(This is the “as prepared” version of the speech Dan Greenstein delivered to the Western Association of College and University Business Officers (WACUBO) on May 2, 2017 in Seattle, Washington.)
Bridging the Gap
Good morning, and thank for inviting me to join you. Full disclosure – as a quantitative historian, spreadsheets and balance sheets became my mother tongue. My appreciation for them only deepened while a university administrator, and has grown deeper still now that I’m at a data-obsessed foundation. And that same appreciation finds me in admiration of the work you do helping your colleges use data to navigate a sustainable future in these unsettled times.
Why unsettled? Because the cost of our colleges is higher than our nation is willing to afford; because the value of a college education and thus its price is increasingly being thrown into question; but above all, because of the growing gulf between public expectations for our industry and what our industry is prepared to deliver.
On expectations, we see higher education as the bridge to individual opportunity, and a linchpin to our nation’s economic vitality and social mobility. And we see, in survey after survey, parents believing that college is necessary for their children to succeed in life. This is even more true for Black and Hispanic parents than for white parents.
Our current realities paint a more troubling picture. The data show that postsecondary education is essential to getting a job with a reasonable wage. Virtually all of the post-recession job openings were filled by people with some post-high school education or training.
But Georgetown also projects an 11 million credentialing shortfall by 2025. Closing the gap requires colleges to increase credentialing output by 4 percent per year. Anyone here working at an institution that is pursuing that kind of growth?
More troubling still, to close that gap, we must address a second and more pernicious one, that of educational attainment across racial/ethnic and socioeconomic groups. Non-white and low income parents who aspire after a college education for their children fight long odds. A high-income student is five times more likely to have a bachelor’s degree by age 24 than a low-income student. Disparities in attainment across racial/ethnic groups have not narrowed over the past generation and in some cases they’ve widened.
Our industry seems to be reproducing privilege, not creating access to it. This is morally wrong, economically damaging, and has inspired resentments that have spilled over into our public sphere, as evident in last year’s election campaign.
So how did we get here? One reason is that our industry stood relatively still while our economy and our students changed. The credentials we offer aren’t attuned to tomorrow’s jobs.
And while we’ve opened our doors to all Americans in the past 50 years, effectively democratizing access to higher education, we’ve done relatively little to adapt education so that it meets the needs of the students who now make up our majority. Four in 10 students are 25 or older. Nearly two-thirds work while enrolled. More than a quarter are parents. The percentage of non-whites has doubled in just 20 years.
These trends matter because they force us to us ask whether yesterday’s education – the one that worked so well for us – is appropriate for today’s economy, for today’s students. They are important because they should shape what our colleges and universities do: design credentials that are responsive to the needs of tomorrow’s economy and today’s students and help students complete those credentials. We are seeing more and more examples of this kind of change, but still as exception rather than as rule.
The good news is we can change that. But bridging the unsettling divide between expectations and reality is a matter of choice.
We can choose innovation over inertia. I’m talking about purposeful change that puts students at the center of our enterprise and questions longstanding assumptions. And innovation is not just about technology; it is about re-examining every aspect of our business using a student lens – from the courses we offer, the transfer pathways we permit, the advising supports we provide.
We can choose inclusion over exclusion. For too long, higher education has celebrated institutions known for how many students they keep out rather than how many they bring in and make successful. This can change. Look at the University Innovation Alliance, a group of research universities committed to increasing student success without reducing access. Look at the college mobility report cards recently published by Raj Chetty that highlight the stunning successes of student-centered institutions like CUNY, UT-El Paso, and UT-Pan American (now UT-Rio Grande Valley).
And we can choose cooperation over competition. The challenges we face as an industry are so vast and so urgent we cannot afford to pilot our way to resolution one institution at a time. And we are seeing incredible progress in various college networks and reform associations whose participants are sharing lessons learned, openly and honestly, accelerating their time to impact.
The choices we make will do more than simply address the widening gulf between expectation and reality. They will directly affect the sustainability of our enterprise. And time is of the essence. According to Inside Higher Ed’s most recent survey of college and university presidents, fewer than one in three presidents believe the business model for regional comprehensive universities is sustainable over the next decade. The number is lower for community colleges.
So what’s the role of the business officers in all this? A few thoughts:
Data are a critical – and underused – resource. Our institutions are data rich, but too often information poor. This can be traced to a number of factors, including data systems inside and across campuses that can’t talk to each other, lack of staff capacity to analyze and interpret the data, and, in the policy world, the tyranny of the anecdote. The result is a fragmented picture of student progress and success that doesn’t get us to the real issues.
But institutions are coming around to the power of data and predictive analytics – and it is impacting their bottom lines. Georgia State University has closed degree attainment gaps according to race, through a multifaceted effort that started by carefully unpacking data on students who dropped out. GSU discovered that it could have an impact on persistence by taking relatively simple steps, like correcting registration errors early and providing small emergency aid grants to students encountering unplanned expenses.
In addition to closing completion gaps, these efforts increased retention rates. And that means revenue. GSU estimates the university realizes $3 million in additional revenue for every one point increase in retention. Those numbers add up over time.
Another example –Delaware State University – a historically Black institution – invested in a full-time data scientist as part of a multi-year effort to increase retention and completion rates. And as they combined student data with cost data, they came to realize that it is more cost-effective to retain a student than to recruit a new one.
This realization focused priorities and triggered actions. Delaware State invested more in activities associated with improved retention, such as planning and advising services. To pay for this, it eliminated more than 20 such programs – nearly a quarter of its inventory.
Interest in the power of data is spreading virally across sectors. It implicates CFOs directly, and I encourage you to champion it and show its potential.
Seriously engaging issues of cost is difficult but essential. The national conversation about higher education finance has been stranded for too long on the revenue side of the ledger, both in terms of public funding and tuition pricing. But as pushback against rising tuition mounts and policymaker focus increasingly turns to outcomes and return on investment, leaning into questions of spending and costs will not be a “nice to do”; it will be a “must do.” The challenge is that our ability in higher education to adequately account for costs at the unit/activity level is not very sophisticated.
There are, however, bodies of work that have helped to advance the cost conversation. For example, UC-Riverside has used activity-based costing to introduce a performance-based funding formula.We’re seeing research coalesce around basic efficiencies colleges can effect – flying the planes full, tweaking the academic calendar, merging or eliminating under-productive departments.
Another example is the Delta Cost Project, which charts spending trends for thousands of institutions nationwide. And while the dataset has its limitations, it has made a contribution to the finance conversation by making several critical observations:
Costs are not going up everywhere. In fact, for most public colleges and universities, total spending has increased modestly, if at all. So what we’re seeing is more of a cost shifting, from states to students via tuition dollars. And that brings us back to reallocation discussions like the one I highlighted at Delaware State.
The rich are getting richer; everyone else is scrambling. Elite institutions, particularly in the private sector, are among those getting and spending more, while less selective four-year institutions and community colleges are treading water or losing ground. This is important because those are the very institutions that we are counting on to provide access and success for today’s college students.
The cost of instruction can be controlled at some institutions and in ways that challenge the persistent storyline in policymaker circles about overpaid faculty (and climbing walls) being the reason behind rising college costs. The Delta data tell us otherwise, and that is important for key stakeholders to recognize in engaging conversations about cost management.
Clearly, we need to continue our efforts to become more sophisticated in the area of cost measurement. But we can start by using the tools that are available to inject more of a cost focus into planning, budgeting, and accountability conversations.
New delivery models, done well, can create a “win-win” for students and institutions. It is critically important not to be simplistic here. I do NOT believe that if we just put more programming online everything will be OK. We’ve seen enough global campuses rise and fall in the past decade to prove that point.
But I do believe that smart uses of blended online and onsite delivery models can improve student and faculty experience and the bottom line. The University of Central Florida, now one of the nation’s largest public universities, came to the realization several years ago that their students needed more course options to stay on track to graduation and prioritized the development of online and hybrid offerings to help students earn those critical final credits.
The more allowed the university to substantially grow its enrollment, thereby bringing in additional revenue. Today, nearly 80 percent of UCF’s students take an online or hybrid course, and nearly 40 percent of all credits are earned online. And students are performing better in online courses than in comparable onsite courses. UCF’s graduation rate now stands at 70 percent – a full ten points above the average for public four-year universities.
Students – especially working adults – appreciate the flexibility. Faculty are deeply involved in the design process to ensure consistency and quality, and some indicate that their work in online and hybrid programs has actually improved the creativity of their teaching. And the university achieved these gains at a fraction of the cost of pursuing a strictly “brick and mortar” approach – $20 million versus $400 million.
By this point you might be saying to yourself, “This all sounds great, but how does it relate to me? What can I do when I get back to campus?” I see three critical roles that business officers and CFOs can play in the unfolding conversation about sustainability:
Ask the tough questions. You already do this, and it is important to keep doing it, and to direct some of those questions at conventional wisdom, as Delaware State did. For example, pushing for more out-of-state and foreign students may be a viable revenue strategy in the short term, but what does it do to acquisition costs? Are there longer term implications? Does it jeopardize public funding?
Interrogate the data. As Georgia State learned, there is often a story behind the story when it comes to student progress and success measures. It is really important to disaggregate key indicators by characteristics like race, income, and age to determine who is being affected by various policies and practices, and what that means for the bottom line. For all of the institutions I mentioned, digging into the data led to decisions that are having a positive impact on sustainability.
Look for opportunities to collaborate and leverage what already works. As I noted earlier, collaboration is not always an instinctive act in our enterprise. But colleges and universities are learning that it is possible to adapt models and practices from peers in ways that honor their distinctive missions while not reinventing the wheel.
I recently came across an example of this in an interview we did with Lou Anna Simon of Michigan State. She described how her student success team spent time on the ground at Georgia State to understand their approach to predictive analytics, with the goal not to copy it, but to adapt it to Michigan State’s infrastructure and culture. It’s a great discussion, and you can listen to it by visiting ToADegree.com.
The path to sustainable and inclusive excellence is not going to be an easy one, and it certainly will not be linear. But it absolutely runs through your offices. You are critical players in your institutions’ efforts to bridge the gap between expectations and reality, and your voices are essential to the future direction of the change conversation in higher education.
As an historian, I have seen that major social change is usually the product of a convergence of ideas, people, and time. We have the ideas. You are the people. And now is the time. So let’s get to work.
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