The Joint Legislative Committee on Education heard a
plea from Commissioner of Higher Education Jim Purcell to back some familiar
ideas that he said would promote efficient delivery. One addresses the
long-standing bane of state higher education: capping tuition at 12 hours paid
even if a student takes more than that. This leads to overstaffing as some
students deliberately load up and then drop classes in which they are doing the
weakest, and makes for free education typically for 20 percent of a student’s
career (most programs are designed to require 120 hours to graduate, meaning 15
hours taken a regular semester, and often financial aid pays for 12 hours only)
and thereby unpaid-for use of resources. At the very least, any such limit
should be raised to 15 hours.
Purcell also broached the idea of charging higher tuition for programs
more in demand. This might be a double-edged sword, however; higher rates may
discourage students from entering these programs and, worst of all, drive them
to proprietary schools that disproportionately offer these kinds of programs.
He counts on the relative inelasticity of demand for these at state schools,
but that may be a miscalculation which bears further investigation.
Finally, he also stumped for ending the state’s status as the only one where the Legislature must approve of tuition increases. This desire for politician control partly comes as a populist legacy, especially in a political culture where for times of political convenience tuition hikes are equated with tax increases, but also has become structural in that the Taylor Opportunity Program for Scholars entitlement program, where an entirely average standardized test score and inflated high school grade point average wins students a free tuition ride to a state university, siphons out of the budget a figure headed to $150 million a year (although increasingly it is relying less upon general fund expenditures as more of it is coming out of an education trust fund) that only heads higher as tuition rises.
Certainly Purcell has a
point when he argues that freedom to set tuition works better in a higher
education marketplace becoming increasingly privatized, where market pressures
can be responded to in more optimal fashion. But legislators cautious of that
move also have a point when they argue efficiency and effectiveness gains still
remain available before perhaps turning it over to higher education – signaling
wariness that higher education would pursue these further if given the keys to
the vault.
Consider a summary of facts:
in total state funds, which is taxpayer support plus tuition, since 2004
Louisiana has gone from over $2.3 billion to over $3 billion annually in higher
education spending while the number of students enrolled has increased just from
around 214,000 to about 222,000. In per student terms, this means the cost has
gone up roughly 20 percent, and while tuition increases have accounted for much
of this, the per student cost still has gone up 7.4 percent in money coming
from the state over this span.
And while Purcell and others
may bemoan reductions since 2008, which the Board of Regents asserts have
totaled $625 million offset by only $331 million in tuition increases, the fact
is the overall numbers show an increase of $34 million spent over that period, and
on a per student basis a decrease of only 5.6 percent. Presently, the state
pays $7,781 per student while tuition averages out to $5,296 gathered per
student.
There has been minor
retrenchment, but surely more can be done – especially since Louisiana ranks 8th
highest among the states in per capita higher education costs. The main reason
for this, however, is the overbuilt higher education system among
baccalaureate-and-above institutions and technical colleges and stubborn
insistence on multiple, duplicative governance boards. Money that could go to
campuses doesn’t, and too many mouths to feed means none specifically gets fed
all that well.
While legislators such as
state Rep. Dee
Richard recognize mergers and closures should be in order, unfortunately, these
kinds of sensible strategic changes, in contrast to the tactical ones offered
by Purcell, have proven too bold for required legislative supermajorities to
form to enact them, so we’ll have to do with tactics. And they should get
implemented with two modifications.
First, TOPS reform must
occur to make it a true scholarship program, where the state promises for
above-average performance a base amount aligned with the lowest tuition from a baccalaureate-and-above
school (or for its award designed for two-year and below schools, the lowest
there), and, as performance prior to college increases, offers higher amounts
so that a really high achiever gets tuition at the state’s most expensive
school (no doubt Louisiana State University Baton Rouge) paid. This would
encourage students in high school to work harder, discourage students
marginally interested in higher education from wasting their time and taxpayer
dollars from enrolling, and better align resources.
Of course, this change
brings these advantages much reduced, if even there, if schools can do whatever
they want with tuition, but that can be solved with the grant to allow them to
charge whatever tuition they want – except that it be subject to a formula that
slices away a portion of state support for every penny tuition increases. This
would provide incentives to continue searching for efficient delivery without
subsidizing practices of the opposite, encourage more efficient pricing by
creating a reward for that through the “extra” state money retained, and, in
the search for more enrollees and more retained enrollees to gain more revenue
over costs, spur schools to meet market demands of programs.
Cutting many apron strings in all ways – not just in legislators’
control over pricing, but also in subsidizing – can help Louisiana higher
education become that more efficient and effective deliverer despite its
overbuilt structure featuring maldistribution of resources. It’s a natural extension of the GRAD Act philosophy of swapping control for better performance, and is a trade both
politicians and academicians should welcome.
1 comment:
By your numbers in an earlier post, you find an increase of 21.9% in per student higher ed funding from 2004-2005 to what you called the "last completed fiscal year" (I take it that's 2011-2012). So over 7 years there was a change of 21.9% in dollars not adjusted for inflation. How much higher is 21.9% over inflation during those years? Not much; the CPI-U for July 2005 was 195.4; for June 2012 it was 229.478, an increase of 17.44%. The biggest expense for universities is paying its employees and that includes at least a portion of their benefits. How much have health insurance premiums gone up during that time? How much of that is part of the higher ed funding? My best guess is that inflation and health care insurance alone account for the increase in funding -- with plenty leftover to make the funding a true, higher-ed-inflation-adjusted amount that has fallen.
Consider: when's the last time you got a raise?
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