HESA

Higher Education Strategy Associates

October 24

Scenario Planning Outside Ontario and Quebec

After a one day hiatus, we’re back to the topic of scenario planning.  You’ll recall that on Wednesday, I showed some pretty pessimistic projections for what could happen to university financing in Quebec and Ontario.  Today, I have some better news for people in seven of the eight other provinces: your futures aren’t nearly so disastrous.

When scenario-planning at the provincial level, four things matter:

1)      The forecast for nominal GDP.  Over the long-run, government budgets tend to remain pretty stable with respect to the size of the economy.  And within the budget, the share to any given field of expenditure – with the signal exception of health – stays pretty constant, too.  So, a rough rule of thumb for what’s going to happen to government income is: it’s going to stay in-line with projected nominal GDP growth.  For this reason, it’s much better to be a university in a province like Alberta, where average nominal GDP growth over the period 2014-2016 is expected to be about 5.5%, than it is to be Memorial in Newfoundland, where the projected figure is just 2%.  In most provinces, though, the outlook is between 3 and 4%.

2)      Deficits. The only reason growth might not be equal to nominal GDP growth is if there’s a deficit to get rid of.  Here, there’s good news: BC, Alberta, Saskatchewan, and Newfoundland are essentially deficit-free.  Universities in other provinces are going to find the going somewhat tougher.

3)      The percentage of total income coming from fees.  In all provinces, nominal increases in fee income is outstripping increases in GDP; in other words: fees are becoming more important everywhere.  Obviously, this is better news for provinces that are already relatively fee-dependent than for those that are not; a 5% increase in fee income means a lot more in Nova Scotia (where fees make up almost half of all income) than in Newfoundland (where they make up about 15% of income).  In this sense, the Maritime provinces and BC are in better shape than the rest of the country.

4)      Whether salary mass is rising faster than total income.  If so, you’re in deep trouble.  It’s not true in most provinces; but it’s clearly been the case both in Alberta and Newfoundland over the past few years.

If we simply multiply out expected increases in nominal GDP, and assume that current trends for tuition revenue growth remain stable, we get the following projections for income:

Figure 1: Projected Real Annual Operating Income Increases, Based on Stable Increases in Tuition Revenue and Government Revenue Increases Based on Nominal GDP

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(*indicates a province with a significant budget deficit, meaning institutional income will likely be lower than indicated)

Alberta looks set for a good few years, with real income increases of 4.5% or more, while Saskatchewan and BC look set for annual increases of 3%, or so.  Manitoba and the Maritimes are, in theory, set for increases of 2-3%, but given that all four provinces are carrying deficits the strong likelihood is that their governments will not increase their budgets at the same pace as nominal GDP, and so actual results will be somewhat smaller.  Newfoundland, where projected economic growth is shaky, and the university has little in the way of tuition income to fall back on, looks in deep trouble.

Figure 2 shows what happens if current rates of salary growth are subtracted from growth rates in income.  Provinces with positive numbers can – assuming their income numbers hold up – afford current rates of salary growth, while provinces with negative numbers cannot.  Nova Scotia and New Brunswick appear to have the most sustainable numbers, but recall that both their governments have deficits to eliminate, so in fact their position is likely not nearly as good as this graph makes it seem.  Prince Edward Island and Manitoba are headed for trouble, and Newfoundland’s prospects resemble the Titanic.

Figure 2: Difference Between Annual Projected Percentage Rate of Operating Budget Growth and Current Annual Percentage Rates of Salary Mass Growth

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(*indicates a province with a significant budget deficit, meaning institutional income will likely be lower than indicated)

To sum up:

i)        Generally it’s better to be in the west than the east

ii)       Memorial University in Newfoundland is in for one heck of a shock pretty soon.

iii)     Most provinces appear to have relatively stable finances if you assume continued growth in tuition revenue, which implies continued international student numbers.  It’s not at all clear how stable an assumption that is.

We’ll wrap-up this topic on Monday, so stay tuned.

October 23

Where the Questions Are

I had planned to continue on today with my series about operating budgets by taking a look at some scenarios for Central Canada, but I’ve been on the east coast for work the past couple days, and so that post will have to wait.  We’ll get back to it shortly, I promise.  But for now, let me turn to something I’ve been thinking about lately.

One of the maddening things about many discussions that concern higher education and business is the crudeness of many popular views on their relationship.  Mostly, we hear about how business’ role is to “contribute” to higher education, either via taxes, or philanthropy, or both (depending on where you are on the political spectrum).  Often times, the role of business is to hire “our” graduates (and if that’s not happening then let the agonized introspection begin).

And while those things are all true, what these analyses actually miss is the true role of business, particularly with respect to science: it’s a huge, incomparable reservoir of questions to be answered, and problems to be solved.  Of course, people get this at the level of applied research – by definition, when companies engage with higher education on applied research, it’s to solve specific problems – but they have trouble understanding when it comes to “pure” research.  Partly, that’s due to rhetorical confusion – the wording of “pure” research (a rhetorical device of Vannevar Bush designed to keep money flowing to universities after World War II) implies that interaction between scientists and pretty much anyone else will “contaminate” research.

But a quick history of 20th century science will show you that this is nonsense.  Much of Einstein’s early work was hugely influenced by being immersed in commercial technology at the Swiss patent office.  Quantum physics was an accidental discovery made by German scientists who were trying to design more accurate instruments to measure very small weights.  The Manhattan Project wasn’t about meeting commercial needs, but as research goes, it’s about as applied as it gets.  Etc., etc.

The point here is that there are parts of commercial science that are up banging against the frontiers of the unknown just as much as university science is: just think of what was discovered at Bell Labs, or what Craig Ventner has accomplished.  It’s where the rubber hits the road: where the most advanced academic science gets put into practice and tested in real-world conditions.  Under commercial pressure, commercial science looks for every little advantage when learning how to cure disease, design better buildings, and develop new technology.

Even Vannevar Bush didn’t believe “pure” research happened in a vacuum.  Indeed, the justification for “pure” research is always that someone, somewhere, will find an application for it.  If you don’t have an inkling of where your “pure” research findings might actually be applied someday, you probably aren’t conducting your “pure” research in a way that’s very effective, because you’re not asking the right questions.

And this is the real reason universities need to engage with industry: it’s where the best questions are.  And you’re not going to get top-notch research without top-notch questions.

October 22

Scenario Planning for Ontario and Quebec

Yesterday, we looked at data from 2004 to 2012 to examine income and expenditure trends for Canadian universities, and found that salary and operating budgets were both moving up at a pace of around 4.4% per year in real dollars.  Today, I want to do a bit of scenario planning for the country’s two largest provinces using the same technique of focussing just on operating grants, tuition, and salaries. 

Ontario

Ontario sits in between two divergent trends – real public funding has been stable or declining for many years, while tuition revenue has been increasing by about 8% per year, thanks mainly to the influx of international students.  As a result, since 2009, operating budgets have been increasing by 3.8% per year, which has been enough to deal with salary mass rises of 3.9% per year.

But can Ontario keep up that pace?  We’re already at the start of a phase where domestic enrolments are declining, and at best government income is going to decrease by about 1% per year in real terms (according to the government’s own budget papers, future increases will be 1%, less than the recent norm of 2%).  So a best guess at what’s going to happen is that government income trajectory will remain negative, and the 8% per year budget increases will start to trail off somewhat.  If this happens – and of course this still depends on ever-increasing international student numbers, which is by no means assured – then current levels of salary mass increases can be tolerated.

But what if things don’t go as planned?  What if international student numbers don’t offset losses from declining domestic student numbers?  What if the Wynne government decides to make one significant cut (say, 5%) in budgets this year to finally get the deficit under control, now that they have a majority government?  In this case, assuming no change in salary mass trajectory, salaries would rise to 82% of combined operating grant and tuition, from 76% today.  That may not sound like much, but let me turn those words around and phrase it another way: in order to accommodate current levels of growth in the salary budget, in a pessimistic scenario, the non-salary portion of the operating budget – light, heat, scholarships, lab supplies, etc. – would need to be cut by 25%.

Figure 1: Budget Scenarios for Ontario, 2012-13 to 2017-18

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So the quick summary here is: If you want salary mass increases to continue, find ways to bring those foreign students in.  Otherwise, you either have to accept massive cuts to non-salary areas or a cut in salary growth.

Quebec

The situation in Quebec is both more straightforward and more problematic than in Ontario.  There, the government has already signalled it will cut funds in nominal terms next year in order to balance the budget.  The only question is what happens afterwards – and I have assumed here that spending will rise again at the rate of projected GDP growth.  Tuition revenue growth was never as high in Quebec (5% per year in real terms) as it was in Ontario, as Quebec doesn’t attract as many international students – there is no obvious reason to think this will change.  On the other side of the ledger, salaries as a percentage of total income is 87% of combined government grants and tuition, compared to 76% in Ontario (if you’re wondering why Quebec universities feel poorer than Ontario ones, there’s your answer right there).  You can come up with other scenarios, of course, but most plausible ones look worse than this.

Put these factors together and you get a pretty ugly picture.  Operating budgets are simply not likely to grow much in the short term, so even a continuation of current salary trends – a 2% real increase per year, or about half what it is in Ontario – would mean salaries rising from 87% of income to 91.4% of income.  Meaning, in short, that without a change in salary policy, Quebec universities would have to cut a third of their non-salary budget in order to make ends meet.

Figure 2: Budget Scenario for Quebec, 2012-13 to 2017-18

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Whichever way you look at it, the numbers are ugly.  Compression of salary mass seems almost inevitable in Quebec; for Ontario to avoid the same requires institutions to continue a not-necessarily-sustainable trend of enrolling ever-increasing proportions of international students.

Tomorrow, we’ll get out of central Canada and see how things stack up elsewhere.

October 21

Operating Budgets

So, yesterday I said it was pretty easy to show what’s going on in university budgets just by looking at operating grants, tuition, and salaries – and so I thought, perhaps, I should practice what I preach.  So here goes:

Between 2004-5 and 2012-13, operating grants from provincial governments rose from $8.27 billion to $10.9 billion (all figures inflation-adjusted, expressed in 2012 dollars), an average increase of 3.5% per year.  But this encompasses two very distinct periods.  Up until 2009-10, the rate was about 5%, whereas since then the average has been 1%.

Tuition income has been rising by 5.3%, but here again we see a two-period effect.  Between 2004-05 and 2008-09 the increase averaged about 3% per year, after inflation; since then it’s been about 7%.  And this when actual tuition rises have only marginally outpaced inflation – the growth has mostly come from increases in fee revenue from international students and professional Master’s degrees.

Put all of that together and you get Figure 1, below, which shows that operating grants increased 4.4% per year, after inflation.  And you thought there was some sort of crisis.

Figure 1: Operating Income at Canadian Universities, 2004-5 to 2012-3, in Millions of $2012 (Source: CAUBO Financial Information on Universities and Colleges)

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So much for income.  What’s going on with compensation?  Well, here’s the simplest way of showing the data.

Figure 2: Operating Budgets and Total Salaries & Benefits at Canadian Universities, 2004-5 to 2012-3, in Millions of $2012 (Source: CAUBO Financial Information on Universities and Colleges)

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In 2004-5, staff compensation was 72%, and while it bounced around between 69% and 74%, by 2012-3 staff compensation was still exactly 72%.  And although the portion of this which goes to academic salaries fell slightly (40.8% to 39.2%), it was offset by a rise in benefits.

Now, it’s tempting to look at all this and say “what the heck is all the fuss about”?  Institutional income and salaries are rising at the same rate, meaning pay rises are affordable and, by implication, staff costs have not increased faster than non-staff costs.  But this is looking backward to a time when institutional income was rising 4.4% per year.  The question is: how likely is it we’ll keep hitting that mark in the future?

Tune in tomorrow for some scenario planning.

October 20

Talking About Money

As I go from campus to campus across the country, one of the things that truly astonishes me is the poor quality of conversation about money.

There are far too many campuses where the administration insists everything is fine, until it comes time to negotiate collective agreements (especially with faculty) – at which point everything is suddenly disastrous.  As a result, faculties are naturally suspicious of these claims.  If everything really is disastrous, they reason, why are we only hearing about this now?

When administrations present claims ham-handedly, this scepticism is fair.  Where problems arise, however, is when faculty unions decide to play on this scepticism, and start spreading (what are essentially) falsehoods about university finances.  “They’re diverting operating budgets to the capital budget!” goes one oft-told story – which seems to be born of unwarranted jumping-to-conclusions about “unrestricted” and “restricted” funds in institutions’ annual financial reports (the unions assume they are equivalent to operating and capital, which they aren’t).  So one major problem we now have is that there is simply no common set of understandings on campus about the financial situation institutions face.  It’s getting to the point where some schools practically need a Parliamentary Budget Office to set out some common ground.

Though people like to make university finance out to be hugely complicated, it’s not.  You can more or less ignore everything going on in the capital and research budgets: for most purposes, the operating budget is what matters.  On the income side, well over 90% of operating budgets come from government operating grants and tuition fees.  On the expenditure side, salaries and benefits make up 75% of operating expenditures.  If salary mass is growing more slowly than operating grants and fees, a pay raise (or some new hires) might be in order; if operating grants and fees are growing more slowly than salary mass, you’ve either got to rein in salaries or find some other stuff to cut.  Many people out there want to complicate this, but that’s really all there is to it.

What institutions need to do is constantly inform their communities about what’s happening to those three things, and invite everyone to think through scenarios for the future.  Think we should all get 3% raises?  How likely is it that government income will rise to match?  If not, is everyone prepared to take on more international students to keep the appropriate amount of money coming in?

Institutions could be publishing something on this every month in their house newspapers.  If they wanted to, they could send something out to all staff every week.  They could invite faculty to help them find better ways to communicate budget information.  Then there would be some shared understanding of financial situations, and the atmosphere on campus would get a lot less tense.  I’d cite McGill here as something of a leader: I’m a big fan of their budget infographics and budget books.  Not coincidentally, McGill seems to be one of the places that has adjusted to declining revenue with the least amount of fuss.

Most faculty know times are tough, and want to be part of the solution rather than part of the problem.  But their goodwill can’t be tapped so long as institutions aren’t more open about finances and financial projections.

October 17

North American Fachhochschule

When trying to make big-picture comparisons between Europe and North America, one big difference always shows up: the existence in Europe of large, Bachelors’-degree-delivering institutions, which are nevertheless not universities.

These go under various names in various places – ammattikorkeakoulu in Finland (which the government translates as “polytechnics”, but which institutions themselves choose to translate as “universities of applied sciences”), Hogescholen voor Hoger Beroepsonderwijs (or HBOs) in the Netherlands, or Fachhocschule in Germany and Austria.   Because they are all “not-universities”, and because they all describe themselves as being in the business of providing a more “applied” type of education than traditional universities, the easy temptation is to compare them to our own “not-universities” – i.e. community colleges.  But this is simply wrong.

The first way it’s wrong is that these European Non-University Higher Education Providers (or NUHEPs, to steal a phrase from my Australian colleague, Andrew Norton) deliver all of their programming at the Bachelor’s level, or higher.  They do not, for the most part, get involved in trades training via apprenticeships.  And – in some countries at least – they also dominate the “continuing education” market for short-course professional post-baccalaureate training.

But while we don’t have Fachhochschule sectors, per se, it is nonetheless true that North America is gradually developing institutions that look a great deal like Fachhochschule.  The most obvious examples are in the United States, where community colleges are starting to deliver 4-year Bachelor’s degrees. (e.g. Florida).  In Canada, some of our newer universities (e.g. Mount Royal and MacEwan) look somewhat like Fachhochschule, though it’s not a comparison either would likely accept.  More eager to claim that mantle would be the colleges that actively refer to themselves as “polytechnics”, which, like their European counterparts, engage in a fair bit of applied research (this is not unknown at American community colleges, but it’s rarer).

What’s interesting about the way this phenomenon is emerging in North America is that it’s piecemeal in nature.  It’s not happening because governments are saying “hey, we need some more professionally-oriented Bachelor’s level programming – let’s create some new institutional forms to deliver it”.  That was always unlikely to happen over here because our universities are considerably less sniffy than European ones about delivering professionally-oriented programming – after all, most of the new programs universities have added in the last fifty years, such as nursing, business, journalism, etc., have been in professional areas.  Instead, what’s happened is that community colleges have taken advantage of universities’ inherent disciplinary conservatism by trying to pick-off new fields of work that are being professionalized (e.g. construction management) and offer degree programs in these, before the universities can get to them.  And by and large, they’ve been pretty successful at that, though in no case are these institutions’ Bachelor programs anything like the dominant credential they deliver – for the most part, they remain providers of sub-baccalaureate education.

Will we ever reach the point where any of our non-university institutions, like European Fachhochschule, are fully engaged in Bachelor’s level education?  My guess is no.  Once institutions reach a certain level of intensity in terms of Bachelor’s degree provision our governments’ instinct will be to “promote” them to universities, as happened in Alberta and British Columbia over the last ten years.  And indeed, that may still happen in Europe – even the Finnish Polytechnics are agitating for legal recognition as universities.

The prestige pull of the word “university” is mighty hard to resist.

October 16

Osgoode’s Income-Contingent Experiment

There’s an interesting experiment developing at Osgoode law school involving the creation of (what is being called) an income-contingent loan system.  Dean Lorne Sossin outlines the plan a little bit in his blog, here.  There are some fairly big details missing from this description, for the quite good reason that the Dean is leaving a number of design features open, pending discussions with the faculty’s students.  But one crucial thing about this program is being obscured by the term “loan”: namely, that no money actually changes hands.

The language of “income-contingency” can make things a bit confusing.  Canada, as I’ve argued before, already has a system of student loans that is substantially income-contingent – but they are income-contingent loans.  What Osgoode is considering is an actual Australian-style income-contingent fee.  This is quite different.

In North America, the way student aid works is that an institution charges students a fee.  A student asks the government for money via student aid.  The government gives the student money, and the student pays the institution.  Technology makes this little money circle move pretty quickly, but the basic point is the money moves through the student’s hands (legally, if not in fact) before it goes to the institution.  The fee is immutable, and the loan contract is between the student and the government.

In Australia, the Higher Education Contribution Scheme works somewhat differently.  There is a HECS “charge” – that is, an amount a student notionally owes.  But there is no loan that goes through the student’s hands.  When the student is admitted, there is simply an agreement that the student will pay that notional amount down over time through his or her earnings.  Most do so, and relatively quickly; others never do because their incomes never reach the necessary threshold to trigger payment (re-payment is not required below about $51,000).  But as the title says, it’s a contribution, not a fee.  The contribution is conditional on future income, and so there is no “loan” in the sense that we understand it.  This is effectively what Osgoode is trying out.

You can see why this idea might be attractive: for those people who are put off by the sticker price, the idea of waiving up-front tuition seems like a pretty good deal.  But there are some legal/administrative issues that might make this more complicated that it appears at first glance.  The most obvious is how to manage repayment.  In Australia, the government monitors graduates incomes and collects repayment through the tax system.  Osgoode, to state the obvious, does not.  If there’s an Achilles heel here, this is probably it.

But that’s not the only problem to solve.  The other issue is how the waived tuition will be reported to the government.  If it is reported as zero, it will reduce a students’ eligibility for loans and thousands of dollars’ worth of tax credits.  Some reduction in public loans probably makes sense since they have less immediate need for liquidity; however, if the students don’t get the tax credits *and* they repay their entire tuition, they would actually be worse off over the long-run.

Hopefully, some solutions can be found to these problems.  Because its nice to see institutions innovating in making professional education cheaper for a change.

October 15

Free Tuition in Chile

Last fall, Michelle Bachelet was once again elected as President of Chile, on a considerably more radical platform than that which propelled her to the same position eight years earlier.  One of her many campaign promises was to make higher education completely free.  This is a Big Deal.  It’s not like Germany, where tuition was only ever a derisory sum; in Chile, tuition payments are equal to 2% of GDP, a larger percentage than anywhere else in the world, outside Korea.

So, ten months on from re-election, how are they getting on with things?  The quick answer is: slowly.  But not for want of trying.

The heart of the problem is a constitutional provision, dating from the Pinochet era, which guarantees Chileans the freedom to make a living however they want.  Effectively, this prevents the government from compulsory nationalization.  In higher education, where the vast majority of institutions are private (though some of them receive public funds), this makes effectuating the Bachelet promise difficult.  So the government has gone down the route of trying to buy private institutions’ obedience by paying student fees on students’ behalf.

Now, the government isn’t stupid; it’s aware that private universities are likely to respond by raising fees.  That’s why they intend to rely on something called a “reference tuition fee”.  This is an invention of the Chilean student aid system, which is the only one in the world that takes the Bennett Hypothesis (i.e. that student aid encourages cost inflation in higher education) seriously.  Basically, Chilean loans programs don’t provide 100% of tuition – they only cover a “reference” fee, which ranges from about 80% to 100% of the actual fee.  The problem is that reference fees vary significantly: the fee for a law program at one institution may be vastly different than at another.  So the first task to make this work is to create a “standard” reference fee – but this is causing enormous problems.  Set it too high and you risk getting fleeced by the institutions; set it too low, and institutions will opt out of the system.  It’s not clear that the government will be able to find such a not-too-hot-not-to-cold fee.

Although the government claims to be able to fund the one-time cost of transferring 2% of GDP from the private to the public sector via new taxes, some independent observers question whether it will, in fact, be able to fully replace the tuition income institutions will lose.  Even if this money can be replaced, it’s not exactly clear where money will come from to fund future system growth or system quality improvement.

More generally, there’s a question about value-for-money in this policy.  Even the proponents of free fees don’t dwell on the promise that the system will become more equitable.  Access to higher education and stratification in Chile are already reasonably good: indeed, their access outcomes look a lot like Canada’s, despite significant fees in both the public and private sector, and the fact that Chile’s (mostly private) system of secondary education creates enormous inequities in outcomes, meaning room for improvement is not great.

Mostly, what proponents of free fees in the Chilean system believe is that “the market should not decide” in higher education.  Which, you know, fair enough.  Only two problems: i) historically, the state tends not to be so hot as a master, either; and ii) in a country that has as many challenges as Chile, is such a goal worth 2% of GDP?  Honestly?

October 14

Free Tuition in Germany

A few years ago, Germany’s Supreme court declared that tuition fees were constitutional, thus paving the way for some states to experiment with fees.  Seven of them (containing over half of all students) did so: Baden-Wurttemburg, Bavaria, Hamburg, Hesse, Lower Saxony, North Rhine-Westphalia, and Saarland.  The fees varied a bit from place to place, but most settled on a modest €500 (Hesse was €1000) – though in some places waiver systems meant that as many as a third of students paid nothing at all.

Gradually, the Länder have reversed their decisions, and this fall the final Länder (Lower Saxony) got rid of fees.  Hence a raft of stories in the last couple of weeks about Germany “going tuition-free”, and questions from some quarters, asking: “could Canada do the same”?  To which the answer is: of course we could.

It would be trivially easy for us to eliminate tuition.  Heck, we already pay net zero tuition, in that what we charge domestic students is more or less equal to what we spend on various forms of non-repayable aid.  If we got rid of all our student aid and scholarship programs we could have free tuition.  It would be a bit rough on low-income students, students with dependents, and college students (who for the most part would lose money on the deal); it also would be a windfall for wealthier kids who go to university, but I’ve yet to meet anyone in the free-tuition camp who seems to care about that.  Of course, that too would make us more like Germany, where direct funding for living costs is pretty meagre: only about 20% of students there qualify for student aid, and it tends to be for far less than what our students get.

At another level, of course, it would be even more trivially easy for us to “do a Germany”.  All we need to do is stop spending so much public money on higher education.  Their expenditure on higher education is about half of what ours is: per-student funding to institutions in Germany is about $10,000 (€7,000); in Canada, it’s about $15,000.  And that has impacts as well: professors there, on average, only get paid about 60% of what ours do.  When education costs are so low, it’s not difficult to keep tuition down.

German participation rates in higher education are also lower than ours, in part because they have no money to accommodate more students.  They could have kept tuition fees and directed institutions to use that money to expand access, but they preferred not to do that.  And so, as a result, the German student body is much more socio-economically selective than ours is – indeed, it is one of the most selective anywhere in Europe, and was so before fees were introduced.

So ask not if we could become like Germany, ask why we’d want to be more like Germany.  Why would we want to spend less public money on higher education?  Why, when the private returns to education are so high, would we want to exempt the beneficiaries from paying for the privileges they receive?  Why would we want to give a windfall benefit to children from wealthier families who quite clearly have the capacity and desire to pay?  Why would we spend all that money when the benefits to the poor – whose net tuition is already close to zero – would benefit barely at all?

Warum, indeed.

October 10

A Miracle in Melbourne

Today, I want to tell you about one of the most amazing stories in recent higher education history.  It happened at the University of Melbourne about eight years ago, and it involved having the country’s leading university completely up-end its entire curriculum – every single degree program – in the space of about 24 months.  Ladies and Gentlemen, I give you: the Melbourne Model.

The basic story is this: A decade ago, Melbourne – like all Australian universities – had a three-year undergraduate study degree, with law and medicine being direct-entry first degree programs (a bit like how Quebec allows direct-entry to these programs for select CEGEP grads), and with a fourth-year acting as an honours year for those wishing to pursue graduate (mainly doctoral) studies.  Then in 2005, a new President (Glyn Davis) came to office, vowing to make Melbourne a more research-intensive kind of place.  In the first draft of a widely-circulated strategic plan, Davis suggested it might be time to “examine the possibility” of moving to, what he called, a “US graduate-school model”, with a much more generalist three-year undergraduate program, followed by graduate/professional studies (it was referred to internally as a 3+2+3 system, which implied a much larger role for Master’s programs).  The proposal was seen as useful both because it might increase research-intensiveness and because a major re-design might force the Melbourne community to think harder about graduate outcomes and what it actually meant to be a “Melbourne Graduate”.

The professional model was by no means the centrepiece of the strategic plan, but it generated curiously little comment, and eventually ended up in the final version in February 2006 without having been subject to much debate.  Having got that far, Davis and his team went for broke: all faculties were told to re-design their curricula in time for implementation in January 2008.

It was at this point, of course, that people freaked.  Much of the Arts faculty thought it was going to be sold down the river – until then, many of their students took joint courses with professional programs (e.g. law/history) and many reckoned that without the professional link, they’d be sunk.  It took a while for it to sink-in that with law now inaccessible for direct entrants (a fact that enraged many parents), more students had time to take three years to study something purely for interest.  History – and most of the rest of the Faculty – in fact did just fine.

One of the most interesting decisions was to limit the number of Bachelor’s degrees being offered to just six – Arts, Science, Bioscience, Environments, Music, and Commerce, and to some extent de-link the degree from the faculties in which professors resided (there were 12 faculties).   These degrees were also designed to have common elements between them regarding program depth and what they called “knowledge transfer” (what we could probably call experiential learning).  They didn’t achieve this goal perfectly, but then, when you’re trying to re-vamp every single degree in a university with 40,000 students in the space of under 18 months, you can tolerate the odd imperfection.

There still remained the trick of selling the idea to government and students.  The former was important for financial reasons because Australia doesn’t fund non-research graduate degrees, so the switch to a “professional” model theoretically put money for all those students at risk – but since allowing the switch didn’t cost the government anything (it would spend what it had always spent on those students) it was a relatively quick sell.  A more serious issue was convincing students that this was a good idea.  After all, students bent on law or medicine would now have to go through three years of undergraduate study first, while other institutions could still offer it to them straight out of high school.  Partly through effective marketing, and partly because of the institution’s own brand power (Melbourne is essentially Australia’s U of T) this fear never materialized.  Applications from top students held up, and in some fields the institution was able to become even more selective.

Try, if you will, to imagine a Canadian institution that could re-jig all of its curricula from top to bottom in less than 24 months, not because a government told them to, but simply because it seemed like a good way to make the university a better place.  I can’t, but I wish I could.  What Melbourne achieved here is proof positive that universities can change, and at speed, if they wish to do so.  And that’s news everyone needs to hear.

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