A Fork in the Higher Education Road

The National Education Writers Association conference will be held May 2-4 at Stanford University. U.S. Secretary of Education Arne Duncan and Thomas Freidman will headline, and I will be on a panel discussing MOOCs. My main point will be that the push to use for-profit companies to provide online education at public institutions can be best understood by looking at for-profit universities. Institutions like the University of Phoenix receive the vast majority of their funding from the federal government through student loans and Pell Grants, and yet these schools have very low retention rate as they saddle students with life-crippling debt. Not only do most of the students fail to earn a degree or find employment, but virtually all of the faculty work without tenure or any other form of job security or academic freedom. Moreover, these schools spend most of their money on marketing, administration, and technology.

As I argue in my forthcoming book, Why Public Higher Education Should be Free, the world is now faced with two central options: either we go down the road of for-profit education, or we find a way to make all public higher education free. My research shows that we could eliminate tuition by just using current resources in a more planned and rational way, and if we do not do this, we will end up creating a privatized system with high costs and low quality. Furthermore, the push for MOOCs and other forms of privatized online instruction are in reality just a distraction from the real problems facing higher education, which center around out-of-control student debt, state de-funding, the rise of the administrative class, and the casualization of the academic labor force.

As Evgeny Morozov argues in his book To Save Everything, Click Here, we are constantly being told that every social problem can be fixed through technology, and education is just one example of how high-tech solutionists have taken over the public and political imagination. Leading the way in this new form of capitalist utopianism is the Silicon Valley billionaires and millionaires who hope to get rich by appearing to do good. Instead of dealing with the complex and messy aspects of our social world, the techno-evangelists sell efficiency, transparency, certitude, and perfection. In the context of higher education in California, each week seems to bring another high-tech solution to our problems of access and affordability. However, as Morozov reminds us, cheap fixes prevent us from developing real, sustainable public policy.

Likewise, the push to base university funding on degree attainment rates applies a factory model of production to the complicated world of instruction. Instead of pushing for innovative creativity, we are re-imagining education as a technological machine that spits out graduates at a faster rate. Yet, students are not widgets, and faculty are not assembly line workers; instead, we need complex solutions to complex systems.

Changes to Steinberg's Online Bill and the Governor’s Outcomes for Higher Ed

April 24th saw a flurry of activity for higher ed in Sacramento. In the morning, Senator Steinberg faced an onslaught of criticism for his online education bill. Students, faculty, and unions have successfully forced the leader of the state senate to rewrite his legislation so that it now only sets a goal rather than requires an online version of the 50 most impacted courses in the three higher ed segments. Moreover, Steinberg has backed off his insistence that the systems use public-private partnerships to develop these online courses, and he has inserted language stating that no public money will go to the private side of a public-private partnerships. While the devil will be in the details, the bill has been pulled back and will be re-introduced next week.

Meanwhile, the governor has released his long-awaited accountability framework for higher education. The essential part of this new funding model for higher education is the following: “Up to a 20% increase in General Fund appropriations to UC and CSU over a four-year period (2013-14 through 2016-17), representing about a 10% increase in total operating funds. Freeze on UC and CSU resident tuition from 2013-14 to 2016-17. If a segment raises tuition during any of those years, its cumulative funding augmentation beginning in 2013-14 will be forfeited and cannot be earned back. For UC and CSU, funding augmentations will be contingent on progress made toward the following goals. (Note: the latest values for the performance measures will be updated this fall to reflect actual 2011-12 values, which will serve as the base year): Ten percent improvement of on-time graduation rates by 2016-17 (meaning 4 years for freshmen and 2 years for transfer students). Ten percent increase in the number of degrees completed by 2016-17 for: First-time freshmen, Transfer students, Pell Grant recipients (both freshmen and transfers). Ten percent improvement in undergraduate degree completions per 100 full- time equivalent enrolled students by 2016-17, to capture improvements in efficiency.” Essentially, the governor wants the universities to freeze tuition, increase the number of transfer and Pell grant students, and move everyone through the systems in a reduced time.

Governor Brown has added these further qualifications to his plan: “If a segment partially meets its targets, it will still receive a proportional share of its planned funding augmentation. Additionally, segments can recoup any funding lost by missing an interim target if they fully meet a subsequent year’s target, up through 2016-17. Segments will be expected to show 1%, 3%, and 6% improvement on each of the outcome measures in the first three years of the plan, respectively, or the segments may propose alternative interim measures and targets provided they can show those interim measures build to the same overall 10% targets in 2016-17. Universities will report annually on progress made toward the targets, biennially on spending on graduate versus undergraduate instruction and research, and on any additional measures that are deemed appropriate for tracking effects on educational quality and service to disadvantaged students.” This push for a more efficient system is thus coupled with a requirement for more budgetary transparency.

The full details of this plan should be outlined in the governor’s May Revise budget. It will be interested to see how the UC system reacts to this new emphasis on undergraduate education.

Student Debt and the Stalled Recovery

As many people now know, student loan debt has surpassed $1 trillion, but few people understand the structure and effects of this type of educational mortgage system. First of all, a recent New York Federal Reserve report shows how recent college graduates have contributed to the recession by not buying cars and homes like they once did. Due to their high level of student debt, low employment rates, and bad credit ratings, college grads cannot afford to contribute to the consumer economy.

More importantly, while students with debt graduate with on average $26,000 in loans, this amount soon balloons once these students fail to make their payments. The New York Fed reports that 31% of federal student loans are in default, and only 56% of all student loans are in repayment (the rest are in forbearance or deferral). Of course one of the major reasons why students are not able to pay back their loans is that they cannot find jobs, and the jobs they are finding often come with low wages. In fact, according to a recent Pew survey, only 42% of college grads have jobs requiring college degrees. For the most part, only students with diplomas in medicine, engineering, and computer science are finding jobs that match their education.

Meanwhile, as a record number of students default on their loans, these debts are being sliced and diced and sold on the secondary market, just like mortgages. In this toxic brew of debt, speculation, and federal guarantees, we may be seeing the roots of the next big financial meltdown. Student loans are a great target for speculation and exploitation because unlike most forms of debt, they are exempt from bankruptcy protections, the Truth in Lending Act, the FDCPA, state consumer protection laws, state usury laws, and the statute of limitations. Yes, student loans are ripe for a speculation bubble due to the fact that they are backed by the federal government, and there is virtually no way for the debtors to escape from their escalating debt.

Stepping back, we can now see that perhaps the most devastating result of the state defunding of higher education is the creation of a generation of indentured students who will never be able to use their education in a productive manner. (many of the sources and ideas for this blog entry come from the blogger and avid commenter Unemployed_Northeastern)

The Truth about Higher Education

It is rare that people in power actually say what they think, but the current President of San Jose State, Mohammad H. Qayoumi, recently exposed what many university leaders really believe. In response to a question concerning the questionable educational value of some of his institution’s new online classes, Qayoumi said the following: “It could not be worse than what we do face to face.” This shocking statement implies that the current modes of education at his own university are so bad that nothing could be worse.

It is no wonder that many education leaders are willing to experiment with unproven instructional models when they themselves do not believe in the value of their own teachers or the learning of their own students. It is also not surprising that many academic institutions are now willing to give course credit for work and learning done outside of their schools. Since no one can seem to define or defend quality higher education, there is no stopping a race to the bottom where students are given credits and credentials for unproven and untested learning.

In an act of pure institutional suicide, universities are simply selling their credits to outside entities, are in a way, they are surrendering to their own logic of self-destruction. By saying that nothing could be worse than the current form of education at his university, Qayoumi opens the door for a large-scale privatization of public higher education. This move fits in well with legislators who want to make up for years of public educational defunding by turning to MOOCs and credit by exams. For example, Assembly member Scott Wilk’s bill for a New University of California reduces the idea of a university to simply testing students for previous work and learning. This bill exposes one of the hidden desires of so many political officials and university administrators, and that is a university or college without faculty. In the race to decrease the compensation and power of teachers, here we find a way for a “final” solution: eliminate all of the people.

Unless universities and colleges begin to support, improve, and defend their own educational methods, there is nothing stopping this bi-partisan move to destroy our institutions of higher learning.

The UC Cost Wars

Last year, the legislature moved UC budget transparency language through the budget conference committee's "supplemental report" process. The language that was adopted by the legislature and became part of the supplemental report is the following: “Item 6440-001-0001—University of California (UC). It is the intent of the Legislature, and in follow-up to State Audit Report 2010-105, that by July 31, 2012, UC provide to the appropriate legislative budget subcommittees and LAO the recommendations of the systemwide working group established to examine variation in funding across the system. Further, it is the intent of the Legislature that UC identify the amount of revenues from the general funds and tuition budget that each campus received in 2012 13 for specific types of students (such as undergraduate, graduate, and health sciences) and explain any differences in the amount provided per student among the campuses to the appropriate legislative budget subcommittees and LAO by January 1, 2014.”

In response to this legislative request for accountability, the UC has told the legislature that it cannot calculate how much it costs to educate specific types of students: “The University is unable to provide information on funding provided for specific levels of students. Funding from the State is neither received nor allocated to the campuses by level of student. Funding for enrollment has been received from the State for more than 15 years on the basis of a marginal cost calculation that does not distinguish among levels of students. Nor have allocations to the campuses been made on that basis. The University has consistently stated that information on cost of education by level of student – or expenditures by level of student – are impossible to determine, given the myriad way in which funds provided from the State and other core funds are used.”

What is strange about this response is that in the same document, the UC states that it has moved to a new model of distributing state funds based on the following logic: “Per-student funding is to be distributed on a weighted basis in which undergraduate, postbaccalaureate, graduate professional, and graduate academic master’s students are weighted at 1, doctoral students at 2.5, and health sciences students at 5 (except health sciences undergraduate students are at 1 and health sciences academic doctoral students are at 2.5).” So while the UC claims it cannot calculate the different costs of educating different levels of students, it is basing state funding distributions on a differentiated cost basis.

All of this may be moot because in the January state budget proposal, the Governor's administration proposed stronger, trailer bill language on UC budget transparency: “Article 7.5 Expenditures for Undergraduate and Graduate Instruction and Research Activities 92670. (a) The University of California shall report biennially to the Legislature and the Department of Finance, on or before October 1, 2014, and on or before October 1 of each even-numbered year thereafter on the total general campus costs of education, on a systemwide and a campus-by-campus basis, segregated by undergraduate instruction, graduate instruction, and research activities. The costs shall also be reported by fund source, including all of the following sources: (1) State General Fund. (2) Systemwide tuition and fees and professional fees. (3) Nonresident supplemental tuition and other student fees. (4) All other sources of income. (b) For purposes of the report required by this section, undergraduate and graduate research for which a student earns credit toward their degree program shall be included under instructional costs. (c) A report to be submitted pursuant to this section shall be submitted in compliance with Section 9795 of the Government Code. (d) The requirement for submitting a report under this section shall become inoperative on January 1, 2021, pursuant to Section 10231.5 of the Government Code.” In other words, the UC is now required to do exactly what we have been asking them to do for ten years, and that is to calculate how much it costs to educate students and how these activities are being funded.

One reason why it is important to have the UC report on educational costs is that many legislators are now pushing online education because they believe the cost of educating undergraduates is driving up tuition and blocking access. However, in reality, undergraduates are already subsidizing different parts of the university. Moreover, the new rebenching funding model pushes some campuses to increase their enrollments of doctoral students, but no one really knows if this will help or hurt the funding of the campuses since no one knows how much it costs to educate graduate students.