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Section 3: Efficiently Use Resources

Chapter 13: Improve Facility Utilization

Abstract: Compare the use of building space at a typical private business and a university. The private business usually uses most space at least 50 hours a week, 52 weeks a year, and often more than that—well over 2,000 hours annually. By contrast, large amounts of campus building space is occupied perhaps 25 hours a week, perhaps 32 weeks a year—800 hours a year. (This problem is less prevalent at for-profit universities operating with strong financial incentives to maximize facility utilization.) In the long run, using facilities more intensely will reduce the need for new buildings, reducing capital and maintenance costs noticeably.

Units within universities think that they “own” the space they occupy, and often are reluctant to share it with others who can better utilize it. The solution to this and related “turf” problems is to assert institutional (as opposed to departmental or college) ownership over all facilities, and then use the market mechanism to allocate space more efficiently. For example, the university might give departments specific budget allocations to cover rent of facilities, and then charge rents in a manner that would increase off-peak usage. Perhaps classrooms would be free for use on Fridays, evenings, weekends, and in the summer, relatively cheap at 8 a.m. or after 4 p.m., but relatively costly at other times. Departmental funds provided for rents should be established at less than what would be required to maintain the pre-rental usage of facilities.

The concept of renting space can apply to more than classrooms and laboratories. It should be used with respect to office space as well. The market incentive can even be carried down one more level. Each faculty member could be given a personal budget for telephone, computer usage and internet access, mail, travel, and, most relevant here, office space. Rents on offices would vary with their desirability. Those insisting on large private offices with a beautiful view would have fewer funds available for travel or other support services.
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Chapter 14: Increase Teaching Loads

Abstract: The corollary to the tenth point on eliminating some academic research is to increase teaching loads. At research universities in the United States between 1988 and 2004, it is estimated that teaching loads fell 42 percent.  Even in private liberal arts colleges that pride themselves on their attention to instruction, those loads fell 32 percent.  William Massy and Robert Zemsky have talked about an “academic rachet” effect, and the impact of this on instructional costs is huge, as demonstrated above.

The root cause of the fall in teaching loads relates to incentives and rewards. Faculty are rewarded for publishing articles, the results of which can be precisely measured (pages of articles published, numbers of citations in scholarly journals, etc.) and is observable nationally or even globally. Good teaching is less easily measured, and is observable locally. National reputations are built through research, not teaching. The federal government gives billions in grant money for research, not teaching. Grant recipients receive large summer stipends and often generous overload compensation. Two equally competent professors might receive $75,000 in salary, but the great teacher will get $5,000 for teaching one summer school course, raising annual compensation to $80,000, while the research grant recipient will get a summer stipend of perhaps $17,000 plus $15,000 in academic year overload compensation, for a total of $107,000. Is it any wonder that faculty push for lower teaching loads to increase their research prowess, in their mind increasing their chance for winning research grants?

There are two ways to increase loads: one by fiat or mandate, and the other by use of incentives. State governments could mandate all professors at state universities teach nine hours a week, for example. That approach has severe limitations, including failing to give institutions flexibility to vary loads with the strengths of faculty members—Nobel Prize winners would flee a state with such a law, and with good reason. Mandates can be made slightly less onerous by being placed at the institutional level—the average load of the full time faculty must equal X hours a week, with top researchers teaching less and excellent teachers teaching more. But universities and colleges strongly resist even this approach, which they view as an unwarranted intrusion on their institutional autonomy.

The alternative approach is to use a carrot rather than a stick approach. Explicitly reward teaching financially, both by increasing rewards for quantitatively and qualitatively teaching more, but also, perhaps, by lowering the rewards for research somewhat. Since there is a bias, due to information costs, in favor of hiring professors with good research credentials, at the local level perhaps universities should offset this by increasing the weight of teaching performance in the assessment of salary and promotion. Instead of weighting teaching and research equally (say 40 percent, with 20 percent for service and administrative contributions), increase the weight placed on teaching to 50 percent and reduce that on research to 30 percent. Recognize great teaching with large and well publicized teaching awards. But complement the financial incentives with mandated higher teaching responsibilities for the faculty. Very few schools are willing to do this, but increased financial stringency may lead to a move in that direction, one that hopefully will grow into a broader movement. Another step in the right direction would be to promote greater transparency in the provision of university information regarding teaching, student performance, and student post-graduate success in a manner that would diminish the influence of college rankings that especially reward research results.
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Chapter 15: Encourage Timely Degree Completion

Abstract: A large majority of full-time students do not graduate from four-year degree programs on time. Similarly, a huge problem exists with two-year schools. The drop-out rate in general is a national scandal at all levels of academia, including doctoral-level programs.  Huge amounts of resources are devoted to giving incomplete educations to students, who often incur large debts and, because they lack a degree, are unable to get a well paying job that will compensate them for their college expenses.

In part, of course, students drop out because they were inadequately prepared for college and, in some cases, should have never enrolled in the first place. But often perverse incentives keep students lingering around colleges for long periods, whether or not they obtain a degree. The fifth or sixth year student pays the same tuition money usually as the third or fourth year student, and very often earns the institution the same amount of state subsidy. Rather than pushing students to graduate in a timely manner, skewed incentives lead schools to encourage students to take five or six years to get a bachelor’s degree.

This problem is much smaller at private not-for-profit schools. In those institutions, the aforementioned perverse incentives are less present. High tuition costs provide a strong incentive for students to avoid the fifth or sixth year of study.  Academic standards on average are higher. States and individual institutions wanting to lower dropout rates and time to completion will change their incentives. Indiana, for example, gives a cash bonus to universities whose students graduate in the standard four years.  An alternative approach is to deny subsidy payments for any student with more than, say, 110 percent of the credit hours needed for graduation. Again, a voucher system of government subsidization offers good ways to provide incentives for timely completion. Deny subsidies (vouchers) to students with more than 100 (or perhaps 110) percent of the hours required for graduation. Give a bonus payment to students graduating early—a payment smaller than the subsidy associated with the period of early graduation, but big enough to incentivize students to seek early graduation. Again, insist upon ease of course transfer between institutions, and encourage early enrollment, Advanced Placement, credit via the CLEP exam (perhaps paying the fee for students to take the test), for-profit accredited internet-based courses, etc.
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Acknowledgements