Risk or Predictability: UT System Fixed Tuition Proposal Is No Guarantee

Despite the failure of fixed tuition plans in Georgia and Michigan, and the dubious results of similar efforts in Illinois, the University of Texas System Board of Regents is following the wishes of Gov. Rick Perry and ordering all UT System campuses to come up with proposals to set four-year fixed tuition rates for future entering freshmen.

Perry has been pushing a variety of alleged reforms in Texas, most of them in line with recommendations from groups that have an ideological agenda that is a threat to excellence in public universities.  For the last year and a half, Perry and his followers on the System board, along with right-wing “think tanks,” such as the Texas Public Policy Foundation and the Center for College Affordability and Productivity, have been attacking UT Austin and its president, Bill Powers.

Because of this antagonistic relationship and the poor record of fixed tuition plans in other states, UT system schools should view the latest demand with considerable skepticism.  For one thing, when a university sets fixed tuition for four years for a given entering class, the institution has no way of knowing how much (or, more likely, how little) state funding will be allocated for the same period.  So what happens is that schools set modest fixed rates and run the risk of low-balling expenses or they set higher rates to hedge against cuts in state funding.

For this reason, it is typical for the initial implementation of fixed rates to yield somewhat higher tuition increases than would otherwise have been set.  Moreover, the subsequent entering classes are still subject to higher tuition rates than the class before it.

At the University of Illinois, where fixed tuition was implemented with the support of disgraced former Gov. Rod Blagojevich in 2003, “fixed” tuition rose 9.5 percent for the class of 2010, over the previous class, and then rose another 4.8 percent for the class of 2011.  How much of this increase was needed to offset the fixed rates for previous classes is anybody’s guess.  And four-year graduation rates have not substantially improved, according to university officials.

In Georgia and Michigan, state universities had to forgo their fixed tuition plans because the volatility of state funding and the complexity of budget forecasting made the process to complex to sustain.   University officials emphasized that stable, continuing state funding support was necessary to successful implementation, but the financial crisis led to sharp cuts.

One motive for the UT System plan, aside from providing politicians with what appear to be nice talking points, could be a desire to make UT Austin more vulnerable to state decision-makers and micro-management, since the fixed plans will likely restrict institutional autonomy.

Perry and his supporters point to the UT Dallas as the exemplar of the fixed tuition approach.  While it is true that the four-year graduation rate for UT Dallas has increased from 46 to 51 percent since the implementation of the plan in 2007, it is also true that UT Dallas has the highest tuition of any public university in the state–14 percent higher than UT Austin and 31 percent higher than Texas A&M.

Supporters of fixed tuition say that UT Dallas has so many business and science majors that their costs are necessarily higher.  A review of the variable tuition rates at UT Austin confirms that students majoring in business pay about 6 percent more tuition than the average tuition at the school; engineering majors pay about 4.8 percent more.  Aside from nursing, these are the most expensive majors.

According to U.S. News, the most popular major at UT Dallas is, indeed, business, with 32 percent of students enrolled.  But at Texas A&M, 18 percent of students major in business, and another 14 percent in engineering.   Since there appears to be relatively little difference in the cost of educating business and engineering majors, both UT Dallas and Texas A&M have the same proportion of students in high-cost majors; yet average tuition at UT Dallas is much higher.

Gov. Rick Scott of Florida, who frequently follows Perry’s lead on university “reform,” is also advocating fixed tuition in Florida.  Ohio University is also looking at fixed tuition options.  Yet amid all the change in higher ed these days, no option is without risk, even (or especially) when the goal is predictability.




Gates Cambridge Scholars for 2013 Announced: Rutgers Leads Public Universities

The Gates Cambridge Foundation has announced the 39 American scholars selected for graduate study at Cambridge University, and Rutgers University leads public institutions with two scholars for 2013.

In addition, Arkansas, Auburn, Binghamton, Christopher Newport, Maryland, Michigan State, New Mexico, New Mexico State, Salisbury University, UC Berkeley, and UT Austin have bachelor’s degree holders who won Gates awards.  The U.S. Naval Academy also has an awardee this year, not unusual for the academy.

The overall leader in 2013 is Harvard, with five scholars.  Yale, Princeton, and Stanford have two scholars each; MIT and Duke have one apiece.  Other private institutions with Gates winners are Penn, NYU, Pomona,  Chicago, Boston University, Case Western, De Pauw, Notre Dame, and Franklin Olin College of Engineering

A student from the University of British Columbia was also honored with an award this year.

The Gates Cambridge Scholarships are among the most prestigious in the world, paying the cost of graduate study at the eminent English university for multiple years of study.



Decline of the Residential College Experience: A Risk to ‘Emerging Adulthood’?

Amid rising college costs and sharply reduced state funding, many actual and would-be reformers view the dramatic expansion of online instruction as the best way to save money and improve access to higher education.  While online classes are a great advantage for non-traditional students and perhaps for traditional students who can take them in place of some large lecture courses, their overuse may have a negative impact on the personal development of students in the 18-29 age group.

Thus far, the arguments for online instruction have been so influenced by the current financial angst that the impact of true “distance learning” on the personal development of college-aged students has not been at the forefront of the debate.  Yet with generations of highly successful residential college students standing as testament to the value of the traditional college experience, both in the U.S. and abroad, we should take care not to permit the perceived financial advantages of distance learning to overwhelm the developmental advantages of residential learning.

Instead of focusing exclusively on whether cheaper online instruction can impart knowledge as effectively as a college instructor in a lecture hall, we should also take equal care to understand the impact of online instruction on the personal development of students.  This is increasingly true now that Massive Open Online Courses are being considered for college credit.  If we continue to speak in developmental terms, we could say that the atomization of the college experience may only be in its infancy, and we are far from certain about the impact of its growth.

The online revolution is not the only factor that has reduced the proportion of students who participate in the residential college experience.  According to “The American Freshman 2012,” the fascinating work of the Higher Education Research Institute at UCLA, fewer college-aged students are living in dorms now and more are living at home with parents.  The UCLA report also shows that more students are acceding to the wishes of their parents now when it comes to which college to attend and whether to live at home, largely because of financial reasons.

While it is understandable that the economic crisis has forced parents and students alike to be more realistic, we are still left with the question whether, in the long term, we want to see further declines in residential college life.

At least since 2004, when Oxford University Press published Emerging Adulthood: The Winding Road from the Late Teens through the Twenties, by Jeffrey Arnett, psychologists have recognized a distinct development phase between adolescence and adulthood

Arnett convincingly argues that this phase, emerging adulthood, has come about because of the “rise in the ages of entering marriage and parenthood, the lengthening
of higher education, and prolonged job instability during the twenties…. This period is not simply an ‘extended adolescence,’ because it is much different from adolescence, much freer from parental control, much more a period of independent exploration.”

Well before Arnett’s influential work, eminent scholars such as A.W. Astin, founding director of the influential Higher Education Research Institute at UCLA, had written in the 1970s about the importance of the college years to the development of personal identity.  Other scholars who have contributed to our understanding of the college years as a time of critical personal development include Arthur W. Chickering (Education and Identity, 1969), among many publications.

Chickering identified seven “vectors” of development during the college years:

1. Developing intellectual, social, and physical competence.
2. Learning to manage emotions.
3. Moving through autonomy toward interdependence.
4. Developing mature interpersonal relationships.
5. Establishing identity.
6. Developing purpose.
7. Developing integrity.

The list begs the question: Can’t these “vectors” be followed outside of the residential college experience?  The answer is yes, but at what levels of interdependence, with what high or low purpose in mind?  The context of the development is critical.  Other researchers have also pointed to a phenomenon called the “environmental press,” which is a nice way of describing how our peers can push and challenge us.  Will some of our old high school friends challenge us in the same way as our smartest friends and classmates in college, not to mention our professors?

Although the UCLA study tells us that more students are arriving at college feeling “overwhelmed,” it also reports that students with such feelings are more likely than others to find positive support in college that reduces this kind of pressure and enables them to succeed amid the “environmental press” of classwork.  Students living at home may experience only the classroom “press” while lacking the support of student groups and counselors.  These students, in turn, are more likely to turn to their parents at just the time in the students’ lives when they should be pursuing the “vectors” described by Chickering.

Other recent research on college peer relationships, by Lisa M. Swenson, Alicia Nordstrom, and Marnie Hiester, looks at the relationship of college freshmen with their former high school classmates.

“Peer relationships are an integral part of adolescents’ and emerging adults’ lives,” the authors conclude. “In this study, we identified specific ways in which close peer relationships are associated with adjustment to college. Maintaining ties with high school friends can help a new college student adjust during the initial transition period, but it is also important for these college students to make new friends in their new environment if they want to improve their chances of success. Given the serious implica­tions of failure in college, this study provides empirical evidence for the importance of friendships in the transition to college.”

Without considering the personal development of the “emerging adults” who enter college and the ways their peers and professors can affect the remainder of their lives, reformers who are keen to increase access and reduce costs via distance learning may discover that, contrary to their dreams of producing more highly-trained students for the market place, they will be sending young people into the world who have yet to emerge from their early adult phase, and must then “emerge” on the job.  Do we really want to wait so long for this to happen?

–John Willingham, Editor





Gates-Funded Reform Plan: More Low-Income Aid, Fewer Merit Grants, No Tax Credit

More than five years ago, the Bill and Melinda Gates Foundation decided to fund projects and research aimed at doubling by the year 2025 the number of low-income students who graduate from college or from some other post-secondary institution.  The Gates-funded proposals that have come forward in recent weeks share this profoundly egalitarian focus and, if implemented, would have a revolutionary impact on higher education.

While the egalitarian goals are laudable, it is also true that if all the recommendations are implemented, middle-class parents and students will for the most part find it more difficult to pay for college.  The message we receive from these initiatives is that the foundation believes that the nation as a whole is at great risk because too many low-income students are falling behind, and that ameliorating this problem is worth some sacrifice on the part of the middle class.

One such initiative is from the Committee for Economic Development, which proposes that current federal non-loan programs (e.g., Pell Grants) be replaced by need-based federal-state matching programs.  This proposal has received some media attention, but after reading the entire 32-page report, we believe its potential impact has been insufficiently understood.

The CED report argues that the current higher education system is inefficient because too little financial aid goes to those who are most in need.  There is an implicit recognition in the report that “broad-access” institutions will be the most affected, while elite public and private institutions will have to make fewer adjustments.

The report is critical of colleges that regard federally-funded grants and loans as the only means of increasing access to low-income students, meanwhile preferring to use state and institutional funds for the purpose of merit-based aid to high-achieving students who will raise college profiles.  Middle- and even upper-class students who now enjoy merit aid may find that the matching requirements recommended by the CED will dramatically reduce the availability of merit funds.

“Our concern,” the CED says, “is that institutions are engaged in a kind of ‘arms race’ for academically qualified students….This drives an ongoing process of increasing financial aid to students who will go to college regardless of the level of aid they receive.”  One reason for this “arms race” is the focus on student selectivity in college rankings, especially the U.S. News annual best college issue.  Bill Gates has directly criticized this emphasis on “inputs” versus “outputs,” such as improving the skills of under-prepared students.

Clearly the rising cost of attending college has hit low-income students the hardest.  The CED recognizes that state cuts to public colleges and higher operating costs are the principal factors driving higher costs, but sees little on the horizon to change the current lack of public support.  Therefore, the only option is to use student aid funds more efficiently.

The aid funds themselves cannot be increased to cover the increasing costs.  The CED notes that two presidents in a row have funded Pell Grants at record levels (now $35 billion), but the proportion of tuition and fees covered by the grants has gone down.

The specific recommendations of the CED report would transform the college financial aid system, especially grants:

  • Grant funds for a state would be determined by the number of low-income young people in the state, not by the number of high school graduates or college students.
  • Individual grant aid would be determined by the IRS based on tax returns.
  • Grants would be portable across state lines.
  • In-state tuition would not increase more than median family income.
  • State and institutional grant funds would have to match federal funds at 20 percent.
  • Merit-based awards could still exist, but only after this 20 percent matching level has been met.
  • States could refuse to participate, but then would lose the 80 percent federal grant contribution.
  • The tax credit for families with college students would be eliminated and the $18 billion in savings would be used for incentive programs (using financial aid to increase graduation rates; tying financial aid work-study to local job market).
  • Aid applications would be simplified.
  • Loans would be repaid based on income.

The report acknowledges that reduced merit aid and the elimination of the college tax credit will hurt middle-income families, but says that some of this harm will be offset by the requirement that colleges could increase tuition and fees only to the extent of any increase in median family income.

The CED says that this requirement will force state legislatures and college administrators to reach “durable” agreements about how much state appropriations may change or about how much tuition and fees might increase.





U.S. News: Lower Endowment Returns May Affect College Rankings

U.S. News just announced that future rankings may be affected as a result of the generally lower rates of return on investments held by university endowment funds, a development that points out the emphasis (or over-emphasis) that the magazine’s rankings place on financial resources.

Whether the lower endowments will hit public universities harder than it does private institutions remains to be seen.  Many elite public and private universities have large endowments.

While it is obvious that wealthy institutions can provide many advantages to students and faculty, we have argued that ranking components such as small class size, the proportion of faculty with Ph.D.’s, and the proportion of full-time faculty should be considered–but not in tandem with the money behind them.  In other words, measure the impact of the financial resources without duplicating that impact by adding ranking points for the funds themselves.

In general, this double impact results in lower rankings for public institutions.  The current magazine methodology allocates 10 percent of the total score to the wealth of an institution; 7 percent for faculty pay; and 5 percent for alumni giving, which the magazine refers to as an “indirect measure of satisfaction.”  It can be argued that it is, rather, a direct measure of higher income–often a great satisfaction, but not the only one worth noting.

It will be interesting to see whether the loss of endowment income offsets the ranking advantages of wealthy private universities, hits pubic and private schools about equally, or hurts public universities the most.  We will be careful to note the impact when the new rankings come out in September.