We face two possible futures. In one, institutional and policy leaders
take the steps necessary to ensure that American higher education is
responsive to public needs for that education. In the other, the gap
between institutional-self interest and the public agenda grows,
leading to a continuing erosion of confidence in the academy, budget
cuts, and punitive regulatory treatment. Whether we end up on road A or
B depends in large part on the leadership of our colleges and
universities--and leaders' ability to demonstrate results from the
spending decisions they make, in language and using evidence that is
relevant to the public's priorities for higher education. doing that
means connecting the dots between how resources are used and the
results produced.
Boards can make a big difference in this discussion, by helping to
define the terms of the conversation and making it clear that they want
to see budget recommendations supported with evidence about the
effectiveness of past spending and the value produced for students and
the institution by such spending. they can also push for better data
about spending and different aspects of performance. Board members are
often less put off by performance metrics--such as average cost-per
student or cost-per degree--than people within the institutions, and
understand that they are meant to be guideposts rather than goalposts.
this work will be controversial within the institutions, however, and
so it is important for boards and presidents to be closely aligned on
the agenda, both in terms of what they choose to focus on, and how they
will communicate the process and results of the analyses internally and
externally.
The Good News: Public Support for the Purposes of Higher Education
America "gets it" about higher education. Public opinion polling
consistently shows high positive ratings for colleges and universities
and for the importance of a college education for individuals and for
society. Polls conducted in december of 2008 showed 55 percent of
respondents believe that a college education has become a necessity to
make a decent living--a sharp increase from the 37 percent who felt that
way just eight years ago. Polls also show strong positive perceptions
about the institutions--colleges and universities consistently score
higher on institutional "trust" measures than virtually all other types
of institutions in society.
Policy leaders "get it" too. At the state and federal levels, a
consensus is developing about the connection between higher-education
attainment and social and economic advancement--and the need to increase
the number of college graduates to produce the knowledge and skills
needed for the future. A national public agenda for higher education is
beginning to form, with the goal of increasing attainment levels from
the current rate of around 40 percent of the population having some
type of higher-education degree or credential to somewhere between 55
percent and 60 percent of the population by 2025. that's a huge
increase: more than doubling the number of students who persist and
succeed at every level of the educational pipeline, from high-school
graduation to adult continuing education. Meeting this goal also will
require new investments in research and development, to produce the
advances in science and technology so essential to future economic
growth.
People inside higher education need to understand that this public
agenda isn't driven by a desire to help colleges and universities; it's
about the role that colleges and universities play in our nation's
future. If we fail to meet the daunting challenge of producing more
graduates, we risk developing mass shortages of skilled workers of the
types that an innovative economy relies on, which will continue to
erode our communities and our economy, and put our nation at risk for
economic stagnation and decline. We also face a society characterized
by growing inequality between the haves and the have-nots, with the
dividing line determined by education. Getting to where we need to be
will require concerted attention to student preparation and success
from kindergarten to graduate school. in many institutions, where
quality has been achieved by weeding students out rather than helping
them to succeed, it will require a change in attitudes about
institutional responsibility for student success.
The Not-So-Good News: Costs and Eroding Public Confidence
Despite the generally positive attitudes about higher education,
concerns about college costs have become the flashpoint for a growing
public and policy critique about the leadership and direction of the
academy. the public correctly believes that tuitions have gone up more
rapidly than almost any other commodity, increases they don't see as
justified by improvements in quality. Almost 67 percent of the public
now believe that qualified students are being denied the opportunity to
enroll in college. the majority also question the values of
institutions' leaders--and whether they don't place their own
institutional priorities ahead of their mission to serve society: Just
35 percent say that the institutions are primarily motivated by making
sure that students get a good education, in contrast to the 55 percent
who say that the institutions care most about their own "bottom lines."
And a majority believes that institutions could cut their budgets
without harming quality.
Some of the critics' perceptions may be misplaced: for many public
colleges and universities, tuitions are going up because state funds
are going down, not because they are spending a lot more money. And
polls also show that most people overestimate college tuition costs and
underestimate the availability of financial aid. But these facts are
somewhat beside the point: there's no question that tuitions are going
up very rapidly and that, despite increases in financial aid,
affordable access is clearly at risk. And the financial crisis is
pushing many institutions to limit admissions, so qualified students
are being denied the opportunity to enroll. institutions may be
struggling to cut costs even as they need to increase tuition, but the
evidence is invisible to the public and most policymakers. All they see
is that the institutions are raising tuition and cutting off access.
An Accountability Agenda: Results and Value
Convincing the public and policymakers that institutions are
spending money wisely will require new attention to the intersection of
funding and performance. Within institutions, it means looking to see
whether spending makes a difference in educational results, and then
using that knowledge to invest resources in ways that will improve
performance. With public audiences, it requires data-based
communication about how the institution is using resources to ensure
improved access, increased degree attainment, student learning, and
innovative research and development.
Focusing on spending effectiveness will require a shift in the
traditional discussion about value in higher education--moving from a
focus on the economic value to an individual of a college education, to
a focus on the internal economics of how institutions spend their
resources to produce results. Academics have long comforted themselves
about the high cost of college by pointing to economic evidence showing
that students' tuition investments reap lifetime benefits through their
higher incomes. true enough, but this begs the question about
cost-effectiveness, since the income advantage goes to students who
graduate from low-cost institutions as well as high-priced ones. And
tuition and fees have risen precipitously while income growth has been
pretty stagnant, so the return on postsecondary investment, while still
positive, is declining. to turn that situation around, institutions
need to attend to ways they can control growth in costs without
damaging access or quality. that means paying attention to efficiency
and effectiveness--and to the intersection of spending and value.
The problem is that most institutions don't do this. despite many years
of effort to improve evidence about student learning and outcomes,
institutions as a general rule still fail to connect the dots between
performance and resources--either within our institutions or with public
audiences. it isn't that we haven't made an effort to assess quality,
particularly as that relates to student learning. in the last decade,
institutions have taken the public call for "accountability" seriously,
with the result that there is now more evidence being collected about
aspects of institutional performance than at any time in our history.
the Voluntary system of Accountability (promoted by the American
Association of state colleges and Universities along with the
Association of Public and Land-Grant Universities) and U-cAn (used by
private colleges) are cases in point. More than 1,000 institutions
nationwide now participate in these efforts, which report information
about institutional performance on measures such as: four-, five-, and
six-year graduation rates; average entering student test scores;
proportion of applicants who are admitted; total student costs of
attendance (tuition and fees, room and board, books and transportation)
and the proportion of students receiving some form of financial aid.
More than 1,000 institutions also participate in one of the national
surveys of student engagement in the educational process.
But none of those systems gets at the nub of the "value" question--to
evidence about institutional priorities and whether the dollars spent
on various activities have produced the desired results: slowing
tuition increases, producing more graduates, better educational
outcomes, or more noteworthy research, for example. VSA and U-CAN do
report tuition and financial aid, but there is no mention of what the
tuition dollars actually pay for, and how much goes to pay for faculty,
student services, operation of the physical plant, or for research. And
while the surveys of students' engagement in the educational process
tell us about effective educational practices, they don't tell us what
these practices cost--and whether improving educational effectiveness
really requires more money, or simply a shift in focus within the
institution.
The reality is that the accountability movement has basically avoided
issues of resource use. we presume that money is needed for quality,
but research on the relationship between spending and, for example,
what budget allocations buy in terms of better graduation rates or
improvements in graduates' performance on state licensing exams and the
like is at best ambiguous (see resources list). This shouldn't be that
surprising in higher education; similar findings about the lack of data
linking spending to performance objectives have emerged in K-12
education even though the issue has received much more attention in
that sector.
Part of the problem lies in the weakness of strategic planning within
many institutions, where goals are general and all activities seem to
have equal priority. Measuring "value" requires the ability to evaluate
resource use against clearly defined, measurable goals (such as
increasing degree attainment or closing achievement gaps among
demographic groups or keeping tuitions down). If everything is a
priority, then all activities have equal value. Another part of the
problem is that most institutions--and board members-- know more about
how much money they have overall than they do about how funds are
spent. They focus on raising revenues needed to balance the budget and
look at year-end accounting reports of cash balances and reserves. The
typical institution does remarkably little to look at how the funds
raised are actually spent, much less whether that spending has anything
to do with changing performance.
But the biggest problem is that looking at spending makes many
academics very uncomfortable, precisely because it raises questions
about effectiveness when they believe all activities are meritorious.
At one level, they're right: there's nothing about the study of, say,
foreign languages that is "better" than the study of math and science.
they're both important. But in an environment of great fiscal
stringency, in which almost no college can afford to do all things
equally well, the issue of relative priorities and value becomes a
critical factor in making spending decisions. further, leaders should
be looking at ways to reduce spending, in order to keep student tuition
low, without compromising core capacity and quality.
To get at value for the dollars spent, institutions also need to
broaden the lens used to look at effectiveness, from a narrow focus on
priorities as those are defined within the institution, to the public's
priorities for higher education. to document public value, we need to
show whether the institutional priority is essential to meeting the
goal of improving higher education's performance in such areas as
expanding access, keeping tuitions down, improving educational
effectiveness, or increasing graduation rates. And that must be done
with evidence, not just with rhetoric.
Take as an example the issue of faculty compensation. it is commonly
understood that faculty members are one of the greatest assets that an
institution has, and in almost every institution, one of the top budget
priorities is to improve faculty compensation. But improving such
compensation by itself isn't a public priority for those outside higher
education; increasing students' attainment of degrees is. This isn't
because the public is anti-faculty; they understand that faculty
members need to be legitimately compensated. But there's no reason for
them to think that increasing faculty pay should be a higher priority
than keeping tuitions down, or making sure that students can get the
classes they need to graduate. And in this post-A.I.G. environment,
public resentment over executive compensation could easily spill over
to higher education, where reports of low teaching loads for highly
compensated faculty members are common.
To meet the test of public value, institutions need to show whether
faculty compensation is related to student attainment. for an
institution that has made increases in graduation rates a top priority,
the "value proposition" will be demonstrated by asking how investments
in faculty compensation will pay off in reducing attrition. if
increasing compensation means that more full-time faculty are put into
the lower-division classes where attrition is highest, it could: there
is some research showing a positive connection between use of full-time
faculty members and lower student attrition levels. But if increasing
faculty compensation means paying more to tenure-track faculty members,
while increasing use of part-timers in lower-division courses, then the
investment in faculty compensation likely won't move the dial on
student degree attainment, even if it makes for a better life for
full-time faculty members. Asking the question about value and results
helps to show these trade-offs and to focus the policy discussion on
how faculty resources are used, not just how faculty members are
compensated.
The Role for Boards
Working with presidents, boards need to help set the stage for this
work, because they are in the best position to balance the
institutional interests with those of public audiences, and to frame
the dialogue about value in language that both sides can understand.
this can't be approached simply as a bean-counting, cost-cutting
exercise. The discussion needs to be about evidence for effectiveness
and how to promote the value of the institution in language that
resonates with public values for higher education. trustees should be
prepared to help set the stage by working with their presidents to ask
a series of questions about the existing strategies for evaluating
performance and addressing value--and making more explicit the links to
budget priorities. (see "Questions About Spending and Results.")
The days when institutions could argue that more money means more
quality are over. to demonstrate value for investments, we need
evidence about cost effectiveness, and value-added for money spent.
this work will be difficult for many academics, who will want to force
a level of empiricism in discussions about how to evaluate performance
that will effectively stall the agenda. Boards are critical to keeping
the work focused: not everything needs to be measured, just the key
areas that are institutional priorities. And the measures of costs and
effectiveness don't have to be extremely detailed either, so long as
they help to show whether the institution is moving in the right
direction. we don't need to get this perfect in order to get it right.
Questions about Spending and Results
1) How do the institution's strategic priorities translate into
goals for spending? how consistent are these priorities with the public
agenda of increasing access, degree attainment, affordability, quality,
and research and development?
2) How are resources being used within the institution and are spending
increases going to areas that are consistent with the strategic
priorities?
3) What steps is the institution taking to increase the graduation rate
for all students? Where are the leaks in the pipeline, and how are
these being addressed through counseling, tutoring, or other
interventions? Do these interventions have the resources they need to
be most effective?
4) Has the institution undertaken an efficiency-and-effectiveness
review? What savings have been produced as a result, and how have these
been reinvested to improve performance (including keeping tuition down)
in priority areas? How have steps to improve efficiency been
communicated to the public?
Resources:
Peter Ewell, "Dissecting Myths About Institutional Quality," Change magazine, Volume 40, no. 6, November/December 2008.
Public Agenda and the National Center for Public Policy and Higher Education, "Squeeze Play 2009: The Public's Views on College Costs Today," San Jose, California. National Center for Public Policy and Higher Education, http://www.highereducation.org/reports/squeeze_play_09/index.shtml
State Higher Education Executive Officers, "More Student Success: A Systemic Solution," Boulder, Colorado, 2007, http://www.sheeo.org/k16/studsucc2.pdf
Lumina Foundation for Education, "A Stronger Nation Through Education," February 2009, http://www.luminafoundation.org/publications/ a_stronger_nation_through_higher_education.pdf
National Association of Independent Colleges and Universities, "U-Can Get the Facts for a Smart College Choice!" http://www.ucan-network.org/
Voluntary System of Accountability, http://www.voluntarysystem.org/index.cfm
