HESA

Higher Education Strategy Associates

Category Archives: Policy

March 08

The Coming Cost Debate in Ontario

Today I want to think about how the new Ontario system of student assistance is going to play out.  I think there is the potential here for quite an interesting and useful debate; but the timetable is somewhat tricky.

As you will recall, the Government of Ontario is rolling out a plan to provide enough grants to fully offset tuition in most university and college programs for students from families with incomes of less than $50,000.  That’s going to happen by 2017-2018.  But the really interesting thing they want to is what they call “net billing”.  It’s going to roll out sometime in early 2018 for students starting in the 2018-19 year.

Until now, student aid in Canada has worked on the fairly bonkers premise that you don’t need to know anything about your student aid package until after you’ve applied to and been accepted by an institution.  Mostly, that has to do with Canadians governments’ instinct to make things easier for themselves more than for clients.  You see students apply for college/university right around the time that governments make budgets (i.e. January-March).  Governments like to have the flexibility to change programs entirely at the last minute, and so prefer to make students wait until after budget season to apply for the next year’s aid.  What Ontario has done is say “that’s stupid”, and will now accept applications a few months earlier so that students’ aid request can be processed at the same time as their applications.  In effect the province has guaranteed that henceforth changes to aid are going to have to be announced a full application cycle before they take effect.  Result: henceforth, students will see on their acceptance letter what tuition is, what grants they will receive, and what “net tuition” is.

Now in the short term, this will work extremely well for the governing Liberals because by a COMPLETE COINCIDENCE (no, really), the next provincial election is scheduled for Spring 2018.  So tens of thousands of students and parents will be receiving these letters announcing clear, accurate (and low) net prices right before voting.  Amazing how that happens.

But in the slightly longer term – say the first twelve months of a new government, when some serious decisions are going to have to be made about paying off the province’s world-beating debt – there’s going to be another debate.  Because the data that feeds into those admissions letters will be in universities’ hands.  And they are going to show in excruciating detail how much public subsidy is going to people who don’t really need it.

Think about the histograms the Council of Ontario Universities will be able to produce.  They’ll be able to show, by income level and field of study, how little families are actually paying.  And they’ll be able to do it not just in reports for wonks like me, but also to parents in the actual acceptance letters.  “After grants, you pay: $1,000.  Actual cost of child’s education: $18,000.  Degree of subsidy: 94.5%”

For families under 50K, the average payment will be zero (which is about where it should be), and the figure will show 100%.  But families around $100K, whose net tuition payment might end up being $2000 or $2500, might be surprised to learn that they are being subsidized to the tune of 88-90%.  And families at $175,000, subsidized at perhaps 65%?  Hmmmm.

I don’t think many people – other than say, the Canadian Federation of Students and their wilder-eyed allies – genuinely believe that tuition for children of wealthier families should be free.  Most people agree that there should be some sort of net price slope, running from zero for students from poorer families and upwards as family income increases.  There’s no consensus about where the threshold for going above zero is, and no consensus about what the grade of the slop should be.  That’s mostly because we’ve never had data to look at the question properly before. 

But soon we will.  And that is going to kick start a discussion about who might be able to pay more, especially in times where governments are apparently no longer prepared to hand new money to universities and colleges.  Only this time, no one is going to be able to make misleading arguments about tuition and how it affects the poor, yadda yadda because  a) everyone will finally understand how little low-income students pay and b) because proposals to raise fees will explicitly be made in terms of net fees, and can be targeted specifically to on those families who can pay.  In fact, to start with they won’t be phrased as tuition increases at all, they’ll be phrased in terms of diverting some subsidies from (better-off) individuals to institutions.

And that’s all good.  We will -finally- have informed debate.  Expect the summer of 2018 to be particularly interesting, policy-wise.

March 03

Income-Contingent Loans (Repaid Through the Tax System)

Every once in awhile, someone important says that what Canada/America really needs are income-contingent loans.  I usually reply, “we have income-contingent loans in Canada/America, that’s what the Repayment Assistance Program/Income Based Repayment program does”. To which the rejoinder is “no, no, that’s not income-contingent, what I mean by income-contingent is recovery of the loan is done automatically through the tax system, so you don’t run into all these messy issues around borrowers in repayment having not signed up for things”.

At this juncture, I could point out that the size of the loan payment and its method of recovery aren’t the same thing (I wrote a monograph about this about a decade ago), but I usually just keep my mouth shut because, really, my interlocutors have a point.  RAP in Canada and IBR in the US would both be much better programs if borrowers in trouble automatically received relief, instead of going through the tedious application/income verification process they do now, and the easiest way to achieve this would be to run repayment through the tax system, as they do in Australia, the UK, and New Zealand.

So why don’t we?

The New America Foundation investigated this question in a recent paper, and enumerated a number of challenges in moving to a tax collection system.  One of these reasons is specific to the US (they tax families not individuals, so setting the tax rate on an individual is awkward if he/she is marries), and need not detain us here.  The other reasons can basically be boiled down into two big categories.

First, how do you integrate employers – who do the tax-withholding in Canada – into such an operation?  How do they know how much to withhold?  How do they know when to stop withholding (i.e., when the borrower is finished repaying)? And are we actually going to require students to tell their employers about their outstanding loans?  Part of the issue here relates to people who do not have a single, full-time job that provides all of their income.  How does withholding work when students have two jobs?  Or when wages are not the sole source of income?   Of course there are fixes and workarounds to these questions, but every fix and workaround creates even more complication.  And complication is what ICR is meant to avoid.

(In Canada of course, we’ve got quite specific reasons why income-contingent loans are difficult: namely, most students are not receiving one loan, but rather two – one from the province, and one from the feds – and these don’t always have identical conditions.  You’d need to to align both levels of government across the country for this to work.  That’s not impossible, of course, but it’s tricky.)

But there’s one final reason why governments are reluctant to recoup debts through the tax system, and that’s for fear of damaging something called “tax morale”.  Basically, tax morale is a way of measuring one’s sense of moral obligation to pay taxes, or one’s belief that taxes contribute meaningfully to society.  A 2004 paper in the Journal of Economic Psychology examined the effect on tax morale of Australia’s Higher Education Contribution Scheme, which collects student debt (technically “contributions” rather than debts, but the distinction can be a bit fine). The result, perhaps unsurprisingly, was that students with HECS debt were likelier to have lower tax morale than those who did not.  That might sound trivial, but to governments, it is not.  Our system of taxation depends on voluntary disclosure and reporting.  Messing with that has big consequences; putter around with it at your peril.

None of this should be taken as a reason to not collect student loans through the tax system.  There are a lot of potential benefits to such a policy.  My caution here is simply that implementation will be complicated, may lead to different kinds of errors and difficulties (especially for individuals with multiple jobs), and have drawbacks in terms of tax morale.  For good reason, governments don’t undertake system changes with this level of complexity lightly; there would be a serious risk to service delivery if something went wrong.

Maybe, just maybe, this is the next big project in student aid, now that we seem to be getting the switching-tax-credits-to-grants thing right.  Just don’t assume that this would be a simple process.

March 01

When is Free Tuition Free?

You would be forgiven, over the past 24 months or so, for growing ever more confused about when tuition is “free” and when it is not.  The reason, in part, is that “free” tuition is in the eye of the beholder.

You’d think it would be as easy as saying “no fees”, but it’s actually not that simple.  What if, instead of a fee, there is a variable “contribution” or a gradate tax?  What if fees are charged to a minority of students based on their high school marks (as in most of the former socialist countries in Europe, and parts of Africa)?  What if fees are charged to richer students but not poorer ones?  Or, what if fees are waived for a limited number of years and then kick in?

And that’s just the issue of fee setting.  What if tuition fees exist, but grants or other aid are distributed to help some students cover the costs?  Or, how about if fees exist, and are refunded after graduation in return for some service? And, finally, how do we deal with objections – such as those from American academic, Sara Goldrick-Rab – that free tuition isn’t actually free unless you also cover living expenses?

(This is about where some will say: “education is never free; it always has to be paid for by someone”.  Which is true, but beside the point that I’m making here, which has more to do with retail price.)

And so, forthwith, a quick cheat sheet to all the varieties of “free tuition” available around the world:

Manitoba and Saskatchewan don’t claim to have free tuition, but they actually do have it, subject to certain conditions: essentially, anyone who finishes on-time and stays within the province for a few years to collect their tuition tax rebates will actually receive more money in grants and tax rebates than they spend in tuition.

Ontario has had “net free” tuition for poorer undergraduates for most of the last ten years.  Now, however, they’re actually calling it “free tuition” for dependent students under $50,000 (although there are a couple of caveats). This doesn’t change much in terms of dollars and cents, but the framing seems to matter.  At the same time, a substantial number of college students across Canada have this kind of “net zero” tuition due to a combination of low tuition and large tax credits.  As, indeed, do many students in cheaper 2- and 4-year colleges in the United States.  For instance, a number of US states, including Tennessee and Oregon, now have schemes to ensure that all students – in community colleges, anyway – who have financial need get grants that are at least equal to the amount of their tuition.

Chile goes a bit further than this.  Its new system of “gratuidad” actually waives tuition fees for university students (but not yet colleges or polytechnics) from families below the national median income, which accounts for about 25-30% of the student body.  Similarly, tuition fees in England between 1998 and 2005 were variable according to family income, and those with family incomes below £20,000 paid no tuition.

In most former socialist countries and parts of Africa, there are what are called “dual track” tuition systems.  Students who do well on matriculation or university entrance examinations are allowed to attend for free, while everyone else is charged a fee.

In France, there is an entirely public system of higher education, in which most institutions charge nothing; however, the “grandes ecoles” charge fees of €10,000 or more.  Ireland has “free tuition”, but still charges a whack of other fees, amounting to thousands of euros, which might as well be tuition.

In a whole bunch of countries too disparate to mention, there are public institutions that charge nothing, but also have significant numbers of private institutions that do charge tuition (Germany falls into this category, though the fee-charging institutions only educate about 5% of all students).  And sometimes, as in Romania, this overlaps with the “dual track” tuition system.

Australia does not charge fees, per se, but rather demands a “contribution” from graduates.  The amount of the contribution sure looks like a fee (it is a set amount of money per year of study, based on one’s chosen field of study), but if your post-graduate income never rises above a certain level (currently about $50,000/year), you never pay a cent.  (In a more roundabout way, this is also true in England, even though formally there are fees.)

Greece charges nothing at entrance, but provides essentially no assistance whatsoever with living costs.

Finally, Scandinavian countries charge nothing, and provide more or less all students with grants of varying degrees of generosity to cover living expenses (and loans to cover the remainder).

So there you have it.  Next time someone talks about free tuition, be sure to ask what they mean by “free”.

February 26

A Great Day for Student Assistance

I was going to stay off the blog this whole week (I need a reading week, too!), but there was a budget in Ontario yesterday.  A weird and wonderful (if somewhat under-documented) budget, which is going to change the way we think about student aid, tuition, and affordability in Canada for decades to come.

Here are the basics: all of Ontario’s different grants and loan remission programs are being merged together into one big up-front grant program (all the provincial education tax credits are getting merged in there too, though I haven’t seen that actually mentioned in there).

There is absolutely no new money here – in fact, there’s actually a slight reduction because some of the tax credit dollars are going to be diverted to institutions.  It is simply a re-casting and re-profiling of existing money, which – crucially – takes all those hidden, opaque and often-delayed subsidies and turns them into grants available at the time when tuition is due.   But what that means is that all those students who currently receive more in subsidies than they pay in tuition will actually be able to “see” this for the first time.  It’s mainly an exercise in re-packaging.

But boy, what a re-packaging.  The government is now announcing what we here at HESA have been saying for some time: in “net” terms, tuition is free for low-income students.  And now, all of a sudden, you have the government, the Toronto Star, and the Canadian Federation of Students all saying tuition is “free” for low-income dependent students.  It isn’t, of course.  Fees are the same as they always were, and the offsets are reasonably similar, too.  In most cases, students aren’t getting a whole lot of new money (to the extent students are getting extra cash, it seems to be mainly those in the $50-100K family income range, but it’s hard to tell because a lot of this is still pretty sketchy, and dependent on the federal Liberals following through on their promise to revamp tax credits and grants as well).  Ignore the hype: this is not about bold new investments, it’s about changing perceptions through simplification.

And yet, the biggest change on the perception front was something that was not actually in the budget, but rather was signalled to stakeholders in the budget lock-up.  Starting in 2018-19, OSAP will be moving its processes forward in time so that students can have student aid decisions at the same time they get acceptance letters.  This means that institutions will be able to do “net billing”.  So whereas, now, students get acceptance letters, a bill for tuition, but then have to wait several weeks to find out what kind of aid they will get, in future they will receive a letter saying “Welcome to University of X; tuition is $6,500, and you have qualified for $7,000 in grants”.  The difference this will make to perceptions of affordability is enormous, and it’s a hugely positive step.  Every other province should adopt this step, immediately.

Not everybody wins.  From what I can tell, students from families above $110,000 in income or so will be slightly worse off due to the disappearance of tax credits, as will some part-time and independent students.  The first of these shouldn’t bother anybody, but the latter should.  And if you’ll allow me a small kvetch, yesterday’s announcement is probably too focussed on traditional-aged students (whose parents vote), and not enough on the mature students who are probably the least well-served by the current aid system.

But that’s for another day.  For the moment, let’s just admire this as a bold piece of policy, which renders transparent an already-generous student aid regime and thereby makes it that much more effective.  Congratulations are due to the folks at the Ministry of Training, Colleges and Universities for cleaning away a couple of decades of kludges, and bringing some much-needed coherence to student aid policy.

And to their counterparts in Newfoundland, Nova Scotia, New Brunswick, Prince Edward Island, Quebec, Manitoba, Saskatchewan, Alberta, and British Columbia: this is the future. What are you waiting for?

December 08

Innovation Ecosystems: Promise and Opportunism

We sometimes think of innovation policy as being about generating better ideas through things like sponsored research.  And that’s certainly one part of it.  But if those ideas are generated in a vacuum, they go nowhere – making ideas spread faster is the second pillar of innovation policy (a third pillar – to the extent that innovation is about new product-generation – has to do with venture capital and regulatory environments, but we’ll leave those aside for now).

Yesterday, I discussed why the key to speeding up innovation was the density of the medium through which new ideas travel: basically, ideas about IT travel faster in Waterloo than in Tuktoyaktuk; ideas about marine biology travel faster in Halifax than in Prince Albert.  And the faster ideas travel and collide (or “have sex” in Matt Ridley’s phrase), the more innovation is produced, ceteris paribus.

Now, although they don’t quite use this terminology, the proponents of big universities and big cities alike find this logic pretty congenial.  You want density of knowledge industries?  Toronto/Montreal/Vancouver have that.  You want density of superstar researchers?  U of T, McGill, and UBC have that (especially if you throw in allied medical institutes).  That makes these places the natural spot to invest money for innovation, say the usual suspects.  All you need to do is invest in “urban innovation ecosystems” (whatever those are – I get the impression it’s largely a real estate play to bring scientists, entrepreneurs, and VCs into closer spatial proximity), and voila!  Innovation!

This is where sensible people need to get off the bus.

It’s absolutely true that innovation requires a certain ecosystem of researchers, and entrepreneurs, and money.  And on average productive ecosystems are likelier to occur in larger cities, and around more research-intensive universities.  But it’s not a slam dunk.  Silicon Valley was essentially an exurb of San Francisco when it started its journey to being a tech hub.  This is super-inconvenient to the “cool downtowns” argument by the Richard Floridas of this world; as Joel Kotkin has repeatedly pointed out, innovative companies and hubs are as likely (or likelier) to be located in the ‘burbs, as they are in funky urban spaces, mainly because it’s usually cheaper to live and rent space there.  Heck, Canada’s Silicon Valley was born in the heart of Ontario Mennonite country.

We actually don’t have a particularly good theory of how innovation clusters start or improve.  Richard Florida, for instance, waxes eloquent about trendy co-working spaces in Miami as a reason for its sudden emergence as a tech hub. American observers tend to attribute success to the state’s low tax rate, and presumably there are a host of other possible catalysts.  Who’s right?  Dunno.  But I’m willing to bet it’s not Florida.

We have plenty of examples of smaller communities hitting tech take-off without having a lot of creative amenities or “urban innovation strategies”. Somehow, despite the lack of population density, some small communities manage to get their ideas out in the world in ways that gets smart investors’ attention.  No one has a freaking clue how this happens: research on “why some cities grow faster than others” is methodologically no more evolved than research on “why some universities become more research intensive than others”, which is to say it’s all pretty suspect.  Equally, some big cities never get particularly good at innovation (Montreal, for instance, is living proof that cheap rent, lots of universities, and bountiful cultural amenities aren’t a guarantee of start-up/innovation success).

Moreover, the nature of the ecosystem is likely to differ somewhat in different fields of endeavor.  The kinds of relationships required to make IT projects work is quite different from the kinds that are required to make (for example) biotech work.  The former is quick and transactional, the latter requires considerably more patience, and hence is probably less apt to depend on chance meetings over triple espressos in a shared-work-environment incubator.  Raleigh-Durham and Geneva are both major biotech hubs that are neither large nor particularly hip (nor, in Raleigh’s case, particularly dense).

It’s good that governments are getting beyond the idea that one-dimensional policy instruments like “more money in granting councils” or “tax credits” are each unlikely on their own to kickstart innovation.  It’s good that we are starting to think in terms of complex inter-relations between actors (some, but not all of which involve spatial proximity), and using “ecosystem” metaphors.  Complexity is important. Complexity matters.

But to jump from “we need to think in terms of ecosystems” to “an innovation agenda is a cities agenda” is simply policy opportunism.   The real solutions are more complex. We can and should be smarter than this.

December 01

The Higher Education of Heads of Government

To follow up on yesterday’s musings about the educational history of Canadian Prime Ministers: I think you can tell something about a country’s social structure just by looking at the clustering of leaders’ educational backgrounds.

In this exercise, I look at the records for Canadian, British, Australian, Japanese, and New Zealand Prime Ministers, German Chancellors, and French and American Presidents.  I would have included Italy but politicians’ Wikipedia bios are weirdly silent on education (even in the Italian versions).  I take all leaders back to 1900, except in New Zealand where Dominion Status was not granted until 1907, and Japan where I stop at 1945 because holy moley there are a lot of them.

The most interesting thing to me is the degree of concentration we see in each country.  In the UK, it is absolutely absurd, with nine of the last thirteen prime ministers (dating back to 1940) having studied at Oxford (Callaghan and Major did not attend university, Churchill went to Sandhurst, and Brown studied at Edinburgh).  Australia runs a close second.  Of the fifteen prime ministers with a university education (fourteen did not attend), seven went to the University of Sydney, three to Melbourne, and one each to ANU and Western Australia (two went to UK universities, without ever attending an Australian one).

Japan and France have a different sort of concentration.  In France, where every head of state since 1900 had a post-secondary degree, fourteen of the seventeen Presidents studied in Paris.  Among the pre-WWI presidents, all of whom went to school before 1908 during a period where there was only one university in France (but lots of different affiliated faculties dotted around the country), they nearly all studied Law in Paris.  Since DeGaulle, all Presidents have attended a “Grande Ecole” in Paris, with the exception of Sarkozy who attended Paris X.  In Japan, 29 of 32 post-War prime ministers studied in Tokyo, the only exceptions being Uno (Kobe), Ikeda (Kyoto), and Tanaka (no PSE).  Eleven of these went to the University of Tokyo, and seven to Waseda, with the rest scattered around the capital’s other mainly private universities.  So, in the UK, France, Japan, and – perhaps oddly – Australia, elites come from a fairly narrow set of proving grounds.  The US is a bit better, but maybe not much: the last twenty Presidents have five Harvard Degrees and five Yale Degrees among them (only one – Bush Junior – has both).

However, Canada and Germany seem to have much less concentrated patterns of attendance.  In Canada, the university with the most prime ministerial graduates is U of T (four out of seventeen).  In Germany, you have to be careful how you count pre-WWII, because those guys went to school in the 1800s when it was still the tradition to wander around taking courses at three universities before eventually taking a set of exams somewhere (credits were not a thing back then), but Humboldt has five Chancellors  (out of twenty-seven) if you don’t get picky about where the exams were taken.  In other words, in these countries, the path to the top seems somewhat more open to people from a wider set of backgrounds.

But that’s nothing compared to New Zealand, where only seven out of twenty-two prime ministers even went to university (closest competitor on that score is Australia, where fourteen out of 29 were non-attenders), and no university can claim more than two of them.  In fact, they’ve had as many prime ministers who did not finish secondary school as they’ve had those who finished university.  The contrast with Canada is fascinating; even if you knew nothing else about the two countries, you’d know our society has been much more urbanized and stratified for longer than our kiwi cousins.

To summarize:

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Another interesting comparison is with respect to study abroad. Canada looks pretty good on this measure with 6 PMs having got some education abroad, but we actually come second to Australia, which has seven.  The Japanese do well, too, with five.  Germany has a number of Chancellors who studied at Strasbourg, but at the time it was part of Germany – Adenauer (LSE) and Luther (Geneva) were the two who actually studied abroad.  The New Zealanders have one.  The Americans have one and change, what with Clinton having a couple of years at Oxford and Kennedy having a couple of weeks at LSE.  The French and English, needless to say, have none.

(A final completely tangential fact I have to throw in here, because not enough people know it: before moving to Columbia, Obama started his educational career at Occidental College, which was the real-life setting for “California University” on the original Beverly Hills 90210.  This means he literally could have been at the Peach Pit all those years.  Fabulous.)

Anyways, I’m not sure much of this means anything, but it is an interesting way to think about comparative stratification, both social and educational.

November 13

A Ministry of Talent

My friend and colleague, Jamie Merisotis of the Lumina Foundation in the United States, recently wrote a book called America Needs Talent.  It’s a short, popularly-oriented account of how human capital drives the economy, and what countries and cities can do to acquire it.  One of the suggestions he makes is for a federal “Department of Talent”, which is intriguing as a thought experiment, if nothing else.  So let’s explore that idea for a moment.

To begin, let’s be clear about what Merisotis means by “talent”.  He’s painting with a very broad brush here.  Yes, he means “top talent” in the sense of highly qualified scientists, entrepreneurs, etc.,  but he’s also talking about the talents one acquires through post-secondary education: everything from car repair to microbiology.  So when he says “Department of Talent”, what he’s really talking about is a “Department of Skills”, just with a much less vocational sheen.

Most of Merisotis’ argument could be transported to Canada (albeit in somewhat muted form, given the differing nature of the two countries’ federal responsibilities).  The primary goal of any government is (or should be) to raise levels of productivity.  No increase in productivity, no increase in standard of living (or standard of public services).  So there’s always a need to come up with better ways to think through how a country can raise its overall skills profile.

Yet at the federal level, we split up that responsibility among four ministries (warning: I have not yet bothered to learn the snappy new names the Trudeau government has bestowed upon departments).  In Canada, we have an Industry/Science Ministry, which plays a huge role in developing scientific careers, and fostering skills/knowledge through science-business relationships.  We have a Human Resources Ministry (now on its sixth name in twelve years), which supports training and learning in a variety of guises.  We have an Immigration Ministry in charge of bringing people into the country, which sort of co-ordinates with Human Resources in working out labour market needs, but not necessarily in ways that maximizes skill acquisition.  And finally, we have a Foreign Ministry, which is increasingly interested in attracting foreign students, and that has knock-on effects for immigration down the road.

And so, genuine question: why not hive-off the bits of all of those ministries that focus on talent development and acquisition, and stick them into a single ministry?  Why not create an organization with a singular focus of making our talent pool across all industries better?  It’s not impossible; in fact, Saskatchewan already tried it for several years with a ministry of Advanced Education, Employment and Immigration (an experiment recently unwound for reasons that remain obscure).

I think the quick and simple answer here is that changing bureaucratic chairs is not the same as changing actual policy orientation, and still less about changing results.  In reality, you might create a lot of churn, with very few actual results.  Still, the thought experiment is a useful one: who is in charge of ensuring that Canada always has the best talent at its disposal, in every field of endeavour?  Who makes sure that our education and immigration policies are complimentary?  Given the nature of our federation, this is always going to be a distributed function, but it seems to me that we don’t actually pose questions this way.  We talk about programs (how can we improve student loans?) or institutions (how can we increase the number of community college seats?), but only rarely do we talk about what the final talent pool will look like.

So, while a Ministry of Talent might make not make a lot of sense, there’s still much to be gained by talking about ends rather than means.  A “Talent Agenda”, maybe?  Something to think about, anyway.

November 10

An Update on England’s Teaching Excellence Framework

Last week, the UK Minister for Business Innovation and Skills (which is responsible for higher education) released a green paper on higher ed.  It covered a lot of ground, most of which need not detain us here; I think I have a reasonable grasp of my readers’ interests, and my guess is that the number of you who have serious views about whether the Office For Fair Access should be merged into a new Office for Students, along with the Higher Education Funding Council for England, is vanishingly small (hi, Andrew!).  But it’s worth a quick peek into this document because it puts a bit more meat on the bones of that intriguing notion of a Teaching Excellence Framework.

You may remember that back in the summer I reviewed the announcement of a “Teaching Excellence Framework” wherein institutions that did well on a series of teaching metrics would be rewarded with the ability to charge higher tuition fees.  The question at the time was: what metrics would be used?  Well, the green paper is meant to be a basis for consultation, so we shouldn’t take this as final, but for the moment the leading candidates for metrics seem to be: i) post-graduation employment; ii) retention rates; and, iii) student satisfaction indicators.

Ludicrous?  Well, maybe.  At the undergraduate level, satisfaction tends to correlate with engagement, which at some vague level correlates with retention, so there’s sort of a case here – or would be if they weren’t already measuring retention.  Retention is not a silly outcome measure either, provided you can: a) control for entering grades (else retention be simply a function of selectivity), and b) figure out how to handle transfer students.  Unfortunately, it’s not clear from the document that either of these things has been thought through in any detail.

And as for using post-graduate employment? Again, it’s not necessarily a terrible idea. However, first: the regional distribution of graduate destinations matters a lot in a country where the capital city is so much richer than the rest of the country.  Second: the mantra that “what you study matters more than where you study” works in the UK, too – measuring success by graduate incomes only makes sense if you control for the types of degrees offered by each institution.  Third: the UK only looks at graduate incomes six months after graduation.  Presumably, a longer survey period is possible (Canada does it at three years, for instance), but the only thing on the table at the moment is the current laughably-short period.

So, there’s clearly a host of problems with the measures.  But perhaps even more troubling is what is on offer to institutions who do “well” on these measures.  The idea was that institutions would pay attention to “teaching” (or whatever the aforementioned load of indicators actually measures) if doing so allowed them to raise tuition above the current cap of £9,000.  However, according to the green paper, the maximum an institution will be allowed to increase fees every year is inflation.  Yet at the moment CPI is negative, which suggests this might not be much of an incentive.  Even if inflation returns to 1% or so, one has a hard time imagining this being enough of a carrot for all institutions to play along.

In sum, this is not a genuine attempt to find ways to encourage better teaching; rather, it is using a grab-bag of indicators to try to differentiate the sector into “better” and “worse” actors, and in so doing try to create more “signals of quality” to influence student decision-making.  Why does it want to do this?  Because it desperately wants higher education to work like a “normal” market, the government is trying to rationalize some of its weirder ideas about how the system should be run (the green paper also devotes quite a bit of space to market entry, which is code for letting private providers become universities with less oversight, as well as market exit, which is code for letting universities fail).

Though the idea of putting carrots in place to encourage better teaching has value, an effective policy would require a lot more hard thinking about metrics than the UK government appears willing to do.  As it stands, this policy is a dud.

August 27

Theories of Change

One of the easiest things to do in policy is to advocate for policy X, so as to change effect Y.  One of the hardest things to do is to get people to explain clearly their theory of change.  That is, what are the steps by which changing X actually affects Y?

Take performance-based funding.  It’s easy to get hot for the idea that organizations can be steered by offering incentives: if you pay schools for students, they’ll raise enrolment.  If you pay them for graduates, they might spend a bit more effort and money on academic support service.  And so on.  By this theory, all you need to do to get universities to change their behaviour is to offer the right financial incentives.

But here’s the problem: that theory works a lot better for individuals than for organizations.  If what you are trying to do is force a change in organizational culture (e.g. get them to shift to a more student-centred focus), you have to remember that individuals inside an organization aren’t necessarily going to face the same incentives as the institution.  Just because an organization is incentivized doesn’t mean everyone in it is incentivized.

In extremely hierarchical organizations, it’s possible for management to pass incentives on to staff in various ways.  But universities are not particularly hierarchical institutions.  Outside of terrorist cells, universities are about the most loosely-coupled organizations on earth.  Some of the larger among them, to quote Kevin Carey, are more like holding companies for a group of departments, which are themselves holding companies for professors’ research interests.

So let’s get back to the example of a government that hopes to get universities to pay more attention to student success.  Say the government comes up with a funding formula that potentially allows an institution to access a couple million dollars more if it increases its graduation rate.  What happens?

Well, it’s certain that university leadership will try to grab the money.  That’s their job.  Then they’ll think about how to achieve the goal.  Pretty much every authority on retention will tell you that it is a institution-wide exercise.  The key is identifying students that are having trouble, and then making sure they get appropriate assistance, either from instructor(s), or from some kind of centralized suite of academic services.  But while it’s easy enough to invest money in new centralized services, the key to such an approach still rests on professors (some more than others) altering the way they behave in class, so as to spend more time/effort identifying strugglers early, and then doing something about it (talking to the students themselves, sending their name to a counsellor who can then contact the student and offer assistance, etc.)

The question is: how do you get the professor to make those changes?  The promise of more money to the institution is a pretty weak one.  First, while many people’s behaviour will need to change in order to get the money, not everyone’s does, so there’s a rational reason to try to free ride on the process.  Second, even if the institution does get the money, it doesn’t follow that the money will be distributed in such a way that all individual profs  benefit.  A prof’s behaviour is not incentivized in the same way as the institution’s.  And if that’s so, why would we expect the prof to alter his or her behaviour?

I’m not saying it’s impossible steer universities by using money as an incentive; I’m saying that success in doing so requires the incentives to be aligned in such a way that everyone’s behaviour down the chain is incentivized.  And in a university, where every professor is, to an extent, a free agent, that’s really hard to do.  It works where the incentive aligns with career goals or professional norms (e.g. do more research).  But when it pushes against professional norms, it’s a lot more difficult.

Fundamentally, people trying to steer system reforms need to ask themselves: how will this incentive alter what individuals on the ground actually do on a day-to-day basis?  If there’s no good answer to that question, chances are the incentive isn’t likely to work.

August 26

October 20th

Policy-making in Ottawa is like a huge river, moving in a slow stately procession, and only occasionally providing excitement if you hit some rapids.  It’s not like Washington, which – for all its vaunted “gridlock” – is actually more like an ice jam: there is a lot of pressure in the system, and things can move pretty quickly if the jam breaks somewhere.  Partly it’s because of our Westminster system, and our tradition of party discipline: there are not many independent policy actors on the hill, and hence, not many points where interest groups can exert leverage.  Add to that a relative lack of genuinely independent intellectual life in Ottawa (government and interest groups are dominated by policy analysts – Canada has no real equivalent to the Brookings Institute, or even the New America Foundation), and what you’ve got is a shop that doesn’t absorb new ideas easily.

All of which is to say that changes of government represent one of the very few times where new ideas get a hearing.  And while it’s far from assured, there’s a significant chance that there will be a new government on, or shortly after, October 19th – the Tories haven’t seen a poll putting them in majority territory in years, and it seems unlikely that either opposition party will keep them in power, either with votes or abstentions.  So October 20th is going to be the crucial date for policy entrepreneurs.

A new government comes to power with only a limited idea of what it’s going to do.  Party platforms don’t come close to covering all areas of government activity, so new ministers are winging it on most files.  Most post-secondary files come under the “winging it” category: apart from a Tory promise on tax breaks for apprenticeships, and a Liberal promise for more money for Aboriginal students, there’s been nada in the platforms so far, and as I said back here, that’s probably not going to change. Also, if there is a change of government, the new cabinet will be pretty raw: apart from Mulcair, there’s no one on the NDP front bench who’s ever held a cabinet seat at either a federal or provincial level; among Liberals, there are a dozen or so who have the “Honorable” prefix, but only Ralph Goodale, Stephane Dion, and John McCallum had substantial portfolios for any period of time.  Whether a new cabinet is red or orange, or a combination of the two, it’s actually going to be pretty green (but not Green).

Now, if you’re in the business of selling policy ideas, green cabinets are the best kind.  They have little allegiance to the status quo, are interested in new ideas, and cynicism hasn’t yet set in: they will never be more open to new ideas than they are at the start of a new government.  But – and this is the important bit – they have to be new ideas.  New governments may want to replace old policies, but they won’t do it by re-adopting even older ones.  There has to be an element of progress involved.

In higher education, there aren’t a whole lot of areas where the Harper government agenda needs to be re-wound.  On student aid and transfers, frankly, they’ve done little that opposition parties wouldn’t have done themselves.  Internationalization has been a disappointment, but it’s small ball from a government perspective.  Where a big re-think is needed is on research.  Dollars are getting scarcer, and while a greater focus on applied research has had some successes (particularly the bits involving polytechnics), the degree of de-emphasis on basic research, and the obsession with knowledge translation, is becoming alarming.

Unfortunately, there doesn’t seem to be anyone out there proposing solutions that go beyond: “bring back the status quo ante”.  That’s a problem, because no matter how much everyone liked the status quo ante, that approach doesn’t excite new ministers.  If the sector wants a new approach that will attract big interest and big dollars, it has to come up with something genuinely new.

October 20th is fast approaching.  And this kind of window rarely opens twice.  Time to get cracking on some new approaches.

(corrected from the original and the version that went out via email to reflect the fact that the election is on the 19th, not the 18th.  That was a bad goof on my part – sorry)

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