Arne Duncan's Got it All Wrong, Again

I'm just back from Washington DC and now unhappily certain that President Obama is headed in the wrong direction with his efforts to get a handle on college costs.  The winds have shifted and Arne Duncan has taken the lead on the planning-- and well, you know what that means.  We're going to get yet another quasi-market solution that fails to grapple with the real problems and destroys any hope for a good result.

Here's the thing:

The current financial system hinges on the actions of students, prioritizing their consumer choice in the hopes that those choices will be well made.  It assumes that any problems with schools will be resolved by students turning away from them.  But this assumption is deeply flawed, not only because students do not (and cannot, and will not) make informed choices, but also because a segment of selective schools (and states) have manipulated aid policy for so long that the incentives are now distorted and they can do whatever they wish. And what they want is to maximize their own interests, which are rarely aligned with those of their students. So the problem, in other words, is really the behavior of schools and states.  Yes, students and families are an issue too, but their lack of information is just a fraction of the overall college cost problem.

Creating a ratings system for all of the nation's colleges and universities will do absolutely nothing about institutional and state behavior because:

• Student choice is often highly constrained by finances, family, and geography -- you can declare a local community college "bad" but students have no choice but to attend it anyway, and if it closes nowhere else public to go (remember, there are far fewer community colleges than k-12 schools, and for-profit institutions who'd jump at the chance to fill in for the missing community college). We already have a ranking of community colleges, thanks to Kevin Carey, and no one is making use of them.

• Schools simply won't care -- good luck making ratings the elites will take more seriously than US News, and for the others, they know their consumers and count on the fact they have no other good options

• States won't view the ratings as their problem

Frankly, it is laughable to suggest that a college ratings system will be "consumer protection" from the college cost crisis we now face.  Instead, just like Arne's war on teachers (rather than poverty and segregation) it is an enormous waste of taxpayer resources and destined for failure. Just look at the Scorecard and the Navigator-- they aren't used or demonstrably effective at all.

This kind of nonsense has to stop. President Obama had it right when he said he'd tie Title IV financial aid to institutional performance. The next step was not to turn to Arne, but rather his experts who've crafted nuanced accountability systems with anti-creaming provisions. We've tried the voucher approach to financial aid-- it's time to get serious.  

When Title IV began, there were relatively few seats in higher education in the public sector and relatively few students. Today there's enormous capacity in the public sector and tons of students.   We can't afford to make every current institution Title IV eligible, and the ones that should re-compete for their eligibility are the ones who have created the current crisis: 

(a) the selective, elite private non-profits whose admissions criteria mean they do not serve any kind of public good while they establish "standards" for college quality that are conflated with great expense, and 

(b) the for-profit institutions that set their tuition according the availability of federal aid.  

If you reign in those two players, the rest will begin to fall in line.

President Obama needs a do-over. He made a mistake.  Pull back on the wasteful ratings plan, and instead say "let's do this thing right."  Prioritize putting public resources into public institutions of higher education.  Fund them and their students well, for once.  Time to degree will go down, and quality of instruction will rise.  Next, create accountability metrics intended to lower costs and open access at the private non-profits (else cut them out of Title IV), and to lower costs and increase completion rates at the for-profits (again, or else they're out).  

Such a plan will not require massive behavioral changes on the part of millions of college students or require big informational campaigns.  It will not leave students to attend colleges designated "bad" or have no local option at all-- the community colleges will remain and do their jobs better by having a decent amount of money to spend.  What it will do is focus squarely on the problem at hand, and go straight at it.

There, now get to work.

  *****

But really, who am I kidding?  Arne and his big money men in Congress (mainly grads of private colleges and universities) will never let this happen. They'll ensure we get a ratings system that protects no one,  least of all the students. There's simply too much money to be made.

Senator Warren, Director Cordray --- are you listening?

Rethinking Financial Aid's Role in Student Retention

The administration of federal student aid is a highly complex and bureaucratic job thanks to a great deal of program complexity and regulation. Financial aid offices are often overwhelmed with the tasks involved in that administrative process, with staff finding that little time for anything else remains at the end of the day.

Unfortunately, simply following the rules and norms associated with financial aid administration is demonstrably insufficient when it comes to meeting the needs of today's students.  With a far greater number of students entering higher education without the support of college-educated parents, and facing more significant financial constraints (and higher college costs), an effective financial aid office must do more than distribute financial aid and apply rules and regulations.  To ensure that the aid dollars are spent in a cost-effective manner, aid offices must also be part of a cross-campus effort focused on student retention.

Everyone who works on the campuses of colleges and universities today has a shared responsibility for supporting undergraduate retention. This responsibility is essential if they want to help higher education become an engine of equality and social mobility, rather than the engine of inequality that it currently is.  Many of the nation's financial aid officers are committed to this goal and eager to achieve it.

In today's context, a traditional aid office focused on regulation and personal responsibility is contributing to a crisis.  Across the country, students who have overcome enormous challenges to college access find their way onto campus but struggle to retain their financial aid due to rules surrounding the 'satisfactory academic progress' (SAP) standards.   SAP usually means that students must maintain a C average or risk losing their aid. When students fail to do this, there are significant institutional consequences (a loss of Pell dollars, lower graduation rates) and thus the school has failed as well.

Given the stakes, it is reasonable to ask: what role should financial aid offices play in ensuring students make SAP and keep their aid so that they have the financial support necessary to stay in school and reach graduation?

Recent conversations with aid officers suggest that the typical answer goes something like this:
"We want all students to succeed. We tell them that they must make SAP and what will happen if they don't. When they get in trouble, we let them know, and tell them to get help.  We have lots of students to support, and some do their job, and others don't."

I'm sympathetic to that answer, but research suggests it is woefully inadequate.  Here are three critical facts about first-generation college students to illustrate the problem:

1.  They do not know what actions to take to increase their grades.   Research across the educational spectrum shows that holding students responsible for outcomes they do not know how to achieve is ineffective and counterproductive.  Example #1: a student tries to improve her GPA decides to take fewer classes, which results in her becoming part-time, and losing her grants that require full-time enrollment.  Example #2: a student tries to improve her GPA by taking more courses, because she does not know how GPA is computed and she thinks more is better.

2. They are ill-equipped to sort out good advice from bad advice.   When they follow instructions and go seek advice from advisers, they do not know how to handle conflicting advice or determine when that advice is under-informed.  I have encountered academic advisers who do not know that student #1 above will lose some financial aid, or do not tell student #2 that taking more classes could put her at risk.

3. They have little external support, experience more family crises, work longer hours, and are often more averse to taking on loans.  While they might want to seek out help from others, that help is often offered only during daytime hours when their schedules are packed.  In addition, when told they they should take on loans, they feel alienated and misunderstood. 

The growing presence of such students in higher education and the consequences of failing to support them to make SAP as they work their way through college requires financial aid offices to rethink their role in student retention. The financial aid officer is often the first to know the student is in trouble.  This should trigger an early warning system.  In 2013, the implementation of an early warning system ought to be required at every Title IV institution.  The result of an early warning trigger should be proactive efforts (coordinated by multiple offices as needed) to reach the student for comprehensive advising that integrates academic, financial, and family support.  Proactive efforts must reach the student where they are-- email is notoriously ineffective for this purpose. Until the office is connected to the student and progress is occurring, contact should be by phone or in person.

Effective advising is be supportive, non-judgmental, and aligned with the realities of students' lives.  First generation students are more than willing to take responsibility for their academic performance and they are, at the same time, right to expect their colleges and universities to be responsible in return for serving them.    In this day and age, responsibility in financial aid office goes beyond using the same old practices for every student, irrespective of need. We will never increase equity in graduation rates or do our jobs in a cost-effective manner without this fundamental transformation.

The nation's colleges and universities are littered with dropouts who began college with support from financial aid, only to lose it because of an insufficiently supportive environment.  That is a tragedy we cannot afford.   It's time to act.


Data Note:

Some schools are open and honest about the extent of their SAP challenges.  It would be great if more schools published reports like this one from El Camino.

Three Radical Ideas for Improving (not Reforming) Higher Education

While watching the annual Gates Postsecondary Education Convening from afar via twitter, I am struck by the apparent absence of discussion about several core underlying issues keeping more students from succeeding in earning college degrees.

We cannot increase the success of undergraduates from disadvantaged backgrounds without ensuring that they are safe, healthy, and ready to learn. Food insecurity is a growing problem in higher education, as revealed by institutional surveys, and hopefully soon tracked by national data (I'm working on it).

Idea #1:  Institute a free/reduced price breakfast and lunch program at all public colleges and universities where at least 1 in 3 students receives a Pell Grant. 

Far too many of today's faculty are ill-equipped to teach the students of tomorrow.  The focus on research has trumped the emphasis on high-quality teaching even at institutions with no research mission.

Idea #2: Make teaching a priority in public higher education. 

a. Require that all new hires have teaching experience of some kind.

b. Require a pedagogical talk in the hiring process.

c. Require bi-annual professional development credits.

There is a well-known and very basic resource problem in higher education. The fewest dollars flow to the neediest students.  Per student spending of about $6000 in community colleges is a travesty.

Idea #3: Focus funding where it can do the most good. Require that all states receiving any Title IV financial aid maintain adequate per-student spending at their community colleges.  Based this on appropriate adequacy funding studies done by state.


None of these answers involve technology, I know. None speak to "quality" because I do not think the evidence on declining quality is solid-- the demographic changes in higher education have collided with the redefining process, and thus it is far from clear that reformers are saying anything more than "these students" aren't as good as yesterday's.

Without three these reforms in place, I don't think the technological solutions constitute anything more than tinkering towards utopia, and any efforts to cut costs could do more harm than good.

The Unintended Consequences of Ending Shared Governance

As I wrote in my last post, efficiency-minded legislators are raising questions about the role faculty play in decision-making on campuses across the University of Wisconsin System, and whether shared governance represents an expensive and wasteful practice.

I understand where these folks are coming from. Involving more people in decision-making is costly, in terms of time in particular.   But attending only to those costs without considering the benefits is short-sighted and will generate unintended consequences.  This is because economic evidence indicates that the costly process of shared governance generates cost-savings as well.  It seems that without the cost-savings generated by shared governance, college would be even more expensive for Wisconsin families.

Professor emeritus Robert Martin of Centre College explains this counter-intuitive process in a set of papers written over the last 15 years, and most recently summarizes his conclusions in a paper written for the American Enterprise Institute, titled "Higher education governance: a barrier to cost containment." That paper examines the hypothesis that former student Regent and current Representative Robin Vos expressed at the recent Regents meeting: that "facets of the governance structure push higher education toward higher costs, minimal transparency about outcomes, and a low level of quality control."

Martin finds that Vos is right in one sense-- the governance structure matters for college costs.  But his evidence points to the opposite conclusion that Vos and his colleagues reached-- the answer is increasing the faculty role in governance, not decreasing it. He describes this finding using clear and accessible prose in a piece authored for the Chronicle of Higher Education, "College costs too much because faculty lack power."  In it, he explains that "it is not the "shared" part of "shared governance" that has failed; quite the opposite. The fault lies in the withering away of the shared part. Reason and data alike suggest that the largest part of the problem is that it is administrators and members of governing boards who have too much influence over how resources are used."

In a recent email to me, Martin provided an analysis of the University of Wisconsin-Madison, where the trends mirror those described in his national work. In his words,

 I attach a Word file that contains a summary statistical table for University of Wisconsin-Madison (see below) that corresponds to Table 1 in my SSRN article with Carter Hill on "Measuring Baumol and Bowen Effects in Public Research Universities." There are several things to note. 

1) The dramatic increase in reported spending for instruction, research, and public service after 2008 [which supposedly] came out of overhead and into academics. See my SSRN article on "management" of financial reporting in higher education -- that article will be published this month in Challenge. [Note to readers: this paper concludes that while this apparent resource reallocation might be legitimate, they may also be indicative of a new "management" of financial reporting that simply reclassifies expenses, as frequently done by corporations.]

2) If you look at the pre- and post-2008 staffing patterns for academics versus administrative staffing you will see reductions in academic staffing and increases in administrative staffing after 2008. So, it is hard to explain where the supposed increases in academic spending and reductions in overhead spending could have come from.

3) Throughout the 1987 to 2008 period the university economized on the use of tenure track faculty while rapidly expanding the number of nonacademic professional employees.  If tenure track faculty are the primary cause of higher cost, it is clear they are not very good at looking after their own interest.  Clearly, tenure track faculty would want more of their own and fewer contract and part time faculty and would not prefer more administrative staff.

 
 
































While I appreciate Robin Vos's attention to college costs, on behalf of Wisconsin families I do hope he will take this information into account when deciding how to work on lowering them.  Relying on instinct rather than evidence could have disastrous consequences for the state's future workforce.

Wisconsin Republicans Rethinking Shared Governance in University of Wisconsin System

At a meeting of the Regents today, Representative Robin Vos suggested that the Wisconsin Legislature Republican caucus is rethinking the faculty's role in governance on UW System campuses, out of a sense that they are keeping the System from being "nimble."  I am concerned that Representative Vos may be unaware of economic research that indicates that faculty involvement in decision-making through shared governance appears to contribute to the containment of college costs.  Reducing faculty power in favor of increasing the administration's relative power could make college less affordable for Wisconsin students.  These unintended consequences of Vos's short-sighted idea deserve close examination, and I urge him to attend to these before pursuing it further.

Here is the document from the Republican working group.

Here is the video from the conference.  Vos begins speaking at the 1:17 minute mark on the first video, and these comments come just after the 1:18 minute mark.