Coinciding with our discussions here on Bacon’s Rebellion about higher education, I just received the annual Washington Monthly issue with its college rankings.
The Monthly takes a significantly different approach to ranking colleges and universities than does the U.S. News and World Report. It identifies the aspects it feels are important in making a college or university “good.” After establishing those qualities, it uses quantitative measures to rank each school.
The three basic qualities, or functions, if you will, are: Social Mobility, Research, and Service. In its methodology, these qualities are weighted equally. To come up with its overall rankings, the magazine uses the following quantitative measures: Continue reading
by Peter Galuszka
Imagine the coincidence. On Friday I was reading business writer Christopher Leonard’s excellent “Kochland” book on the hard-right, billionaire industrialists, Charles and David Koch. I put my Nook down for a moment to check the news. David Koch had died at age 79.
He, his brother, the rest of the family and their sprawling, secretive business empire based on oil trading and petrochemicals are fascinating topics. And, the Kochs, especially Charles, have had a huge influence in Virginia as they spread their gospel of free market libertarianism.
David Koch, who lived in New York City rather than Wichita, the headquarters of Koch Industries, had been known as a man-about-town.He was a bachelor until later in life and gave freely to medical research and the arts.
Gifts include $100 million for cancer research art his alma mater, the Massachusetts Institute of Technology where he still held the record for the most points ever scored in a school basketball game. He also gave $100 million to underwrite a ballet theater at the Lincoln Center in New York.
When he died, David and his brother were each worth about $50 billion. They got their money by running the family business, which buys and sells oil and distributes it through pipelines. They also have petrochemical plants where they make plastics used in windows, clothing and a lot more.
With Charles taking the lead, they developed a tough corporate control system that involved loyalty, secrecy and tough discipline. According to Leonard’s even-handed book, they Kochs were accused of making millions by cheating oil producers by under-reporting the amount of crude oil they received. The company settled the case. That and smart business led to success. Continue reading
Increase in undergraduate, in-state tuition & fees between 2015-16 academic year and 2019-20 academic year. Data source: SCHEV
by James A. Bacon
What does it take to create an Opportunity Society? One critical element is providing Virginians with the skills they need to be employable in the occupations of the future. Nearly three out of five jobs created between now and 2026 will be “middle skill” jobs requiring community- or career-college training, not a four-year college degree. A majority of Virginians, therefore, will look to the Virginia Community College System (VCCS) for their ticket to the middle class.
Virginia’s community college system doesn’t get its due. The VCCS board is acutely aware of the affordability issue, and it has made it a priority to limit increases in tuition and fees. I thought it would be interesting to contrast the VCCS’s success in that regard to the runaway tuition-and-fees increases at Virginia’s public four-year residential colleges. I took the latest data from the State Council of Higher Education for Virginia (SCHEV) Tuition and Fees database to compare increases between the 2015-16 academic year and the current 2019-20 academic year.
You can see from the chart above that the community colleges have done a far superior job of keeping charges under control. Community colleges on average increased T&F only 8.1% over the four-year period compared to a range for the four-years of 10.1% for Virginia State University to 22% for the College of William & Mary. (Richard Bland, a two-year residential college is an extreme outlier.)
What accounts for the difference? Continue reading
Virginia Tech is hot right now — very hot. The university is building a high-tech campus in Alexandria, its fund-raising efforts are collecting unprecedented sums of money, its faculty members are snaring serious venture capital funding. And in a new Money magazine survey ranking U.S. universities by “value,” it logged a very respectable position at No. 34.
The big question is whether Tech can sustain this momentum while transforming its campus culture into such an in-your-face caricature of political correctness that it risks offending large swaths of its customer base — middle-class parents who hew to more conservative values. The indoctrination of leftist values on issues of gender, sexuality, and race in this fall’s orientation was offensive to some.
Writes Penny Nance in the Federalist, “I was shocked to experience what I can only describe as extreme and overtly leftist propaganda. … The school constantly defined and showcased identity group politics. … As a mom, part of me wanted to load my son in the car and head up the road to Liberty University.” Continue reading
James V. Koch’s indictment of the U.S. higher education system can be summarized as follows: The cost of attending four-year public universities has soared in recent decades, creating an affordability crisis. Lower- and middle-income students and their families have coped by piling up massive student loans to the point where indebtedness has become a major social and economic problem. Higher-ed institutions, especially those with brand names and pricing power, have extracted wealth from its students to fund institutional priorities of bolstering prestige and influence.
The underlying problem, Koch suggests in his recently published book, “The Improverishment of the American College Student,” can be traced to an asymmetry in political and market power.
Undergraduate students come and go. They and their families usually focus intently on college costs for a period of one to six years. After this, their attention dissipates. There is no permanent constituency of interested parties or victims. … Hence it is difficult to organize student or parent pressure groups that might address tuition and fee issues…
By contrast, the institutional interests of colleges, universities, and their bureaucracies endure. Boards of Visitors, set up to provide oversight of ambitious administrators, are routinely captured and dominated by university presidents. Board members adopt the goals and priorities of the administration rather than those of largely invisible students and families. Continue reading
Increase in tuition & Fees for full-time in-state undergraduate students in 2019-20. Source: SCHEV
Thanks to an increase in state support, Virginia’s four-year colleges and universities held tuition mandatory E&G (education and general) fees stable this year for in-state undergraduates. However, according to the latest Tuition & Fees report from the State Council of Higher Education for Virginia, the total cost of attendance including room, board, and fees for auxiliary services will increase 2.2% for the 2019-2020 academic year.
Drivers of the cost increases are a 3.5% increase in the cost of room & board, accounting for about 44% of the total cost of attendance, and a 4.1% increase in mandatory non-E&G fees. It’s hard to see how those increases are justified, given the fact that the Consumer Price Index has increased only 1.6% over the past 12 months.
Did Virginia’s college administrators shift costs — perhaps in the form of administrative charges and overhead — to those line items so they can say they held the line on tuition and mandatory fees? Perhaps SCHEV could look into that question.
There are two broad theories explaining why the cost of higher education has increased at roughly four times the rate of inflation over the past two decades. One is the Baumol cost-disease hypothesis. Economist William J. Baumol used the example of a chamber orchestra to explain why it is so difficult to increase productivity in the service economy. It takes the same number of musicians and same length of time to perform a Beethoven’s String Quartet No. 14 in C-Sharp Minor as it did in 1826. By analogy, the job of transmitting higher-order knowledge from teacher to student is as labor intensive as it was a half century ago. Yet to recruit and retain faculty, colleges must pay their professors far more.
Howard Bowen. His “law” explains about half of all increases in higher-ed tuition and fees.
The other theory, known as “Bowen’s Law,” was articulated by former college president Howard R. Bowen. He laid out five axioms:
- The dominant goals of institutions are excellent, prestige, and influence.
- There is virtually no limit to the amount of money that an institution could spend for seemingly fruitful educational ends.
- Each institution raises all the money it can.
- The institution spends all it raises.
- The cumulative effect of the proceeding four laws is toward ever-increasing expenditure.
Together, the two theorems explain about two-thirds of the increasing the cost of college attendance in the United States, says James V. Koch, author of “The Impoverishment of the American College Student.” While he gives credence to both theories, his research suggests that Bowen’s Law has twice the explanatory power as Baumol’s cost disease. Continue reading
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An enduring debate in higher education, especially here in Virginia, is the extent to which cuts in state support are responsible for skyrocketing tuition & fees at public universities. In his book, “The Impoverishment of the American College Student,” James V. Koch has tackled that question on a national basis, and in so doing has provided some interesting data on five Virginia universities.
For 20 flagship institutions, 20 urban institutions, and 20 “typical” institutions, Koch performed a series of calculations tracking changes between the 1999/00 school year and the 2014/15 school year:
- The percent change in published tuition and fees (T&F) adjusted for inflation.
- The percentage change in published net T&F — adjusted for inflation and financial aid — per full-time equivalent student.
- The percentage change in state appropriations, adjusted for inflation, per full-time equivalent student.
- The net change in revenue available to the institution resulting from changes in tuition, fees, financial aid, and state support.
UVa’s new president, Jim Ryan, starts to leave his mark on the institution.
The University of Virginia’s Board of Visitors has adopted a new strategic plan, The 2030 Plan — the first under the leadership of President Jim Ryan. If UVa achieves its goals, says Ryan in the introduction, “We will be the leading public university in the country in 2030 and one of the very best in the world, whether public or private.”
The 2030 Plan expresses many high-minded goals — among them, to recruit “talented, diverse and service-oriented” students; recruit and retain excellent faculty and administrative staff; prepare students to be “servant leaders” in a diverse, globally connected world; establish leadership in critical areas of research; and offer one of the best values in higher education.
The plan is devoid of details on how the university will attain these goals, but it appears that the board will be delegating much of its authority to Ryan and his staff. The Daily Progress notes that the board “will approve three-year funding plans at a strategic level” but leave “line-item allocations” up to senior officials. “Previously board members would have approved those expenditures as well.” Moreover, UVa’s administration will have the authority to adjust the funding plan by as much as $15 million without full board approval.
While illuminating institutional goals to boost UVa’s national standing as one of the nation’s great universities, the strategic plan is silent about an issue of vital interest to Virginians — affordability. Rather than emphasizing affordability, the strategic plan emphasizes “value”: Continue reading
The College of William & Mary: setting the standard for using tuition policy as an engine of income redistribution
An article in the Wall Street Journal today explains how middle-class American families are finding themselves swamped with debt. Consumer debt (not including mortgages) has climbed to $4 trillion, higher than it has ever been, even counting for inflation. The major sources of that debt: credit cards, car loans and… student loans, which now exceed $1.5 trillion.
Against this backdrop, the timing couldn’t be better for just-published book by James V. Koch, “The Impoverishment of the American College Student.” Steve Haner has written a broad overview of the book, but the volume contains such a wealth of research, much of which applies to Virginia higher-ed policy, that I feel compelled to go into greater detail.
The starting point of Koch’s work is that the cost of college attendance has been escalating far more rapidly than median American incomes. He acknowledges that there are many reasons why: administrative, bloat, mission creep, and lagging support from state governments, among others. In Chapter Five he examines a reason that gets little attention outside academic scholarship: how universities use tuition-setting as an engine of wealth redistribution from wealthy families to poorer families, and how they take a rake-off to fund their own priorities. Continue reading
True, employers are putting an increasing emphasis on technical skills. But 58% of all Virginia jobs in 2016 were classified as “middle-skill,” which usually can be supplied by community colleges and career schools, and the percentage still will be 58% by 2026, according to Virginia Employment Commission forecasts cited by the Demographics Research Group at the University of Virginia.
As total employment increases, the number of middle-skill jobs will increase by 200,000 in Virginia, reports Spencer Shanholtz in the StatChat blog. The percentage of low-skill jobs will decrease from 4% to 3% over that 10-year period, while the percentage of high-skill jobs will increase from 33% to 35%.
Exploring the public-policy implications, Shanholtz writes: “It would be sensible to increase attention towards “Middle-skill” pathways, which can provide gainful employment and encourage further education and degree completion.” Continue reading
Former Old Dominion University president and current emeritus professor of economics James V. Koch is willing to shoulder his share of the blame. “I was president for fifteen years, so I sang some of the same songs that presidents and administrators sing these days.”
Those would be the siren songs sung when seeking major and continuous increases in university tuition and fees, Koch told The Chronicle of Higher Education in an interview on the issue. It is the subject of his new book, “The Impoverishment of the American College Student,” just released by Brookings Institution Press.
What he is saying is hardly a fresh insight for Bacon’s Rebellion. The message may resonate a bit because of who is saying it. Continue reading
Here’s a rare good news story coming out of Virginia’s educational establishment: The state has enacted reforms to its teacher-education system that should help reverse the teacher shortage created by… the state.
Last month, reports the Washington Post, the Virginia Department of Education approved undergraduate teacher education programs at more than a dozen colleges and universities. Aspiring teachers will be able to earn teaching credentials in undergraduate school without the necessity of completing a teacher-preparation program requiring a fifth year of higher education.
The change is driven by chronic teacher shortage at Virginia public schools — 940 teaching positions went unfilled in the 2017-18 school year. The shortage is especially acute in lower-income schools where new teachers are frequently demoralized by discipline issues, and quit or move to schools in more affluent neighborhoods.
Stephanie D. van Hover, a department chair of the University of Virginia’s Curry School of Education, explained the economics behind the teacher shortage:
Shortening the time it takes for aspiring educators to get into the classroom will make choosing teaching as a career a less cost-prohibitive proposition.
Would you buy a “free” college degree from this man?
Bernie Sanders, a leading Democratic Party candidate for president, has proposed making college “free” and erasing all $1.6 trillion in student debt. He calls the cost of higher education a “national disgrace,” which it is. But his proffered remedy is so wrong-headed that it’s all I can do to keep steam from shooting out of my ears.
Other commentators have opined on how free tuition would benefit mostly affluent Americans who qualify for college admissions, while debt forgiveness would reward students who recklessly piled on debt they couldn’t repay and penalize those who made sacrifices to make good on their loans. Less frequently noted, taxpayers should not be compelled to subsidize young wastrels who spend years partying or engaged in a search to “find themselves.”
But in this post, I focus on a question Sanders neglects to ask: Why are college costs are so high? His platform ignores administrative bloat. It ignores low faculty productivity. And it only partially addresses the gold-plating of buildings, grounds, and facilities. If we want to make college affordable without devastating taxpayers, we need to strip the costs out of the higher-ed sector.
What if… What if students could contract directly with accredited college professors to take a course rather than contract with a college or university? Continue reading
Job openings outnumber job seekers by a record gap, the Wall Street Journal reports today. There were a seasonally adjusted 7.45 million unfilled jobs at the end of April compared to 6.2 million Americans looking for work. With workers so much in demand, there exists a never-seen-before-in-our-lifetimes opportunity to increase social mobility.
Here in Virginia, contend John Broderick, president of Old Dominion University, and co-author Ellen J. Neufeldt, the commonwealth can kill two birds with one stone: meeting the demand for tens of thousands of unfilled technology jobs and helping lower-income Virginians climb out of poverty and near-poverty by equipping the disadvantaged with the skills required for those jobs. In a Richmond Times-Dispatch op-ed published today they write:
It is our obligation, particularly at public universities,” “to enhance social mobility for the students we serve. By removing barriers to higher education and preparing students for STEM-H jobs, institutions will not only increase economic opportunity and social mobility, but also ensure that the jobs of the future are filled by a well-educated, career-ready and diverse workforce.
From a high-altitude perspective, Broderick and Neufeldt make an excellent point and their ideas are well worth exploring. However, their analysis fails to account for the bottleneck in the school-to-college pipeline for lower-income students, especially African-Americans and Hispanics, and a naive application of their ideas could have unintended negative consequences. Continue reading