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Autonomy and Accountability in Higher Education – Part 4

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How do Virginia’s public higher-ed institutions rate on the goals established in the 2005 Restructuring Act and embedded in state code? The data is incomplete.

This is the fourth of four articles exploring higher-education accountability in Virginia since enactment of the 2005 “Restructuring Higher Education Financial and Administrative Services Act.”

The 2005 Restructuring Act created a new covenant between the Commonwealth of Virginia and its system of higher education. In exchange for greater freedom from state regulation, colleges and universities would be held accountable for achieving 12 core state goals. Those goals are still part of the state code. But over the intervening years, priorities have changed and many benchmarks have been dropped. The state publishes no comprehensive report card for individual institutions based on achievement of those goals.
Yet the State Council for Higher Education in Virginia (SCHEV) does compile much of the data needed to track progress in achieving the state goals. The numbers can be extracted from a searchable database the council maintains on its website.

In the concluding chapter of this series, Bacon’s Rebellion extracts that information to see how Virginia’s higher-ed system has performed since 2005. The task of extracting the data for each of the state’s public institutions would be too arduous to undertake within a reasonable time frame, so we show data for the system as a whole.

Goal 1: Ensure Access to higher education, including meeting enrollment demand.
Virginia’s system of higher education has expanded significantly since enactment of the 2005 Restructuring Act to accommodate a growing student population. Between 2005 and 2016, total enrollment at public, four-year institutions increased 11%. However, almost all of the increase took place by 2011. Enrollment has leveled off since.

Are Virginia’s public colleges and universities keeping up with demand for higher education? That’s impossible to say. SCHEV has not defined enrollment demand or set any benchmarks.

A related metric is the number of degrees awarded. A stated goal of higher education policy is not simply to increase enrollment, it is to increase the number of Virginians graduating with degrees. Indeed, the 2011 Top Jobs Act, which amended the 2005 Restructuring Act, set an explicit goal of increasing the cumulative number of two-year and four-year degrees awarded by public colleges by 100,000 over 15 years. To award more degrees, colleges must enroll more students and/or increase the retention rate.

As with enrollment, the number of degrees granted each year increased at a robust pace from 2005 to 2011 — and then plateaued. Ironically, that tapering off coincided with the Top Jobs legislation, which was enacted with the goal of boosting enrollment. It is not clear why enrollments have plateaued. One possible explanation is that students signed up during the depths of the recession because so few jobs were available; once economic recovery took root, students returned to the job market. Another is that students began balking at the rising cost of attendance.

The Top Jobs Act put special emphasis on awarding more STEM (science, technology, engineering, math) and health degrees. SCHEV data indicates that the higher-ed system boosted the output of STEM-H degrees by 11.1% between the 2011-12 and 2015-16 school years — double the 5.3% increase for all degrees. STEM degree awards are on an upward trajectory.

Goal 2: Assure affordability, regardless of income.
As discussed in Part III, SCHEV did not develop an overall affordability metric for individual institutions. However, its annual Tuition & Fees report does provide a measure for the higher-ed system as a whole: average undergraduate charges (tuition, fees, room, board) as a percentage of per capita disposable income. After bottoming out at 31.8% in 1999-2000, charges rapidly outpaced Virginia earnings. By the 2016-17 school year, a year’s charges consumed 47.6% of per capita income.

Until recent years, the main preoccupation of politicians and college presidents alike was ensuring “access” to the higher-ed system by “underrepresented populations” based on income, race, ethnicity, first-generation college status, and geographic origin within Virginia. In 2005, affordability was not deemed to be “much of a problem” for students from households earning $80,000 or more, declared a 2008 Joint Legislative Audit and Review Commission (JLARC) study.

But affordability was problematic for those from lower-income families. Four-year institutions were expected to offer extensive financial aid through such programs as AccessUVa at the University of Virginia, the William & Mary Promise, and Virginia Tech’s Funds for the Future.

As shown in the chart below, Virginia colleges have more than tripled their financial aid since enactment of the 2005 Restructuring Act. By 2015-2016, they collectively provided more than $188 million to in-state students (not including aid to out-of-state students).

As SCHEV observes in its most recent Tuition & Fees report, the concept of “net price” — charges after deductions for institutionally and state-provided financial aid — “is a valuable addition to the discussion of access and affordability.” However, the report does not detail the net price for individual institutions or for the higher-ed system as a whole.

As a proxy for affordability, SCHEV tracks student indebtedness in great detail. The graph below shows known debt at graduation of in-state student borrowers at Virginia’s public institutions. Over the course of nine years, average debt per mean (half above, half below) borrower at graduation increased 58%.

Not only was the mean borrower taking on a bigger debt load, a higher percentage of students were driven to the necessity of borrowing money in the first place. The percentage of borrowers increased from 56% of all grads in 2006-07 to 63% in 2014-15.

The irony is that colleges funded most of the increase in scholarships by hiking tuition, in effect redistributing wealth from better-off students to the poor. While scholarships helped maintain affordability for the poor, the higher sticker price proved a shock to the middle class.

In 2008 SCHEV adopted a measure that compared graduation rates for Pell Grant (lower-income) students to those of students not receiving aid, on the grounds that access without success was not a desired outcome. It was later dropped in the name of simplicity.

Goal 3: Provide a broad range of academic programs.
The original idea was for SCHEV to regularly assess the extent to which each institution’s curricula and degree programs address the Commonwealth’s need for graduates in specific shortage areas. SCHEV no longer conducts this analysis except when an institution applies to create a new degree program. As part of its review process, SCHEV determines whether the market demand exists to support the program.

Goal 4: Maintain high academic standards.
SCHEV has not developed any metrics or benchmarks for “academic standards.” Instead, it relies upon the Southern Association of Colleges and Schools to review each institution as part of the re-accreditation process.

Goal 5: Improve student retention and progress toward timely graduation.
Although SCHEV does not set system-wide benchmarks for student retention, it has compiled a vast amount of data on retention rates. The table below shows the six-year graduation rates for freshmen classes of 1994, 2005 and 2008. Statewide, the average increased from 61% for the 1994 class to 70% for the 2008 class.

The statewide average was driven by spectacular gains among a handful of colleges, most notably Christopher Newport University (36 percentage-point gain), George Mason University (20 points), Old Dominion University (20 points) and Virginia Commonwealth University (22 points). The raw data do not tell us why these institutions saw such dramatic increases in graduation rates, however, nor whether the favorable trend is likely to continue.

Goal 6: Develop uniform articulation agreements with community colleges.
The purpose of developing “articulation agreements” between community colleges and four-year colleges is to create a lower-cost pathway to a four-year degree. Students study two years at low-tuition community colleges, and transfer to four-year colleges to take more advanced courses. To track progress, SCHEV measures the number of associate-degree holders enrolled in the four-year colleges.

Virginia’s higher-ed system has boosted two-year enrollment significantly — 34% over the seven-year period. Those nearly 12,000 students account for a big chunk of the roughly 140,000 in-state undergraduate students at four-year institutions across the system.

Goal 7: Stimulate economic development.
SCHEV concluded that there was no practical way to quantify the efforts that Virginia colleges and universities devote to assisting economic development efforts around the state. Instead of submitting data, higher-ed institutions provide a narrative in their Six Year Plans.

UVa supports the “Appalachian Prosperity Project” by supporting schools, entrepreneurship and health care in far Southwest Virginia. VCU touts its role as a “regional steward”: community developer, convener, thought leader, and moral leader. In the one new “economic development” initiative emerging from higher education in 2017-18, W&M and Old Dominion University will spend $1 million for the Southeast Virginia Cybersecurity Consortium. The universities will lead an initiative to act as a bridge between faculty researchers and entrepreneurs to identify emerging cyber technologies.

Goal 8: Increase externally funded research and improve technology transfer.
The National Science Foundation (NSF) collects extensive data on research & development activity at the nation’s colleges and universities. SCHEV staff decided there was no point in duplicating the NSF efforts, and the Council does not report the data on its website. The chart below, which shows the increase in R&D spending at Virginia’s six research universities, comes from the NSF.

Source: National Science Foundation

Since enactment of the Restructuring Act, four of Virginia’s research universities — GMU, Virginia Tech, UVa and VCU have climbed in the national R&D rankings. The rankings gains by Virginia Tech and UVa were especially noteworthy, for both institutions were competing against other highly regarded research universities that sought to boost their R&D rankings as well. GMU broke the $100 million barrier. ODU and W&M both slipped a few notches.
Data for another metric, the number of patents issued, is available through the Patent & Trademark Office but SCHEV does not track it.

Goal 9: Work actively with K-12 to improve student achievement.
SCHEV concluded that university collaboration with K-12 schools was impossible to quantify, and it collects no data for this goal. As with economic development, institutions cover this topic in their Six Year Plan narratives.

Goal 10: Prepare a Six Year Financial Plan.
There is no data to collect. Virginia’s public colleges and universities outline their six-year plans that forecast revenues and expenditures, providing detailed numbers for the year ahead. SCHEV publishes these plans on its website.

Goal 11: Meet financial and administrative management standards.
SCHEV compiles Biennial Assessments of Institutional Performance for each institution, which it publishes on its website. These assessments contain benchmarks for enrollment, degrees awarded and community-college transfers as well as actual performance. Additionally, they include a checklist of administrative and financial benchmarks that Level II and Level III institutions must meet in order to maintain their autonomy from state regulations. These assessments are the only remnants of formal accountability envisioned in the 2005 legislation.

Goal 12: Ensure the safety and security of students on college campuses.
Legislators got exercised about campus safety after the Virginia Tech massacre in 2007, but police and related expenditures are routine — as W&M spokesperson Suzanne Seurattan puts it, “an integral part of our mission and daily operations.” SCHEV has not created any benchmarks, and it does not monitor this data.

What SCHEV leaves out
The affordability crisis in higher ed has metastasized from the poor to the middle-class. While numerous legislators have expressed dismay at the continual increase in the cost of attendance — a trend that goes beyond tuition to include student fees, room, board and books — it is not the responsibility of any state entity to inquire why costs are rising.

In 2014, JLARC conducted two useful studies — “Addressing the Cost of Public Higher Education in Virginia” and “Support Costs and Staffing at Virginia’s Higher Education Institutions.” The former study found, among other conclusions, that schools were boosting spending for non-academic functions such as athletics and building maintenance more than for academic spending. The latter found that Virginia institutions have a disproportionately high number of employees in supervisory positions — more than half of the supervisors at Virginia’s higher education institutions supervise three or fewer employees; 24 percent supervise only one.
But the JLARC reports left many avenues of inquiry unexplored, and SCHEV does little analysis of its own. No one holds hold individual institutions accountable for how much they increase costs or tuition, fees, room, and board.

More specifically, no one is monitoring on a year-to-year basis how much universities are allocating to athletic subsidies, how much they spend on marketing to prospective students to increase the number of applicants, or how much they are spending on student amenities inessential to academic performance such as workout facilities, student commons, fancy cafeterias, and upscale dormitories. No one is auditing academic programs for increasing or shrinking demand for different disciplines. Other than the universities themselves, no one tracks if students are actually signing up for the courses offered.

No one is tracking faculty productivity — the ratio of students to teachers — much less how many hours tenured faculty spend teaching versus researching, nor how that ratio compares to hours taught by non-tenured instructors and adjuncts. No one is counting the ratio of administrative staff to faculty, or the percentage of revenue consumed by administrative expenses. SCHEV does not have the resources even to compile the number of employees at each institution, much less the breakdown between faculty, administration, and other.

SCHEV does track space utilization. The Council maintains an inventory of all space, and it has developed space utilization standards. When an institution wants to erect a new building, says Blake, “We can say whether it is space justified or not.” That information gets forwarded to the lawmakers, who then make their own decisions on which projects include in bond packages.

With that rare exception, no one in Virginia state government has a handle on the cost drivers in higher ed. And there is a reluctance to acquire that capability, for, as Blake notes, “Collecting all this data would go against the spirit of the [2005 Restructuring Act] — measuring inputs rather than outcomes.”

Blake has a point, but as a consequence of that philosophy, no one knows if increases in higher-ed charges — tuition, fees, room, and board — are caused by justifiable increases in costs or reflect the bureaucratic impulse to expand the institution and boost its prestige. Budgetary analysts cannot answer fundamental questions: How much does it cost different institutions to provide an education? Within an institution, how much does the cost vary between departments? How much does one academic field subsidize another? How much does undergraduate tuition subsidize graduate research?

SCHEV would be the logical state entity to monitor the cost drivers of higher education. But SCHEV is a creation of the General Assembly, and it performs only those tasks the legislature assigns it.

As the higher-ed debate shifts from increasing enrollments, providing access for low-income students, and improving graduation rates to addressing the middle-class affordability crisis, it is appalling how little state officials truly know.

Instead of imposing arbitrary caps on tuition increases and out-of-state students, as they tried to do in the previous General Assembly session, perhaps lawmakers should direct SCHEV to begin compiling data that would allow Virginians to really understand what’s happening inside higher-ed. That would represent a big step forward.

(This article first ran in Bacon’s Rebellion on July 13, 2017)
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