HEQCO is consistently putting out interesting reports these days, and it’s a shame they aren’t attracting more attention. The latest one is called, College-to-University Transfer Arrangements and Undergraduate Education: Ontario in a National and International Context, by David Trick. It’s a really nice paper which gives a multi-jurisdictional overview of transfer policies and practices, and provides a balanced assessment about both the benefits and the limits of 2+2 policies. Its final conclusions concerning different possible policy positions for increasing transfer are also clear and sensible.
That said, one aspect of the paper is highly problematic: namely, its financial projections.
The paper attempts to compare the costs of delivering a degree through 4 years in university, versus delivery via a 2+2 transfer arrangement. This is done – far too simplistically – by comparing the tuition a student would pay with the amount of government grants each student would attract using each pathway. To his credit, Trick does show that it’s not quite that simple: savings to students and governments would, in fact, vary by field of study and by time spent in university after the transfer (2+2 college/university is cheaper than 4 years of university, 2+3 isn’t), and he notes that there are some scenarios in which transfer is more expensive than not transfering.
Regrettably, though, HEQCO’s project summary page glosses over this caveat with the headline, “2 + 2 = potential savings for students and government”, which – possibly unintentionally – makes the paper seem a lot less equivocal than it actually is. But there’s an even more basic problem in Trick’s math: his assumption that the “cost per student” at universities actually approximates “income per student”.
Over the course of a degree, this assumption is undoubtedly true, but on a year-by-year basis it’s plainly false. Universities spend a lot less per student in years 1 and 2 than they do in years 3 and 4. It’s not a trivial difference; just looking at class-size differentials in Arts, you’d have to think the gap is as much as 4-to-1. If that had been taken into account, the paper would have arrived at the opposite conclusion: that shifting to 2+2 would actually raise costs per students because it would take students out of universities for precisely the years they don’t cost very much. If this became government policy, it would undoubtedly “save money” in the sense that formula-driven costs would drop. But it would mean that universities would see a cut in their budget, but no cut in the number of expensive upper-year students. Inevitable end result: larger class sizes.
As I said, it’s a good paper. But greater realism in these numbers would have made it even better.
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I haven’t read the report yet, but do agree with your final comment about costs. In the case of business programs, many 1st and second year courses can be well taught by contract faculty to large classes. However it is difficult to find qualified contract faculty to teach advanced courses, especially in such fields as finance. Tenure stream faculty in business command very high salaries, so the cost of 3rd and 4th year classes would not be affordable without being subsidized by large 1st and 2nd year classes. 2+2 models leave the expensive cost of the programs to the universities. In niche areas where there is excess capacity at the university, they may make sense, but for volume programs like business, they are not financially sustainable on any large scale.
I think CREPUQ made a similar point a few years ago in a paper on the underfunding of Quebec universities. Since (McGill aside), the vast majority of Quebec university students do the equivalent of their first year of study at CEGEP, CREPUQ argued that the province’s universities were underfunded even beyond the typical “revenue-per-FTE” measure. They argued that a proper comparison would take into account the fact that the cost of teaching the equivalent of years two to four is higher and thus the revenue-per-FTE should be even higher in Quebec than elsewhere.
My impression is that trial balloon sunk pretty quickly, for what it’s worth.
Alex, thank you for taking note of my paper on college-to-university transfer. Thanks especially for giving the paper a careful read and summarizing the nuances so well. There is much for Ontario to learn from the 14 jurisdictions I looked at, but, as you suggest, the details matter a lot.
You are right to say that my financial analysis uses revenue data as a proxy for expenditure data. Ideally one would want to have comprehensive unit cost data for every university and college program in Ontario, based on a standard methodology that everyone could agree on. If these data were available, one could test a number of interesting hypotheses.
First, one would want to test whether university programs in Years 1 and 2 generate a financial surplus. They may well do so, but the remarkably low operating grant that Ontario pays for students in Year 1 and General Arts suggests the surplus is lower than it would be in other jurisdictions.
If students in Years 1 and 2 do generate a surplus, one would want to test some different hypotheses about how that surplus is spent. One possibility is that university programs in Years 3 and 4 generate a loss that requires a subsidy. This is essentially the position taken in your commentary. We know from CUDO that programs in Years 3 and 4 have smaller class sizes than programs in Years 1 and 2. But we should also want to know how sessional lecturers are being used. Even small sections in upper-year courses can operate at a surplus if they are taught by sessionals. Sadly there is no system-wide data on how sessionals are being deployed to reduce unit costs.
Another hypothesis is that the surplus from students in Years 1 and 2 is being used to subsidize research. Neither the federal government not the Ontario government explicitly funds the research time of principal investigators, and government programs to support research overheads pay much less than actual costs. Given the magnitude of the research enterprise, any claims about cross-subsidization within the university will be sensitive to one’s assumptions about how research is being funded.
Yet another hypothesis is that the surplus is used to subsidize graduate programs, especially at universities that guarantee financial aid to students in research-oriented graduate programs.
Any analysis of cross-subsidization is complicated by differences among universities and programs. A further complication is that the level and direction of cross-subsidization need not be static; in fact, the situation probably changes each year as per-student costs outpace per-student revenues.
In the absence of better information, I think it is reasonable to conclude that any the surplus from teaching students in Years 1 and 2 (however large or small) is being used to address many competing claims across the university, not just the costs of teaching Years 3 and 4. For this reason, I think revenue is the best available proxy for expenditure on teaching students in Years 3 and 4.