HESA

Higher Education Strategy Associates

Category Archives: U.S.

March 30

Why the US Free Tuition Debate is Different

Free tuition is a growing political issue in the United States.  Most of the free tuition plans out there (for instance in Tennessee and Oregon) are effectively variations of what was recently introduced in Ontario – that is, a re-packaging of student aid so that some students pay “net zero” in college – or at least community colleges.  The plan President Obama has presented to Congress over the past twelve months or so seems to be a bit more expansive – that is, actual zero-tuition for two years of community colleges rather than just a re-jigging of aid (personally, I don’t think the math adds up on the proposal but that’s as may be).  But it’s still just for public community colleges, which make up around a third of the system as a whole.

A more expansive set of proposals comes from the work of the University of Wisconsin’s Sara Goldrick-Rab and Nancy Kendall, who have produced an even more expansive proposal, which includes two years of free tuition (that is, no up front fees to anyone, not a simple re-jigging of aid to achieve “net zero”) at all public institutions – including 4-year universities – plus substantial financial aid for all.

(I am going to skip Bernie Sanders’ even more expansive plan for four years of free tuition at public universities.  That’s partly because I’ll be getting into that later this week when I look at the various presidential candidates’ higher education plans, but also because the Sanders plan isn’t costed in a serious way.  Basically, it involves raising revenue by imposing a Tobin tax on financial transactions and states suddenly agreeing to do spend a lot more on higher education, neither of which has a snowball’s chance in hell of happening. So I’m skipping it here to focus on the programs which are actually likely to be a part of public policy over the next couple of years.)

What’s worth noting about all these plans is that they all share one thing in common: they all restrict their ambitions to public institutions.  They all assume that private higher education, whether for-profit or non-profit, will go on regardless.  In international terms, that would result in a system that looks a lot like Hungary’s or Romania’s: a mostly-free public sector and a full-cost private sector.

This assumption insulates US free-tuition types from one of the arguments made by pro-tuition types (like me) – namely that free-tuition gives away too much to the rich.  In the US, the free-tuition types can dismiss that argument by saying – with some justification – that the rich don’t go to public institutions (two-year colleges anyway) because they prefer to seclude themselves in private ones.  That being the case, very little of the new subsidy would reach the top quartile, who are the prime beneficiaries of free tuition in countries where education is all or mainly in the public sector.

In fact, if you look at the Goldrick-Rab/Kendall proposal, it’s quite the opposite: the rich in the private institutions pay quite a bit.  Her proposal takes away $18 billion in need- or income-based financial aid from students at private not-for-profit universities – it also redirects effectively all existing grants and tax expenditures at both publics and privates as well (the assumption here is that institutions will re-deploy their own aid away from 1st and 2nd years to help upper-year students so that they don’t lose out, but it seems clear that to some degree students in later years might be more loan-dependent than they currently are).

Now, that said, this proposal is not as clearly pro-poor as some of the state policies.  By including all publics (including the big flagships), it provides money to a lot of people, many of whom are not what you would traditionally call needy.  Making attendance cheaper at prestigious public institutions while increasing net costs at privates may also significantly change enrolment patterns.  Almost certainly it will mean fewer low-income students at private universities (which may or may not be a good thing, depending on your point of view); it also probably means some upper-middle class kids will make the switch back to public universities which would to some extent dilute the progressiveness of this measure.  Goldrick-Rab and Kendall would almost certainly respond that in the US, only universality will get the middle-class to buy-into a program that would help the poorest; of course, in Canada, we’ve just had two big re-arrangements of student financial aid (in Ontario and federally) which show that our politics are quite the opposite.

The important points here are: i) free community college plans are cheap because they’re near “net free” already; and, ii) a free first-two years plan is at least fiscally conceivable if you completely defund the private system (which may or may not be politically feasible).  The former of these is pretty much true in Canada as well.  The latter is quite different and depends on a very different set of institutional factors that those at play up here.  Don’t assume that the arguments which make sense south of the border also make sense up here.

February 19

The Dollar Quandary

If you haven’t been hiding under a rock these last few months, you may have noticed that the US dollar is on a roll.  And it’s not just on a roll in Canada, where the price of oil has reduced the value of our own currency; since mid-2014, the US dollar is up over 20% against a trade-weighted basket of currencies. This creates some interesting conundrums and strategy options for pricing international education.

The change in the dollar’s status means that everyone’s price has been reduced vis-à-vis those at American universities. If you’re a university in, say, Sweden, it doesn’t matter much because practically all of your competitors are European. Basically: if your price isn’t changing relative to that of your main competitors, then the fall of the dollar is fairly meaningless.

However, if the fall in the value of your currency is greater than that of your competitors, then this does actually create some room to maneuver. I was in Russia last week, where the fall in the value of the rouble (76:1 USD, down from 37:1 USD at the end of 2014) means that their product is now much cheaper, relatively speaking, than that of their competitors, and that makes them a more attractive destination.  As a result, the Russians are now marketing themselves as a “bargain” product because, let’s face it, Russian universities have a brand image problem after the disasters of the 1990s. Their strategy is to go low price, high volume, and admit as many Asian and Latin American students as possible.

That’s one strategy. But there are others. If you are an Australian or a British university with a reasonable reputation, you might ask why you should keep your prices constant in local currency. If you think your main competitors for international students are American schools, you might also think it makes sense to take advantage of your lower currency, and increase prices a bit. It won’t necessarily hurt you with recruitment, and you can make a little bit of extra money in local currency terms. Basically, in these situations, universities have a choice between marketing themselves as a “bargain” institution (take advantage of low price to increase volume) or as a luxury institution (risk volume to increase price).

Now in Canada we have a somewhat different set of issues at play, for two reasons. First, we actually have a lot of American students, institutional pricing strategies need to take account of that market. Second of all, unlike European universities, Canadian schools can be very sure that US institutions are a major source of competition, and hence we have more scope to re-price based on currency changes. So here’s the question: should institutions take the “bargain” route and keep prices steady in local terms, or a “luxury” strategy that sees us raise prices, or perhaps even start charging in US dollars?

Essentially, this is the choice every institution needs to make over the next couple of months. I think there’s a pretty clear case for Toronto, UBC, and McGill to move to USD pricing, and keep last year’s fees constant in USD terms (that is, raise them by about 20% in $CDN terms). Will they lose some applicants? Probably. But they have the brand power to deal with that, and the students for which they are really competing are going to be paying more anyways to go to an American university. And the prize is a big whack of extra cash.

For everybody else, it’s a trickier proposition. Some institutions – particularly if they are experiencing recruitment shortfalls (say Trent, or any one of a dozen Atlantic universities) – will probably see more benefit in going the “bargain” route, and aggressively going after students looking for a “cheap” North American experience. Others – Windsor, perhaps – might decide to take that pitch directly to American students. The institutions with the trickiest task are the other U-15 universities. They might be tempted by the USD route, but may be unsure if they had the brand power to make it work. Expect a period of experimentation, not all of it successful.

In any case, for those interested in looking at price elasticity as a function of institutional prestige, the next couple of years promise to be quite interesting.

February 08

(#fake)Tenure, Governance, and Academic Freedom

If you follow higher education news from south of the border, one scrap you’ll probably have noticed over the past year or so is the one over tenure in Wisconsin.  Until recently, tenure provisions at the University of Wisconsin were inscribed in state law.  Last year, Wisconsin Governor and erstwhile presidential candidate Scott Walker decided to remove tenure protection, leaving the University’s Board of Regents to inscribe it in their own rules.  At the same time, the Governor gave university management more power, free from the scrutiny of Senate and other shared-governance arrangements, to close or modify programs.  Put these two things together, add the fact that public sector unions in Wisconsin are legally forbidden from bargaining over anything other than wages, and you have a situation where it’s a lot easier to get rid of professors than it used to be.

So far, so clear.  For obvious reasons, professors at Wisconsin are upset about this, and many are calling this new system #faketenure because they believe that any tenure protection given through new Board of Regents rules is effectively undermined by the new management powers to eliminate or modify programs.  This, they say, means that there will be a form of academic chill at Wisconsin, with people afraid to voice controversial opinions or undertake challenging research for fear of political backlash.

Now, I get why most professors would prefer the old regime to the new, but the idea that challenging or difficult research can only take place in environments where tenure is ironclad and all program modifications can only take place with faculty agreement is simply not true.  If this is genuinely your position, you have to have a good answer to the question: “what about the UK and Australia?”

In the late-1980s, the Thatcher government in the UK simply abolished tenure for anyone hired after 1987.  People were still hired on permanent contracts (though as in the US and Canada, massification also led to an increase in the use of part-time contracts), but there was nothing stopping institutions from making people redundant by chopping whole departments – as is the case in Wisconsin.  Of course, unions can deter this to some degree by insisting on buyouts, redeployments, etc (as indeed Canadian unions do, too – see here for more on this).  But essentially, the conditions in the UK are pretty close to what some in Wisconsin are calling #faketenure, and yet one doesn’t often encounter the claim that UK researchers are doing ideologically cowed, or less daring research.

It’s the same thing in Australia.  Universities give out “permanent” positions somewhat more quickly than our universities – their equivalent of “tenure-track” is maybe half as long as it is here – but academics are much more actively managed (a fall in publications will bring a rise in teaching load relatively quickly), and large-scale institutional restructuring is much more common (La Trobe University, for instance, more or less slashed its entire economics department a couple of years ago).  Again, possibly not a model to follow if you’re a prof, but can anyone really claim that Australian academics are less free, less bold, less daring than their counterparts elsewhere?

To put this simply: people make a lot of universal declaratory statements about tenure and academic freedom.  For the most part, they aren’t true.  There is lots of top-notch research – even in the social sciences and humanities, where a lot of the most controversial stuff is concentrated – that occurs in places without the specific North American context of tenure and shared governance.  This is undeniable.

Now, this isn’t to say that removing those kinds of protections over here in North America wouldn’t have an effect.  One of the reasons the loss of protection in Wisconsin is cause for concern is because Wisconsin’s Board of Regents is increasingly a partisan body, with its members entirely appointed by the Governor, and it’s not that far-fetched to imagine them going after specific programs or even specific professors.

But that’s precisely the point: claims about the effects/benefits/drawbacks of any particular constellation of policies on tenure and academic freedom need to take very close account of the legal and political context in which they are operating.  Claiming that tenure *has* to be inscribed in a collective bargaining agreement, or that it *has* to be inscribed in legislation are equally incorrect; the point is that there are many possible equilibria on tenure, governance, and academic freedom.  Claiming the opposite is simply evidence of a fairly limited imagination about how higher education can be run.

November 23

The Nature of Universities: Multicultural Edition

I find myself increasingly annoyed with particular a line of rhetoric that academics sometimes use when they want to make a point.  “The university is not a corporation”, they say, “it is a community of scholars dedicated to the truth – if it is not that it is nothing.” You know, the Steffan Collini-types.

Two things here.  First, a modern university actually is demonstrably a corporation, which is indeed a very good thing for everyone who likes to get a steady paycheque.  I’ll come back to that issue in another blog post relatively soon, but what I want to get at here is this whole notion of the “university-as-truth-seeking- community-of-scholars” thing, because it’s really only true in some parts of the world, and even there it’s not 100% true.

Let’s start with Europe.  There, the first “universitas” (the word means “a whole” in Latin), was not a universitas of scholars, but rather of students.  Back in Bologna in the 11th century, students basically formed a union in order to bargain collectively both with Bolognese landlords (town-gown relations being a fairly important thing at the time) and with professors (over fees and professors’ responsibility to show up to class on time – things have turned around a bit on that one).  Gradually, scholars themselves started to band together, and often fought with civic or, more often, ecclesiastical patrons about the right to self-organize.  And there were certainly occasions when professors themselves founded a university on their own (Cambridge, for instance).  This is one of the reasons why, until quite recently, in much of Europe the governing boards of universities were entirely internal to the university, and did not include non-academics. So, close to 100% true here.

But it was a different story in North America.  Here, universities were set up by local communities, and governing boards and Presidents were put in place before academics were hired.  Unlike Europe, therefore, in North America professors have always been employees of universities.  True, after WWII, they obtained a lot of the trappings of self-governing communities of scholars, but that’s not how they started out, and they remain to a considerable degree under the control of boards, which are either made up of state appointees or a self-perpetuating group of local worthies.  So mostly true here, if not quite as much as in Europe.

Now, consider some different traditions.  If you go back to the earliest precursors of higher education in Asia and the Middle East, the “community of scholars seeking the truth thing” is fairly hard to discern.  The scholars at the Imperial Academies of China, for instance (which I wrote about back here), were concerned more about imparting the minutiae of Confucian ideology to future civil servants than they were about opening up these ideas to scrutiny.  The great medieval Islamic universities like Al-Azhar are basically madrassas, and certainly by the late 10th century and the “closure of the door of ijtihad”, there wasn’t a whole lot of new thinking going on; the belief was that everything useful with respect to the Qu’ran and the Sunna had already been learned, and so it was simply a matter of preserving this wisdom for future generations.  The great Indian “university” of Nalanda taught a broader set of courses (including very applied stuff like archery) and was more open to discussion, but it was still a community of priests rather than a community of scholars.

And those traditions continue today, to some extent.  In many parts of the world, universities main functions were – and are – to provide career-oriented instruction and to perpetuate official ideologies.  In Communist China, universities are very definitely under the control of the Party (if not the State), and the search for “the Truth” is necessarily somewhat circumscribed.  Does that mean Chinese universities don’t deserve to be called universities?  Similarly, were there no universities in Russia between 1918 and 1992?  What about the many universities in the oil states of the Gulf?  In none of these places would universities appear to meet the description that Western idealists claim is the bare minimum; does this mean there are no “real” universities there, either?  I bet there are a lot of people in those countries who, while wishing for more academic freedom like their western colleagues, would nonetheless bristle at the claim that their universities – and hence their scholarship – is any less real than ours.

There are good historical reasons why western universities look the way they do, and we are not wrong to treasure them.  But maybe, if we are going to use universalizing rhetoric about what universities are, we should have the decency to test the validity of our generalizations.

October 15

The Most Horrifying Book of the Year

One of the most famous studies on higher education and opportunity was published a little over fifteen years ago by economists Alan Krueger and Stacy Berg Dale.  Using something called the College and Beyond Survey, they followed over 6,000 students who had been accepted to American universities in 1976, and then looked at their outcomes almost twenty years later, in 1995.  The key finding was that holding SATs constant, school selectivity didn’t matter much.  The important thing wasn’t attending Harvard, it was having the marks to get into Harvard (for whites, at least – for black students, accessing the networks available to selective school alumni did have a positive effect on education).

As selective universities became even more selective during the early 2000s, and their average student’s socio-economic background drifted upwards, this study was comforting: the rich were just wasting their money on Ivies, and the poorer but talented who were excluded from those schools would end up doing just as well, even if they went elsewhere.  Except: I’ve never met an American parent who actually believed the study.  Sure, they’d say, but things have changed since the mid-70s.  Networks matter more, and by God the one thing you get at an Ivy League school is a network.

A book came out this past spring that explains why they’re right and Kruger and Dale are, if not wrong, then at least out of date.  It’s called Pedigree: How Elite Students Get Elite Jobs by Lauren Rivera, a professor at the Kellogg School of Business at Northwestern University.   It follows the graduate recruiting activities of a number of unnamed banking and consulting firms – the tiny fraction of companies that give 22 year-olds jobs that pay roughly six figures in the first year – across a number of Ivy League schools. And it will horrify you, and make you profoundly glad you don’t live in the United States.

The first couple of chapters are pretty mind-blowing.  The descriptions of how these major banks and consulting companies are dropping hundreds of thousands of dollars – each – on recruiting activities on these Ivy League campuses are bad enough (there must be a lot of very good parties at these places). What is truly mind-blowing is that all of these organizations, filled with “masters of the universe” types, genuinely seem to think that whatever Harvard and Princeton admissions is doing, it must be absolutely, 100% right, because that’s effectively the only filter they have.  If you’re from a selective Ivy, these purveyors of elite jobs think “they must be smart and fast learners; let’s hire them”.  From a state school?  You don’t even get an interview.  What you have accomplished in your four years of higher education is irrelevant; it’s all about where you went to school.

Not only is this mindbogglingly stupid (and, to tell the truth, odd – surely one of these companies should have arbitraged this over-focus on a tiny minority, and gone big on flagship state university hiring?), but also it is infuriating in the extreme.  Read it, or at lest the first couple of chapters, which describe how firms filter by campus (it gets less interesting after that): if your blood doesn’t boil, you have no soul.

A last note: try reading this book next to Kevin Carey’s The End of College, or Ryan Craig’s College Disrupted.  Both Carey and Craig are of the opinion that one thing that will drive disruption in higher education is that companies are going to want the “best” employees. Eventually, they say, algorithms are going to come along and find those employees wherever they are, at which point the prestige value of a degree from a selective school will disappear quickly.

But reading Pedigree it becomes clear that what employers are usually looking for are people who remind them of themselves.  People they won’t mind hanging out with on a long night in the office.  People who will fit in.  And you don’t need an algorithm for that.  You just need an old boys’ club.

September 30

Fields of Study: Some International Comparisons

Stop me if you’ve heard this one before: “We really need to have more STEM grads in this country.  Really, we ought to be more like Germany or Japan – fewer of these ridiculous philosophy degrees, and more of those lovely, lovely engineers and scientists.”

Personally, I’ve heard this one too many times.  So, just for yuks, I decided to take a look at the distribution of degrees awarded by field of study across the G7 countries, plus (since I’m overdue in throwing some love in the direction of the blog’s antipodean readership) New Zealand and Australia.  The data is from the OECD, and is valid for 2012 for all countries except France, where the data is from 2009, and Australia where it is from 2011.

I started with the percentage of degrees that came from the Arts and Humanities.  The result was… surprising.

Figure 1: Percentage of All Degrees Awarded From Humanities Fields

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Germany leads the pack with just under 21% of all degrees being awarded in humanities, and Canada and Australia bring up the rear with 11.6% and 11.1%, respectively.  So much for the narrative about Canada producing too many philosopher baristas.

But as we all know, humanities are only half the story – there’s also the question of applied humanities, or “Social Sciences” as they are more often known.  The Social Science category includes business and law.  It turns out that if you add the two together, the countries cluster in a relatively narrow band between 47 and 56 percent of all degrees granted.  No matter where you go in the world, what we call “Arts” is basically half the university.  We should also note that Canada’s combined total is essentially identical to those of the great STEM powerhouses of Japan and Germany.

Figure 2: Percentage of All Degrees Awarded From Humanities and Social Science Fields

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Let’s now look directly at the STEM fields.  Figure 3 shows the percentage of degrees awarded in Science and Engineering across our nine countries of interest.  Here, Germany is in a more familiar place, at the top of the table.  But some of the other places are surprising if you equate STEM graduates with economic prosperity.  France, in second, is usually not thought of as an innovation hub, and Japan’s third place (first, if you only look at engineering) hasn’t prevented it from having a two-decade-long economic slump.  On the other hand, the US, which generally is reckoned to be an innovation centre, has the lowest percentage of graduates coming from STEM fields.  Canada is just below the median.

Figure 3: Percentage of Degrees Awarded from Science and Engineering Fields

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Last, Figure 4 looks at the final group of degrees: namely, those in health and education – fields that, in developed countries, are effectively directed to people who will pursue careers in the public services.  And here we see some really substantial differences between countries.  In New Zealand, over one-third of degrees are in one of these two fields.  But in Germany, Japan, and France – the three STEM “powerhouses” from Figure 3 – very few degrees are awarded in these fields.  This raises a question: are those countries really “good” at STEM, or do they just have underdeveloped education/heath sectors?

Figure 4: Percentage of Degrees Awarded in Health and Education Fields

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So, to go back to our initial story: it’s true that Japan and Germany are heavier on STEM subjects than Canada.  But, first, STEM-centricness isn’t obviously related to economic growth or innovation. And second, STEM-centricness in Germany and Japan doesn’t come at the expense of Arts subjects, it comes a the expense of health and education fields.

September 14

Better Post-Secondary Data: Game On

On Saturday morning, the US Department of Education released the College Scorecard.  What the heck is the College Scorecard, you ask?  And why did they release it on a Saturday morning?  Well, I have no earthly idea about the latter, but as for the former: it’s a bit of a long story.

You might remember that a little over a year ago, President Obama came up with the idea for the US Government to “rate” colleges on things like affordability, graduation rates, graduate earnings and the like.  The thinking was that this kind of transparency would punish institutions that provided genuinely bad value for money by exposing said poor value to the market, while at the same encouraging all institutions to become more attentive to costs and outcomes.

The problem with the original idea was three-fold.  First, no one was certain that the quality of available data was good enough.  Second, the idea of using the same set ratings for both quality improvement and to enforce minimum standards was always a bit dicey.  And third, the politics of the whole thing were atrocious – the idea that a government might declare that institution X is better than institution Y was a recipe for angry alumni pretty much everywhere.

So back in July, the Administration gave up on the idea of rating institutions (though it had been quietly backing away from it for months); however, it didn’t give up on the idea of collecting and disseminating the data.  Thus, on Saturday, what it released instead was a “scorecard”; a way to look up data on every institution without actually rating those institutions.  But also – and this is what had nerds in datagasm over the weekend – it released all of the data (click “download all data” here).  Several hundred different fields worth.  For 20 years. It’s totally unbelievable.

Some of the data, being contextual, is pretty picayune: want to know which institution has the most students who die within four years of starting school?  It’s there (three separate branches of a private mechanics school called Universal Technical Institute).  But other bits of the data are pretty revealing.  School with the highest average family income? (Trinity College, Connecticut.)  With the lowest percentage of former students earning over $25,000 eight years after graduation? (Emma’s Beauty Academy in Mayaguez, PR.)  With the highest default rates? (Seven different institutions – six private, one public – have 100% default rates.)

Now, two big caveats about this data.  The first is that institutional-level data isn’t, in most cases, all that helpful (graduate incomes are more a function of field of study than institution, for instance). The second caveat is that information around former students and earnings relate only to student aid recipients (it’ a political/legal thing – basically, the government could look up the post-graduation earnings for students who received aid, but not for students who funded themselves).  The government plans to rectify that first caveat ahead of next year’s release; but you better believe that institutions will fight to their dying breath over that second caveat, because nothing scares them more than transparency.  As a result, while lots of the data is fun to look at, it’s not exactly the kind of stuff with which students should necessarily make decisions (a point made with great aplomb by the University of Wisconsin’s Sara Goldrick-Rab.

Caveats aside, this data release is an enormous deal.  It completely raises the bar for institutional transparency, not just in the United States but everywhere in the world.  Canadian governments should take a good long look at what America just did, and ask themselves why they can’t do the same thing.

No… scratch that.  We ALL need to ask governments why they can’t do this.  And we shouldn’t accept any answers about technical difficulties.  The simple fact is that it’s a lack of political will, an unwillingness to confront the obscurantist self-interest of institutions.

But as of Saturday, that’s not good enough anymore.  We all deserve better.

September 01

The Tennessee Promise

So, yesterday I talked about a big increase in access in the UK, which seems to have little to do with tuition fees.  Today, let’s talk about a developing story in the United States, where a lowering of net prices seems to have had a big impact on access.

You may recall that in the US over the last couple of years, there has been a growing movement for free community college, something that President Obama picked up on earlier this year.  But before Obama picked up this baton, free community college had already been introduced in Republican Tennessee, where governor Bill Haslam had turned something called “the Tennessee Promise into law in 2014.

Technically, the Tennessee Promise is not “free tuition”.  It’s only available to students entering straight from high school (which is a bit weird in terms of design, but whatever).  Students have to be full-time, maintain a 2.0 average, meet regularly with a mentor, and perform eight hours of community service per term.  And technically, what it does is reduce your tuition to zero after all other forms of aid and scholarship are taken care of (this is what is known in the business as a “last dollar” scholarship).  If you apply for the award and meet the terms, government will cover your tuition to the point where your net price is zero.  For a good number of people, this means free tuition with minimal strings attached, so let’s just call it free tuition.

Now, you might expect that with this kind of incentive, enrolment might rise a bit.  And you’d be right.  According to very early results, the number of freshmen is up 29.6% over last year.  Obviously this is a pretty impressive result, but before we get too excited, we should probably find out a little more about where these new students are coming from.  Are they “new” students, or are they mostly students who would have gone to a 4-year college, but have chosen 2-year instead?  And what about students’ financial background?  If you’re poor enough to be anywhere near maximum Pell grant ($5,775), the Tennessee Promise provides no additional aid, because tuition at Tennessee Community Colleges is about $4,000.  So it may well be that what the Tennessee Promise is doing is providing aid to people higher up the income ladder.  This is a little inefficient, but since (as I noted back here) community college students tend to come from poorer backgrounds anyway, this is not as regressive as it would be if it were implemented at 4-year colleges.

We should be able to answer these questions in a few weeks (yes, Canadians, in some places data is available in weeks, rather than years).  Even though Tennessee does not track applicants by income the way the UK does, the state’s excellent annual Higher Education Fact Book does contain two pieces of data that will help us track this.  The first is college-going rates by county, which will help us understand whether the jump in participation is concentrated in higher- or lower-income counties, and the second is the percentage of students who are Pell-eligible.  I’ll keep you up-to-date on this when the data is out.

The most intriguing possibility here is that rates of attendance for Pell-eligible students might be rising, even though the Tennessee Promise provides no actual added benefit for many of them.  It may well be that simply re-packing the way we frame higher education costs (“it’s free!”) matters more than the way we actually fund it (“your tuition is $4,000, and you also have a grant for $4,500”).

This would have significant policy ramifications for us in Canada.  As we noted last year in our publication, The Many Prices of Knowledge, many students at Canadian community colleges face an all-inclusive net price that is negative, or very close to it.  Similarly, poor first-year university students in both Ontario and Quebec have negative net prices.   No one knows it, because we package aid in such a ludicrously opaque fashion, but it’s true.  And if the Tennessee data provides evidence that the packaging of aid matters as much as the content, then it will be time for Canadian governments to re-evaluate that packaging, tout de suite.

August 24

Welcome Back

Morning, all.  August 24th.  Back, as promised.

School starts shortly.  The new crop of frosh were born in 1997, if you can believe that – to them, Princess Diana has never been alive, and Kyoto has always been a synonym for climate change politics (check out the Beloit Mindset List for more of these ).  Stormclouds line the economic horizon.  It’s going to be an interesting year.

In the US, progress on any of the big issues in higher education are likely to be in suspension as the two parties spend months figuring out who their candidates are going to be.  On the Democratic side, the presumptive candidate, Hilary Clinton, has put forward an ambitious plan for higher education, which, barring an absolute sweep at the polls, has almost no chance of passing Congress.  On the Republican side, no one apart from Marco Rubio seems to care much about higher education, except for Scott Walker who seems to want to use higher education as a punching bag, much as his idol Ronald Reagan did fifty years ago.

Overseas, the most consequential potential development is in the UK where – if the government is to be taken at face value – for the first time anywhere, measured quality of teaching might meaningfully affect institutional resources. In the rest of Europe, the ongoing economic slump looks set to create new problems in many countries: in Finland, where GDP contracted for the third year in a row, government funding will be down roughly 8% from where it was last year.  And that’s in one of the countries that thinks of itself as being particularly pro-education.  Germany, Sweden, and (maybe) Poland look like the only countries that might resist the tide.

Here in Canada, the outlook remains that post-secondary education will continue to see below-inflation increases in government funding for the foreseeable future, except in Alberta where the new provincial government intends on giving institutions a big one-time boost, which may or may not be sustainable, depending on how oil and gas prices fare.  This means resources will be scarce, and in-fighting for the spoils will be fierce.  And this, in turn, means a lot of governance, a lot of wailing about “corporatization” (always a good epithet when funding decisions aren’t going your way), and – inevitably, given the recent events at UBC – a lot of arguments about resource allocations, dressed up as arguments about governance.

(In case you’re wondering: I have no idea what happened there, exactly.  I do, however, believe three things: i) in a corporate context, the statements by the Board of Governors and interim President on Gupta’s departure are actually quite easily interpretable, and don’t leave a whole lot to the imagination; ii) if/when the truth comes out, it’ll be a hot mess of grey zones, and some of the wilder conspiracy rhetoric about the departure will seem ludicrous; and, iii) any theory positing that Gupta was fired for a lack of “masculinity” by a Board Chair who not only spent millions of his own dollars to create a dedicated Chair on Diversity in Leadership, but also that replaced said “unmacho” President with Martha Piper of all people, has more than one prima facie credibility problem.)

But behind all this, there’s a broader truth that I think the higher education community is being very slow to acknowledge.  The era of growth is over.  Higher education is not a declining industry, but it is a mature one, and this changes the nature of the game.  In the aughts, Canadian university income increased faster as a proportion of GDP than pretty much any country in the world (Netherlands and Russia aside).  It was a rising tide that raised all boats.   And I mean that literally: as a share of the economy, universities grew by half a percentage point (from 1.4% to 1.9% according to the OECD, which I think is a bit of an underestimate), which is like adding more than the value of the entire fishing industry.

But those boats stopped rising a couple of years ago.  Institutions with smug strategic plans about increasing excellence need to face reality that there’s no new money with which to achieve those goals: funds for new projects are, for the most part, going to have to come out of increased efficiencies, not new money.  It’s tougher sailing from here on out – permanently.  Institutions are going to need to be leaner, better managed, and more focused.  However, the meaning of those terms are hardly uncontested in academia.

This should make for a fun year.  Looking forward to it.

August 12

Summer Updates from Abroad (3): An Intriguing American Student Aid Debate

Why do we give people student loans and grants?  Is it to help them get knowledge, or just credentials?  That question is subject to much debate in Washington right now.  At issue is whether student assistance helps or hinders innovation in higher education; at stake are potentially billions of dollars in public funding.

Let’s rewind a bit here: student aid in the US is governed by something that goes by the name of “Title IV” (meaning, essentially, chapter IV of the Higher Education Act, as amended from time-to-time).  The very first section of title IV states that student loans can only be given to students at “eligible institutions”, which means (among other things) that the institution has to be post-secondary, has to award degrees, has to be accredited, etc.  All sensible things to protect both consumers and the public purse.

The problem is, what if a new form of education pops up that is valuable, but doesn’t meet these tests?

There’s been a lot of focus recently on a variety of different types of programs called “just-in-time” education, the buzzword du jour that refers to code academies/bootcamps, and the like.  These academies – private educational establishments that often skirt the legal edges of provision of vocational education – are seen in many quarters as being incredibly valuable.  Coders are in short supply, and these bootcamps provide short (usually 8-12 weeks) courses that allow students to get the basics, and apply for jobs.  Some of them also provide training in entrepreneurship, and have mentors on-site to help with start-ups.  Stories about graduates quickly getting well-paying jobs abound, and given the long-standing worries about the youth labour market, a lot of people want to see these things expand further.

But these organizations aren’t charities.  A 12-week course in New York or San Francisco will run a student five figures, and not everyone has that kind of scratch on hand.  Hence, the desire in some quarters to see student loans extended to this sector.

Now you can see the argument here: why are we prevented from giving public support to institutions that provide skills rather than credentials?  Why are we stifling potentially beneficial innovation?  On the other hand, you can also see the opposite argument: who runs these schools, who regulates them, what are their credentials as educators, and what kinds of cranks and shysters will flood into the sector if you start letting students pay for this education using public money rather than their own?

The cranks and shysters problem is a perennial one in American higher education.  Even the vaunted GI Bill attracted them.  Though it’s more famous for putting ex-servicemen though college, the Bill also dealt with vocational training, leading to some rather dubious circumstances; Glenn Altschuler and Stuart Blumin, in their excellent account of the Bill, have a hilarious anecdote about veterans signing up at a school that offered three-month courses in chicken sexing, because they could get their living expenses covered while doing a (sorry, can’t resist) bird course.

Quite simply, when you hand over a lot of your education system to the private sector, *and* you choose to allow students to use public money, you either have to have some very good regulators, or you have to tolerate the fact that there are going to be some dubious folks trying to make a fast buck out of the situation.  As the Harkin Report on for-profit education, and Suzanne Metzler’s excellent book Degrees of Inequality have made clear, that’s exactly what happened in the 00’s when he Department of Education’s rules were too lax.

At the moment, the Obama administration’s preferred solution seems to be to try to get these academies to nestle themselves within existing universities and colleges.  There are some advantages here: universities would love to have these kinds of spaces to help students gain tech/entrepreneurial skills, the academies would gain access to more secure revenue, and the government would be assured of some oversight on quality.  From the perspective of people worried about cost-inflation in higher education, though, this might be a disaster.  Universities would undoubtedly pay for this by charging even higher fees to all students; instead of academies being a force outside the system, competing with universities, and forcing them to get better at producing better employment incomes, they’d be joining the Beast instead.

Complicated stuff.  Personally, I’m glad the Americans go through these debates, so the rest of us can learn from them without actually having to do the difficult and politically dangerous work of experimentation ourselves.

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