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Details good, overall bad in higher education report

Because it ignored the elephant in the room, the higher education transition team report prepared at the behest of Gov. John Bel Edwards makes it irrelevant to any serious discussion about long-term policy in that area.

Much of the minutiae within in made sense. It discussed the mediocrity supported by the Taylor Opportunity Program for Students, and recommended either raising its standards or capping award amounts, the latter an approach sent to former Gov. Bobby Jindal’s desk that he vetoed. It asks to continue building upon former Jindal and Department of Education initiatives to reduce bureaucratic impediments and to align better educational delivery with state needs. It recommends targeting resources to areas of excellence, champions bureaucratic realignments to promote efficiency and better delivery, and advocates helping institutions realize more self-generated revenues from their intellectual products and activities. Tactically, it makes many sound and few unsound points.

But it has two fatal flaws strategically that almost entirely moot its salutary aspects. First, it remains captive to the illusory notion that reductions in state funding act as a “disinvestment” into higher education. Factually speaking, the trend of the last several years where fewer state dollars went into higher education replaced mostly by self-generated revenues (mostly tuition and fees) better represents an overdue rebalancing that formerly underpriced higher education to its consumers and demanded over-subsidization by taxpayers that has left the higher education spending only around $40 million fewer a year than when Jindal took office (although with inflation factored in the decline reaches 13 percent).

A decade ago, Louisiana ranked 6th per capita in state spending on higher education of the states. Even in 2013, it still held 12th in state and local spending (keep in mind the state’s local governments don’t spend anything on higher education). Today it ranks 24th. In the past quarter century, Louisiana always has spent above the median on higher education. The problem never has been, and continues not to be, with taxpayer contributions.

Instead, the problem lies in continued underpricing of tuition and fees. Until a few years ago, the weighted average tuition and fees paid by attending students resided in the bottom five charged among the states for baccalaureate degrees and a few places higher for community and technical colleges. After a few years of steady increases, it still ranks only 38th for senior institution study, and actual cost of attendance on average (with West Virginia) still by far ranks lowest in the region (although a bit above the median for junior institutions). With a state per capita income in 30th place – dispelling the notion that Louisiana is a “poor” state that must have underpriced tuition – if senior institutions need more money, increasing tuition and fees only should occur to accomplish that.

But that approach does nothing to address the other flaw, the elephant in the room – that Louisiana has an overbuilt higher education sector that reduces the efficiency of the money spent. It continues to rank in the top ten of states in institutions per capita (with almost all above it having significantly smaller populations) and, in comparison to a peer state demographically such as Oregon (the only significant difference between the two being Louisiana’s minority population almost twice as large), has fewer students per institution and much more disproportionately attending senior institutions that cost more per student (still a few points above the regional and national averages) and depresses completion rates (many attendees of senior institutions that fail to complete a bachelor degree could succeed in completing an associate degree at a junior institution, and much less expensively).

The parts inside a model could work very efficiently, but if the intake into it uses those resources inefficiently before the process even starts, the system remains wasteful. And this does not even take into account that too many buildings for too much duplicative administration and instruction needlessly increases maintenance costs and has contributed substantially to institutional woes in this area. Thus, for the report to ignore completely that too few dollars and students chase too many institutions makes it useless.

It further turns into harmful rubbish when it ignores system streamlining as a necessity but instead wants to pilfer more money from people’s wallets to make up for that inefficiency rather than solving for that inefficiency. Its recommendation to have “state appropriation of 80% or more of the Southern Regional Education Board average by 2020” (currently at 62 percent) not only focuses on a symptom rather than the disease, but as a result buys into the wrong metric: the relevant indicator is not the SREB’s per student measure, especially when applied to an environment where too many students get steered to senior institutions in the first place because there are too many of them, but a per capita measure.

The report makes helpful suggestions at the nuts-and-bolts level. It becomes worthless when it addresses fiscal matters. Policy-makers pondering higher education issues must keep this in mind.

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