Bacon's Rebellion

I’ve been exploring the idea on this blog recently that the evolution of a mono-culture of left-of-center thinking on American college campuses is alienating a large swath of the electorate. On the one hand, public colleges and universities lobby for more public dollars; on the other, their actions vitiate the values of much of the tax-paying public. No wonder political support for public higher education is waning.

In an article entitled, “Elitists, crybabies, and junk degrees,” the Washington Post highlights the views of Frank Antenori, a former Green Beret who serves in the Arizona state legislature — a legislature that has cut state support for higher education by 54% since 2008. Writes the Post:

There is a growing partisan divide over how much to spend on higher education. Education advocates worry that conservative disdain threatens to undermine universities. …

In July, a Pew Research Center study found that 58 percent of Republicans and GOP-leaning independents think that colleges and universities have a negative effect “on the way things are going in the country,” up from 37 percent two years ago. Among Democrats, by contrast, 72 percent said they have a positive impact.

A Gallup poll in August found that only about a third of Republicans had confidence in universities, which they viewed as too liberal or political. Other studies show that overwhelming numbers of white working-class men do not believe a college degree is worth the cost.

Antenori, who got most of his higher education by working through night school, thinks universities are becoming increasingly elitist and politically correct, that more kids should pursue vocational educations, and that taxpayers shouldn’t pay students to pursue “junky” degrees in “diversity studies and culture studies.”

Bacon’s bottom line: The backlash against higher education is just beginning. In a world in which every aspect of society and culture is becoming politicized — with the most heated rhetoric emanating from leftist echo chambers of the academy — don’t be surprised if taxpayers and tuition-paying parents begin evaluating higher-ed institutions through a politically polarized lens. If presidents of public universities in Virginia want to blunt that backlash — which seems to be gaining momentum — they might consider devoting at least a fraction of their efforts to attaining political/philosophical diversity as they do to racial and socio-economic diversity.

In the 2017 State of the Commonwealth Report, authors Robert M. McNabb and James V. Koch address the perennial question of why the price of higher education is increasing so much faster than everything else. While acknowledging that stagnant state financial support for the higher-ed system has played a contributing role, they insist that’s only part of the story.

As evidence, they proffer the graph seen above. The red line tracks the increase in the Consumer Price Index (CPI). The green line shows the cost of room & board, which relies on charges to students, with no contribution from the state at all. That cost has risen consistently over twenty years at about twice the rate as the CPI. The orange line shows mandatory student fees, which also receives no state funding. That cost has risen about three times the increase in the CPI. Together, the two categories account for roughly half the expense of attending college.

Tuition, the blue dotted line, rises at a rate somewhat faster than room and board. That’s the only piece influenced by the level of state aid. What factors other than state support might influence the cost of tuition? McNabb and Koch offer several in this list of factors driving up the overall cost of attendance (including tuition, fees, room and board), which I replicate here almost verbatim:

• Institutional concern with national rankings is epitomized by U.S. News & World-Report rankings. Fixation on rankings can lead to decisions divorced from the needs of taxpayers, students and families.
• Amenities competition stimulates institutions to offer such things as recreational spas and climbing walls as well as upscale (and expensive) food services.
• Institutions often construct new, spacious buildings even though it is costly to maintain this space, and utilization of existing space is surprisingly low. A 2014 study by the State Council of Higher Education for Virginia (SCHEV) disclosed that no residential four-year campus in the Commonwealth of Virginia utilized its classrooms more than 76 percent of reasonably available hours, and three campuses ranged below 60 percent usage. Parenthetically, it is not clear that adding significant new space is an intelligent public policy when internet-based instruction is expanding and head count enrollments are declining. Modernization and rehabilitation of existing space may make more sense and be less expensive.
• Institutions increasingly assess mandatory fees to support items ranging from student centers to athletic teams. In 2016-17, eight Virginia four-year public institutions charged their full-time undergraduate students athletic fees of $1,538 or more. Consider Christopher Newport’s $1,886 annual fee. This corresponds to a charge of $188.60 per three-hour undergraduate course. Doubtless, CNU’s Captains are well regarded, but they also are expensive, and students bear a substantial portion of that cost.
• The growth of institutional room and board charges at most Virginia institutions easily has exceeded the growth of the consumer price index. First-rate residence halls and excellent food are pleasing, but costly.
• Administrative proliferation (as measured by the number of administrators per faculty member or student) exists on most campuses. Further, these administrators tend to be paid well.
• Institutions have reduced the proportion of their budgets they spend on instruction.
• Disproportionate growth in spending on employee fringe benefits (which sometimes have substituted for pay raises during difficult years) has pushed tuition and fees upward.
• Federal government financial aid policies are based upon institutional costs. Hence, when institutional costs increase, the “feds” supply more money.
• Institutions are reluctant to take advantage of new teaching and learning technologies, flipped classrooms and other innovations that have the potential to scale higher education.
• Institutions are disinclined to share resources with other institutions, even in low-enrollment areas such as foreign languages and literatures.
• Institutions are averse to pricing the resources they use internally, such as space, and this leads to suboptimal behavior and hoarding.
• Institutional mission creep has propelled many institutions into offering new, low-enrollment programs, often at the graduates level.
• Faculty productivity, as measured by faculty credit hours generated, has declined on most campuses.
• Subsidies from undergraduate students often are required to support faculty research activity and this is true even in cases where the research also is supported by outside grants.

While the influence of these factors varies widely from institution to institution in Virginia, the authors acknowledge, “collectively, these are among the primary reasons why tuition and fee increases at Virginia’s public colleges and universities not only have vastly exceeded the growth in the consumer price index and median household income, but also why they have been substantially higher than the national average.”

Bacon’s bottom line: While I agree with the thrust of the McNabb-Koch analysis, I would be more circumspect in concluding that the factors listed above are “the primary reasons” for tuition and fee increases. In many cases, we just don’t have the data to say one way or the other. Despite that reservation, I think the list provides several fruitful lines of inquiry, and I suspect that the data would prove the authors correct in many instances.

Space utilization. To what extent, for example, is space underutilized on Virginia campuses? Every institution provides a different story. When Norfolk State University saw its enrollment plummet several years ago, for example, its space utilization went down as well. Utilization should improve as enrollment rebounds. Elsewhere, research universities cite the need for new buildings outfitted with specialized laboratories or other features to pursue advanced scientific and engineering disciplines, even if it means leaving former space underutilized. Thus, there may be legitimate explanations for temporarily low space utilization. However, I would agree that every college or university president should include in his or her dashboard of institutional performance a metric showing the utilization rate for individual buildings and campus-wide.

Low-enrollment programs. How many universities maintain low-enrollment programs? Which departments are fully enrolled? Which are under-enrolled? If I were a university board member, I would like to see a faculty-to-enrollee ratio for every department. If a department had persistently low enrollment, perhaps it should receive fewer resources — or perhaps it could compensate by pursuing more online enrollment. Do university presidents even collect that data?

Faculty productivity. My sense is that faculty productivity has declined over time, especially for tenure-track faculty members who are subject to the publish-or-perish dictum. What is the relative teaching load for full professors, associate professors, assistant professors, instructors, and graduate institutions? How many courses do they teach — and how many students are enrolled in those courses? This data should be readily available, and there is no excuse for institutions not compiling and publishing it.

McNabb and Koch are both industry insiders — Koch is former president of Old Dominion University. As long-time participants in the academic enterprise, they know how higher-ed works. They have tremendous credibility. Let’s hope that Virginia’s political class is paying attention.

Everyone knows that the cost of attending college in Virginia has soared in recent years, even as family incomes have stagnated. A good way to visualize the divergence between cost and affordability is to calculate the number of hours it takes for a family earning the Virginia median hourly wage to pay for a year of average tuition & fees. That’s exactly what Paul M. McNabb and James V. Koch have done in their 2017 State of the Commonwealth Report. The results can be seen in the chart above. The number of working hours required to attend a four-year college has increased 82% since the 2001-02 academic year, while the number for a two-year college has increased 67%. (These numbers don’t include room, board, textbooks and other miscellaneous costs.)

Higher education is the most inflationary sector of the U.S. economy, with cost increases outpacing that of the inflation-prone housing and healthcare sectors. In their analysis of Virginia’s higher-education system McNabb and Koch explain the causes of runaway tuition increases and explore the impact on Virginians. (Note: Koch, a former president of Old Dominion University, serves on the board of Partners 4 Affordable Excellence @ EDU, a sponsor of this blog.)

The question naturally arises whether Virginia’s colleges and universities are pricing state residents out of higher education. Pointing to the declining head count in the state’s public institutions — nearly 6% between the 2011-12 school year and the 2016-17 year — the authors say yes. “Simply put, increasing numbers of students have decided that our public colleges have become too expensive compared to the benefits they generate in return.”

The sticker price of college tuition & fees is not the same as the actual price that many students pay. The federal government dispenses Pell grants to low-income students, the state operates its own financial-aid program, and higher-ed institutions themselves extend financial aid. Consequently, the net price paid by students often is considerably lower than the advertised price.

Colleges and universities raise much of the money for financial aid by raising the sticker price that students from affluent families pay. In effect, the authors write, “the pricing policies of most colleges and universities today … administer a collegiate version of a steeply progressive income tax, taking from the more wealthy and giving to the less wealthy by means of the net prices each group pays.”

Despite their redistributionist tuition policies, universities remain economically and socially stratified. While some of Virginia’s elite public universities do offer steep discounts to low-income students, high admission standards mean that, as a practical matter, only a small number make it in.

If the denizens of the bottom 60 percent of the income distribution can be fashioned as “common people,” then one might say that at least five Virginia public institutions (University of Virginia, William & Mary, Virginia Tech, University of Mary Washington, and Christopher Newport University) have relatively few common people in their undergraduate student bodies.

McNabb and Koch raise the question of whether the General Assembly should financially support colleges and universities whose pricing policies imitate that of private universities.

Is it appropriate for the citizenry to subsidize institutions that increase social and economic inequality rather than provide the traditional ladders of opportunity that diminish differences?

Tough question. Virginia’s elite universities are unlikely to change their policies. Programs designed to increase the presence of lower-income students at the elite institutions might endanger their coveted Top 25 rankings if they eroded SAT score, ACT scores and on-time graduation rates.

Rare is the president of a top-ranked institution who wants to preside over a noticeable decline in his or her institution’s rankings. What member of an institution’s board of visitors will brag about the lower national ranking that came about because more Pell Grant recipients were admitted?

The authors point to the University of California system as an alternative model that Virginia might emulate. At the University of California at Berkeley, for example, 30% of undergraduates were Pell Grant recipients in 2015-16, while at UCLA the number was 35%.

But Virginia institutions are moving the opposite direction. At least a half-dozen Virginia public four-year institutions appear to have pursued policies that had the effect of restricting access of lower-income Virginians, say McNabb and Koch. “Is this a trend that the citizenry should support? We do not have the answer to this question, but it is easy to observe that what is perceived to be good for an individual institution’s national rankings may not be synonymous with what is good for Virginians.”

Bacon’s bottom line: That’s where the authors leave it. They don’t carry their thinking to its logical conclusion: that Virginia should cut off state funding and turn its elite public universities loose, letting them be free to be what they want to be — like, say, Duke or Dartmouth — and then redistribute state funds to institutions that appeal to a broader cross-section of the population.

I’m not sure how I stand on the issue, but I do see the logic.