is at the 25th percentile.  I’m not sure I would go so far as to say that institutions are using different strategies of non-academic spending to meet their mission – it’s not clear that these spending variations are occurring in a conscious manner – but it is certainly true that institutions are exhibiting quite different patterns of spending.

ottsyd 20160425-W

So, a variety of thoughts here:

  • The universities with the lowest-spend in Libraries are all small-ish, new-ish (post-1992) institutions; those with the highest spending are more of a mix.
  • Athabasca and RRU near the top of the ICT spending charts is not a surprise; what is a little weird is seeing Université du Québec en Outaouais in top spot.  Also, why is U of T near the bottom?  ICT is one of those fields in the FIUC survey which is prone to bad comparisons (some institutions stick a lot of the salary costs related to ICT in their central admin numbers or occasionally in their faculty expenditures, if staff are based in the faculty – a quirk of the way the data is compiled), so it might be that.  On the other hand, expenditures on ICT might just scale a lot better.
  • The student services numbers are fascinating: 4 of the 5 top-spending institutions are in Nova Scotia; 4 of the 5 lowest-spending institutions (and 7 of the top 10) are in Quebec.
  • The physical plant numbers are the hardest to interpret because in a sense these are in some ways legacies.  NSCAD owns some historic properties with high upkeep and doesn’t have a lot of students and so has high per-student costs.  Kwantlen is a relatively new institution and therefore doesn’t need to spend a lot on upkeep (or heat – institutions in the lower mainland have a big cost advantage because of the climate)

There are a couple of ways to look at these numbers overall.  There’s the competitive-bidding aspect: some will look at these numbers and say “why isn’t our institution spending that much?  Gotta keep up with the Joneses!”  But there’s an efficiency angle, too.  Those institutions spending at the 75th quartile and above – what are they getting for their money that other institutions are not?

Maybe the most interesting case is Libraries.  A lot of big Ontario universities have very low library costs: Guelph $473/student, Waterloo $591, McMaster $688, Ottawa $723, Western $749, all of which are below the national average.  You might think the big difference is in the collections budget – and it’s true those are lower, in part because there is a lot more collections-sharing between institutions in Ontario than is possible in places like Saskatoon or St. John’s, which don’t have nearby neighbours.  But the biggest single cost in Libraries is salaries, which makes up 45-65% of any university library’s budget (higher in Quebec).  The real difference between these institutions is therefore staffing.  So do users notice the difference?  If so, which users and how is the difference felt?

More tomorrow.

 

April 25

Who Should Sit on Boards of Governors?

Western Canada seems to be ground zero for talking about Board composition these days.  Take, for example, folks at UBC getting upset that government appointments to the Board of Governors lack a certain diversity (i.e. they all come either from old Vancouver money or the tech sector).  The Government of Alberta has decided to not automatically re-appoint any Board members whose terms are up for renewal (this actually is not something specific to universities – it’s part of a more general effort of De-Baathification of all provincial boards which have been stacked with appointees by a single party for the last 44 years). 

This raises the question: what should a Board of Governors look like?

Governing Boards in North America have a pretty simple history.  The first universities were set up by groups of local worthies (which usually included a lot of the local merchant class) to provide liberal education, mainly to train teachers and clergy.  Those universities were very small – the President was often the only professor, though he may have had a couple of assistants to help with tutorials and recitations.  Tuition was not enough to keep these institutions funded, so there were regular contributions from the local worthies.  Since the President was spending their money, they had a real interest in making sure the President was hewing closely to their views on education.  Boards of Governors were therefore primarily instruments of accountability, a way of ensuring that Presidents (and, as the schools got bigger, his employees) did not get too far out line.

Now, as governments started to take over the funding of universities, the importance of local worthies’ money diminished.  But the principle of “the payer calls the tune” remained in most places.  At public universities, Governing Boards still payed the same role, but their members were named by governments, not local committees.  Boards weren’t necessarily partisan, but appointments certainly tended to follow the party in power (this is still the case pretty much across Western Canada).  The argument at UBC is essentially that the Board looks too much like the party in power and not enough like “the province as a whole”.  This is an accurate observation, but difficult to see how in practice how this could ever be changed; on the whole, governments tend not to divest themselves of patronage opportunities.

But meanwhile, as public universities acquired an ever-increasing appetite for prestige and money, they looked to Board members to have other skills.  The first was an ability to raise funds, which tends to make them seek out people exactly like the old local worthies (if you need to ask a rich person to donate money, it helps if the person doing the asking is another rich person who has already donated).  But other needs are important, too: Boards need members with enough knowledge to oversee the increasingly complicated property and financial deals on which universities are embarking, enough judgment to understand how the university should deal with major sources of financial risk, etc.

So here’s the trick.  You need boards whose members collectively have the ability both to cheerlead and fundraise for an institution, provide it with specialized knowledge and talent whilst simultaneously holding its senior management (via the President) to account generally on behalf of the both the democratically-elected government of the day and the general citizenry.

Simple?  Not by a long shot.  And what makes it more complicated is that no one has the luxury of composing an entire board to get an adequate mix of talents.  That’s not just because most Canadian boards have a variety of elected positions in addition to those either selected by governments (in most of western Canada) or by the institution itself (more common in eastern Canada), but because Board membership turns over slowly and so the mix of talents (and hence the gaps in needed talent) are constantly changing.

So with respect to the Alberta New Democrats’ attempt to make big changes on the province’s university boards, there is both opportunity and danger.  Opportunity because the policy of not automatically renewing anyone’s term means they can change board composition quickly if they think something is amiss; danger because there’s a worry about jettisoning too many people with specific, needed skills in a bid to make the new boards “look like” the province (or “act as NDP agents”, as the case may be). 

Basically, boards are tricky.  Getting them right is a serious, delicate business.

April 22

Keeping Some Perspective

Much yelping in the twittersphere this week over a story in The Independent re: Edinburgh University.  To wit:

“Edinburgh University has come under fire for planning to introduce a new monitoring policy to check where employees are when they are out of the office.

Campus staff are now required to tell university management if they leave their “normal place of work” for half a day or more – a rule that until recently only applied to international staff in accordance with Home Office policy.

Under the new rules, all schools and departments at the university have been asked to put in place “sensible and proportionate arrangements” to monitor staff whether they are on leave, working from home, working on campus or away from the university…”

Now, this pretty clearly is a solution in search of a problem.  Professors are professionals.  They’re on-campus when they need to be (classes, meetings) and the rest of the time, frankly who cares?  As long as they are producing in terms of research (admittedly, this assumes expectations about research production are clear and unambiguous, which is not always the case) and they are available by phone/email, there is no problem.  Creative, productive people work wherever they feel most productive.  Everybody gets that, even Edinburgh.

The University isn’t saying “you must be on campus all the time”; it’s saying “hey let us know when you’re not on campus”.  And they’re probably not using it to track people hour by hour; more likely they just want to root out the odd Professor Piercemuller trying to work at an overly long distance.  But the fact is a) the university is requiring people to take an irritating minute out of the day to write to tell them someone where they are and b) the policy will make everyone feel as if they might be being monitored.  What problem could Edinburgh have that was serious enough to wish to irritate staff to that extent?

On the other hand, it is important to keep things in perspective.  In literally any other line of work, letting the boss know where you are is not optional but expected.  The fact that this is not the case in universities speaks to the fact that Professors have achieved a kind of magical status of acting like freelancers while still drawing a steady paycheck.

Now, I sometimes wonder if everyone in academia understands how unbelievably privileged this arrangement really is.  For instance, when I see people on the internet conclude that what Edinburgh is doing “violates academic freedom” or that having to tell your employer where you are is tantamount to acting “under the shadow of the police”, my thoughts are basically “get a grip”.

Edinburgh’s decision affects professors’ privileges, not their rights.  It doesn’t seem to be a very good decision – seems to me the downside to staff morale and institutional culture likely outweighs.  But the quickest way for academics to get tarred as being out of touch elitists is to start ranting about how something that is 100% normal for 99% of the population is the forerunner of jackbooted fascism.

Check your privilege, as the kids say.  There’s nothing wrong with opposing irritating and officious management decisions: just, you know, keep it in perspective.

April 21

Harvard. I Mean, Really.

Last week, the Harvard Crimson printed some unofficial estimates on the university’s current capital campaign.  Be forewarned: these numbers will give many of you a heart attack, so to soften the impact I’m going to lead  by providing some background on the campaign. 

Universities raise money.  Sometimes it’s small donations, sometimes it’s big ones.  Sometime the university spends that money right away, sometimes the money goes into an endowment, which means the capital is available in perpetuity and the university only a small fraction each year (often less than the interest earned).  The standard “take” from endowments these days is 4%, hence the fundraising joke “the quickest way to turn $1 million into $40,000 is to endow it”.  Big donations – the kind you read about in the papers – are almost always endowments.

(The campaign numbers are two paragraphs away.  Are you sitting comfortably?  I want you to be sitting comfortably, because it’s going to be a shock.)

Every 15 years or so universities do something called a “capital campaign”. This is an intense, time-limited effort to get a lot of money out of donors, usually for purposes of acquiring specific physical assets like a new building or two – though the politics of universities are such that capital campaigns aren’t entirely about infrastructure (it’s suicide not to fundraise for scholarships at the same time, for instance).  Capital campaigns always have the same format: they start with a “quiet” period in which money is raised behind the scenes.  Then, after a year or more, they have a public launch ceremony in which the institution sets a goal for the campaign and announces that “surprise!” they’ve already met some suitably high percentage of that goal.  Needless to say, this is always done in such a way that the announced goal will be surpassed.  The face(s) of this effort are always drawn from the senior ranks of local business and alumni.

(Are you ready?  The number is coming.  Deep breath.)

The largest ever university capital campaign was concluded in 2011 at Stanford University, which raised $6.2 billion.  Naturally, when Harvard launched its campaign in 2013, it set a target of $6.5 billion ($8.1 billion Canadian), of which it raised $2.8 billion during the “quiet” phase.  Last week the Crimson broke the story that the $6.5 billion target had been reached.  The University declined to comment, noting that it only announces updates every October, but if true this means that with two years to go, the campaign is on track to raise something on the order of $10 billion by the time it finishes in 2018.

(Everything OK?  Another deep breath.)

Think briefly, if you will, about what $8 billion looks like.  It’s about three years worth of the entire budgets of our granting councils.  It is 33% more than the gross domestic product of Prince Edward Island; (or, if you want to get all internationalist about it, equal to the GDP of Malawi).  It is more or less equal to the aggregate operating budgets of all the universities in Ontario.  And remember, this is just the take from four and a half years of a capital campaign.  We’re not talking the entire endowment here – that’s six times as large again (US$37.6 Billion at last reporting but presumably around US$40 billion now).

Of course, all of this money comes tax-free.  Donations are deductible to the donor, and of course universities are charities and consequently exempt from most taxes.  But at a certain point you have to wonder whether or not Harvard is a charity in any meaningful way.  What’s the public good of having all this money go to a single institution?  Assuming a 30% tax rate, the Harvard campaign has cost American governments almost $2.2 billion in lost revenue.  Imagine the number of students that could be supported with that money. 

Recently, the legislature in Connecticut debated taxing charities’  endowments (read: Yale’s endowment) if they exceeded $10 billion because beyond a certain point it’s tough to make the case that there’s a genuine public benefit to that money.  In the end, they chose not to pursue this idea, but this is – deservedly – going to be a significant public policy issue for the next few years.  There are limits to the amount of money a university needs.  Berkeley aside, the top half-dozen American research universities are now reaching that limit.

April 20

The Politics of Unfreezing Tuition

Freezing tuition is a terrible policy.  Free tuition is actually a better idea.  At least it’s based on a particular theory of access and public expenditure.  A tuition freeze is just a decision not to take any more decisions.  It’s a recipe for drift.

And what’s worse, the longer you let policy drift, the harder it is to stop drifting.  Case in point: Newfoundland.

To recap: In 2000, the province of Newfoundland decided to reduce tuition by 5% a year over four years and then freeze tuition thereafter.  And it’s been frozen ever since, with the agreement of all political parties.  The ostensible rationale for this is that it improves access to post-secondary (though in truth participation rates remain well below those in Ontario, where tuition is 3 times as expensive); in practice, what it’s done is reversed the flow of student from Newfoundland to Nova Scotia, bringing home their own students and attracting a few hundred new ones.  

As long as some of those new students were staying in province and helping reverse the long-term population loss, that was probably a good deal for the province.  Of course, no one actually tracked this to see if it was true and the policy was working, but that’s cool – this is Canadian postsecondary policy and we’re used to never evaluating the success of a program.  But now that oil revenues have plummeted and unemployment seems headed back towards 20%, it’s harder to maintain that this is happening, and so the cost of the tuition pledge seems to outweigh the benefit.  And given the government is currently spending roughly 33% more than it is taking in tax revenue, time for a change of policy, right?

Wrong.  In last week’s budget, the government raised all sorts of fees related to apprenticeship, which tends to heart lower-income learners.  It cut student aid, turning part of its vaunted grants programs into loans, which also hurt lower-income learners.  And it cut $14 million from Memorial’s budget.  But God forbid it touch tuition.  Upper middle-class people pay that stuff. Nuh-uh, no way, not touching.

Actually it’s somewhat worse than that.  The government didn’t touch tuition, but instead started making noises about how Memorial has always had the ability to set it’s own tuition (nudge, nudge) and of course the government expected to do what was right for students (wink wink).  I mean, first of all this is nonsense – the tuition freeze promise has been formally written into every provincial budget since 2000 – and second of all it’s unbelievably cowardly.  Unable to muster the political courage to get rid of tuition on its own, the government is reduced to pleading for the university to do something (but maybe not too much) to help it out of a jam.  I suspect if Memorial weren’t so broke ($54 million in cuts over two years, if you include cuts to the pension plan) it would tell the province to grab a chair and then rotate at an ever-increasing speed around that idea.  I know I would.

But the point is this: even a new government, with a massive majority in the legislature, facing the biggest fiscal emergency in twenty years, and having the courage to cut all sorts of programs still doesn’t have the courage to touch tuition.  It will touch all sorts of things which hurt the less-fortunate, but not tuition.  The upper middle-class defends its privileges to the last.  Which is precisely why those privileges shouldn’t be given out in the first place.

April 19

The Balkanization of Canadian Student Aid

So, a couple of things happened late last week worth mentioning:

First, the Newfoundland Budget was released and as predicted it was a slash-and-burn exercise.  The province, facing a deficit of something like 8% of GDP, had to make major changes.  Unbelievably, the tuition freeze stayed, sort of (more on this tomorrow), but student aid took a hit.  Remember in 2014 when Newfoundland eliminated grants?  That’s over, the first $40 week in provincial aid is now a loan again.  But more importantly, the government has completely eliminated grants for students studying outside the province if their program of study is offered inside the province.  So, a law student going to Dal gets the grant, but if God forbid you want to study Science or Engineering somewhere other than MUN – it’s loans only on the provincial side (said students would still receive federal grants).

Second, the premier of New Brunswick announced pretty much out of nowhere that low-income students in his province would be free and that details would be available from the Ministry of Advanced Education “in a few days” (at time of writing we’re still waiting).  Not many details yet – from the few nuggets available it sounds a lot like the Ontario program (provincial tax credits are being axed) – which is of course a Good Thing.  But one key point did come out, namely that the grant would not be portable.  If you chose to leave New Brunswick, it would be loans only on the provincial side.

I. Am. Furious.

The extent to which young people in Atlantic Canada are treated as “resources” to be hoarded is just appalling.  It’s almost never “how can we attract young people”, it’s “how can we keep the ones we’ve got from leaving”.  From a very young age, bright young people are essentially sold a bill of goods by guidance councilors and community leaders – “don’t leave the province, it’s a betrayal to leave the province, you are our future”.   The guilt-trips are outrageous.  And now along comes provincial policies in Newfoundland and New Brunswick to use financial means to punish students who have the temerity to want to study outside the province. 

At least you can sort of excuse the Newfoundland one on grounds of austerity because financially that government really is in trouble.  But New Brunswick?  They canned a huge graduate tax rebate last year and promised to re-invest the money.  There is no way that amount of money wouldn’t cover an extension of the program to out-of-province students.  Hell, Ontario actually cut total grant + tax-credit dollars in its announcement and still managed to extend the coverage of its new grants (currently, the Ontario Assistance Grant is portable but the Ontario Tuition Grant is not – the new grant is fully portable).  Instead, New Brunswick is doing this specifically to try to divert New Brunswick students away from out-of-province schools in order to give its own universities more tuition revenue and hence obviate the need for the province itself to actually pony up some money.  Brian Gallant calls that a win; we’ll see if he thinks the same when New Brunswick lose students after Nova Scotia and PEI retaliate in kind.

Now look, I get it.  People want what’s good for their communities, and the economics of Atlantic Canada have been scary for decades.  It’s easy to retreat into a defensive shell.  But holding your own youth hostage is not cool.  Those kids aren’t resources to be hoarded; politicians need to let them go and succeed wherever they want to succeed.  Student aid should be about expanding opportunity, not limiting it.

These changes need to be reversed.  And if the provinces won’t do it on their own, the federal government should change the legislation underlying the Canada Student Loans Program to penalize partner provinces whose loan programs don’t provide mobility across Canada.  More than ever before, their programs are built around federal largesse – Ottawa should extract something in return.  And freedom to study without penalty anywhere in the country is a right worth fighting for.

April 18

Some Alternative Explanations for Provincial Funding Decisions

So, last week (see here) I contrasted the fact that higher education was a consistent winner at the federal level over the past twenty years, and contrasted that with the fact that higher education had largely been a loser at the provincial level since about 2010 (and not just in the sense that funding is falling in real terms – also in terms of having the ability to offset those losses with higher fees).  I went on to suggest that this contrast was more than passing curious since both levels of government are ultimately responding to the same electorate.  And I finished by saying that the only possible answer here was that politicians and the public are a lot happier with what universities and colleges are doing on the research front than on the undergraduate teaching front.

A few readers pointed out that it was a bit facile to call that the “only possible answer” and offered some possible alternative explanations, including:

  • The state of the economy and provincial fiscal capacity.
  • Changing demographics and lower student numbers
  • The fact that some provinces at least have privileged resource development over knowledge production
  • Provinces understand that universities can make up the difference by loading up on international students

OK, so clearly I shouldn’t have said my explanation was the “only” possible explanation.  But I still think it’s the most likely one.  Let’s run through those possibilities.

State of the economy?  Both levels of government are suffering from weak growth, so it’s difficult to use as an explanatory variable.  Yes, the feds are in somewhat better shape fiscally and able to dive into debt in part to fund higher education, but that hardly explains higher education’s success in the latter Harper years.

Privileging resources production over knowledge production?  I think that actually proves my point.  If post-secondary education can’t compete with commodities whilst we are in the middle of the mother of all commodity downswings, then post-secondary education’s perceived value proposition must really be terrible.

Demographics?  This could be a more persuasive argument – the reductions in the real value of grants look somewhat less scary in some provinces if you express them in per-student levels.  But a) that doesn’t explain a reluctance to see tuition rise and b) the reductions in government grants don’t map onto changes in demographics very well (i.e. the biggest drops aren’t in the provinces with the biggest demographics issues).   This factor is in fact probably exercising some influence on policy-making but I don’t think it’s in the foreground.

The “foreign students will pay for the difference” argument?  This is an interesting one because it reverses the usual causality argument – is increasing internationalization of enrolments a cause or a consequence of government funding decisions?   I tend to view it as the latter, but can’t really rule out the former.   But man, if it is the former, provincial politicians should be called out on this.  Someone ought to actually force them to say “do you expect post-secondary institutions to increasingly fund themselves by being finishing schools for the Asian middle-class”?  Because if the answer is yes, everyone needs to be thinking much more carefully about their internationalization plans.

So maybe there are some other potential explanations.  But ask yourself this: can anyone imagine a government relations strategy which is successful in reversing this decline which doesn’t rest on an improved “offer” from post-secondary institutions?  Even if demographics were the problem, the answer to the problem is still going to hinge on the question “what can institutions do better/differently that would change politicians minds?”  Even if dissatisfaction with current offerings is not the (sole) root of the problem, can anyone imagine a positive solution which involves universities and colleges staying at the status quo?

No?  Me neither.

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