A Few Thoughts on Mitch Daniels at Purdue

Posted on January 18th, 2013, by 1 Comment

I’m a bit of a late comer to the party, but new Purdue University President Mitch Daniels made national news even before he officially left the Governorship of Indiana to oversee the University, particularly with his compensation package. On the main, I think there is considerable merit in the way Daniels has insisted that he be paid (utilizing a performance-based contract), even though only time will tell how well this will work out in practice. For now, though, Daniels deserves commendation for his willingness to put into actual practice some of the ideas floating around for increasing accountability in the Ivory Tower. The fact that this has been brought about by a voluntary arrangement on his part is also a good thing because now it’s very much in his interest for this to work out (part of the risk associated with externally

forcing these changes is that rather than try to bring about the success of the new approach, the existing leadership may try to fight it instead) and no one outside the University forced him to do this. If the Daniels’ project at Purdue succeeds, he will gain as a legacy far more than he ever would in foregone income. In this respect, Daniels is just taking one step further the recent “leadership-begins-at-the-top” realization of a number of incoming college leaders.

Even were Daniels to meet all of the incentives targets in his contract, his annual salary ($546,000) would still only be the 9th highest in the Big Ten conference as it is currently structured (being 9th used to mean something in this conference but since it appears that the conference has difficulty in ensuring that its name corresponds to its actual size, who knows what this may mean in five years). It is, however, unlikely that Daniels will hit all the targets, however, so his actual level of compensation may be a significantly lower $420,000.

Besides just the big picture, the details of the contract (that is, the performance metrics) are worth additional attention. According to the Purdue press release, there are five general categories for measuring Daniels performance: “student affordability, graduation and student achievement,

strategic program development with demonstrated student outcomes in knowledge and understanding, philanthropic support, and faculty excellence and recognition.” The first category (affordability) is, at least on its face, a good one, though one does have to be careful in defining the term correctly. For example, since Purdue is a public institution, keeping future tuition increases low by leveraging Daniels’ connections in Indianapolis to massively increase state subsidies to the university may meet some definition of affordability to the student, but it may not actually be the appropriate way to maintain college affordability in a broader sense for society (i.e., taxpayers). Should affordability be a metric for assessing college president performance? Yes, but to borrow an expression from constitutional court cases, such a goal must be “sincere” and not a “sham.” It won’t work just to shift costs around just to make it seem like the students are getting a break when in reality, once they join the august group known as “taxpayers,” they’ll be stuck with the tab.

What also complicates the picture on affordability is the fact that, in one sense, the traditional model of education, with its emphasis on face-to-face instruction, is inherently very expensive, especially if it is of high quality. As I see it, many of the cost savings that can be gained from leveraging new technology may actually only be possible with a model that exists, at least in large part, outside of the current system. In other words, it won’t be possible to maintain quality while increasing affordability simply by slapping new technologies on the existing model (that’s a bit of the new wine in the old wineskin problem). Part of the problem with some online classes is that all we’ve managed to do is to the combine high costs of the traditional with low quality, the exact opposite of the goal. Unfortunately, I think too many within the existing higher ed system who get excited about using new technologies miss this crucial point; they get excited about using something that’s brand new without first considering the more fundamental change that would be needed in order to effectively achieve efficiency gains.

The second metric–graduation and student achievement–presents its own set of problems (at least with respect to graduation rates), despite the fact that, at first glance, this metric may be the most appealing of all five. For starters, graduation rates, by themselves do not convey nearly as much information as people say they do. To illustrate this point, take two very different institutions, one a diploma mill and the other an elite school with a very, very low admission rate–both very well may have identical graduation rates (~100%) and yet obviously there are enormous differences in educational quality. To be sure, that is an extreme example, but it is helpful in demonstrating the soundness of  Arthur Hauptman’s thoughtful point that it is “a mistake to use institutional completion rates as a measure of educational quality, because institutional selectivity is by far the principal predictor of completion rates.” Thus, the best way for Purdue to achieve a higher graduation rate would be to start turning more applicants away. To be sure, given existing constraints (its own enrollment targets, its status as a public institution, etc.), there are limitations to how extensively Purdue might use increased selectivity to effect higher graduation rates. Another way Purdue could increase its graduation rate would be to dilute its standards just to push more students up and across the stage. I’m sure that Daniels is well aware of the fact that graduation rates need a proper context, which would possibly explain why he is linking “student achievement” directly to “graduation.” (As an aside, if anything, shouldn’t “student achievement” be listed first, before graduation?) Nonetheless, the point is that the focus should be, as Hauptman argues, on “faculty who are good teachers and a commitment to provide a quality education to whichever students are admitted.” Graduation rates can be helpful in reflecting positive qualitative changes, but the whole picture includes a lot more.

I view the last three metrics as mostly restating traditional college administrative goals, albeit it in new terms (to allow for increased accountability). That’s not to say the affordability and student achievement metrics aren’t already mentioned frequently; they just aren’t often thought of directly relating to the performance of a college president. Securing philanthropic support is just part of the normal duties of a college president nowadays; given that Daniels the politician gained skills in soliciting donations, he may find doing so for a university to be a piece of cake. Next, I think it is laudable to tie strategic development to student outcomes (provided, of course, that those outcomes are clearly and correctly defined and properly measured); without this constraint, it is perhaps too easy to set a course that is advancing an institutional objective while marginalizing the attention directed towards students’ education.

Of all five metrics, I’m actually the most curious about the incentive related to “faculty excellence and recognition.” It’s possible that this in practice will mean nothing more than what countless universities refer to when they give grand promises about investing in the faculty, promises which result sometimes in, well, nothing (they’re just statements made in the hopes that it will keep the faculty quiet and happy), or sometimes in advancing faculty interests (no matter how noble they are in and of themselves) at the expense of undergraduate education (see, for example, the awarding of tenure, with its emphasis on research but precious little, by comparison, on student learning). Yes, we need to promote “faculty excellence and recognition” but it’s even more important to make sure that that is truly supplementing–and not discarding–the educational mission towards the students.

It does remain to be seen how the Daniels era at Purdue will work out, if it will be the first big step in the emergence of a broader reform agenda in higher ed. Here’s to hoping for its success.

If We Only Fix 15%, It's Still 85% Broken

Posted on January 17th, 2013, by Leave a comment

Talk about really missing the forest for the trees (or finding the speck in your neighbor’s eye while ignoring the plank in your own, or whatever metaphor one prefers), but this story by Michael Stratford for the Chronicle ended with a rather deft counter to the recent hand-wringing by the Consumer Finance Protection Bureau (CFPB) on private student loans. As the story describes, the CFPB has issued, over the past year, multiple reports on the dangers and shortfalls of the private student loan industry. But as Stratford dryly notes at the very end of his story,

Private loans represent only a fraction of the overall market for student loans, accounting for about $150-billion of the more than $1-trillion in outstanding student debt. The vast majority of student loans are held by the government.

It goes without saying that one can list legitimate grievances against the private loan

industry, but it is somewhat amusing to see the CFPB

spill so much ink over was is, in reality, only a very narrow segment of the student loan market. Sure, I suppose it is true that we have to start somewhere to fix the student loan system, but ignoring the elephant in the room really won’t serve students or taxpayers well in the long run. Besides, if all we do is just shift the loans from private holders to the public, might not that put taxpayers at a higher level of future risk than they have already? If anything, rather than just a 15% fix, shouldn’t we focus on how to retool the whole system?

Those Bothersome Essays

Posted on January 16th, 2013, by 1 Comment

I don’t know whether I should laugh, cry, dance a jig or merely shrug my shoulders at this new story by Eric Hoover in the Chronicle which reports that over the past year, “Boston College saw a 26-percent decrease in applications this year, a drop officials largely attribute to a new essay requirement.” If writing a measly 400 words is enough to dissuade around 9,000 students from applying to a school ranked 31st in the nation (by US News and World Report), I suppose one can be forgiven for wondering what this might mean in general for the nation’s aspiring college students. In one sense this very much reminds me of the more salient points buried in Dave Tomar’s screed The Shadow Scholar” How I Made a Living Helping College Kids Cheat (as Tomar recounts, one of his “clients” once maintained that while he can do the course work, he would prefer not to “waste” his time on it).

Perhaps the most interesting issue raised by the Chronicle story, however, is one related to measuring academic quality of institutions of higher education. As Hoover himself points out, this trend at Boston College, if it can be generalized across all of higher education, “reveals the slipperiness of application tallies, widely viewed as a meaningful metric.” Perhaps the most intelligent immediate response to this may be “why in the world have we ever thought the application rate is a meaningful metric for academic quality?” After all, as Kevin Carey perceptively pointed out a few years ago, the use of application rates in college rankings is really a measure of institutional “exclusivity,” and which merely “confirm[s] the status of colleges and universities that by virtue of their prestige are valuable to students irrespective of the quality of the education they provide.” The problem with that, obviously, is that even if exclusivity can be related to superior educational outcomes for students, that connection is not necessarily a direct one and it leaves the door wide open for institutions to promote their own exclusivity at the expense of educational outcomes. This may exactly have been what happened at Boston College before they added the essay requirement this year: they could enjoy a lower admissions rate but who knows what their educational outcomes really were.

Of course, it would be impermissible to single out Boston College to the exclusion of anyone else in higher ed (the College is at least seeking to improve its admissions process), but this is just another example of why we should be continually questioning the underlying rationale for the status quo. It is perhaps, unrealistic to expect higher ed at any time soon to abandon the use of prestige metrics like application rates as a proxy for institutional quality, but we must not forget that simply because elite school can turn tens of thousands of prospective students away, it does not necessarily mean that the education the admitted students receive is, in fact, superior to the education they would have otherwise received or even superior to the education that the rejected students would have obtained at a lower tier institution.

Udacity Teams Up with San Jose State

Posted on January 15th, 2013, by 1 Comment

The New York Times today broke the news that Sebastian Thrun’s Udacity is partnering with San Jose State University to offer “a series of remedial and introductory courses” to students. This announcement, while certainly part of the (almost) daily news updates in the press about “massively open online courses” (or MOOCs), is unique because, as the Times puts it, this is “the first time that professors at a university have collaborated with a provider of a MOOC… to create for-credit courses with students watching videos and taking interactive quizzes, and receiving support from online mentors.”

As I see it, this a very smart move by both Udacity and San Jose State. For the latter, the upside is both that the school may be able to lower costs and increase student outcomes for remedial courses (that, of course, very much remains to be seen) but also that San Jose State may be able, by incorporating MOOCs into their curriculum, forestall any future threats that MOOCs may have to their operating model. Notably, the agreement with Udacity maintains the presence of San Jose faculty in the courses, though the teaching/tutoring work will also partly be borne by online mentors employed by Udacity. San Jose State is, therefore, maintaining at least a nominal control over the courses while still incorporating the basic model of a MOOC; for the purposes of these course offerings, San Jose can both verify the quality relative to their traditional offerings while at the same time make political hay for embracing new approaches using technology. Given the potential for increasing political and economic pressure that schools (particularly the mid-quality state institutions like San Jose State) are likely beginning to feel to utilize cost savings from MOOCs (see Kevin Carey’s article in the Washington Monthly a few months back), perhaps San Jose State did not have much of a choice.

This is also a shrewd move by Udacity. Of course, only time will tell how successful this experiment with San Jose State will turn out to be, but then again, Udacity does not have anything to lose and everything to gain. While it surely is remarkable how swift and widespread the rise of the MOOCs have been, it is also very easy for many in academia to dismiss MOOCs as nothing more than a passing fad, all the rage today but nothing compared to the resilience of an Ivory Tower. If Udacity can conclusively demonstrate to San Jose State that it can improve outcomes at reduced costs in either introductory or remedial courses (courses which present their own unique challenges), then that will go a long way in establishing the right of the MOOC to remain at least a feature in higher education going forward. But even if the experiment cannot unambiguously demonstrate that the MOOC model beats out the traditional model, it will still show that Udacity is serious about improving education (and not just trying to maximize media hits or running up huge initial course enrollments) and will provide valuable feedback directly to San Jose State about how to leverage technology to improve education–both by lowering costs AND improving outcomes.

Of all the places that MOOCs should try to make their mark in higher education, introductory courses seem to be the most likely. But they can make an even bigger mark if they can improve remedial education. That would be a win-win for everybody: the MOOCs will secure their place as a positive force in education, students will win because they can obtain their remedial courses for minimal to zero cost and the colleges and universities will win because they can specialize exclusively in what they are supposed to be good at: offering quality higher education.

Rick Santelli interviews Richard Vedder

Posted on January 11th, 2013, by Leave a comment

On Wednesday, Richard Vedder appeared on CNBC to discuss the rising cost of college tuition, reform, and Mitch Daniels’ presidential contract.

CCAP In the News

Posted on January 7th, 2013, by Leave a comment

On Forbes, Richard Vedder discusses the ever-increasing rise of tuition, and the possibility of liberal-arts colleges going bankrupt:

Colleges have so far gotten away with their price hikes by making it easy for students to borrow money. But now the customers are tapped out. They owe $1 trillion, and they are having a rough time repaying that debt with the kinds of jobs available in today’s economy. Vedder notes that 115,000 janitors have bachelor’s degrees.

Kiplinger’s focuses on college rankings and the best values from public college, and quotes Richard Vedder:

The outlook for new grads isn’t much better. Many recent graduates are swapping mortarboards for part-time or low-paying jobs, while tackling student debt. “The notion that college is a ticket to a good, middle-class life of prosperity is perceived to be less true today,” says Richard Vedder, of the Center for College Affordability and Productivity. Still, a typical college grad can expect to make about $20,000 more per year than the typical high school graduate.

The Chronicle of Higher Education has an article on the number of administrtors necessary for a university (and whether “administrative bloat” actually exists). They quote Jonathan Robe and CCAP’s May study of the University of Nebraska system:

Even when academic programs aren’t in danger of elimination, “administrative bloat” can be an issue, says Jonathan Robe, a research associate at the Center for College Affordability and Productivity. “It takes away resources from the research, teaching, and public-service mission of the university and diverts them to other areas of spending that don’t have a direct relation to those core missions,” he says.

Mr. Vedder says he joked at the time of the report’s release that if he stretched all the system’s excess administrators end-to-end, they would extend from the steps of the state Capitol across the Cornhuskers’ Memorial Stadium football field. “Everybody laughed,” he says. “But no one disagreed with my calculations.”

Before the end of the year, Richard Vedder published an op-ed in Bloomberg on research universities and their overblown assumptions of benefits:

U.S. total research spending was estimated at $436 billion for 2012, in a forecast done by the Battelle Memorial Institute, absorbing $2.85 of every $100 of U.S. output. What may come as a surprise is how little of the work is directly financed by universities themselves — about 3 percent of the U.S. total, according to the National Science Foundation.

Nor are U.S. universities conducting most of this work, either. More than 80 percent of research dollars in the U.S. goes to applied research and development, very little of which is financed or carried out in university facilities, but in corporate laboratories.

CCAP in the News

Posted on December 28th, 2012, by Leave a comment

The Des Moines Register interviewed Jonathan Robe for an article on mandatory student fees:

Greater scrutiny of all college costs, including fees, will continue as long as the economy flounders, said Jonathan Robe, a research fellow at the Center for College Affordability and Productivity in Washington, D.C.

Universities can use fees as a way to raise revenue with less public scrutiny than tuition increases receive, or as a way around tuition caps instituted by legislatures in states such as Ohio, he said.

For the 2011-12 school year, Iowa’s universities publicized a 5 percent tuition increase for Iowa students. But at ISU, for example, combined tuition and fees increased 7 percent. The year before, average tuition costs increased 6 percent. But at the U of I, tuition and fees combined jumped nearly 9 percent.

“Public universities know they’ll suffer some sort of negative public perception for tuition increases, and they can avoid that by minimizing tuition increases if they can increase student fees,” Robe said.

* * *

The Fiscal Times also references a report by CCAP on student fees:

Fees assessed to students can include processing fees, technology fees, lab fees, student activity fees and athletic fees. In a report by the Center for College Affordability and Productivity (CCAP) conducted in January 2011, mandatory fees can add as much as 25 percent to the cost of tuition. Student fees at four-year public universities averaged more than $1,700 per year in 2008, the last year figures are available, according to the Department of Education. That’s up more than 36 percent, even after being adjusted for inflation, since 2000.

* * *

Richard Vedder wrote an opinion for Bloomberg that’s generated a considerable amount of buzz about colleges offering remedial education:

The bigger problem is that colleges admit students unlikely to succeed in the first place. Taking in subpar students leads to a “dumbing-down” of the curriculum for everyone. That may be why studies (such as “Academically Adrift” by Richard Arum and Josipa Roksa) found little evidence that students were learning a whole lot or mastering critical-thinking skills in their college years.

U.S. colleges should not take hundreds of thousands of ill- prepared students and put them through ineffective remedial- education programs only to see them fail to graduate while running up significant college-loan debt. Instead, they should be encouraged — through the tightening of federal loan policies and other accountability incentives — to become more selective in their admission practices and reject students who show on tests, such as the ACT readiness exams, that they are not ready for college work.

Many of these academically marginal students might excel in non-college-degree vocational programs that teach skills in relatively high-demand jobs, which pay reasonably well.

In today’s economy, why is a bachelor’s degree in marketing more valuable than training in high-tech manufacturing?

* * *

An opinion in the San Francisco Gate on President Obama’s education agenda heavily quotes Richard Vedder:

There is no reason a qualified poor kid cannot get into college in the United States simply because of money. Richard J. Vedder[sic], director of Ohio University’s Center for College Affordability and Productivity, told me that Obama is correct, “people might get an acceptance at a relatively expensive private school that they can’t afford to go to.” But if students are accepted into one college, they can get into another, more affordable college, such as a community college, where Pell Grants cover tuition.

“If he’s saying that not everyone can get into whatever college they want to get into, he’s probably right,” Vedder said. “I’m not sure that the American people would agree that every student should be able to get into the school they want.” As an example, he mentioned Harvard.

 * * *

The Huffington Post aired a live segment on remedial education with Richard Vedder’s participation.

New TPPF Report on Texas Higher Ed Reform

Posted on December 20th, 2012, by 1 Comment

Richard Vedder contributed to a recent study published by the Texas Public Policy Foundation on higher-education reform in Texas. Toward Strengthening Texas Public Higher Education: 10 Areas of Reform by Thomas Lindsay, director of the Center for Higher Education at the Texas Public Policy Foundation, offers seven internal reforms and three external reforms for the state to lower costs and improve quality for students, educators, administrators, and taxpayers. As “the average cost of tuition at Texas public universities has increased five percent a year —every year— since 1994,” the higher-education system could greatly benefit from reform.

Among the suggested reforms, Lindsay advocates tying university funding to learning outcomes rather than enrollment figures; feasibility studies for a 10 percent reduction in administrative staff budgets; feasibility studies for a $10,000 degree in every institution’s four most popular degrees; more transparency from institutions in regards to tuition, retention rates, graduation rates, average student debt relative to other institutions, and other data that can help prospective students and parents make informed decisions; and reform Texas law that prevents other quality institutions from entering into competition.

It remains to be seen whether any reforms will be enacted, but recent efforts might provide an argument for optimism. Regardless, the study provides a blueprint for other states to examine weaknesses in their higher-education systems and a path to improvement.

Peter Schiff on Bouncers with a Bachelor’s

Posted on December 20th, 2012, by Leave a comment

I only just now came across this video that Peter Schiff posted about a month ago. It is funny, if nothing else:

H/T Nathan Harden

CCAP In the News

Posted on December 17th, 2012, by Leave a comment

In a new article at Minding the Campus, Richard Vedder discusses college presidential pay and the recent news that 25 of the 50 highest-paid university presidents don’t pay income taxes; their institutions cover it as a perk:

[T]his is still another example of universities avoiding transparency —no, let’s use a better word- -honesty. It is dishonest to tell the world “we pay our university president $500,000 a year” when, in fact, that person is getting a hidden fringe benefit so exotically outrageous that it is virtually unknown to the American public. American corporations, facing withering criticism from stockholders, abandoned this practice years ago. But universities have no stockholders, and trustees ordered to jump off the top of the school’s 30 foot climbing wall by the president typically will do so. There is little constraint on college presidents from their ostensible “bosses.”

At the New York Times, Andrew Martin wrote a featured piece on colleges acquiring large amounts of debt to finance building projects and

its effect on rising college tuition and the academic arms race. He quotes Richard Vedder:

Despite a lull in construction after the financial crisis, borrowing has continued to grow, Moody’s data shows. “Schools are behaving like the Greeks, irresponsibly,” said Richard K. Vedder, an economics professor at Ohio University and director of the Center for College Affordability and Productivity. As an example, he cited his own employer, Ohio University, which has proposed spending $2.6 billion on construction projects in the next 20 years, half of it paid for by debt — an undertaking university officials said was necessary to update antiquated buildings.

“The Edifice Complex pervading higher education flies in the face of other trends that call for caution in capital spending,” Dr. Vedder said in an e-mail.

On National Review Online, Katrina Trinko quotes Richard Vedder when writing about efforts in Florida and Texas to offer a $10,000 degree:

Richard Vedder, director of the Center for College Affordability and Productivity and a professor at Ohio University, points to a variety of tools that colleges could use to reduce costs — including online education, reduction of administrative staff, and requiring professors to teach more hours. “There’s no reason a public-school education can’t

be offered for $10,000 a student,” he remarks.

For a blog at the Atlanta Journal-Constitution, Richard Vedder gets referenced on a post about differential pricing in colleges for majors:

I once was part of an interesting discussion with Emory President James Wagner — he was meeting with the AJC editorial board — on whether tuition should be calibrated so that an education major, for instance, pays less than an engineering major, whose education costs colleges more to provide. The issue came up during a broader discussion about rising college costs and possible solutions.

(Here is a good essay on this issue by Richard Vedderwho directs the Center for College Affordability and Productivity at Ohio University.  If you read it, be sure to read the second comment in response to Vedder’s essay.)