HESA

Higher Education Strategy Associates

February 26

A More Productive Debate on “Differentiation”

One of the big topics over the past three years in Canada – and particularly in Ontario – has been that of “differentiation”.  The idea of differentiation as a boon to the university system essentially traces back to Adam Smith.  Just as in Smith’s hypothetical pin factory production can be increased multi-fold, by having different workers work on different aspects of pin-making, so too can a university system  be made more productive by having institutions concentrate on different aspects of higher education.

It also gains some moral force from the observation that universities tend towards isomorphism.  It’s not that everyone wants to be Harvard or U of T, exactly (though there is a bit of that), but rather it’s that every institution has a drive to make itself more organizationally complex and more research-oriented.   And collegiality makes it difficult for institutions to actually prioritize some fields of study over others: the number of institutions that are genuinely excellent in some fields of study, and yet can’t actually say so out loud, or do anything to promote these areas, for fear of offending other internal constituencies, are too many to count.

So, OK, specialization.  But in what?  The most highly counterproductive aspect of the current debate on differentiation in Canada is that it tends to revolve on only one possible aspect of differentiation (research vs. teaching), and it assumes that the relevant unit of analysis is the institution, as opposed to the discipline.  Neither of these should be a given.

To see how the debate could be re-cast, have a look at how the Dutch have handled the differentiation issue.  A few years ago, the Government struck-up a Committee on the Future Sustainability of the Dutch Higher Education System, whose report was entitled Threefold Differentiation – it’s a very smart plea for greater mission differentiation, without creating a zero-sum game around research.

The key difference between the Dutch and Canadian approaches is the idea of institutional “profiling”.  Institutions can specialize in lots of different ways: the kinds of students it accepts, its involvement in knowledge exchange and interactions with business, its degree of orientation to internationalization and/or regional engagement.  It can also specialize somewhat in terms of its research profile (smaller institutions, for instance, might have doctoral programs in arts or science, but not both).  Thus, their views of differentiation are significantly more multi-dimensional than ours. And more dimensions = more ways for institutions to find a “win”.

A second key difference between the Dutch and Canadian approaches is the idea of performance and incentives.  There’s no pretence in the Netherlands that you can pull institutions away from isomorphism without some form of reward: institutions need to be rewarded for their profiles.  (In Canada, of course, the only incentives government provides is to be big and research-intensive.  And then they whine about institutions choosing not to differentiate themselves. Go figure.)  But the Dutch are equally clear that these rewards need to be based on transparent and measurable outcome indicators.  In Canada, we’ve sort of grasped the indicator bit, without necessarily tying it to rewarding specific profiles.

In short, there are specialization gains to be had through greater differentiation.  But as long as we define differentiation as being specifically about research vs. teaching, my guess is that we aren’t going to realize them.

February 25

The War on Small, Niche Public Universities

Governments love universities that make a niche for themselves.  ”How delightful“, governments say.  ”Oh, we’re so proud of you for not following the herd and trying to be just another big multi-versity.  You go, girl”.

They say all of this, of course, until it comes time to actually fund them, at which point governments effectively flip small, niche universities the bird.  In practice, governments behave as though they hate small universities with a passion.

There are two separate problems here.  The first has to do with the difficulties governments have with “small”.  Funding formulas tend to push institutions towards “average” costs.  But since most universities in Canada are big, “average” costs usually means the costs that large institutions with major economies of scale can achieve.  Small universities have to survive on the same amount, but without the economies of scale.

At one level, maybe that’s OK.  Smaller institutions probably do less research, and because of that they can pay their staff somewhat less.  And maybe there’s an argument to be made that it’s more important to run higher education systems efficiently than to have well-funded small institutions available to those students who would thrive in them.  But then why not let them charge more for their services?  But of course, no government will go that extra simple step.

The second problem has to do with niches.  These sound great, until you realize that niches, by definition, are unstable.  Change just one or two external parameters and suddenly a species can no longer exist .  So, all those institutions that bet heavily on education over the last decade, with the encouragement of lots of government funding?  Now they’re getting hammered by governments that no longer think their niche is worth funding (Law is in a similar situation, different only in that it was privately, rather than publicly, funded).

Now, imagine you’ve been trying to be both a small university and a niche university over the last few years.  The government won’t pay properly for your non-niche programs, and suddenly decides it dislikes the niche you’ve chosen (or, alternatively, the market for that niche suddenly disappears).  You’re screwed, basically.

This is why most small universities become medium or even large universities: in our system, size = more secure income streams.  Utilitarians might say “so what – what’s wrong with scale?”  But the problem for most of these institutions is that their Unique Value Proposition is being small.  Small doesn’t scale.  When you force these institutions to grow, there’s a real danger that you force them to be something they were never intended to be.  And that’s a loss of diversity to the whole system.

What’s really weird is that after all this, governments still wonder why there’s such skepticism about differentiation.  But on that, more tomorrow.

February 24

The Best Argument for Free Tuition

As you’ve all probably noticed over the years, I have little patience for most arguments for free or reduced tuition.  There’s not much evidence it improves access.  Sure, it reduces costs for poorer students, but there are cheaper and more progressive ways to do that than to simply provide aid to all, regardless of ability to pay.

The argument in favour of charging fees is threefold.  One is about fairness: people who gain a personal advantage from using a service (and private returns to education are still excellent, no matter what the “hell-in-a-handbasket” crowd says) should contribute towards its upkeep; the “positive-externality-of-education” argument is correct, and leads to the conclusion that there should be some public support of higher education, but not that it should be exclusively supported that way.  The second argument is about equity: this is a service used disproportionately by the wealthier elements of society, and so using public money for it is always problematic (unless, that is, you adopt the ludicrous arguments espoused by Hugh McKenzie, and the Canadian Centre for Policy Alternatives, that it’s still progressive to give more services to rich people on the grounds that they pay more taxes).  The third argument is simply pragmatic: there are masses of people who are affluent and willing to pay for higher education.  Why would you punt that?

The zero-tuition folks really only have one semi-effective rejoinder to this, which is that most of this is also true of secondary education.  Why free education for one and not the other?  The answer, of course, is that secondary education is compulsory and post-secondary is not.  But this answer is getting less obvious all the time.  A large majority of young people now do get some kind of post-secondary education, and we’re getting closer to universality all the time. If higher education is becoming universal, would it not make sense for at least some of it to be free?  Not all of it, mind you: the fairness and equity rules above would still apply.  But if it were introduced for higher education programs where the students aren’t disproportionately drawn from upper SES groups, and where the returns to education are fairly low, free tuition wouldn’t violate those rules.

An interesting movement is developing along these lines in the United States, with calls from both the left and the right to make two years of community college free.  In fact, the Governor of Tennessee (long a low-tuition state, like much of the South and West – it’s a legacy of 1890s populism) has put such a proposal in his State of the State address. Since US associates degrees tend to draw lower-income students, and lead to less well-paying jobs, it meets the fairness and equity tests.

Something similar wouldn’t make quite as much sense in Canada because more of our college credentials are longer, more specialized, and have high private rates of return; you wouldn’t want to do this with Sheridan’s animation programs, or SAIT’s pipeline technology programs, for instance.  But college ECE or pre-apprenticeship programs?  Free tuition there would be significantly more progressive than, say, grants to university students from families making $160,000.

Worth a conversation at least.

February 21

What a Trudeau Education Policy Might Look Like

So, Justin Trudeau says one of his major policy priorities is to “put more money into education and training”.  As with all Liberal policies these days, it’s short on specifics, though whether that’s because he wants to participate in policy-making, or because he has either no clue/intention of giving Tories a target to shoot at, is unclear.  With the Liberal policy convention underway, it’s an opportune time to think about how a future Liberal government might deliver on this promise.

One thing Trudeau pere knew very well is that education is a provincial responsibility.  Period.  If you can find it, read PET’s 1957 essay, “Grants to Quebec Universities”, in Federalism and the French Canadians, which begins with him saying: “I agree with Duplessis on this”, and mostly consists of him savaging the rationales centralists offer for Ottawa’s intrusion into provincial jurisdictions.  In office, Trudeau killed the direct federal university funding scheme that St. Laurent created, and replaced it with block grants to provinces (then known as “Established Programs Financing”, now known as the Canada Health Transfer and the Canada Social Transfer).

Let’s start by assuming that Justin is closer to his father’s views on this than are most Liberals: what tools would he then have for spending on education and training?  It’s a shorter list than you’d think.  As far as K-12 education goes, there’s practically nothing.  At best, you could boost provincial budgets by offering an infrastructure program to build/repair schools, thus taking those expenditures out of provincial hands.  That’s politically tricky – Alberta, BC, and Ontario, with their growing suburban youth populations, would scoff at most of this – but it is do-able.

At the university level, the most obvious way to get money into universities and colleges would be to pump more money into the CST, and fully designate it as being for PSE.  The problem, of course, is that there there would be absolutely no accountability over this – provinces could spend the lot on a weekend bender with Charlie Sheen if they wanted to – but it would be simple, quick, and most provinces would probably feel the need to make a show of spending some extra money on PSE as a result.  The other two traditional areas of federal expenditure – research and student assistance – would be easier realms in which to create identifiable boutique programs.  Hopefully, Trudeau would refrain from this, though.  An over-large institutional focus on research doesn’t obviously help “education” (there might be a separate case for research in and of itself, but we shouldn’t pretend they are one and the same, and one certainly shouldn’t be funded by initiatives for the other), and as I noted yesterday, there’s already too much boutiquery in student aid.

Skills training may offer some of the most interesting terrain for policy initiatives.  Axing the Canada Jobs Grant, and putting the money back into programs provinces actually seem to think work, would be a crowd pleaser, as would an infrastructure program for colleges to deliver better skills training.  Most ambitious of all would be to work with provinces on a top-to-bottom overhaul of apprenticeships, starting by decoupling federal support to apprentices from the EI system – a feature that perpetuates our deeply unfit-for-purpose system of block release training.

In short: there are some good options, but apart from skills training they aren’t very headline-worthy, and won’t appeal to many Liberals.

February 20

Why Can’t We Just Means-Test Tuition?

A couple of weeks ago, I had an exchange with a colleague who couldn’t figure out why tuition wasn’t means-tested.  It just makes sense, he said: make the rich kids pay lots of tuition, and make the poor kids pay very little.

I argued that it was means-tested.  If you didn’t have means, you’d get a grant, which would reduce tuition (though I allowed that this was done a lot less effectively than it could be, given how poor our targeting system in student aid is).  ”OK”, he said, “but why not cut out the middle-man and just vary tuition directly according to a student’s parental income?”

Now, there’s something to be said for this.  Clarity, for starters.   As we noted yesterday, there are already tens of thousands of low-income students attending for free, and nobody seems to know it.  If we could just re-package aid and fees into a single, easily understood figure, that clarity might go a long way to improving access.

It’s also not unprecedented: in 1998, when tuition fees were introduced in the UK, the fees were made variable based on income.  Students from families making over £30,000 were charged £1,000; those from families making between £20,000 and £30,000 were charged £500, and those from families making less than £20,000 were not charged anything at all.  Similarly, in a couple of the German states that introduced tuition after 2006, waivers were instituted so that poorer students paid nothing at all.

There are basically two reasons why we don’t do this in Canada.  The simple, technical reason is that in most parts of Canada, universities are still notionally in charge of tuition and admission, and universities don’t ask students what their income is.  In the UK, government agencies outside the university were in charge of both, so it was easy enough to achieve.  For us to do that here would require taking away at lest some institutional autonomy and/or making sure that whoever makes the admission decision also knows a student’s family background.  Ontario’s provincial university application centre (OUAC) might be the kind of organization to do this, but elsewhere in Canada it would be more difficult, as each individual institution would have to tool up a separate income-assessment system.  Not impossible, by any means, but difficult.

But the bigger issue is simple raw politics.  If government grants were folded into a single tuition price, how could the federal government get credit for all its tax credits and Canada Study Grants?  How could Ontario get credit for its Utterly Inane 30% Tuition Rebate?  And, depending on how rigid you wanted to be about this one price rule, it might also prevent universities from using their student aid and scholarship budgets strategically.

In short, the barriers to simple, easy-to-understand means-tested tuition systems are less technical than political.  It’s a case of the need to be seen to do good trumping the need to actually do good.  Sad but true.

February 19

Free University and We Don’t Even Know It

I’ve long believed that post-secondary education should be free for bright, poor kids.  And although there’s room for differences over what constitutes “poor” and “bright” (I’ve got a strict-ish definition of the former, less so the latter), it seems to me that this is a sentiment with which most people agree.

But here’s the thing: in actual fact, there are an awful lot of bright poor kids already going to university for free, and nobody seems to notice.  The problem is that we just don’t package it in a way that people recognize it as being free.

Take Quebec.  What’s that?  Lowest fees in the country, but kids still have to pay?  Pshaw.  Over 100,000 university students there receive grants.  The median grant is $4,500.  Average tuition and fees is $2,000 or so.  A quick look at statistics from Quebec Aide Financiere Aux Etudes suggests that at least 40,000 students are receiving more money from government than they are paying to go to school.  Unless you’re deliberately trying to be obtuse about it, that makes 40,000 people getting a free university education.

Ah, you say.  But what about mean old Ontario, where tuition and fees are now up around $7,000.  Well, actually, there are a substantial number of students getting free education there, too.  Thanks to the Ontario Tuition Grant, full-time dependent students from families making under $160,000 (yes, the limit’s an utter travesty – we’ll discuss it another time) get $1,730/year from the government.  Those from families with income under $40,000, or so:  they’re eligible for another $1,600 from the Canada Student Grant.  Add in another $2,300 or so in education tax credits, and we’re up to $5,600.  If the student is doing well at school – say, high 80s – that can qualify them for another $1,500 or so in entrance awards.  That’s $7,100 in non-repayable government aid – more than what they are paying in tuition.

Or, another combination: Imagine the same student from a family earning roughly $60,000.  Probably wouldn’t get the Canada Study Grant, but would get everything else, meaning they’d be receiving about $5,500.  If they left home to go to school, the likelihood is that they’d get a loan in the $9,000-$10,000 range – of which anything over $7,140 would be forgiven (that is, turned into a grant).  So, again, free tuition.

I could go on province-by-province (Saskatchewan and Manitoba do pretty well in this kind of accounting), but I’ll spare you. There are no numbers that would allow us to say for sure how many people are receiving this kind of money.  For what it’s worth, my guess, based on my knowledge of student aid in Canada, is that the number is probably in the 100-150K range, but it’s hard to know for sure.

You’d think that this would be one of those things about which everyone – especially provincial governments – would be standing up and shouting to the rafters: it’s a heck of a good news story.  And yet, absurdly, nearly no one even knows its even happening.

How did this state of affairs come about?  More tomorrow.

February 18

The Canada Apprentice Loan

One of the signature pieces in last week’s budget was the Canada Apprentice Loan (CAL).  Very few details were given out at the time (see p. 70 in the budget, here), but what details did emerge suggest two things to me: first, that the idea went into the budget less-than-fully-baked; and second, that it could turn out to be a fairly significant political mess.

The proof of this being less-than-fully-baked is the lack of detail surrounding the idea.  While the scheme seems to be about putting money into apprentices’ hands during block training periods, it made no mention of how this loan would mesh with the significant amounts of EI money apprentices already receive during those periods (training periods are considered a period “out-of-work” under EI, so apprentices are eligible for EI during this time, and receive payments equivalent to 55% of their normal working income as a result).  Does it replace the EI money?  It seems unlikely that the Tories would try a bait-and-switch, but the silence about integration suggests the issue hasn’t been thoroughly thought through.

But if it’s additional, what’s the $4,000 for, exactly?  Living costs? That would put the amount available to them over 100% of their wage rates. If that happens, all hell will break loose on the Canada Student Loans front.  CSLP doesn’t work on a wage-replacement principle, it works on an allowance principle: that is, it assumes that the purpose of student loans is to top-up students to a particular maximum, based on living arrangements, presence of children, and local cost of living.  For a single student living away from home, that probably means about $1000/month.  But apprentices earning $16/hour in their job already receive about $1600/month in EI funding.  If you lend this better-off group more money, what possible excuse do you have to say no when student groups come asking for similar treatment for CSLP?

Another possibility is that the loans are specifically for training costs.  But then why make it $4,000?  A Canadian Apprenticeship Forum paper from 2007 (see: here) showed that average training costs – including tools and apprenticeship registration fees – were just $1300, and that 50% of apprentices paid less than $800.  Nothing’s changed significantly since then, so why the super-high maxima?  Again, setting maxima well above actual need is going to set off a clamour for similar treatment in the CSLP.

Here’s my take: the current federal government is very fond of apprenticeships.  But the problem is that most of the levers of apprenticeship policy are in the hands of the provinces.  The only thing the federal government can really do is pump money into apprentices’ hands in the hope that the extra funding will make more people want to be apprentices.  That’s probably about as deep as the thinking went on this file before it went into the budget.

It’s possible it will get better upon implementation (as the recent ruckus on income-splitting shows, at least some of the Tory cabinet seem able to re-evaluate policy in the face of evidence), but as it stands right now, the roll-out of the CAL could be more problematic than the federal government seems to think.

February 14

Chinese Higher Education: Where to From Here?

So, now that China has 30 million students and a half-dozen “world class universities”, where to next?

Well, the first thing to note is that the system hasn’t finished growing.  While the major metropolitan areas of the north and centre have PSE attendance rates that approach those in Canada, outside of those very small areas, the average is less than half that.  Even in fairly prosperous coastal provinces like Zhejiang and Guangdong, participation rates are less than half of what they are in the rich metropolitan zones.  Now, some of the growth in participation rates will be taken care of via demography.  China’s 20-24 age cohort will shrink in size by about a third between 2011 and 2016 thanks to the One Child Law (demographically, think of China as just a really big Cape Breton), so participation rates will rise significantly even if China does no more than stay steady in terms of enrolments.  But it’s still a safe bet that in most of the country, we can expect more universities to open, and existing second-tier institutions will need to be expanded.

Participation rates by Region, 2008

Image001

 

 

 

 

 

 

 

So with demand for education set to rise, and the country still struggling to absorb all the graduates from the past few years, I suspect the bigger issue going forward for China is going to be quality.  China’s worked out how to expand its system.  What it hasn’t done quite yet is worked out how to spread excellence beyond its top research schools (the Chinese equivalent of the Ivy League is the C-9: Peking, Tsinghua, Fudan, Zhejiang, Nanjing, Harbin Tech, University of Science and Technology of China, and the Jiao Tongs at Shanghai and Xi’an).

And even at these schools, some of the excellence is only skin deep: they might be able to butt into world league tables based on publication counts, by doing things like requiring all graduate students at 985 universities to get two publications in Thomson ISI-indexed journals (seriously… can you imagine doing that here? The system would totally collapse), but those articles’ citation counts are much lower than at large western universities, indicating that the rest of the scientific world doesn’t think they’re up to much.  But changing that means changing academic cultures – some of which have become sclerotic and corrupt (this stinging editorial in Science magazine [link is to an ungated copy] by two Chinese academics who had returned home from academic careers in the US, Shi Yigong and Rao Yi, is one of many pieces of evidence that could be cited here).  As we know here in North America, there is very little that is harder than changing academic cultures.  If China works out how to fix that problem, then there’s genuinely no reason it won’t lead the world at pretty much everything.  But I have my doubts.

The outlook in China then is pretty simple – mostly continuations of recent trends, with a greater emphasis on quality and employability.  And until they get that sorted out, there will continue to be opportunities for western institutions seeking to poach those who can’t get into 985 universities.

February 13

“Comparability” in Salaries

Come salary negotiation time, every faculty union wants to be paid based on what “comparable” universities are getting.  It was a huge point in the UNB strike, it continues to be one in the Mount Allison strike, and presumably it will be one at U Winnipeg as well (the strike deadline is February 24).

There are three problems with the notion of “comparability”.  The first is obvious: finding genuinely comparable institutions.  On what, exactly, do you compare?  Size? Mission?  Teaching loads?  Research output?  There are number of plausible metrics here, but when choosing “comparable” schools the metric for comparability is never entirely transparent.  And the problem is that in the absence of rigorous metrics, faculty unions might simply try to find official “comparators” that are significantly more prestigious (and better-paid) than themselves, because then they’ll look worse by comparison, and hence be deserving of a larger raise.  Cue round after round of salary gains.

There is, of course, a simple way to stop this kind of gaming: institute a rule that if one institution is going to be considered a comparator to another, both sets of faculty unions must agree.  That is, for the faculty association of (for instance) UNB to be permitted to claim that Queen’s and Waterloo are “comparable” institutions for the purpose of salary, the faculty associations at Queen’s and Waterloo would: a) have to agree that UNB is a comparable institution; and, b) include UNB as a salary comparator in their negotiations.  This form of gaming would stop PDQ.

The second solution is slightly wonkish, and has to do with seniority and salary grids.  Let’s say two institutions are genuinely indistinguishable from one another and have identical pay grids, but at one the staff tends to be older and have more years of employment, and hence are paid better due to seniority. Could the university with the more junior staff claim the need for a raise because of “comparability”?  Real-life example: average pay at every single rank at UNB is about $10K behind the equivalent at Dalhousie, but because UNB staff are on average much more likely to be full profs on higher salaries, the average salary of all profs across each institution looks about the same.  Leaving aside the institutional comparability issue for a second, UNB profs have a legitimate argument about being underpaid.  But if they get a raise, then the administration has a legitimate concern about overpaying in total for professorial services.  See?  Trickier than it looks.

But say these two technical problems are solved: say you’ve found genuinely comparable universities and you can get over the problem of staff heterogeneity. There’s still going to be the problem of affordability.  A Mexican or Costa Rican university might declare itself comparable to a Canadian one, but that doesn’t mean it can afford to pay its staff on a similar basis.  Similarly, within Canada, not every institution is equally well-funded.  McGill and Alberta are comparable institutions in many respects, but one’s in Alberta and one’s in Quebec.  No prizes for guessing which one’s profs make 10% more than the other, on average.  And striking about it, even if that were something McGill profs ever did, wouldn’t change that one bit.

February 12

HESA’s 2014 Federal Budget Commentary

Hi all,

The team at HESA towers was up late last night putting together – as we do every year – a review of the Federal Government’s Budget measures, as they relate to higher education and training.  Far from being the snooze-fest many had predicted, it turned out there was a whole bunch of crazy stuff in there, from vast but slightly hazy research funds, to largely inexplicable apprenticeship loan programs.  You can read all of our budget coverage, HERE. Still not 100% sure what to make of it all, to be honest: but we’d love to hear  your reactions.

 

Ciao,

Alex

Page 18 of 71« First...10...1617181920...304050...Last »