Changing Higher Education

Update on the College of Santa Fe -Laureate deal

I recently described some of the financial difficulties of the College of Santa Fe, and attempts by the city and the state of New Mexico to save the College (New on the for-profit higher education front, May 14, 2009).  I reported that Laureate Education was part of the efforts, and that the College of Santa Fe was likely to soon join the Laureate family of institutions of higher education. 

The Santa Fe New Mexican reported today that the pieces have fallen into place.  Laureate will lease the institution, with a purchase option. Laureate has agreed to commit $20M to offset losses, and to offer discounts to local and in-state students. Governor Bill Richardson has committed $11M of state money to help make the deal possible. The College of Santa Fe name will be kept, "while also giving Laureate the flexibility to add other words." The global Laureate University Network continues to grow!

A missing skill in the globalization of higher education

Inside Higher Education had an excellent article last week entitled Outsourcing Teaching, Overseas that captures many of the problems faced by higher education institutions as they struggle with globalization:

How to teach university degree programs offered overseas is a complicated question. Does a university rely on faculty from the home campus to travel abroad for a year, semester or month at a time to teach, hire a new cadre of faculty at the overseas location, deliver coursework through distance education, or some combination thereof?

 The article describes one approach used by the Utah State University John Huntsman School of Business to offer a Utah State bachelors degree in economics in China.  This program is described in the annual report of the School in the following way:

Utah State University has been offering degree programs through cooperative agreements with partner universities in China since 2000. Currently, the programs are offered at Northeast Dianli University (NEDU) in Jilin City, Beijing Institute of Technology (BIT) in Beijing and Institute of Advanced Learning (IAL) in Hong Kong.....

Students in the degree program in mainland China (at NEDU and BIT) pass the rigorous Chinese national college entrance exam, which identifies the top 6% of high school graduates. Once admitted to our partner universities, the students apply for admission to Utah State University and are admitted if they meet our admission standards. The students become matriculated USU students upon successfully passing our intensive English language courses offered by IELI (Intensive English Language Institute)....

In our model, various USU departments agree to provide the specific courses required in the degree program, including general education courses. Departments assign “lead professors” to write the course syllabus, pick the text book and other instructional materials, and to write exams and other assignments for the course. The teaching materials are provided to “local facilitators” (faculty at our partner institutions) who have been approved by the USU department to deliver the lectures and other course material on-site in China and Hong Kong. Lead professors and local facilitators are in contact each week to make sure that the courses are on-track and to deal with teaching and evaluation issues. Final grades are assigned by the lead professor.....

It is anticipated that we will continue to admit 100 students each year into our programs at NEDU and BIT. In our program in Hong Kong, at IAL, we anticipate an increase in enrollments to 150 each year. Hence, we believe that we will have as many as 800 students in our degree program in Asia in the near future (accounting for students who drop out or transfer to Logan). This number is likely to exceed 1,000 once the Hangzhou program is approved. It is likely that we will graduate more than 300 economics majors each year at these locations.

On the “factual” side, these quotes tell us that the program is offered in several sites, and is attracting a pretty significant number of students.  The students are high quality, having passed the Chinese national college entrance exam plus intensive English language tests. The annual report emphasizes that the student body is so small at present because the Chinese government limits enrollment. So it sounds like this is a successful program from the student’s perspective.

The concerns discussed in the Inside Higher Ed article relate to the 3rd quoted paragraph above, describing how the courses are taught.  Phillip Altbach's comments in the Inside Higher Ed article certainly express the concerns of many:

My view, and I am in a small minority on these matters I think, is that foreign degrees should be taught by faculty from the sponsoring university faculty, and not be random local scholars, even if they are ‘approved’ by the home campus faculty. What USU is really doing is ‘franchising’ their degree -- in a McDonald's way -- which is common especially among low prestige British universities in countries like Malaysia these days. Those British institutions have in some cases gotten themselves into hot water with the British quality assurance agencies and the press for low standards, inadequate supervision and the like. USU may well get into that bind.

This captures, I believe, the cultural and philosophical conundrum that a university must resolve as it seeks to globalize.  At one level, it would be nice to have faculty from the sponsoring university teach courses all around the world, as suggested by Altbach.  Unfortunately, that is highly unlikely to happen - past experience clearly tell us that faculty generally do not want to be posted to some other part of the world for extended periods.  Once is fun, twice is a problem, and three times is impossible.  Even regular short stays are often difficult to make work.  I know of one top  university with two offshore sites where courses are taught in a way that only requires their faculty to be there for two weeks at a time, once each year.  After several years of running this program, the only way to get regular  faculty to commit to this offshore teaching is to make two weeks at one site, two weeks at the other the entire teaching load for the year! This is not the way to solve our budgetary problems!

Various thought provokers

There are too many interesting higher education tidbits floating around recently  for me to write a full post on each, so today I will just briefly comment on several fairly recent reports that struck me as interesting.

I found the recent Inside Higher Ed article entitled Australians Open U.S. Med School to be quite fascinating.  The University of  Queensland School of Medicine and the Ochsner Health System of Louisiana have opened the University of Queensland School of Medicine Clinical School at Ochsner .   This new center will enable a clinical program that involves two years of medical school in Brisbane followed by 2 years of clinical training at Queensland”s outpost at Ochsner.  Only American students will be accepted. Graduates will get an Australian medical degree from Queensland.  The UQ School of Medicine bills itself as “Australia’s Global Medical School”, and David Wilkenson, head of the School of Medicine, describes this new joint venture as “a new model for preparing doctors to work anywhere in the world.” A very interesting way for a foreign university to enter the US market- and an interesting take on globalization of higher education!

Continuing with Inside Higher Ed, I really liked the even more recent Views article by Dennis Jones and Jane Wellman, Bucking Conventional Wisdom on College Costs. They quite persuasively argue against eight nuggets of conventional wisdom:

Conventional wisdom #1: Spending increases in higher education are inevitable, because there is no way to improve the productivity of teaching and learning without sacrificing quality
Conventional wisdom #2: More money means more quality, and quality means higher performance.
Conventional wisdom #3: Among public institutions, state governments are now minority shareholders in higher education, and as a result public policy goals should take a backseat to market rules to steer institutions.
Conventional wisdom #4: Colleges and universities cannot be expected to invest in change or to pursue state priorities without new money. A corollary is that any reductions in funds must be replaced before funds can be considered as “new.
Conventional wisdom #5: Instructional costs rise by the level of the student taught – e.g., lower-division students are cheaper than upper-division students, graduate students are more expensive than undergraduates, and doctoral students who have been advanced to candidacy are the most expensive of all.
Conventional wisdom #6: Institutions can make up for lost public subsidies by increasing research revenue.
Conventional wisdom #7: An expansive undergraduate curriculum is a symbol of quality, and necessary to attract students.
Conventional wisdom #8: States can improve postsecondary productivity if they direct more students to community colleges

Readers of this blog will recognize that I have written often about many of these points, but Jones and Wellman do a great job of concisely making their point that these are, indeed, false "truths".

Nicholas Allen has a very nice short article entitled The Future of Non-Traditional Higher Education in the United States: A Perspective: Part 1 of 2 on the website of InsideTrack. In the interest of full disclosure, I am on the advisory board of InsideTrack. Allen writes:

Major shifts are taking place that may reshape the higher education industry
as never before, creating both opportunities and challenges for most educational institutions, and for the nation. 

He groups the forces bringing about this change into five categories, and talks about the first two, national needs and critical demographic shifts, in this article. Each of these two points to greatly increasing numbers of non-traditional students, a group that our traditional institutions have not served well in the past. His points generally are not new, but he brings many threads together in a very informative, insightful way.  I look forward to Part 2.

And finally- a ranking of institutions that I can understand and appreciate! Readers of my blog know that I am not fond of rankings of institutions of higher education.  However, Jane Marshall writing in University World News informed me of the 3rd annual (how did I miss the first two?) Professional Ranking of World Universities put out by the French Grande Ecole MINES ParisTech.  This straightforward review takes the CEO's of Fortune Magazine's Global 500 and identifies their degree institutions. Points are then assigned to the degree institutions: 1 point if the CEO had only one degree; 1/2 point to each institution if the CEO had 2 degrees.  The points are added up, and viola!- a new ranking that included 377 institutions of higher education, with Tokyo, Harvard and Stanford at the top.  Now, in many ways, this is as crazy as any other ranking.  For example, there are many sociological reasons why there may be correlations between CEO's and their universities that have little to do with the actual quality of the academic programs.  But it has some benefits.  First, other rankings generally come from a closed academic world - they rank on the basis of various forms of recognition by other academics. This one ranks based on value judgments made by a world outside of academe - a world that ultimately supports academe and thus should be noted.  Second, it is a contemporaneous judgment - that is, it is based on who is succeeding in this world at this moment.  Most other rankings are much more backward weighted (Nobel Prizes from 1920!) and so encourage the ossification of the field. Perhaps the most interesting result for me is not the top "winners", which are all pretty predictable, but the very long tail of the distribution.  Most CEO's don't come from the winners, but from a variety of institutions large and small. It suggests to me that if one's goal is to become the CEO of a Fortune Global 500, one may want to question whether or not it is worth paying for one of the "winners".

How the Recession of 2009 Will Affect Post-Secondary Education - viewed from Canada

I thank James Pringle at Ryerson University in Toronto for calling my attention to a report from the Educational Policy Institute with the challenging title On the Brink:How the Recession of 2009 Will Affect Post-Secondary Education. The report was written by Alex Usher and Ryan Dunn .  The report focuses on post-secondary education in Canada, but many of its insights and conclusions apply to higher education more broadly.

The authors look at impacts of the recession, first on endowments, followed somewhat later by decreasing state revenues and corresponding decreasing support of post-secondary education. They discuss increasing tuition to meet some shortfalls, and the differences between Canada and the US in terms of options in this arena.  They discuss a number of institutional response options to revenue shortfalls, none of which will surprise most of my readers.

I particularly liked the discussion of what the authors dub the “Peak Post-Secondary” Scenario.  They note that around 2014 the main cohort of baby-boomers begins to retire, and at that point, costs of health and elder care begin to rise rapidly, and the percentage of workers begins to decline, thus permanently exacerbating pressure on state budgets.  Consequently, just as the recession recedes, societal priorities are likely to be pushed away from education by demographic pressure .  Thus the “Peak Post-Secondary” Scenario calls for permanently declining per-student revenues. 

In almost any scenario, the authors suggest that Institutions will need to increase revenues from non-traditional sources.  In the “Peak Post-Secondary” scenario this becomes urgent. Among the new sources, the authors recommend cross border education, but not just any cross border education:

But cross-border education is not solely about picking up bodies overseas and shipping them here; that might have been an adequate description of the game twenty years ago, but things have moved on since then. The establishment of a broad middle class in many developing countries has vastly increased the demand for post-secondary education. In particular, demand has boomed for education branded (if not provided) by large, established, Western universities is very strong in much of the world. Large public universities from North America, England and the UK have a good name in Asia and Africa – much better in many cases than the local university. The growth market in education for major Western universities lies not in attracting ever-greater numbers of students but rather in modularizing knowledge, delivering it in locally-appropriate forms through international educational partnerships, and certifying students at the end of a course or period of studies.

Sounds like a description you might have read in some of my previous posts!

However, the authors point out that revenue generation is unlikely to be sufficient to resolve the financial problems of post secondary education in the future: Institutions are also going to need to tackle their cost base. At this point, the authors begin to struggle with the challenges of fixing our near-universally broken cost/price model.  They suggest one possible change that is quite logical- and sure to be greatly controversial:

One might reasonably expect, therefore, that Peak Post-Secondary will lead to a reengineering of tasks and costs, and in particular the creation of a two-tier faculty. This will see some faculty paid to concentrate more on research and teaching graduate students, while others will be paid primarily to teach – and in some cases teach an increasingly standardized curriculum.

They suggest that this common curricula, which they view as being at the undergraduate level only,  could have both financial and educational benefits:

By adopting common curricula, many hours of instructor time could be saved – time which could be used to increase student/instructor contact and assist students in developing mastery over freely-available subject matter courses.

Obviously a break from our image of thousands of post-secondary institutions each offering its own special hand-crafted education.  However, it might well offer some educational benefits in that it focuses more on the issue of learning rather than curriculum development.

The report ends with a very important call to reality that sums things up in a way that I heartedly endorse:

Only those institutions and governments that re-think the delivery of education itself, by measuring inputs and outputs and deciding based on evidence where dollars can best be spent, can hope to come out of this recession in better shape than they came in.

What Moody’s doesn’t say in its recent report on higher education

 Moody’s Investor Service recently put out a report entitled Global Recession and Universities: Funding Strains to Keep Up with Rising Demand. It provides a very interesting and informative view of some aspects of the higher education scene as observed from outside of the system. The report came to my attention through posts in GlobalHigherEd (on whose server the report above resides) and University World News, and I thank both for their nice articles.

Moody has looked at universities at selected areas around the world, and how they are handling the global downturn.  Moody’s ultimate interest, of course, is to be able to rate these universities as they access capital markets, so the focus is on aspects of the environment that can or will impact their financial stability.  I will describe some of their observations that I find most interesting, and then will talk about the part of the report that I find most important - the things that are not said.  I will not try to describe the whole report, but recommend that you simply read the original - it is only 13 pages long. I also will focus on the parts of the report that refer to US universities, since that is the group that I know the best.

As a minor point, the report emphasizes public institutions, stating that public universities “most likely accounting for between 80-90% of all students enrolled in tertiary education.” A recent OECD report claims that private higher education now accounts for 30% of tertiary enrollment globally.  This relatively minor discrepancy does not invalidate any of the conclusions of the report, of course. 

Moody’s notes that recessions generally lead to enrollment increases for a variety of reasons, but warn these increases may not be uniformly distributed:

While enrolment declines are possible at individual institutions due to particular market, reputation, and management challenges, we expect higher education overall to enjoy a significant “tail-wind” in student demand for spaces over time. This is especially likely for universities that are “access” oriented with less restrictive academic requirements and a mission focused onskill development. Many prominent universities that function as comprehensive research institutions focused on maintaining strong academic quality reputations and high entrance standards may see the greatest impact in their advanced degree programs.

On the other hand, Moody makes a strong point regarding fundamental changes in funding:

Moody’s believes that the magnitude of economic changes in some countries may place pressure on historic funding and financing patterns of higher education. This would likely be driven by two conflicting trends– increased policy directives to expand university programs and more limited ability of governments to fund the desired expansion Not surprisingly, many countries now face significant budgetary challenges with large competing demands on government dollars.

While some aspects of spending on higher education have been temporarily boosted through stimulus spending, this is largely financed by government deficits and may be difficult to sustain beyond the near term. At the same time, the desire for rapidly rising investment in higher education to support higher participation rates and expanded research capacity suggests the need for significant new operating and capital dollars over an extended period. These trends may well become clearer as the ability to fund higher education comes under greater pressure.

In  regard to this desire for greater revenues, in the understatement of the year, Moody’s cautions: raising student fees is usually a politically sensitive decision.

For the US, there is a timely warning regarding globalization:

In general, we also believe the level of global competition and pooling of talent for faculty and students will continue to increase. As U.S. universities cut back significantly on hiring and capital spending,  non-U.S. faculty and students may be susceptible to recruitment to
other leading universities or home countries. Over the past three decades, the number of students enrolled outside their country of citizenship has risen dramatically, from 0.6 million worldwide in 1975 to 2.9 million in 2006, a more than four-fold increase. Developments like the Bologna Process in the European Union, and similar efforts in other regions, may further encourage the trend of crossing borders to enroll in higher education.

Overall, Moody’s is looking at financial stability impacts of increasing student demand (good), research funding (good), uncertainty of state funding (bad), conflicting demands for services (mixed), political pressures(bad).  So what is missing?  Actually, it is not so much that something is missing, but that the financial problems and dangers become clearer if one looks at them from a slightly different angle, one that will be familiar to readers of this blog.

UNESCO's World Conference on Higher Education

It became clear to us that we are indeed in the middle of an almost unprecedented revolution in higher education -- not just small changes around the edges, but fundamental changes. And our job in the trend report -- and I think in this conference as well -- is to try to understand and then deal with, in constructive ways, the nature of this revolution. It’s different, ladies and gentlemen, from what’s gone on before.

Phil Altbach, quoted in Inside Higher Education

UNESCO is hosting a second World Conference on Higher Education this week, the first having taken place a decade ago in 1998.  A pre-conference press release by UNESCO summed up very well some of the issues facing higher education today.  Among the issues raised in that release are:
•    the number of tertiary students worldwide grew by 50% from 2000 to 2007
•    globally, the number of university aged people who enrolled in higher education increased from 19% in 2000 to 26% in 2007, but enormous geographic differences in participation exist. Women now are a small majority of enrolled students worldwide.
•    higher education is increasingly seen as an engine of economic development, but governments worldwide are overwhelmed with the costs associated with widening access
•    as a consequence, public institutions worldwide increasingly are required to find non-governmental sources of funds to cover some portion of their costs.  This has led to increasing fees, and a variety of entrepreneurial activities that sometimes risk to conflict with mission.
•    private higher education has increased rapidly around the globe, often in response to inability of the public system to meet increasing demand. Private higher education now accounts for 30% of global enrollment.  
•    globalization has produced an explosion of institutions and programs that act across national borders. Countries are becoming international education hubs, regions are developing common educational standards and brand.  Distance learning via the internet in increasingly popular.
•    as a consequence of these changes, improving quality assurance and methods to compare institutions and degrees from different countries become critically important.  The focus of these efforts has become outcomes of student learning and skills rather than traditional measures of input.

There is a nice report of the early part of the Conference in Inside Higher Education, and University World News is providing continuing coverage, as well as a number of articles focusing of specific aspects of the Conference.   A communique will be published at the end of the conference.  A draft of that communique is already available, but will be modified based on events.