Higher education policy going badly wrong this session

While budgetary constraints present in this cycle could have pressured Louisiana to embark on a long overdue and needed reshaping of its delivery of higher education, if anything in regards to this area policy-makers are engaging in counterproductive backpedaling.

The state’s inefficient system has three issues that prevents it from improving both its quality and efficiency, all interrelated. First, it is overbuilt, ranking 18^th in per capita spending on higher education as a consequence of too many institutions chasing too few students, particularly when it comes to baccalaureate-and-above schools. Second, its funding is imbalanced, where taxpayers subsidize disproportionately compared to other states its spending, while average tuition ranks (for study at senior institutions) only 40^th among the states even as in per capita income ranks Louisiana 29^th, meaning the ability to pay is there for families but its taxpayer spending on this is outsized. Third, it spends inefficiently within institutions, as evidenced by the fact that the baccalaureate-and-above institutions in the similar state of Oregon generate much more proportionally of their own resources with lower expenditures per capita, in part by having a much higher proportion of their students in junior institutions.

These realities mean the optimal reform course would seek to demote, merge, or close senior schools, to raise tuition levels, and to reshape incentives so as to prevent inefficient expenditures. Institutional realignment at the four-year-degree-and-above level can’t happen overnight, but at least the groundwork can begin this year. Tuition increases and shifting of incentives, however can commence to take effect in the next fiscal year that begins in less than two months. Yet with one exception, not only are legislators failing to do what’s best for higher education delivery specifically and the citizenry generally on that issue, but they actually are doing the opposite.

Earlier this week, House Republicans and Democrats alike went on a mass pickpocketing of taxpayers with the intent of devoting these tax hikes to funding almost exclusively higher education, meeting a goal of keeping funding about level at last year’s total. Even as the alleged doomsday scenario that would have reduced taxpayers’ contribution to higher education by over 80 percent from last year was unsustainable (which, for point of reference, would have left the proportion of that subsidy still about three times the size of Oregon’s), because the driver of the need for a bloated contribution comes from the overbuilt nature of the system curable only over several years and not all at once, some cuts would have been beneficial to provide motivation for efficiency in operations and in raising tuition, where this increased market discipline would compound the incentives away from supporting low priority, mission-peripheral production. Yet no explicit acknowledgment in the budget-building task of the necessity of tuition increases got baked into the state’s spending plan, showing a preference instead for increasing taxpayers’ burdens further and refusing to ask students to pay their fair share for a product that overwhelmingly benefits them over the citizenry as a whole.

Aside from budgeting, representatives additionally have embarked on jacking up the expenses of taxpayers with several measures designed to justify the higher education bloat. The least objectionable, passed out of the House, was HB 129 by state Rep. Patrick Jefferson, which allows select historically black universities and college to charge out-of-students in-state tuition. Differences in these kinds of tuition are supposed to reflect the missing portion of taxpayer subsidy, but this bill now asks taxpayers to eat it. The idea is that more out-of-state students enrolling than without the cut in tuition for them at the margins (because fixed costs remain the same and/or slack resources exist) would make up for the difference in lost revenues, but that is a chancy argument at best.

(Oddly, the bill’s fiscal note says that Grambling State University expects its nonresident enrollments to triple to 450, producing a surplus. But this assumes that, for example, the extra faculty members hired to handle this load – it’s unrealistic to assume resources are so slack there already that existing faculty members can handle the increase – won’t impose any additional costs. If that is in fact the assumption, this unwittingly justifies the removal of any taxpayer contribution to higher education.)

Worse is HB 333 by state Rep. Wesley Bishop, which passed committee, reverting back to the practice from 2012-14 that allowed admission of students that needed a single remedial course at a senior institution and who could take that there. The current policy of not admitting anybody with need of any remedial coursework benefits twofold: it reduced the proportion of incapable students (as some will not pass even the remedial classes) at senior institutions and it does not use these schools’ resources in a less efficient way, i.e. faculty with talents appropriate to these institutions’ missions, which do not include remedial education, who are more expensive assets end up teaching courses that could be done more efficiently and effectively at junior institutions. This bill subverts that best practice.

But worst is HB 411 by state Rep. Ted James, which passed committee, that would amend the Constitution to allow systems to set their own admission standards. Not only would this confuse the policy role of the Board of Regents with the management role of the four systems, but it also would give license to lower standards in systems and thus waste much more money. The cruel but simple fact is that as admissions standards for senior institutions go lower, you get proportionately fewer students who can succeed, and that means more class failures and degree incompletions, and the consequence of more wasted resources. Gaming the system to lower instructional standards to prevent this produces the same: a worthless degree for the occupations for which recipients of which would be intended. While some low achievers in secondary education who want four-year college degrees later in life do have the capacity to earn that degree, there’s no reason that these diamonds in the rough can’t begin their academic careers at community colleges, a primary part of these junior institutions’ missions being precisely to serve these kinds of students, rather than at more expensive senior institutions where this is not part of their missions and should not be for optimal resource usage.

All in all, these bills really are designed just to do one thing: shovel more students into senior institutions as a method of justifying their existences – even though consultant after consultant has identified as a major problem of Louisiana higher education being it shunts too many students into its four-year schools with their more expensive, less appropriate programs for low achievers, needlessly costing taxpayers extra money because that education is more expensive and more students than necessary drop out. There could not be a set of bills more injurious and subversive to what Louisiana higher education needs than these.

The only bright spot indicating a correct reform agenda in higher education in Louisiana appears in the Senate, which has voted to decouple tuition from Taylor Opportunity Program for Scholars awards and wants to have amended the Constitution to allow systems to increase tuition on their own. But the funding and policy decisions so far made in the House are entirely contrary to improving the quality and efficiency in delivery of higher education in the state. Policy-makers need to understand this if they don’t want to turn back progress when they should strive to make it, and thereby damage further both this aspect of state policy and the citizenry.