Report from Little Hoover: Standing in Front of the Online Train

The dominant take away from the Little Hoover Commission Hearing on Higher Education Funding and Online Education is that many stakeholders believe that most problems in California higher ed can be solved through distance education. Presenters argued that online courses will lower the cost of instruction and make it possible to enroll more students and graduate them at a much higher rate. Daphne Koller even argued that large online classes are better than small classes because when you have the students do the grading and the feedback, the quality of the responses goes up and the time for responding goes down. This is the “wisdom of the crowds” argument that is fundamental to the ideology of crowdsourcing.

During the UC online presentation, we learned that the university wants to move quickly to place many new courses online starting next Fall. The goal is to rapidly increase the ability of students on one campus to take a course on another campus. There is also the idea that students can take outside MOOC courses and get credit for them by taking an exam or asking for transfer credit. Once again, the stress was on taking care of the gateway course bottleneck.

As I mentioned in my testimony, if you reduce the course congestion in lower-division courses, then you will run into congestion in the upper-division major courses. In fact, one reason why many students cannot graduate on time is that they are weeded out of popular majors. I also pointed out that a recent study has shown that the students who do the poorest in online classes are new students and under-represented minority students, and these are exactly the students UC, CSU, and community colleges are targeting.

I added in my testimony that the state has reduced the UC budget by $1 billion, and we raised tuition to cover that loss, and we also increased the size of classes and the faculty-to-student ratio. Now the state is saying that our expanded courses are not as good as online courses, and so we have to do more with less by shifting to a questionable mode of instruction. Meanwhile, the first presenter of the day argued that the new normal is that higher education will be squeezed out of state budgets, so we have to ask students to take on more of a burden, while we exploit various federal aid programs and tax breaks.

In response to this new normal, we need to push for free public higher ed and a rededication to instruction as a core mission of higher education. This does not mean that we should move away from research; rather, we have to find a more transparent and robust way to support this needed social and economic function. Unfortunately, the fascination with online education only blinds people from seeing the realities and solutions facing public higher education.

Little Hoover Hearing on Higher Ed

I will be testifying on Tuesday, February 26 at the Little Hoover Commission’s public hearing on issues facing California’s higher education system. The hearing is scheduled for 9 a.m. on the campus of Long Beach City College, 4901 East Carson Street, Building T, Room 1100, Long Beach, California. According to the hearing agenda, “the Commission is interested in exploring how institutions such as the University of California and California State University can control costs and increase college affordability; the role faculty can play in increasing time-to- degree completion while maintaining quality and high standards; and the development of online education and the impact that massive open online courses, or MOOCs, might have on costs and degree attainment.”

I have been asked to testify on the following issues: “The principal drivers of increased costs at the university, including sponsored research, graduate and professional education, the increase in the number of administrators, and athletics and campus amenities; The impact, if any, on faculty and potential faculty hiring from UC’s intended promotion of UC Online Education; Whether online educational initiatives such as UC Online can help increase student access to classes, cut the time to degree and ultimately increase the number of graduates; Online education’s overall ability to contain costs and increase affordability for students attending a UC campus; How online education should be incorporated into UC; Other issues concerning the current support for increasing the use of online learning in higher education.”

Here is the schedule for the hearing:

9:00 – 10:-00 a.m. Panel One: Student Aid and Postsecondary Financing
David Longanecker, President, Western Commission for Higher Education

10:00 – 11:-00 a.m. Panel Two: Going Online: MOOCs and Beyond
Daphne Koller, Co-founder, Coursera and Professor, Stanford University Sebastian

Thrun, Co-founder, Udacity and Former Professor, Stanford University

Dean Florez, President and Chief Executive Officer, Twenty Million Minds Foundation

11:00 – 12:-00 p.m. Panel Three: Going Online: UC and CSU
Keith R. Williams, Interim Director, UC Online Education and Senior Lecturer, University of California, Davis

Ruth Claire Black, Executive Director, Cal State Online

Robert Samuels, President, University Council-American Federation of Teachers
and Lecturer, University of California, Los Angeles

12:00 – 1:-00 p.m. Panel Four: The Role of the Faculty
Robert Powell, Chair, University of California Academic Senate and Professor, University of California, Davis

Diana Guerin, Chair, California State University Academic Senate and Professor, California State University, Fullerton.

The hearing is open to the public.

No Salary Increase for UC

President Yudof sent off a letter yesterday informing faculty and staff that there would be no salary increases in 2012-13 despite the passage of Prop 30 and the governor’s plan to fund three years of UC budget increases. Here is Yudof’s main message: “It is my hope that the passage of Proposition 30 last fall, and the proposed reinvestment in UC in the Governor's budget proposal last month, mark a turning point for our university. After several difficult years, UC appears to be headed on the path to financial stability. Unfortunately, we still have a way to go before the University stands upon a firm financial foundation. As you know, since 2008, UC has been forced to absorb nearly $1 billion in State funding cuts. Re-balancing the University in the wake of those cuts is still a work in progress, and one that requires many of the ongoing measures that helped UC survive the last few budget cycles. As a result, I very much regret that we will not be able to implement systemwide salary increases for UC staff during the current 2012-13 fiscal year. This includes Chancellors and senior leadership.” The first thing to point out is that Yudof’s claim that there can be no salary increases because the UC has had to deal with a billion dollars of “state budget cuts” is simply not true. As I have previously written, tuition increases over the last five years have far outpaced state reductions. What may be true is that the state has not met the UC’s desired funding, but Yudof’s letter is false and misleading.

We were told about this letter during a meeting at the Office of the President where we were discussing bargaining over the lecturer contract. Lecturers have been negotiating with the university since March 2012 over salary and other issues, but the university refused to discuss any economic issues until after the vote on Prop 30. Once Prop 30 passed, we were then told that the university cannot discuss economic issues until we signed off on pension and retiree healthcare issues. Now we are being told that even if we agree to accept reduced retiree benefits, there is still no money for salary increases. In other words, the university has been bargaining in bad faith, and they have proven once again that they do not accept the basic foundation of collective bargaining.

We are left with no choice but to go to the governor and the legislator to show them that the university believes that none of the money from Prop 30 and the multi-year funding agreement should go to undergraduate instruction. Moreover, according to the university’s own budget documents, virtually none of undergraduate student tuition is going to faculty salaries.

Surely at a time when students are going into massive debt to pay for tuition increases, they and their parents will be interested in the fact that the university does not think that tuition should go to support the faculty doing instruction and research. Parents and students might also be alarmed by the following statement from an Associated Press article: “As of May, there were 2,129 UC retirees drawing annual pensions of more than $100,000, 57 with pensions exceeding $200,000 and three with pensions greater than $300,000, according to data obtained by The Associated Press through a state Public Records Act request. The number of UC retirees collecting six-figure pensions has increased by 30 percent over the past two years, according to Californians for Fiscal Responsibility, an advocacy group that has analyzed UC pension data.” Virtually all of these pensions will be going to administrators, coaches, and medical faculty with no direct connection to undergraduate education. In short, UC is cutting core faculty and staff benefits and freezing their salaries in order to support the high wages and pensions of the highest compensated UC employees.

State Senate Hearing on Higher Ed: Online Program, Budget Goals, and Accountability

The recent California State Senate hearing on higher education provided some news and many interesting discussions. Patrick Lenz announced that the UC will be holding all day meetings with senate faculty on online education April 13th and 25th. He also added that the UC did not think the move to online courses would save money in the near future. However, UCOP is looking to create more courses for the summer that would be available for cross campus enrollment in the Fall.

Nick Schweizer from the Department of Finance stated that the governor’s basic strategy is to increase funding for the UC system and hold the university accountable to certain outcomes, which have yet to be announced. When pressed for details, he discussed increased graduate rates and a shorter time to degree. He also added that online education could play a major role in reducing costs and increasing efficiencies. One possibility is to use a virtual community college to allow students to take all of their courses online before they transfer to a UC. A related strategy would be to make it easier for students to get credit for outside online courses by using the exam-for-credit program.

While access and affordability were the main themes, legislators had a hard time seeing how the issue of educational quality connected to the governor’s proposals. The real problem is that since there is no real agreement on how to measure and compare student learning and the effectiveness of teaching, everyone falls back on the countable measures of credits and degrees generated. This same problem is evident in President Obama’s new college scorecard, which defines “value” by the net cost, the average debt, the graduation rate, and the loan default rate.

Some Real UC Budget Facts

To understand the truth about the UC budget over the last five years, we can look at numbers provided by the legislative analyst and the department of finance. In 2007-8, UC received $3.2 billion from the state, and in 2011-12, it received $2.2 billion; During this time, net tuition went from $1.3 billion to $2.4 billion (these figures subtract 30% for return to aid). So the $1 billion in state cuts were made up for by a $1.1 billion in tuition increases. Moreover, in 2008-9, federal recovery money added $716 million, and another $106 million in 2010-11. From the LAO analyst’s perspective, tuition increases have actually outpaced state reductions. However, UCOP constantly claims that tuition increases have only made up for a third of the state reductions. There seems to be no logical basis for this claim. Perhaps what they are doing is projecting what they wanted to get from the state, and then comparing that figure to tuition increases, but this type of math really makes the legislature not trust the university.

For instance, Speaker John Perez stated at the last regents meeting that, “We've made roughly $900 million in cuts and you've increased fees $1.4 billion dollars. The [fee] increases were disproportionate to the level of disinvestment by the state.” While I do think Perez’s number are a little off, we can look at historical data from the LAO to clarify the situation. Using 2007-8 as our baseline, the following year, the federal recovery money made up for the state reduction, but tuition went up over $700 million (and some faculty and staff had a pay cut called a furlough). The next year, the state funding was $700 million less than 2007-8, and tuition revenue went up $390 million, so we can say the total loss for the first two years was $310 million. In 2010-11, additional recovery money reduced that year’s state reduction to $230 million, but tuition revenue increased $430 million. In 2011-12, the baseline state reduction was $1 billion, and the tuition increase was over $1 billion. If we add up all of these yearly numbers, over the four-year period, the total reduction was $100 million, and if we look at the budget for 2012-13, the tuition revenue is up $1.1 billion from 2007-8’s rate, and state funds are down $700 million. In other words, the five-year change is that UC revenue from tuition and state funds is up $300 million.

This is not to say that relatively flat revenue is a good thing or that students should now be paying almost as much of the state, but what it does show is that UCOP is addicted to presenting false numbers, and the state is starting to fight back. In fact, the governor’s latest budget proposal for 2013-14 has the state giving the UC $2.8 billion, while tuition is projected to be $3.8 billion, which is the same tuition projection as last year and does not take into account the subtraction for institutional aid. Furthermore, the tuition revenue projection will have to be increased because the UC will be accepting a higher number of high-paying non-resident students next year, and they still have not decided on raising fees for professional degree students. In short, using 2007-8 as our baseline, tuition next year should outpace the state reduction by at least $700 million.

The Campaign for the Future of Higher Education: A Call for a New Funding Model

In the United States, quality public higher education was once accessible to most Americans able to benefit from it. The way it worked was simple—taxpayers funded public colleges and universities sufficiently so that students who were prepared to work a few hours a week could complete their degrees in a relatively short time with a minimum amount of debt. For those with even greater need, government provided state grants and Pell grants. This system worked well for decades and opened the door to opportunity for millions of Americans.

Now, we are told we can no longer afford this. We believe that is wrong.

The Campaign for the Future of Higher Education has begun a drive to involve our nation’s college and university faculty in the search for better solutions than funding cuts, privatization, soaring tuition and academic shut-downs. Our nation has arrived at our current quandary for a variety of reasons. One is surely a failure of imagination, a set of assumptions that profoundly limits our ability to think about possibilities.

Three working papers released by the Campaign for the Future of Higher Education aim at stimulating a more thoughtful, fact-based, national conversation about paying for higher education in this country. Two of the CFHE working papers address the common assumption that funding higher education through public means rather than through skyrocketing tuition is simply impossible.

My paper explores the notion of free higher education and examines what the actual cost to provide such an ideal would be. I argue that we could make big strides towards free public higher education by reallocating current governmental expenditures for higher education and by eliminating regressive tax breaks. (More at: http://ucaft.org/category/issues/why-college-education-could-be-free)

The second paper, using the state of California as a test case, looks at the real magnitude of returning to recent, more adequate levels of state funding for higher education. Stanley Glantz, a professor at UC San Francisco, describes that “reseting” higher education funding to more adequate past levels would require only very small adjustments in the median income tax return.

The third paper explores a currently unused tax revenue source that could be tapped if there were the political will to provide adequate public funding for higher education. Rudy Fichtenbaum, an economics professor at Wright State University in Ohio and national president of the American Association of University Professors, explains how to achieve vastly improved funding for higher education through a miniscule tax on selected financial transactions.

Members of the news media, including campus/student reporters and bloggers on education issues, are invited to a news briefing on Tuesday, February 12 (10 am Pacific/1 pm Eastern) to hear a short discussion by the three authors and to ask them questions about their proposals.

To join the call:
• Call (800) 553-0273 / Ask for “Campaign for the Future of Higher Education”
• You may dial up to 5 minutes for the start time

To see the papers in advance:
• Send an email request to dchernow@calfac.org
• Go to www.futureofhighered.org/workingpapers.

Where Does UC Tuition Go?

One of the most surprising statements from the Legislative Analyst’s recent report on UC salaries is the following: “In 2010-11, UC spent a total $1.8 billion on salaries and benefits for faculty. As shown in Figure 3, nearly three quarters of the funding for faculty compensation came from the state. The remaining funding sources include a mix of federal funds, sales revenues (such as from clinical services provided at the university’s medical centers), private gifts, student tuition, and other funds. (Though student tuition makes up a relatively small portion of funding supporting faculty, the university could use more tuition revenue in lieu of state funds since the two fund sources are interchangeable.)” Looking at the accompanying pie chart, it appears that student tuition only funds less that 5% of faculty salaries and benefits. So the question remains, according to the university, what are students paying for?

I recently questioned UCOP on a budget document presented at last summer’s Regents meeting that said the state pays for 98% of instruction at UCSB, and I was told that this figure includes student tuition, but now it appears that only a small part of tuition goes to direct instructional costs. Let’s keep in mind that these figures do not include student housing and dining, which are self-supporting, so are students only paying for administration, staffing and related overhead?

What I think is happening here is the UC budget strategy has backfired. UCOP thought that if it argued that almost all of the funding for the core faculty salaries and benefits came from the state, the state would realize that it would have to increase the UC budget because the core is the central function. However, the end result has been that the Legislative Analyst is saying that the UC does not need extra funding from the state because it can just use tuition. Meanwhile, the governor is arguing that the UC is asking for too much money, and so the university will have to reduce costs by turning to online education.

One major side effect of this bad budget gamble is that the legislature may not fund the UC’s attempt to increase funding for the underfunded campuses. In other words, the great hope of the rebenching model might be dashed by the UCOP’s refusal to present a non-manipulated budget. Yet, the truth always continues to live a life of its own, and sometimes, it emerges into daylight, and when it does, the pile of half-truths and misrepresentations backfires. In this case, UCOP’s budget distortions could result in a decrease in state funding and an adoption of a costly online program, which will cheapen the UC degree and will put pressure to raise tuition as students pay more for less and faculty are asked to do more for less.