HESA

Higher Education Strategy Associates

May 17

The New York Times Swings and Misses

Sure signs of spring: baseball is back (and so is Vlad!), Ottawa is full of tulips, Quebec students are demonstrating in the buff and newspaper editors are turning their attention to student debt.

Exhibit A: the Globe’s spread on debt last Saturday (full disclosure: HESA supplied some of the data the Globe published).

Exhibit B: the cover of Sunday’s New York Times – “A Generation Hobbled by the Soaring Cost of College.”

Now, geeky wonks that we are, our first reaction to the appearance of higher education policy issues front and centre in the press gets us excited all out of proportion. And, nine times out of ten, our excitement turns to righteous indignation as soon as we read what’s written. For some inexplicable reason, journalists don’t tend to report stories the way we would want. So we eat breakfast. Outrage fades. We go on with our weekend.

But, as my insightful colleague Don Heller points out, there’s some crucial sleight of hand going on in that Times piece (and a major factual error) that, given the Times’s outsized influence, could seriously degrade the quality of public debate around higher education affordability. The Times chose to illustrate its story – which reported the average U.S. Bachelor’s-degree-holder debt (excluding those who have no debt) at $23,300 in 2011 – with the story of a hard-luck graduate of a private university marketing program with no prospects and $120,000 in debt.

Don points out the sequence of lousy decisions that have culminated in this student’s moving back in with her parents, and pinpoints how anomalous her story is. Moreover, it’s become clear that the Times misread survey data to conclude that 94% of graduates accumulate debt, when the actual figure is 62%. (The Times’s corrected the error on Wednesday.)

To its credit, the Globe chose to illustrate its piece about average student debt with a story about a graduate with… average student debt.

As we pointed out a few weeks ago, deriving meaning from the stats on student debt isn’t as obvious as it may seem. Newspaper stories that namecheck means and medians but focus on the 1% of graduates in dire straits ($120,000 in debt! “But when I graduate, I’m going to owe like $900 a month. No one told me that”!) royally undermine efforts to have a reasonable debate about access to education and student debt. By presenting the extreme as the norm, newspapers may get more hits, but they betray their public service mission.

We can surely expect better from the New York Times.

May 16

Learning From Other Policy Areas: Housing

Sometimes, I think we spend too much time trying to learn from policy in other countries and not enough time learning from related policy areas in our own country.

Take housing, for instance – probably higher education’s closest relative in policy terms. Choosing a home, like choosing an undergraduate degree, is a major decision with enormous financial implications, but both can be foreseen many years in advance, allowing people to plan for the purchase. Shelter and education are both considered to be “rights,” but we ask people to pay for them both. In addition to their status as public goods, a substantial benefit of both housing and higher education are private. The subsidy picture is a similar mix of non-repayable aid for the poor (grants in our field, social housing and housing vouchers in the other), and assistance via loans for everyone else (CSLP, CMHC insurance). Finally, both are to some degree positional goods; not every degree is from Harvard, not every house is in Westmount, and the location of your alma mater/house determines its value to a substantial degree.

So, what can we learn about ourselves from looking at housing?

First, education policy is big on encouraging savings – so why is there no Canada Education Savings Grant equivalent for housing? (Ok, arguably the home mortgage interest tax deduction in the U.S. is pretty close.) But in Canada, I’d guess the reason we don’t is that everyone would think it’s a stupid idea to help those most able to help themselves. So why doesn’t that logic apply to education too? Hmmm.

Second, housing policy also has a much more limited view about the state’s role in minimum provision. There is a “right to housing,” but that tends to mean things like emergency shelter, a spot in sometimes quite decrepit social housing, etc (that is to say, a good which is significantly inferior in quality to what most people have). In higher education, on the other hand, that right is seen as a right to a shot at just about any form of education, provided you think you can pay back the loan.

Third, there is the way that loan assistance is targeted. Student loans are needs-tested, but CMHC mortgage insurance isn’t. Why is that? Should there be a needs test on loans? Should we introduce one on mortgage insurance? Why would we do one and not the other?

Obviously, there are some differences between the two sectors which make some policy differences natural. The most is the nature of the underlying asset; a lender can repossess a house but can’t repossess a degree. But the similarities are enough that wonks in both fields could benefit from spending more time learning from one another.

May 15

Ranking Higher Education Systems

As you may know, a new ranking of national systems of higher education was released a couple of weeks ago. The ranking was put together by a team of Monash University professors led by Ross Williams, and published by the Melbourne Institute and Universitas 21, a global alliance of 24 research intensive universities. It’s not the first attempt to rank national systems – we here at HESA have done two iterations of a global ranking on affordability and accessibility – but it is probably the most ambitious.

The ranking covers twenty indicators over four themes – Resources, Environments, Connectivity and Outputs. For those keeping score, Canada came third overall behind the U.S. and Sweden. We were top in the resource category (there goes the underfunding argument!), third in the output category and mid-table in both environment and connectivity. Not bad, huh?

But you need to take these results with a big grain of salt for a couple of reasons. The first is that the “environment” indictors are mostly qualitative and there’s no published source available to check the data on two of them. The scoring here is simply bizarre, though. I know there’s no such thing as a validity check in ranking, but surely to God the fall-down-laughing test should have given the authors pause before ranking Canada behind Ukraine on this one.

Similarly, the choice of measures and data sources for outputs tends to benefit the U.S. disproportionately. Awarding points for the percentage of the population over 24 with a degree privileges those countries that massified a long time ago (i.e., the U.S.). Using crude gross enrolment ratios as a measure of access privileges countries where students stay enrolled for a long time (there’s also a nerdy comparability problems on the numerator of this statistics in that the U.S. counts its community college students and we don’t). And using researchers per head of population and unemployment rates as measures of university outputs when in fact institutions have at best partial control over these numbers is just silly.

One thing that is disappointing about these rankings is that in many ways, they just measure how close national systems are to a Northern European ideal. If you’re a rich country that drank the Humboldt kool-aid a long time ago, you tend to do well. If you’re poor and have largely teaching-oriented universities, you don’t. I suppose since the ideal of “world-class” research universities has become a global standard of sorts, this makes some sense. But a measure which was more sensitive to levels of national income would have been nice.

Overall: it’s a good first attempt, but there’s still some room for improvement.

May 14

New Possibilities in African Higher Education

As I’m working in Ghana this month, I thought I’d share a few stories about higher education here in Africa. What’s occupying my thoughts these days is the educational production function (yes, really).

The most amazing thing “western” education systems ever did was to get students to learn on their own, thus reducing both the number of professors required to teach a given number of students and, as a result, the cost of education. Teaching students to “learn how to learn” thus isn’t just cant – it’s the heart of the most important productivity revolution in world education.

But in Africa, libraries are virtually non-existent and until recently electronic resources were inaccessible. Since the tools to “learn to learn” didn’t exist, the only way “learning” can occur is in the classroom. Hence the need for African students to spend 25 to 30 hours in the classroom each week, which is why African professors teach more than ours do.

Now, though, there’s the potential of adopting the western education production function. The libraries are still empty, of course, but the ICT revolution has put an incredible amount of information and resources at the fingertips of anyone with an iPad or laptop, and the relentless fall in computing costs means an increasing number of students are able to access that technology. Which means – in theory at least – they could move to a cheaper, less labour-intensive and generally more “western” university system any time now. That would be a major development, as it makes it possible to expand the higher education system at much lower cost. In a continent with a burgeoning youth population and soaring demand for education, such a game-changer is desperately needed.

The problem is that the new regime reduces the need for professors in the short term (in the longer-term, the effect is probably neutral as demand for education rises). Predictably, therefore, there aren’t a lot of institutions stepping forward to use these new technologies to change the way they deliver education. The mostly church-run private university sector won’t take up the opportunity because, being prestige-seekers like everyone else, they are mainly concerned with trying to ape whatever the most venerable university in the region is doing. And African governments won’t push the idea because reducing employment – even temporarily – causes unrest, and the Arab Spring has made most governments very risk-averse.

The likely best option to catalyze this education revolution is a foreign provider, unencumbered by existing contracts and bringing the prestige of being “western” to come in and establish this model, and hope it spreads by example. There is enormous opportunity to do good here – but will anyone step forward to make it happen?

May 11

Hooked on School

What do Canadian students do when they’ve finished their university studies? And how do they differ from students in other parts of the world? We recently had the opportunity to examine country-level graduate surveys around the world.

Now, there are important caveats – no two countries conduct the same survey among the same exact population of graduates at the exact same time (and international data agencies like the OECD restrict most of their graduate analysis to fairly basic indicators, such as employment rates and earnings). Fortunately, centrally-coordinated surveys in Canada, Australia, France, Germany, New Zealand, Sweden, the United States and the United Kingdom permit meaningful international comparisons of life after a Bachelor’s degree.

So how do Canadian Bachelor’s degree-holders compare? For one thing, those who decide to work (excluding those who work and study part-time) report the second-highest earnings among the countries examined here, along with the U.S. – around $45,000 annually.* German students with a “traditional degree” report earnings of CAD $55,000.

More interesting, though, is the proportion of Canadian graduates who pursue further education. According to Statistics Canada’s National Graduates Survey, 42% of Bachelor’s degree-holders from the class of 2005 had pursued a new course of study by 2007; only 62% of Canadians were working (some did both). No one, other than German graduates of “new” degree programs, studies as much after completing an undergraduate degree than Canadians – even those who were surveyed in other countries much longer after graduation were less likely to return to school.

Of the 42% of Canadian graduates who went on to pursue an additional program (the number of students who pursued any kind of schooling, either within the context of a program or one or more individual courses, is closer to 75%), only 16% had completed their studies when surveyed two years after graduation.

Of course, not all students are as gung-ho about pursuing post-graduate education. Looking at graduates at all levels, while 62% of life-science graduates and 56% of humanities graduates went on to pursue another program of study, the same was true for less than one-third of architecture and engineering students. Education graduates were most likely (64%) to pursue individual courses after graduation; however fewer than 20% undertook a structured program.

Whether a Bachelor’s degree doesn’t confer the benefits Canadians students anticipate or whether it cultivates a thirst for learning that can only be quenched in the classroom isn’t clear. What is certain, though, is that most Canadian undergraduates aren’t ready to stop studying.

* Australian graduates actually reported higher earnings – $61,000 vs. $45,000 in Canada and the U.S., but they were surveyed five years after graduation, compared to one to two years in Canada and the States.

May 10

What We’re Reading Now: Creating the Market University

If you’re interested in reading about the major events that shaped the evolution of universities in the twentieth century, then you could do a lot worse than invest a few hours in reading Elizabeth Popp Berman’s Creating the Market University: How Academic Science Became an Economic Engine.

Most histories of science rightly point to Vannevar Bush’s 1945 essay “Science: the Endless Frontier” as the point at which the U.S. government definitively committed itself to funding university science in a big way. The logic was that academic science, which acted as a reservoir of ideas on which industry could draw, was a public good and needed to be supported as such. Berman argues that from the mid-1970s to the mid-1980s, the science-as-reservoir was replaced by a science-as-economic-engine logic that pushed American scientists to look at how the market valued their research and to seek out opportunities to work with outside partners to increase the value of their knowledge.

What distinguishes Berman from others looking at similar phenomena is her refusal to simply label this as an exercise in neo-liberalism. To be sure, she grants that some of the developments that pushed universities in this direction – notably the 1978 tax changes that favoured venture capital, the Chakrabarty Supreme Court decision – were rooted in free-market logic. But many others of them were rooted in the thinking of economists like Kenneth Arrow, who pointed out that markets on their own could produce suboptimal investments in R&D.

In fact, she points out the real shift in thinking happened not in universities but in governments. Dismayed by U.S. economic performance in the 1970s, state and federal governments began to focus on innovation as a key driver of economic performance. This led them to incentivize institutions to get their knowledge into the hands of American industry so as to make better products and produce more jobs. Far from the shift to the market being a result of government cutbacks (cuts, for the most part, happened in physics and chemistry, whereas the push to market was led by academics in biology and engineering), it was in fact the result of a shift in how governments thought about economic growth.

It’s a very American history, of course, but Canada went through a very similar process ten years later in the 1980s and 1990s, and most of the rest of the world followed suit as well. Indeed, thirty-five years on from the events Berman recounts, good market-focussed academic science is now the gold standard for universities everywhere. Well-written and admirably succinct, this tale of how the modern university acquired these market ideals is definitely worth a read.

May 09

Better Thinking about Access and Tuition

Hey, have you heard about what’s going on in Quebec and Ontario?

Turns out one province is way ahead of the other in terms of university participation rates. And in terms of attainment rates among 25-34 year olds. Also, it turns out one province has tuition almost three times higher than the other. And higher rates of indebtedness. And, among those who borrow, much higher levels of indebtedness at graduation (almost 60 percent higher, in fact).

The thing is, the relationship isn’t the one most people think it is.

That’s right, the province with higher tuition and higher debt has – by some distance – the better outcomes. And it’s not just total numbers; Ontario’s also substantially more successful than Quebec at pulling in low-income students.

Undoubtedly, there are some structural factors behind this. For one thing, low-income students in Ontario are much likelier to be recent immigrants (or children thereof); and as work by my colleagues Ross Finnie and Richard Mueller has shown, these youth are far more likely than non-immigrant youth to attend PSE. Parental education, another major determinant of educational outcomes, is also on average higher in Ontario (a third-generation legacy of low education levels in pre-Quiet Revolution Quebec). And finally, student aid is also in some ways much more generous in Ontario, even if more of it comes in the form of loans.

But then, on the other hand, listing these factors is just a complicated way of saying IT’S NOT ABOUT TUITION! FOR THE LOVE OF GOD, CAN WE ALL SHUT UP ABOUT TUITION AND GET BACK TO STUFF THAT REALLY MATTERS?

There’s lots of blame to go around for the perpetuation of this preposterous meme, but if we have to single out anyone for egregiousness on this file, the Ontario Liberals probably deserve it most. Through eight years of patient work, they’d created an excellent, progressive student aid structure that underpinned the country’s most accessible system of higher education. Then, instead of taking credit for this magnificent achievement, they came up with a hare-brained tuition reduction scheme that was not only implemented with all the grace and subtlety of a Michael Bay movie, but which deliberately undercut the government’s own signal achievement, which was to prove that good outcomes don’t depend on low tuition.

Ernest Rutherford once said “Gentlemen, we have run out of money; it is time to start thinking.” Well, Canadian higher education is rapidly approaching that point. The sooner all our governments stop pandering to students and middle-class voters with tuition freezes and rebates and start actually thinking about the real social and cultural determinants of access, the better we’ll all be.

May 08

The Shape of Things to Come

Sit down before you look at this graph, which shows new investment in higher education in 2011. The data comes from our annual survey of 40 countries around the world which make up over 90% of all enrolments and scientific production.

Change in Public Expenditures on Higher Education, 2011

The basic story here is this: in the OECD, we’ve finally hit what I call “Peak Higher Education”; the point beyond which we can no longer expect any increase in public investment in higher education. Between shrinking youth populations and catastrophic fiscal pressures across most of these countries, there simply isn’t room for expenditures to grow the way they have over most of the past forty years. At the moment, the downward pressure is mostly coming from the United States, and there are some countervailing pressures from newer OECD members (Turkey, Israel and Chile all saw double-digit increases) – but even in the medium term this trend looks unstoppable.

But outside the OECD it’s a whole different story, where the country average increase was 8.4%. Now, some of that was due to inflation, which tends to be much higher in these fast-developing countries than it is here. And the average hides the fact that there is movement in both directions: funding drops in places like Ukraine and Pakistan topped 20%. But the big hitters are furiously increasing spending; in India, a 21% real increase (albeit from a pretty tiny base) and in China it’s 10%. Small players aren’t being left behind, either; Singapore’s increase was close to 30% last year.

Now, we don’t need to get all Lou Dobbs about this. It’s not as though the rise of universities in other parts of the world poses some sort of existential threat to our own schools – the spread of education and knowledge like this is a great thing. But let’s not ignore some of the obvious ramifications. It means increased competition for top faculty, which will drive up prices at the top end of the scale. It means both increased sources of and competition for prestige, which will lead many universities to expand their activities into some very distant parts of the world.

It’s not going to all happen overnight. Many of these countries are starting from a very long way behind our universities in terms of resources, so even with very large annual increases, it could be a couple of decades before they reach western levels of expenditure (and because prestige is a stock rather than a flow, it will take another couple of decades again before institutions in these countries will be seen as broadly comparable to ours).

It will happen; it’s just a question of time. Many more years like 2011, and it could happen a lot sooner than you think.

May 07

The Deal

After twelve weeks and a marathon negotiation session on Saturday, it appears the bitter Quebec student strike is approaching its end.

The deal:

- Tuition increase of $1,778 over seven years ($127 per semester).

- Eligibility for student loans and grants expanded over and above existing plans.

- A provisional committee on university finance will be struck, consisting of six university representatives, four student representatives, two union reps, two business community reps, and one representative each from the province’s CEGEPS and the education ministry, plus a president, named by the minister. The committee will examine university expenditures on marketing, management personnel, travel and real estate, and is expected to report by December.

- Savings the committee identifies will be reduced from the ancillary fees universities charge;

- For the fall semester, ancillary fees will be reduced by $125 – the amount tuition will increase, meaning the net cost to students will not increase. (An idea credited to, of all people, Gilles Duceppe’s son.) However, should the committee not find savings, this money is payable to the university.

Given that all sides declared this a “win-win” deal, it’s worth examining what each gets out of it.

The Government

The headline win: tuition is increasing. The ancillary fee deal is clearly of secondary importance. Given that the latest poll had 68% of Quebecers supporting them (up from 61% at the end of March), the Liberals couldn’t budge on tuition.

Student Groups

Their strike led to important student aid concessions listed earlier as well as gaining students a formal role in reviewing university finances (though the figure of $189 million in savings FEUQ and FECQ have “identified” seem to have been pulled out of thin air). The students’ strategy was to purposefully delay the net tuition increase until after the election. FEUQ President Martine Desjardins emphasized Saturday the plan to make tuition an election issue and bank on a Parti Québécois victory. A very high-risk strategy.

Universities

Though they may not net any new funds for a while (and will be irritated by outsiders dictating management decisions), universities get the tuition increase they lobbied for, a stable funding arrangement for the next seven years (for now) and, eventually, more operating revenue – obviously preferable to a tuition freeze.

Quebec Students

No net increase until winter 2013 at the earliest. Substantial improvements to financial aid. And a fee increase that’s stretched out over a longer period of time than initially thought. It’s hard to imagine a tuition increase with a softer impact.

Our take? Everybody will walk away happy enough, which is good in the short term (assuming the deal is ratified by student associations, which is still iffy). But make no mistake about it, that finance committee is fertile ground for a number of very ugly battles to come. Having a debate about the kind of university system you want (which as we’ve previously said is worthwhile) is one thing; having accounts picked over by an external star chamber is another.

 

May 04

Student Stereotypes in Four Graphs

We all know about stereotypes when it comes to students: computer science students resemble characters from The Big Bang Theory, arts students are inordinately fond of hackie-sack, etc. But is there any truth to this?

Well, there is some, as it turns out. About a year ago we asked our CanEd Student Research Panel a series of questions about their attitudes toward academic challenges. The answers we got were interesting because of the way they broke down by field of study. Below are the answers to four questions about academic challenges for the six fields of study for which we had more than 100 observations.

Figure 1 Strongly Agree that “Being Challenged in School is Important to Me”

Slightly fewer business students say they think being challenged in school is very important to them, but not a huge difference across fields of study

Figure 2 Strongly Agree that Classes that Require Application of New Concepts and Techniques are Enjoyable

Engineers like trying new things, business and humanities students less so.

Figure 3 Agree and Strongly Agree that Courses that Require Long Hours of Work are Enjoyable

Are you getting the picture yet? This last one’s my favourite.

Figure 4 Strongly Agree that “I Prefer to Take Courses where the Instructor is an Easy Marker”

In sum, there are moderate but significant differences in academic outlook among students in different disciplines. It’s possible that these traits were acquired while in school, but I would tend towards the view that different academic disciplines simply attract different kinds of students (recall this little beauty from February?). Which in turn makes you wonder if some of the cross-disciplinary differences in learning outcomes that Arum and Roksa found in Academically Adrift  were less of a reflection on the kind of education students receive in different disciplines than and more a reflection of systemic differences in learners’ personalities.

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