Innovation in the Business of Higher Education

Virginia universities shared business best practices today at Virginia Commonwealth University with the hope of finding ways to shave costs and improve the student experience. 

George Mason University expects to save $3 million over the life of a five-year contract by outsourcing its printing operations to an outside vendor, defaulting to black-and-white print over color, and printing on both sides of the paper.

Universities make huge investments in parking lots and parking decks like this one at the University of Virginia. Today’s students are less car-centric than previous generations, and parking permit revenue has been falling. UVa has turned to metered parking to provide more convenience and recoup revenue.

The University of Virginia expects to generate $300,000 extra in parking revenue this year by shifting from the traditional arrangement, in which students purchase year-long parking passes for a space in a particular lot, to a system of metered parking that provides more flexibility as to where and when students park.

Virginia Commonwealth University doesn’t expect to save money from its Beyond Orientation program, an online orientation program for student’s parents and family members, but the university does hope to increase parental engagement in a low-cost way. When parents feel more comfortable navigating the university bureaucracy, they can provide more support for their kids, which bolsters the goal of graduating more students on time.

These were just three among the dozens of stories about higher-ed innovation highlighted at the “Partnering for Progress” event held today at VCU’s Siegel Center. Some stories reflect nothing more glamorous than the adoption of best practices that are common elsewhere. But some innovations are truly ground-breaking and have the potential to transform how higher-ed institutions function.

The event, itself a first-of-a-kind, featured an hour’s worth of speechifying and exhortations, plus two hours for schmoozing, visiting booths, listening to presentations, and swapping business cards. “Partnering for Progress” was backed by the Virginia Business Higher Education Council’s Growth4VA initiative, a public relations campaign driving home the message that Virginia’s colleges and universities make critical contributions to economic growth and prosperity. A recurring Growth4VA theme is that while state government needs to do more to support its public system of education, Virginia’s colleges and universities need to be more creative about controlling costs, reining in tuition increases, and helping students graduate with less debt.

There wasn’t time to visit every booth, but I had conversations with enough presenters to be persuaded that some very imaginative thinking is taking place in Virginia’s colleges and universities. It’s an open question whether these bright ideas get the funding and administrative support needed to transform the cost-encrusted higher-ed system. While some of the initiatives seem impressive, the thought occurred to me, why isn’t every institution adopting these changes? And what’s taking them so long?

Still, I came away convinced that there may be hope for Virginia’s higher education system. While higher-ed’s lobbyists and advocates may, for purposes of public consumption, be putting blaming runaway tuition on cutbacks in state support, administrators acknowledge the institutions themselves also bear some responsibility for holding down costs. Here follow some of the more promising programs I encountered in my perambulations through the Siegel Center.

Energy efficiency. Gains in energy efficiency had leveled off for several years at the College of William & Mary when Farley Hunter came on board to focus on utility management. Having worked in private-sector property management, he quickly spotted numerous opportunities to cut the university’s $7 million to $8 million in energy bills. W&M cobbled together a $140,000 revolving fund to invest in projects with at least a three-year payback, mostly in areas such as HVAC, ventilation and lighting. That’s a modest sum for a 200-building campus, concedes Hunter, but if he can demonstrate success, he expects the university to invest more.

Faculty productivity. University professors persevere through years-long Ph.D. programs to gain mastery of their subject matter. But unlike school teachers, they receive little instruction on how to teach. The University of Virginia Center for Teaching Excellence created the Course Design Institute to help professors organize and design better courses. Participants engage in a short but intensive exercise that begins with the question, “What do I want my students to know 3-5 years after the course is over?” The program uses proprietary software to build a syllabus and create “knowledge checks” that align teaching objectives with tests and assessments. About 500 UVa faculty members have gone through the program. Said program director Michael Palmer: “We created a revolution.”

Research productivity. University of Virginia researchers apply for roughly $1 billion in research grants in every year, and succeed in nailing down about $300 million worth. Only two years ago, however, the paper-based system for administering the research applications was extravagantly inefficient. It wasted space on literally hundreds of filing cabinets. Files were frequently misplaced (at an average estimated cost of $125 per file). The university even maintained a dedicated car and driver to carry papers from office to office around the grounds for needed signatures.

Ironically, UVa’s inefficiency turned out to be a blessing, said Vonda Durr, senior director of electronic research administration. Other institutions purchased multi-million-dollar software solutions to deal with the same paperwork issues, but many have them are dissatisfied and ready to scrap them. UVa learned from their mistakes and drew upon the university’s in-house IT staff to design a custom solution, starting with a portal for principal investigators, which makes contracts, account balances and other critical information accessible through one online location. The experience was so positive that the Office of Sponsored Programs added new capabilities such as electronic signatures, workflow tracking systems, and data visualization tools. Among other tangible benefits, the university has freed up space by getting rid of the filing cabinets, driven down printing costs, and saved an estimated $5 million in faculty and staff time.

Student retention. One third of the students entering Virginia Commonwealth University are considered “first generation” students — that is, they are the first members of the family to attend college. They are disproportionately poor and minority, and they have a harder time graduating from college. The graduation rate for first-time students is 78%, considerably lower than the 85% rate for all students, and GPAs tend to be lower. A high priority for VCU is improving the graduate rate for first-timers. The university’s You First program assembles a variety of orientation programs, faculty-led sessions, networking events, and support resources to ease the transition of first-timers into college life.

Virginia State University has a program with a similar purpose — helping students complete their college degree — that concentrates support services in a single location where students can access a wide variety of services. Students learn study skills and time management, get tutoring, receive counseling on which courses to take, and gain access to other support services. Every student is provided a mentor.

Radford University is adopting first-year living-learning communities organized around common interests such as the environment, the maker movement, biology, research, and the arts. Students living in the same residence halls take shared classes and engage in other activities together, building a sense of community and belonging. Participants have measurably higher retention rates and higher GPAs. Radford also uses data analytics to predict and improve student attrition. Remarkably, university ID swipes in dormitories and the fitness center is one of three factors with greatest predictive value. The data allows staff to reach out to students identified as being at risk of not returning to the university.

Virginia’s system of higher-education has the second highest six-year graduation rate in the country, second only to Utah. The payoff for students is huge — fewer drop out with big student debts they can’t repay. And the payoff is big for Virginia as well. When more students graduate, Virginia inches closer to its 20-year goal of becoming the best educated state in the country.

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12 responses to “Innovation in the Business of Higher Education”

  1. LarrytheG Avatar

    so here’s a question – can the “free market” offer college that people want at a price point they want?

  2. The nation is going through a revolution in higher education but it is just starting. About 20 years ago many states realized that if they stopped supporting their public colleges and universities the institutions could get more money bly raising tuition and fees and students could easily borrow the money. It worked for a short while but with easy money constitutions spread their wings and lots of recreational and other costly non educational facilities that someone will have to pay for. Student debt of all sources is now approaching $2 trillion and the economic value of a college degree is declining as the economy changes. So interesting little efficiencies will not do the deal.
    And, we can talk about how great university research is but we are way behind NC and Maryland and others. And, one evidence of the impact of that shortfall is that Virginia is ranked 30th in the country in # of patents per 100,000 population. Research is now and will be a major driving force for the national and Virginia’s economy in the future.
    States are taking other actions..for example NC just lowered tuition down to $500 per year for some instate students in certain institution. And Tennessee has just begun free community colleges and a promise scholarship to all Tennesseans in four year public or private college in the state. Kentucky and 20+ others states are moving toward free community college.
    And, several states are now having community colleges offer four year occupational degrees focused on economic development.
    Indiana’s land grant university, Purdue, is now offering 3 year Bachelors degrees like in most other countries including England and other European countries. And, Purdue, under strong Presidential leadership, has purchased Kaplan University the large on-line private university. And, President Mitch Daniels has frozen fees for three years.
    Across the country major transformation is moving forward and none of it is about who does the laundry.
    With major national financial crises coming to DC it will take some real revolution of practices and institutions for America to go forward. And much will need to be done state by state. So real change is coming and it is needed.

    1. djrippert Avatar

      “About 20 years ago many states realized that if they stopped supporting their public colleges and universities the institutions could get more money bly raising tuition and fees and students could easily borrow the money.”

      I never thought of it that way but it does seem right.

      So, commentators, we let the mortgage crisis pass right by us without profit. How can we profit from the almost certain college loan fueled meltdown? What are the early warning signs that the crisis has begun and what do we sell short when we see those signs? Let’s not let opportunity pass us by again.

  3. Steve Haner Avatar
    Steve Haner

    Really? UVA is bragging about a way to charge students more for parking, and to force them to spend more time paying for parking by making it a daily activity instead just giving them a pass? GMU figured out that color printing costs more than black and white? Give that man a PhD! Cutting edge stuff.

    1. Steve, I wouldn’t say that UVa was “bragging” about its metered parking initiative. The director of the program just set up a booth for the purpose of presenting the idea to other colleges and universities. The purpose of the event was for institutions to share ideas.

      Also, my article didn’t include the larger context behind the metered parking initiative. Due to changes in generational preferences — fewer Millennials rely upon cars than previous generations did — there has been a decline in general parking permits and revenue. Spaces were going unused. The metered parking idea is designed in part as a response to changing student driving/parking patterns and part as a revenue raiser.

      That said, none of the initiatives I saw addressed the fundamental cost drivers of higher education. For the most part, they were narrow-bore initiatives that would save a hundred thousand here, a hundred thousand there — all good stuff, but cost-saving measures that taxpayers would expect higher-ed institutions to pursue. Indeed, as I said in the article, why isn’t every institution adopting these changes? And what’s taking them so long?

      Harder to evaluate are the programs designed to reduce college drop-out rates. That’s an important and praiseworthy priority. But I did not get a sense whether or not institutions are measuring the effectiveness of these programs on a return-on-investment basis.

      1. Steve Haner Avatar
        Steve Haner

        The return on investment on efforts to shore up on time completion rates is potentially huge, especially for the taxpayers. For the individual who finishes instead of fails the payoff is infinite.

        The examples cited by Dr. Gilley – all things Virginia should evaluate. Most of these things you mentioned? The daily minor management decisions that in the real world are almost automatic. What a shock to ask professors to ask –
        why am I trying to teach! People in government or in near monopoly operations just don’t think the same way about the taxpayer/customer’s money. A real effort at the ISO approach, or the kind of LEAN process analylsis common in manufacturing, would just – in the vernacular of my youth- freak them out.

        1. TooManyTaxes Avatar

          I have a client who used to work at a private investment firm that bought out companies. It’s targets were reasonably profitable companies that could be made much more profitable by cleaning house and instituting significant cost saving improvements in management.

          It would be interesting to see what might happen if the Commonwealth were to hire such a company to propose restructuring of one of its public colleges.

          Personally, I’d be happy if these schools had to be measured by matrices that show teaching loads today versus 10, 20, 30 years ago. Administrators today versus 10, 20 30 years ago.

        2. djrippert Avatar

          “People in government or in near monopoly operations just don’t think the same way about the taxpayer/customer’s money. ”

          I think they understand that money just fine. Every business has a cost of acquisition. How do I first get a customer into my business? Then, they have a “churn rate” – how long can I keep that customer in my business before they go elsewhere. The route to sustained profit is not so much lowering the cost of acquisition as it is reducing the churn rate. A five year graduate is more than 25% more profitable to a college than a 4 year student because the cost of acquisition and on-boarding has been fully recovered by the end of year 4. Subsequent years are not only more revenue and profit but at higher profit margins too.

          Private jets rides for Teresa Sullivan to go from Charlottesville to Manassas are not free!

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      How can we say that high college dropout rates are bad if the students are learning nothing of value, and/or far less of value than the costs that such non education imposes on them?

      Another words until the value of a college education improves greatly and cost decline, very low dropout rates can be can very counter-productive and harmful, masking great problems.

      Right now it is very likely that a majority of kids, at best, are wasting their time in college, whether it be Harvard or a non selective third 3rd school. Why? Because no one can fail. And most are taught nonsense. But they are kept in their seats by false grades solely in order to milk them of money so the institution can pay its bills and/or live and spend lavishly.

    3. djrippert Avatar

      The so-called “innovations” in printing have been common practice in private enterprises for the last 10 – 15 years. I am stunned they are just coming up with this now. Here’s the next printing “innovation” – eliminate the blue pages of paper used to separate one print job from another – the users will figure out where one job ends and the next begins. Where do I collect my prize for innovation in government?

  4. LarrytheG Avatar

    I’m not arguing against the concept of Higher Ed but the way we fund the traditional 4 year institutions – essentially encourages them determine what education is “needed” and it may well not be what the 21st century economy demands and one of the symptoms is costly degrees that do not have sufficient “value” in the job market to justify the level of indebtedness assumed.

    Traditional higher-ed has been slow to align it’s “product” to what the economy wants and other players like for-profit, Community-college, and online have become essentially competitors rather than enhanced offerings of the 4 year institutions. Higher Ed, instead, has just gotten bigger “traditionally” – not innovatively. Most are still screwing around with Online.. while some like Liberty and for-profits are light-years ahead.

    People are victimized by the for-profits – no question but in a way they have also been victimized by going into heavy debt for degrees that have little currency in the economy.

    In other words – you can get a bad product from the for-profit scam artists or you can get a “well built” product -that is a dinosaur, unsuited for the tasks you intended for it to be used.

    Which is worse if both of them leave you with debt and insufficient job skills?

    I wonder, over time, if the traditional higher ed is going to become a modern day anachronism for most folks and end up being primarily for people who are going to be higher credentialed PHDs involved in research and all other of God’s little children will be going to Hoi polloi Tech?

  5. LarrytheG Avatar

    We should not go overboard in assessing that college is “worthless” to most.. it’s not anything like that… Most colleges do graduate a substantial number of folks who go on to decent, even lucrative employment… We still need doctors, lawyers, Computer Science, and all manner of professionals…

    and while the vast majority of the “herd”do not innovate and tend to follow – there are also innovators.. who push ahead and eventually the others are forced to follow or get left behind.

    Most of us do want highly-educated doctors, bridge builders, airplane designers, automobile manufacturers .. people who make the internet and cell phones work, etc.. and last time I checked they still came from institutions of higher ed… so we all depend on higher ed even if we have bad thoughts about them!

    What most probably agree on – is the need – for more education.. what we disagree on is the means to achieve it – and the cost, the cost-effectiveness.. and what role govt should play versus the free market.

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