Millions More for Higher Ed — with Strings Attached

Written for Bacon’s Rebellion by James A. Bacon

Among the billions of additional spending for traditional Democratic-leaning constituencies in the next two-year budget, the General Assembly is ladling out $80 million more in state support for higher education. Unlike with most new expenditures, lawmakers are demanding something in return: To get their share of the moolah, public colleges and universities cannot boost their tuition in FY 2021.

How refreshing. Legislators are holding a branch of state government — public higher education — accountable for performance. They’re not micro-managing the higher-ed institutions; they’re not telling them how to do their job. But they’re not blindly shoveling money into a broken system either.

Think of it as a paradigm shift for the way government should operate. Set a metric — tuition & fees — by which to gauge performance. Then set a target: zero increase. Reward institutions who achieve the goal and withhold added funds from those that don’t.

Better yet, there’s more to the legislation. Writes James Toscano, president of the Partners for College Affordability and Public Trust in a recent Richmond Times-Dispatch op-ed:

The assembly deserves credit for requirements included in the budget to spend time reviewing the underlying costs on campuses, how tuition is charged by family income level, and the models it uses to make funding decisions.

These reviews will give the public and policymakers a clearer picture of what the public gets in return for its expenditures and the efficiency of financial aid programs, and will help policymakers better use scarce dollars to incentivize outcomes that are in the public interest.

The institutional interests of colleges and universities are not aligned with those of tuition-paying students and their families. As non-profit enterprises, higher-ed institutions are driven by two things: the quest to bolster institutional prestige and the desire to placate noisy internal constituencies. The only time students have any influence is during the college-selection process, when they pick College A over College B. Once they enroll, they are powerless, and so are parents who stroke the tuition checks. The only institutional force capable of pushing back is the legislature.

So, the General Assembly’s interest in stabilizing tuition & fees is a good thing.

The phrase in Toscano’s op-ed that most intrigues me is the reference to “reviewing the underlying costs on campuses.” That is essential. State government should not get into the business of micro-managing public colleges and universities — that would be disastrous. But it would be helpful to highlight cost drivers in college budgets, compare institutional performance, highlight best practices, and provide data and analysis that not currently inaccessible to boards of visitors. The state can bypass the information monopoly in which college presidents spoon-feed boards the data and analysis the presidents want them to see.

Some obvious questions: What is the ratio between administrative staff and faculty? Which departments are bursting at the seams, and which struggle to enroll students? Are faculty teaching more or less? Are the most highly compensated professors teaching more or less? What are the costs (including depreciation) of maintaining buildings and grounds? There are many measures of cost and productivity that higher-ed institutions simply do not make public, if they track them at all.

I look forward with great anticipation to future findings.