More Transparency Coming for Higher Ed?

by James A. Bacon

The General Assembly is considering three bills that would improve transparency and governance in higher education. If enacted, they would a add small measure of accountability to Virginia’s colleges and universities.

A better accounting of costs. HB 927, introduced by Del. Carrie Coyner, R-Chesterfield, would provide for the State Council 0f Higher Education for Virginia (SCHEV) to collect financial data from public colleges and universities broken down by program and discipline. The data would include operational or instructional costs, General Fund and Nongeneral Fund revenue, and planned expenditures.

This would be fantastic. For years I have been calling for deeper analysis of the cost structures of Virginia’s public universities, and SCHEV is the logical organization to collect and examine the data. SCHEV is already doing some of this. For instance, right now it embarking upon a five-year review of the number of degrees granted and majors declared in different programs and departments. HB 927 would drill deeper.

Universities love to grow new programs but hate to shrink old ones.

When it comes to building a new innovation campus or nanotechnology center, they’ll shake the philanthropic tree, lobby the General Assembly, and scrounge up the money one way or another. But how many programs do they cut? Not many. No successful business operates that way. Corporations continually analyze their product offerings — and a college degree is a product offering — for growth and profitability. Corporations divest or shut down unprofitable or slow-growth product offerings in order to reallocate capital to fund products and services that offer greater profit and growth opportunities. But higher-ed administrations don’t have to answer to outside constituencies like shareholders. Administrators answer to internal constituencies, whom they they hate to upset by cutting or eliminating programs.

Maybe there are solid reasons for retaining unpopular departments. But in an ideal world, Virginia’s public institutions at least would know how much their product offerings cost and what they generate in revenue. They would know how much they spend on faculty and instruction, on administrative support, on facilities, on technology, and whatever else. They also would know how much revenue they generate.

Thus, to pick an example for purposes of illustration, the University of Virginia would know what it costs to maintain the Philosophy Department, it would attribute revenues to the department based upon the number of students enrolled in philosophy classes, and it would know whether the Philosophy Department was operating at a surplus or loss. If the philosophy classes were full and growing, and if philosophy were the hot new college major, then the department would get more money to fund expansion. If, conversely, enrollments in philosophy classes were shrinking, the university would reduce the number of instructors and overhead to keep costs in line. In extreme circumstances, it would consider a radical restructuring, such as a merger with another department, partnering with other institutions to share students via online classes, or even shut down the program entirely.

Perhaps such a thinking process goes on, but I have seen precious little sign of it. If you want to know why college is so unaffordable, why costs ratchet ever higher, an unwillingness to cull low-demand programs and departments may be a factor. So, let’s let SCHEV find out.

A better accounting of foundation money. Another worthwhile initiative is contained in HB 1223, introduced by Jason Miyares, R-Virginia Beach, which would require public higher-ed institutions to release annual reports on their foundations. The reports would include total annual expenditures by the foundation as well as the percentage of expenditures applied to financial aid, faculty compensation, program costs, equipment and technology, and administrative support.

Yes, yes, yes! A significant percentage of foundation funds, donated by philanthropists, have strings attached. The philanthropist dictates the use of the gift, so there’s not much that can be done. However, universities also generate endowment revenues from internal financial sources. The most widely publicized of these is the University of Virginia’s Strategic Investment Fund. Virginia Commonwealth University has a similar fund almost as large, and other institutions have smaller funds. These income streams have no strings attached. The public has a right to know how this money is spent, and universities have an obligation to make the readily and easily accessible.

Trustee training. SB 897, submitted by Sen. Bill, DeSteph, R-Virginia Beach, would require all members of public higher-ed governing boards to participate in educational programs that address the role, duties and responsibilities of those boards at least once every two years. Higher-ed issues are specialized, and it takes board members considerable time to learn enough to become a meaningful participant. Any program that accelerates the learning process is a bonus. Any program that equips them with the conceptual tool to ask tough questions of administrators is even better.

All three bills were submitted by Republicans, which may be the kiss of death in a Democratic-dominated legislature. However, the trustee training bill has passed the Senate, while the other two bills have made it out of House Committee, so the signs are positive.

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16 responses to “More Transparency Coming for Higher Ed?

  1. I don’t have the confidence you have in these bills. I hope I am wrong.

    Cost accounting–This is not about collecting financial data. The substitute directs SCHEV to develop a plan for a survey. Then there is verbiage about “attainment of state and institutional goals”, whatever that means. In the end, the bill only directs SCHEV to report to the GA on its plan.

    Foundations–You are right. Information on foundations and how the money is spent is needed. I am not sure if UVa’s Strategic Fund would qualify as a foundation, however.

    Trustee training–Current law requires this sort of training in the first two years of a trustee’s term. The bill would require similar training in the second two years. If they haven’t figured it out by the end of two years, I don’t know how much good additional training is going to do. Besides, these trustees are usually successful business people and professionals. They should know how to ask hard questions.

    • Good comments, Dick. I would respond as follows…

      Cost accounting… Maybe I was engaging in wishful thinking regarding what SCHEV will do with the data it collects.

      Foundations…. if the Strategic Investment Fund isn’t included in the bill’s reporting requirements, it should be! The SIF and its counterparts at other universities, cobbling together miscellaneous pots of cash and generating higher rates of return on them, should be at the top of the list!!

      Trustee training… I may agree with you on this. What’s the justification for a second round of training? Definitely a case of diminishing returns.

  2. I am sorry to disagree here, but your arguments are I believe fatally flawed, thought some proposal are useful round the edges.

    Popularity is a very bad and counter productive test for education. Thus dropping philosophy for lack of popularity and revenues is obscene to the practice of real education in humanities.

    It also is a bogus argument. A great philosophy course can be taught in a 19th century one room little red school house. Or parking lot in good weather.

    I could go on and on, but point is we need to come at these issues from wholly new paradigms, many of which we knew and practiced long ago with great success as evidenced by the very quality of educated people of all classes back in those long ago days. Where did Faulkner come from?

    • Two different issues. I’m not saying that universities need to jettison all unpopular or money-losing courses. I’m saying that they should know if the courses are popular/unpopular and how much revenue surplus or loss they are generating. In the hypothetical example I provided, UVa might decided that it’s necessary to subsidize its philosophy department in order to maintain a well-rounded liberal arts education. On the other hand, it might say it could accomplish that goal with three philosophy professors instead of five, or by combining the philosophy department with another department.

      If universities don’t have this kind of information, however will they control costs?

      Would it have made you feel better if I’d used the example of some university’s English Department or Feminist Studies Department?

      • Again I must disagree, Jim.

        These are kids mostly seeking fun, bad habits and fads, not sophisticated literati. We must break these bad habits and fads. We must insure that these youngsters get a serious education like a kid going into the Marine Corps learns how to fight, survive and thrive in a hostile world.

        Why? Because that is exactly what all our kids need, deserve, and are entitled to get for the hostile world they’ll soon enter.

        Popularity and cost got nothing to do with this. An education worth having ain’t life at the beach, but the reverse.

        So the only proper test for philosophy (here talking selective school) is do we offer an outstanding course(s) in philosophy? Cost is not the issue at all. If it is, then get that institution out of that business altogether, and teach shop.

        I will try to come back to this. But SCHEV’s biggest problem is that it does not take education seriously. It approaches education as if it were purely business, filling seats, making money.

        Hence for example it sells kids on the totally false idea that all of then need go to college and then helps to promote and concoct false but popular highly expensive “popular education” that is not education all. But confection for kids who could not use it if they tried. Hence, there must be gross grade inflation for the many kids who learn next to nothing but bad habits and false expectations.

        These are sorts of fundamental issues we must attack and fix, along with developing far better and more honest ways to follow the taxpayers, parents, and kids money to insure it ONLY goes to pay for their own instruction (education), instead of being use to bloat the school into a monster benefiting itself, not its students.

        Of course in some cases I exaggerate, but not by much or at all in far too many cases.

        Yes offer it, and they will come, this new vision.

        • On this issue, I am with Reed. It is not appropriate to use a cost/benefit analysis on basic elements of a college education and I think philosophy is one of those basic elements. I thought about getting into this in my initial comments, but decided to limit them to the effect of the bills.

  3. For the record, they do cut programs. My department lost its graduate programs when SCHEV implemented new standards and applied them retroactively with a rule to allow a certain percent of programs to not comply with the productivity standards. Instead, our dean at the time wanted our resources for her pet project and our department head at the time was glad to acquiesce. I believed and believe it has hurt my career and our ability to recruit faculty since. We’ll never have the resources to replace our internationally known programs from which our graduates are currently in many administrative and leadership positions. At the time, the lack of productivity was partially due to faculty vacancies. So I can verify that Virginia Tech has closed programs.

    • I’m sorry to hear that your program was affected and your career hurt. It sounds like there was more involved to the story than just the implementation of SCHEV’s productivity standards. Politics and power plays, unfortunately, are part of every organizational culture.

  4. I suspect most of them DO have the info, and they use it, and they are loathe for it to be released to the critics waiting int he wings much like critics pummel K-12 schools with their “transparent” info.

    What I’ve never understood is why demand is not affected by price.

    Why are people willing to pay more and more for a conventional on-campus degree?

    And the critics are no purely concerned about price. They also attack higher ed for being “liberal” and taking endowments from liberals, and a variety of popular right-wing causes ranging from the rape culture to curtailing “free speech”.

    the “transparency” thing is just to get the data so the critics can further hammer them.

  5. One more thing, our programs were the only of their kind in Virginia or adjacent states. Now as they try to use metrics to measure us and compare our progress, we have no true peers. The other undergraduate programs like ours across the nation have graduate programs, too. Our departmental MS and Ph.D. programs in Apparel, Housing, and Resource Management had longstanding roots and international ranking. What was done allowed the Alliance for Social, Political, Ethical, and Cultural Thought program to grow.

  6. The way for the State to address higher ed costs is to offer affordable alternatives for students and parents that want them.

    Incentivize Community Colleges, stand up an online Higher Ed portal that offers a wide range of courses – for credit – that can count towards a degree. Arrange for some of the smaller colleges to offer a 10K degree or less if students transfer from a Community College and/or earn online credits.

    You’re never going to control the bigger Higher Ed institutions. You’re just going to chase your tail – which the bigger 4yr guys are pretty good at.

    But the bottom line is that you have to be FOR something – not in opposition. You can hope someone in the GA will do some legislation to “force” transparency but it’s a fools errand… they adjust… just like GA members “adjust” to campaign finance or Dominion “adjusts”.

  7. “The way for the State to address higher ed costs is to offer affordable alternatives for students and parents that want them.”

    I agree with that statement. Here is where private non-profit Virginia colleges might come in, creating for them a new collective to create within those institutions new and affordable alternatives (models) in lower cost education, particularly in critical humanities (like English, writing, history etc.) and low infrastructure STEM, a collective supported by General Assembly so as strengthen and enhance a stronger system of viable alternatives to State system.

    This collective will also help fuel rebirth of rural and smaller metro Virginia, preserving and enhancing vital existing assets to better enable them to power enhanced human capital and wealth creation in these regions.

    The alternative, the loss of these historic assets, would be a tragedy on many levels for the Commonwealth of Virginia.

    • The following exchange last October buttresses my comment just above.

      Dick Hall-Sizemore | November 2, 2019

      This data and the map shows the complexity involved in the issue of how to improve K-12 education. The irony is that this situation may be a good example of the axiom, “No good deed goes unpunished.” Southwest Virginia apparently does a good job of educating its children, who then are able to leave the area in search of better jobs and opportunity.

      TooManyTaxes | November 2, 2019

      Years ago, I had an interesting conversation with two Virginia state senators; one from Fairfax County and one from SW VA. The latter told me that many parents had mixed feelings about education for their kids. They wanted them to get good educations but, at the same time, didn’t, because they knew many of them would move away. Having lived away from my grandparents, parents, brothers, uncles, aunts, etc., since 1976, I realize the price one often pays for moving for career. And my wife paid a similar price for a similar decision. Our kids paid a price too.

      Reed Fawell 3rd | November 2, 2019

      How right you are in your comment. You have just put your finger on one of the greatest primary reasons why our society and culture are falling apart, people anxious, empty inside, neurotic, lost and depressed, creating whole new industries of healthcare that cannot fix the real problem, except perhaps by pills often doing more harm than good. And nobody, save you, will talk about it, except to extent they demean those who know what so many of the rest of us have lost.

      In addition, you can be sure this has a great deal to do with all of Virginia’s failing schools, and those that despite all else, succeed.

      Reed Fawell 3rd | November 3, 2019

      TMT’s above comment fits in nicely with following comment I made here earlier, namely: Reed Fawell 3rd | March 21, 2019

      In short form, I want to tie in Steve’s and Jim’s above comments with my own above comments, try to show how the all these comments mesh and work together.

      One should never count on the kindness of strangers. Similarly, one should never count on the competence and caring of strangers. Indeed, in all matters large and small, one should be wary of strangers. There is a sensible balance here, but its most always best with strangers to go short on trust and long on verify, until trust is verified.

      We all know these rules instinctively. So, living one’s life amid strangers is inherently stressful, harmful and dangerous. Hence now, more and more, we are able to see why our culture, our communities and our health is falling apart for ever more Americans as they increasingly become atomized individuals, strangers in the own land.

      The internet feeds these trends, as do many other false realities that are now flooding our post modern world. Thus there is a growing need of ever more American to reconnect with their real world, rebuild their lost networks and relationships with real living people in their homes, communities, and at work. Only by actively meeting and engaging with real people, building trust among as many people and factions and institutions, can we as human beings learn, grow, thrive.

      For more go to:

      https://www.baconsrebellion.com/wp/health-care-and-the-oppression-narrative/

    • Likely the single greatest obstacle to learning today is grade inflation. Solve this plague and we are on our way to solving real problems.

      See for example this:

      “Sixteen years ago, Education Next published a research article providing the first hard evidence that students learn more from teachers who are more demanding when handing out student grades (see “The Gentleman’s A,” research, Spring 2004). Using data on elementary school students in Alachua County, Florida, which includes the city of Gainesville, Maurice Lucas and David Figlio identified the toughest teachers by comparing students’ course grades to their performance on end-of-year state tests. Their analysis revealed that all students—and especially high-achievers—benefit academically from high grading standards.”

      For more, go to:
      https://www.educationnext.org/in-fight-against-grade-inflation-rare-tough-teachers-are-champions/

  8. College budgets reflect institutional organization, not “discipline”. My discipline, “policy,” overlaps political science, health administration, education, social work, and public affairs. Program-level reporting would be more meaningful, but would still amount to a pro-rated estimate since virtually all academic programs have personnel/ course/ administrative overlap. I think this bill needs work.

  9. so the ultimate question is – can the state save money by subsidizing smaller colleges ?

    this is where the “not a penny more in tax” folks may be missing something.

    One approach might be to try to drag the data out of Higher Ed so “we” can then tell them how to save and cut costs. The “we” being folks who know almost nothing about the economics of higher ed – they’re just pretty sure they need outside eyes on them.

    And I kinda of doubt that SCHEV is going to be a willing accomplice to “holding higher ed accountable”either.

    This problem is not just with Virginia Higher Ed, so it’s going to take something different than what has been tried.

    Jim says business adjusts to changing markets. Not necessarily. Kodak did not, blockbuster videos did not and Dominion will not to name 3.
    The corporate landscape is littered with those who did not or would not adjust and higher ed is not about to either unless they have no choice.

    Compare higher Ed more to the prescription drug companies.

    who is going to make them change?

    We already have shown that prescription drugs have markups of 10, 20, 100 times and have they changed? Have we held them “accountable”?

    .

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