The Governor, The UC Budget, and Online Education

This will be a rather long post that will discuss two related topics: Governor Brown’s new budget for the UC system and the Regents coming discussion of online education. In terms of the state budget, Brown proposes the following: “The state’s General Fund contribution to UC, CSU, and Hastings will increase by 5 percent per year in 2013‑14 and 2014‑15 and by 4 percent in each of the subsequent two years.” Although it is a welcomed relief to see increased funding for the UC system, it is not close to the amount that UCOP says the university needs. According to Brown’s budget statement: “UC and CSU have proposed budgets that call for increases in state funding of about 12 percent and 18 percent, respectively, from the preceding year. By comparison, over the past three years, personal income growth in California has averaged slightly less than 4 percent per year. California taxpayers cannot sustain institutions whose cost growth greatly outpaces the state’s income growth. Furthermore, the rapidly growing numbers of college graduates who are unable to repay their student loans is an indication that these costs cannot be forever pushed onto students through tuition and fee increases.” In other words, the universities are asking for too much, and they need to live within their means. Moreover, it is unclear from the budget document if the Governor is basing his increased funding on a future tuition freeze.

What is clear is that Brown feels that the UC can do things in a much more efficient and cost-effective manner: “from 2007‑08 to 2012‑13, when other public agencies were retrenching, UC expenditures increased by 15 percent and CSU expenditures increased by 3 percent. These expenditure increases were funded by approximately $1.4 billion in tuition revenue increases at UC and $1 billion at CSU, a near doubling of tuition and fees from 2007‑08 to the present. Specifically, UC’s tuition and fees increased by $5,556 over that period. CSU’s tuition and fees increased by $2,700 over that same period (see Figure HED‑01). These rapid tuition increases have been a significant hardship for students and their families, particularly middle‑income families who do not qualify for Cal Grants.” Thus, while the governor realizes that tuition increases have been in part the result of state budget funding for higher ed, he also thinks the universities need to do a better job at reducing their expenses.

Brown believes that too many students are not graduating in a timely fashion, and so the UC system has to do several things: stop students from taking extra credits, reduce tuition increases, make more classes available, and make the delivery of instruction less costly. To fix many of these problems, he wants to turn to technology: “All institutions will be expected to use these increases to implement reforms that will make available the courses students need and help them progress through college efficiently, using technology to deliver quality education to greater numbers of students in high‑demand courses, improving course management and planning, using faculty more effectively, and increasing use of summer sessions. With savings achieved in this way, in combination with the General Fund increases and realizing the savings of current efficiency efforts (e.g. UC’s Working Smarter Initiative and CSU’s Systemwide Administrative Efficiencies), the Administration expects the colleges and universities to maintain current tuition and fee levels over the next four years.” Governor Brown is arguing here that due to the combination of increased state funding and the use of new technologies, the UC should not need to raise tuition. In fact, he wants to help fund the UC online program: “the Budget provides UC and CSU $10 million each to increase the number of courses available to matriculated undergraduates through the use of technology, specifically those courses that have the highest demand, fill quickly, and are prerequisites for many different degrees. Priority will be given to the development of courses that can serve greater numbers of students while providing equal or better learning experiences.” Since the UC is already planning to spend $7 million on its failing online pilot program, the governor may be actually bailing out a bad idea and doubling down on the online gamble.

The Governor also extends the online panacea to the community college system, where he envisions the following use of technology: “This initiative will include three key elements: (1) the creation of a “virtual campus” to increase statewide student access to 250 new courses delivered through technology, (2) the creation of a single, common, and centralized delivery and support infrastructure for all courses delivered through technology and for all colleges, and (3) the expansion of options for students to access instruction in other environments and earn college credit for demonstrated knowledge and skills through credit by exam.” This strategy brings together some of the worst ideas circulating in higher education: let’s create virtual campuses for the most disadvantaged students as we continue to replace traditional courses with a wide-range of substitutes.

Once again, I should stress that I am in favor of using new technologies to increase the effectiveness of university education, but there is no proof that this will save money, and it fails to deal with the real cost-drivers, which are administration, construction, sponsored-research and graduate and professional education. This failure to understand the real spending streams in higher ed is also evident in the UC Online project report that has been developed for the next UC Regents meeting. In a virtual copy of the Governor’s own discussion of how new technologies will save higher education, we find the following argument about the UC online program: “Anticipated benefits from for-credit online undergraduate courses include additional opportunities for high-quality instruction throughout the UC system, decreased time-to-degree, increased student success, and decreased costs of instruction. Future directions include streamlining cross-campus and systemwide processes, increasing enrollment in for-credit online undergraduate courses, using innovative learning technology, enrolling non-UC students, and establishing viable long-term financial models and short-term investments.” As we will read later on, the initial discussion of saving money through online education is centered on a call to increase funding for online initiatives: “It is clear now that both the campuses and UCOE would benefit from an infusion of funding on a temporary basis to facilitate continued development. The cross-campus hub needs to be developed, and there is currently no budgeted fund source. Additional instructional designers for UCOE and instructional designers at the campuses would greatly increase the rate of creation of new online courses, the improvement of existing online courses, and the movement of courses to approval for both academic-year and summer offering and then to systemwide approval. Current estimates are that an instructional designer can develop three to four courses per year, provide a major update for three to four courses already offered per year, and provide a minor update to several courses per year. Several campuses, if not all, and to a lesser extent UCOE would also benefit from additional equipment and facilities for the production of online, hybrid, and technology-assisted courses and from a fund for the short-term contracting out of particular development tasks. UC will continue to elaborate on resource needs as campus plans and systemwide goals become clearer.” Let’s see, we are going to save money by finding money to fund course developers, technological hubs, new equipment, new facilities, and outsourced development people. As I have previously written, once you start to take into account all of the expenses related to developing an effective online program, you quickly run up the tab.

Like the expanding sponsored research mission, it is hard for online programs to pay for all of their related costs. It just seems like you never have enough administrators and staff as you push to downsize the faculty. If you think I am being paranoid here, let us look at one of the ideas for replacing current courses taught by regular UC Faculty: “some of the Extension XB, XD, etc. online courses might be considered for approval as courses to be offered during regular terms and systemwide if the course is appropriate and is not currently offered online to UC students.” In other terms, more students will be able to get UC course credit for extension courses that are often taught by non-UC faculty. In fact, the extension teachers do not have benefits, job security, academic freedom, fair compensation, or the same credentials as UC faculty who teach in the “regular” programs.

Moreover, the other way that the UC thinks it can save money is by using new technologies to simply expand the size of classes and eliminate the need for the faculty: “The increased enrollment capacity possible with online for-credit courses could result in a cost-savings to campus departments. An on-ground course that enrolls 100 students may require an instructor and two teaching assistants (TAs). To teach 500 students, the department would have to offer and cover the instructional costs of offering the course five times. An online course could enroll 500 students in one offering; it may still require the same number of TAs, ten in this example, but it will save the department in instructor expenses and time.” Not only might this model save the department money, but it may also eliminate the jobs of most of the faculty members.

The fantasy underlying most of these proposals is a high-tech university staffed with high-paying administrators and exploited graduate students. With large online courses and graduate student assistants, there is no need to hire more faculty members. Furthermore, as I have stressed elsewhere, undergraduate instruction is the most cost-effective part of the university, and so instead of turning their attention to the real causes for increased costs, the administration wants to standardized the curriculum and develop system-wide courses: “UC is developing a mechanism that will easily allow UC students to take courses at campuses other than the one in which they matriculated. This cross-campus enrollment process will allow UC students to take full advantage of one of the key benefits of online courses – the opportunity to learn from experts outside their own campus.” The problem with this notion is that once departments lose their cash cows--lower-division undergrad courses--there is no need to fund these programs.

UC argues that one area of potential savings could come by lowering the need to build more classrooms: “Online courses also allow the university to enroll students without the proportional need for new capital projects. It would cost the University approximately $1.8 billion to build the brick and mortar infrastructure needed to serve 11,000 new full-time equivalent students. The online infrastructure required to support the same number of students would cost approximately $20 million, a savings of over $1.7 billion. Because online courses will not require classroom space, greater adoption of online instruction can alleviate some classroom scheduling constraints and some need for new instructional space.” This seems to make sense, unless you know that during the recent surge in UC enrollments very few new classrooms have been added. Instead, the UC spends its money building medical facilities, research centers, and dorms.

In an apparent nod to the faculty, the report does offer a way for professors to make more money: “UC will undoubtedly continue to identify how it can leverage current and evolving trends in innovative learning technology to benefit UC students and faculty. One aspect of this might be to encourage UC faculty to develop MOOCs with the various for-profit or non-profit groups while simultaneously working to develop ways to provide UC credit for MOOC students either currently at UC or with intentions to enroll at UC. This might be accomplished by developing specific exams for current or future students to take that would certify a competency appropriate for UC credit or by adding additional learning activities and instructor involvement that rounds out the MOOC experience in ways that make the totality eligible for UC course credit.” I read this passage as saying the faculty can make some extra money by selling their courses to other content providers, while the UC saves money by giving course credits for online classes developed by outside providers. So let me get this vision right: UC faculty stop teaching UC courses as UC students start getting credit for courses developed outside of the UC system; meanwhile, the remaining UC faculty could increase their earnings by selling their courses to the highest external bidder as UC courses are outsourced to other providers.

But what about quality? Here is the best line from the whole report: “The Academic Senate has established procedures and criteria at all campuses that consider the unique aspects of online courses, and the Senate’s systemwide University Committee on Educational Policy (UCEP) has established guidelines for extending the approval process to make campus-approved courses available systemwide. Early information from the Senate’s requested UCOE evaluation are that courses are successful, valued, and “high quality curriculum.” Similar evaluations of campus-produced online courses would undoubtedly yield similar results.” According to this circular logic, since the past courses have been deemed high quality, the new classes will “undoubtedly” be high quality. This line of thinking does not increase my faith in the ability of the university to maintain educational quality.

At one point, the report does recognize that virtually all of its previous predictions concerning the pilot online program have failed: “When the original marketing study was done 16 months ago, there were relatively favorable indications of interest in enrolling in UC for-credit, for-fee online courses within California, and many of the online options available now were not in place or even envisioned. For a number of reasons, development of online courses in UCOE is approximately six months behind the original schedule, but the number of course offerings that could enroll non-matriculated students for 2013-14 exceeds the original budget planning assumptions. However, projections as to the market for these courses may turn out to have been overly optimistic.” This is an understatement since we now know that UC has spent $5 million to enroll 5 students and not the planned 3,000 non-UC students. And yet, it looks like the state will bail out the UC online pilot program so they can double down on their delusional bet. We all need to educate the governor and the regents about the realities of this online venture.