Tuesday, July 31, 2012

Floodgates are now open: Education Department won't enforce state authorization for distance education programs

Inside Higher Ed

July 31, 2012 - 3:00am
WASHINGTON -- In a reversal of one of the most sweeping and controversial portions of its program integrity rules, the Education Department said Friday that it will no longer enforce a requirement that distance education programs obtain permission to operate in every state in which they enroll at least one student.
The change was announced quietly — on the third page of a five-page attachment to a "Dear Colleague" letter that the Education Department sent to institutions Friday — but will likely be cheered by many in higher education. Colleges have fought the state authorization rule both in Congress and in the courts since it was first put forward in October 2010, arguing that archaic authorization rules create too much red tape and financial burden for online programs.
The decision not to enforce the policy comes in the wake of a court setback in June, when an appeals court upheld a lower court's decision to overturn the rule.
The court threw out the rule on procedural grounds, saying the department had the authority to create such a rule but overstepped the bounds of the negotiated rule-making process. It was considered a minor victory for the for-profit colleges that brought the lawsuit — with effects for nonprofit and public institutions with an online presence.
In the letter, the Education Department said colleges still will need permission to operate in their home states. And, it noted, colleges still have to comply with state laws on authorization. In the wake of the program integrity rules, some states have changed their authorization requirements, in some cases making it more difficult or expensive for colleges to get permission to operate, said Russell Poulin, deputy director of research and analysis with the WICHE Cooperative for Educational Technologies.
As efforts to overturn the rule made their way through the courts and Congress last year, Poulin had warned that the genie was out of the bottle: states would likely seek to enforce authorization laws already on the books even if the federal requirement was thrown out.
That's still true, Poulin said Monday night. But he added that many states don't have the manpower to enforce the authorization rule, and without the threat of federal enforcement nudging colleges to comply, many might wait to get caught rather than seeking authorization in advance.
The department could also try again to craft a state authorization requirement during another round of negotiated rule-making. Whether it will do so is still unclear. Department representatives did not immediately respond to a request for comment Monday night.
Efforts were already underway to make the patchwork of state laws less complicated, notably through reciprocity agreements, under which states would agree to accept each other's authorizations. Those projects are likely to continue, Poulin said.

Adjuncts Need Support, Says Report; Student Learning Is at Stake

The Chronicle of Higher Education

Academe needs a new model for the professoriate that better supports the growing number of instructors who are off the tenure track, the participants in a national project about the changing faculty have concluded.
The participants, who represent a cross-section of academe and its stakeholders, also said in a report being released this week that they need to align to gather data that will paint a clearer picture of higher education's increasing reliance on contingent faculty.
A key reason for those two strategies to improve the jobs of contingent faculty members is that their poor working conditions may harm student learning, says the report, a "working document" produced by the Delphi Project on the Changing Faculty and Student Success.
The 49-page document, in part, details the challenges linked to the rising number of contingent faculty, who now make up about 70 percent of all instructors at the nation's colleges and universities. But data that quantify the effects of this shift in the make-up of the faculty and the issues it creates aren't readily available, the report says. Without hard numbers, campus policy makers may be unaware of the extent of the challenges they face.
"Everybody agreed that we lack good data tools to help inform policy making at various levels as it relates to non-tenure-track faculty," says Adrianna Kezar, director of the project and an associate professor of higher education at the University of Southern California.
"What we're doing now is creating all of these data tools and resources so that we can make people aware of the extent of the issue and then have a series of best practices that have been put in place at various institutions that we can point to that we know work."
Participants in the Delphi project also agreed that the current system—with tenure-stream faculty on the one hand, and full-timers and part-timers who work off the tenure track on the other— "isn't working," Ms. Kezar says. "We all thought, What is the new model of the faculty that we need to have?"
The document reflects a year's worth of work by more than 40 people, including college presidents, higher-education researchers, leaders of scholarly associations, faculty union leaders, and representatives of organizations that represent faculty who are off the tenure track. The report and the strategies it proposes emerged from discussions at a recent meeting where most of the project's participants gathered.
The participants will be pared down into two task forces to work on advancing the project's strategies in various ways.
For instance, they will need to develop a conceptual paper that details what the future faculty should look like and how it could be adopted by all types of institutions. And eventually, the project will need some grant money to make pieces of both strategies a reality—such as setting up models at individual institutions or university systems of how to best support non-tenure-track faculty.
Ms. Kezar says she expects to post the document at the project's Web site later this week. Other documents related to the project's current efforts will be posted over the next six months.

Monday, July 30, 2012

Dual career tough issues brought case to court

Inside Higher Ed
July 30, 2012 - 3:00am
"Don't worry. We'll work it out."
Many an academic couple has heard this line when one partner has been offered a job and arrangements haven't been quite worked out for the position of the other. A ruling by the Rhode Island Supreme Court this month may illustrate how important it is to get specific about what is being offered to the accompanying spouse. The ruling backed a woman who sued Brown University when the terms of her employment were changed after she and her husband accepted positions there.
In this case, the couple in fact had detailed discussions with Brown officials before accepting the positions. And those discussions are what protected them in the Rhode Island Supreme Court ruling. But experts said that the case shows just how vulnerable academic couples can be to having one of the positions change.
"This case says make sure you get tenure [for the partner] before you say yes," said Lisa Wolf-Wendel, a professor of educational leadership and policy studies at the University of Kansas, who has written extensively about family-friendly policies in academe.
The Supreme Court ruling begins by noting just how important these issues are to many colleges and universities: "Aristotle once said that love is composed of a single soul inhabiting two bodies, and herein lies a significant problem for recruitment and contractual relations in the venerable halls of academia."
The Recruitment Process
As described in the ruling, Brown recruited Paul Armstrong to become dean of the college in 2000. At the time, he was a dean at the State University of New York at Stony Brook. Beverly Haviland, his wife, was a tenured professor of comparative studies at Stony Brook, and had previously earned tenure at Vassar College. Armstrong asked for a tenured position for his wife, and Brown said that wasn't possible. Armstrong turned down the job, but Brown continued to pursue him, with the provost and interim president at the time telling him, "Let's see whether we can work something out."
What Brown came up with for Haviland was a position as "visiting associate professor/senior lecturer in the Department of Comparative Literature and American Civilization." And with regard to reappointment, Brown promised -- multiple times in writing -- that Haviland would be reviewed in the same way that non-renewal of a tenured faculty member's contract would be considered. In other words, she wouldn't have tenure, but she couldn't be dismissed without meeting the criteria for dismissing tenured faculty members -- giving her job security that would be in many ways indistinguishable from tenure.
But after Armstrong and Haviland accepted the offers, resigned from their Stony Brook positions and put their house on the market, a new letter arrived from Brown, stating that Haviland would be evaluated for renewal as are other non-tenured faculty members. Armstrong and Haviland complained and were told not to worry. Then, when she came up for renewal (and since), she has been evaluated by the standard of "sustained excellence in teaching," which is not the standard she was initially promised, and is a higher bar for her and a much lower bar for non-renewal.
Haviland appealed these decisions internally at Brown, and when her appeals were rejected, she sued. Brown has pushed since the suit was filed in 2005 to have it dismissed, and the university lost at both the district court and Supreme Court levels. Brown argued that Haviland hadn't suffered any harm when the standard for review was changed, and the university made several arguments for why the pledges made to Haviland were not a contract.
The Supreme Court said that just because Haviland didn't lose her job doesn't mean she doesn't have a right to sue. "[P]laintiff's continued uncertainty as to which standard Brown will employ for her reviews is a concrete and particularized interest," the decision says.
On the matter of the contract, Brown argued that because only the university's board can authorize tenure, Haviland should have known that the communications promising a tenure-like position were not necessarily final. But the Supreme Court noted that Haviland and Armstrong had negotiated with high-ranking officials -- a dean, the provost and the interim president. Statements from those people were "reliable indicia of authority" such that Armstrong and Haviland were reasonable to rely on them.
The Supreme Court's decision means that Haviland -- who, along with Armstrong, remains teaching at Brown -- will be evaluated as Brown initially proposed.
A Brown spokesman did not respond to requests for comment on the ruling.
Advice for Dual Career Couples
Thomas M. Dickinson, a lawyer who represented Haviland, said that his client was happy with the result. He said that his advice for other couples would be to do what Haviland and Armstrong did.
"I think you want to make sure that whatever working out you are going to do, you work it out before you change locations or sign up for the new employment, and frankly I think that's what Professor Haviland did here."
Wolf-Wendel said that the case points to a number of issues. One is that she has heard that in dual-career couples where one partner is an administrator, many have found colleges reluctant to award tenure. "There is the implied expectation that the [administrator] might not be around for a long time," so institutions are reluctant to offer tenure to the spouse.
More generally, with dual-career academics, many talk about being told to trust institutions. Wolf-Wendel says not to do that. If you want tenure for an accompanying spouse, "you need to be sure to get it before you say yes" to either job. "The bargaining chip goes away once one person accepts. The minute they agree to come, the person [who was recruited first] no longer has the power. The institution has the power."

Profits, not student success, drive exec pay at por profit colleges

The Chronicle of Higher Education
A congressman's investigation into executive pay at for-profit colleges has found that it is based "predominantly on the profitability of their companies rather than the success of their students."
Rep. Elijah E. Cummings, who released his preliminary findings on Friday, said he found it particularly troubling that "some companies provided no documents indicating any link whatsoever between corporate pay and student achievement."
Representative Cummings of Maryland, the top Democrat on the House Committee on Oversight and Government Reform, focused his inquiry on the pay practices at 13 publicly traded higher-education companies whose billions in revenue come in large part from federal taxpayers.
In a memorandum to fellow Democrats on the committee, Mr. Cummings noted that several of the companies did include measures of student success in their pay policies. But, the memo said, "across the board, measures relating to corporate profitability dwarfed those relating to student achievement."
It said two of the companies—Kaplan Inc., a subsidiary of the Washington Post Company, and Lincoln Educational Services—provided no documents that could verify that student success had played a role in determining executive pay, even though both companies asserted that they considered that factor.
The memo also said three companies provided details on specific criteria related to students such as persistence, average starting salaries, and job-placement rates for graduates. The rest of the companies provided information with "vague references to student performance" but failed to show how those policies for executive pay would work or how they are actually applied in practice.
Mr. Cummings said the investigation would continue with a request for additional documents from the companies and direct meetings between company executives and committee staff members.
Congressman Cummings is also scheduled to take part on Monday in a presentation by Sen. Tom Harkin, an Iowa Democrat, of the much-anticipated results of a two-year investigation of 30 for-profit college companies by the Senate Committee on Higher Education, Labor, and Pensions. Senator Harkin, who is chairman of the committee, said the report would include previously unreleased data and documents on "student outcomes" for each of the companies reviewed.

Experts expect more remote learning but worry about its effects

The Chronicle of Higher Education
The college experience of 2020 will further shift from in-person lectures on brick-and-mortar campuses in favor of Web-based learning, according to a majority of technology experts, education administrators, and Internet users who responded to a survey conducted by the Pew Research Center and Elon University.
Sixty percent of the 1,021 respondents agreed with a statement predicting that technology will have a powerful influence on education in the coming decade, foreseeing "mass adoption" of online classes, and graduation requirements customized to individual learning. Thirty-nine percent sided with a contrasting prediction that institutions will incorporate new technology without changing educational paradigms.
Regardless of which prediction they chose, participants were doubtful that adopting technology was best for students.
The findings are described in a new report, "The Future Impact of the Internet on Higher Education,"which is part of a continuing study by researchers at Elon and the Pew center's Internet & American Life Project.
The researchers posed the two scenarios to elicit a variety of opinions on technology's role in higher education. Written comments from the survey revealed that most participants expected reality would be somewhere in between the two options. The extent of change in higher education, according to comment themes, hinges on institutions' responsiveness to new technology, the success of new business models, and the effectiveness of remote learning.
A common opinion among respondents, regardless of their favored scenario, was disdain for online classes. Respondents felt that such formats "will lack the personal, face-to-face touch they feel is necessary for effective education," said Lee Rainie, director of the Pew Internet Project.
Tapio Varis, a professor emeritus at Finland's University of Tampere and a research associate with the United Nations, wrote in his survey response that "traditional face-to-face higher education will become a privilege of a few." Many other respondents expressed similar concerns and added that decreasing traditional classroom learning would disproportionally leave students from the lower- and middle-socioeconomic classes to learn online, increasingthe educational divide.
In contrast, some respondents championed the idea that Web-based education could increase access to the lectures of top experts in academe. Technology will create "more opportunities for students to connect to others—mentors, peers, sources—for enhanced learning experiences," wrote Charlie Firestone, executive director of the Communications and Society program at the Aspen Institute, in his survey response.
Despite debate of the educational value, many respondents felt that new experiments with higher education delving into the digital world were necessary amid economic realities and dwindling applicants.
"If traditional universities don't move in this direction," one anonymous respondent wrote, " they will find themselves facing daunting start-up competitors who will deliver educational value at lower prices for students coming from a contracting middle class."

MI state u rule prohibiting free speech struck down by graduate who became attorney

The Chronicle of Higher Education
July 30, 2012, 4:55 am
The Michigan Supreme Court on Friday declared unconstitutional a Michigan State University ordinance under which a student was convicted following a 2008 dispute over a parking ticket. In the 5-to-2 ruling, the court’s majority, citing a U.S. Supreme Court decision, said that the ordinance was unconstitutional because it “criminalizes a substantial amount of constitutionally protected speech.”
The ordinance made it an offense to “disrupt the normal activity” of a university employee performing his duty. The Michigan court called that policy “overbroad” on its face, in that it had been written such that people on the campus could be prosecuted in “seemingly infinite ways.”
The case stemmed from a confrontation between Jared S. Rapp, who was ticketed for parking his Land Rover at an expired meter, and Ricardo Rego, a parking attendant. When Mr. Rapp vehemently disputed that the meter had expired, shouting and taking pictures of Mr. Rego with his cellphone, the attendant summoned campus police officers.
Mr. Rapp, who is now a lawyer in Illinois, won dismissal of the parking ticket, but he was convicted of violating the ordinance. A subsequent court ruling, however, overturned the conviction. Friday’s decision reversed an appellate court that had restored Mr. Rapp’s conviction.
A university spokesman told a reporter for the MLive Web site that Michigan State was reviewing the decision “with an eye toward what changes are needed to ensure the ordinance meets the court’s ruling.”

U of CA seetle felony charges from fatal lab fire

The Chronicle of Higher Education
July 28, 2012, 11:21 am
The University of California on Friday settled three felony charges stemming from a fatal 2008 lab fire that led to the unprecedented filing of criminal charges against both the university and the professor in whose lab the accident occurred.
In the settlement with the Los Angeles County district attorney’s office, the university’s Board of Regents pledged to follow rigorous lab-safety standards, accepted responsibility for lab conditions that contributed to the death of a research assistant, and created a $500,000 endowed scholarship in her name. The assistant, Sheharbano (Sheri) Sangji, died soon after she suffered severe burns in a fire that ignited while she was working in the laboratory of Patrick G. Harran, a prominent organic-chemistry professor on the university’s Los Angeles campus.
Mr. Harran continues to face the same felony charges that the university settled—willful violations of three occupational-safety-and-health regulations—and the university said it would continue to support the professor and provide for his defense. In a court filing this week, Mr. Harran’s lawyers attacked the credibility of the state investigator who recommended that criminal charges be brought in the case. Mr. Harran has yet to be arraigned.
The accident occurred when Ms. Sangji was using a syringe to transfer from one container to another a chemical compound that ignites when it comes into contact with air. Ms. Sangji was not wearing a protective lab coat, and her synthetic sweater caught fire, causing burns that proved fatal 18 days later.
The state investigator concluded that Ms. Sangji’s death could have been prevented if she had been properly trained and made to wear protective clothing. The university has maintained she was fully trained and simply chose not to wear a lab coat. Even so, it has stepped up lab-safety measures in the years since the accident.
The university could have faced $4.5-million in fines if it had been convicted of the three felonies. Mr. Harran could be imprisoned for up to 4½ years if he is convicted on all three counts.

Friday, July 27, 2012

Was Portland State right in expelling student as safety risk?

Expelled Portland State student Henry Liu says the university wronged him by unfairly banning him from campus. The PSU police chief says the university had to treat the claim seriously.
Henry Liu was a promising graduate student in Portland State University's conflict resolution program. He had excellent grades, with law school on the horizon. But his academic career swiftly derailed last spring after he confided to a classmate that he was upset with a faculty member and mentioned guns in the same conversation.

Liu's classmate told campus police that her friend felt a lot of hatred and said of one assistant professor, "He could get shot." Liu, a gun enthusiast, denies making any such threat and says he never intended to harm anyone. Yet Portland State officials took swift and decisive action.

Less than 24 hours after Liu spoke to his classmate, campus police put him in handcuffs and he landed in a psychiatric ward. PSU officials barred him from school property and put out a public flier with his photo that included this line: "If you see Mr. Liu on campus, or if you have any significant concerns about your immediate personal safety, please notify law enforcement officials by calling 911." Last month, PSU expelled him.

The 33-year-old Astoria resident hasn't been charged with a crime and has no history of violence. A psychiatric report concluded that he poses no danger to himself or anyone else. At the time of his arrest, Liu's interest in firearms had waned because owning guns seemed to conflict with his growing passion for conflict resolution.

He now finds himself considering legal action against the university, saying he was harmed by school officials who wildly overreacted to the allegations and profiled him -- in his words -- as a "crazy Asian shooter."

Campus safety
The dorm-room rape and murder of Lehigh University freshman Jeanne Clery in 1986 prompted major safety reforms on college campuses across the United States.
Congress passed a law in 1990, known as the Clery Act, which requires colleges and universities with federal financial aid programs to publicly disclose campus crime information -- including timely warnings of incidents posing threats to students and staff. Schools can be fined for failing to abide by the law.
The 2007 mass shooting at Virginia Tech sent school administrators nationwide scrambling to review their policies. The massacre precipitated safety reforms on many college campuses, including Portland State University.
PSU in 2008 formed a team called CARE -- Coordination, Assessment, Response and Education -- to help the campus community feel safe and supported. The team assesses and coordinates responses to student issues and concerns that require intervention, according to university officials.
The CARE team handles a wide range of campus safety issues, from suicide prevention to family traumas to reports of threatening behavior, said PSU spokesman Scott Gallagher.
– Bryan Denson
So what went wrong at PSU? Did anything go wrong?

Liu's case shows how a student can get caught up in a post-Virginia Tech world and how universities find themselves in dicey territory as they balance student security with free speech rights.

The way U.S. colleges respond to any hint of a gun threat took a dramatic turn five years ago, when a mentally ill Virginia Tech senior, Seung-Hui Cho, went on a shooting rampage at the school, killing 32 people before committing suicide.

Since then, campus administrators across the United States have grown hypervigilant to the point where concerns about gun-related speech have spiked into a state of alarm, says William Creeley, director of legal and public advocacy for the Foundation for Individual Rights in Higher Education.

"We are seeing an increased sensitivity to any behavior that could possibly be construed as aberrant, threatening or evidence of some larger personality disorder," Creeley says. "As a result of this broad focus on unusual behavior, we're seeing lots of normal, protected speech swept into the dragnet and used as reason for investigation or even punishment."

Here's what led to Liu's expulsion, based on The Oregonian's interviews with Liu, his accuser, his lawyer and campus police, as well as police records, a psychiatric report and other documents.

Walking with a classmate

On the evening of April 19, Liu walked a classmate to her car after class. What happened next remains in dispute.

Liu's classmate told police he vented loudly about the conflict resolution program and its chairman, Robert Gould, saying, "I'm about ready to stick a .45 in his ass." She said that Liu had complained about his chronic back problem and sleeplessness, and that he was going target shooting that weekend, according to a campus police report.

Liu disputes his classmate's characterizations of the conversation. He says he confided his deep disappointment in PSU's conflict resolution program and his unhappiness with assistant professor Stan Sitnik, who had given him a B-plus instead of the A he thought he deserved. But Liu says he never raised his voice and never mentioned Gould.

(Although Liu's 55-year-old classmate is named in public records and gave a brief interview for this story, The Oregonian is withholding her name at the request of PSU officials, who say that naming her might have a chilling effect on others taking safety concerns to campus authorities.)

About 3 a.m. the next day, Liu's classmate encouraged him by email to seek counseling or mediation for his anger. Liu was asleep and didn't reply.

At some point, she reported his comments to PSU authorities. At roughly 9 a.m., an official in the dean of student life's office phoned campus police to report the comments attributed to Liu. The police report described the incident as "inappropriate behavior."

At 1:38 p.m., two campus police officers, joined by a pair of Portland cops, walked into a brick building on Southwest Clay Street, one block from the PSU campus, and knocked on the door of Apartment 43. Liu answered, shocked to see a group of officers on his landing, and stepped outside to talk.

Portland Officer James Crooker asked Liu if he had any guns inside his one-bedroom apartment.

"No," he said.

Liu, who had four firearms in the apartment, would later explain that he wasn't truthful for a reason: He saw police ushering people out of the building, and he hoped to defuse the situation rather than scare his neighbors or the officers.

Police told Liu they wanted to talk about statements he had allegedly made about harming staff members at PSU. When Liu denied having made any threats, Crooker asked again if he had any guns inside. Liu looked at campus police Sgt. Joseph Schilling, who said, "Where are the guns, Henry?"

Liu invited police inside and told them they could find two semiautomatic handguns in a locked footlocker in his closet. Police found both guns -- a .22-caliber Smith & Wesson and a .45-caliber Springfield -- and handcuffed their suspect. Liu says he heard one officer, noting the .45, ask, "You didn't say you were going to stick this up somebody's ass?"

Liu denied making the comment, and he told them where to find two other firearms, including a Daniel Defense M4 carbine, a semiautomatic version of a combat rifle used by U.S. troops. None of the guns were illegal, and none were loaded. Liu had bought two of them -- one equipped with pink grips -- for his fiance.

Officers poking through Liu's place found loaded magazines, boxes of cartridges, survival gear stuffed into packs, along with extra food and a QuikClot sponge designed to quickly stop bleeding. Liu also had shooting glasses and ear protection, a first aid kit, a flashlight, wet naps, and a Bear Grylls survival knife.

The gear looked suspicious to police, as if Liu were planning a hasty departure, and, according to Liu, they kept using terms such as "tactical" and "military." But as Liu later explained, he's an avid camper with an abundance of gear, including a huge stock of ramen noodles his mother bought him at Costco.

Liu recalls police asking about his state of mind, wondering if he intended to follow up on his threats. He says he kept telling them it was all a terrible misunderstanding, but he felt as if they were trying to coerce a confession.

The impasse ended this way: Liu voluntarily agreed to be evaluated at Oregon Health & Science University. Police walked him out to a patrol car in lounge pants, his hair a mess. "I had my head down in shame," he recalls.

Liu says he didn't realize he would have to spend six days in a psychiatric unit at OHSU before he was released with a clean bill of mental health.

Conduct evaluated

PSU's Student Conduct Committee, composed of students and faculty, heard the complaint against Liu over two days last month.

The panel took testimony from Liu's accuser and Sgt. Schilling. Liu didn't appear in person because he wasn't allowed on campus. He testified by speakerphone in the office of his attorney, Michael E. Rose.

Rose wasn't permitted to speak during the proceeding. Students can have advisers at the hearings, says PSU spokesman Scott Gallagher, but only as consultants, not as participants in the proceedings, which aren't intended to be judicial in nature.

"The fact that the two witnesses against (Liu) were sitting in the room with the committee, and Henry was only allowed to participate by telephone -- invisible, and highly ignorable -- really cuts at the root of any notion of a fair hearing," Rose says.

On June 20, Liu got notice that he had been expelled for violating two provisions of the code of student conduct: "Furnishing false/misleading information," and "Possible health/safety threat."

Liu isn't the first student expelled for making credible threats on campus, Gallagher says. School officials declined to cite the precise number of expulsions, saying the information could possibly violate the privacy of other students.

Liu has filed for an administrative review of PSU's expulsion. He and his lawyer will wait for the outcome of that review before planning their next step, Rose says.

The circumstances confronting PSU officials last April were serious, says Public Safety Chief Phillip Zerzan. They had a heavily armed student -- with survival gear and hundreds of rounds of ammo -- who lived spitting distance from campus and was accused of threatening faculty members.

With all those factors in play, he says, PSU took reasonable and compassionate steps to keep Liu and the campus community safe.

Zerzan's job is to keep the university safe, but he also recognizes that students and faculty have free-speech rights.

"It is a difficult balance, and I think we were responsible," he says. "This was not a rush to judgment. ... How defensible would it be if we didn't put out the warning and he came back and shot up the school?"

Liu feels betrayed.

"My takeaway is that I was wrongly dismissed from the university based on hearsay and conclusions that weren't supported by facts," he says. "My name's been smeared, and so much has been taken from me. My future is uncertain. And I miss school."

PERS Needs Changes according to Oregon State Treasurer

The Oregonian

Oregon Treasurer Ted Wheeler is stepping into the state's pension reform debate, endorsing changes to the system that he says are necessary to ensure its sustainability while protecting basic services like public safety and education.
Wheeler's office circulated a letter Thursday that he sent to the Board of the Oregon Public Employees Retirement System in late June. In it, Wheeler asked the board to immediately revisit and potentially lower the pension fund's aggressive assumption on investment returns, currently 8 percent.
He also suggested two reforms to the pension system: capping the annual cost of living increases granted to retirees and eliminating the practice of paying out-of-state retirees extra benefits to cover Oregon income taxes, which they don't pay.
Wheeler's suggested changes came with mitigating measures that would lessen their financial impact and make them more palatable to PERS members and public agencies. Still, it's politically risky for a Democratic politician with possible ambitions to higher office. Oregon's powerful public employee unions have not been shy about throwing around their political and financial weight to protect members' retirement benefits -- largely successfully.
The pension debate may be at a tipping point both nationally and locally, however. States nationwide are pursuing pension reforms to deal with ballooning costs and public angst over the generous benefits and declining public services. Whether that changes unions' calculus in Oregon remains to be seen.
Wheeler told the PERS board that the prolonged recession is undermining the pension fund's investment returns, hampering its ability to meet long-term funding objectives. At the same time, rapid increases in PERS' costs are sapping budgets of government employers around the state.
Critics have long assailed the optimistic earnings assumptions used by public pension systems, saying they lead to a chronic underfunding and cause pension managers to take too much investment risk to bring in big returns.
Oregon's pension system is more dependent on investment returns than most. It has historically looked to its investment portfolio to bring in about 70 percent of necessary funds. Between 1980 and 2007, the system brought in that and more. But its bountiful returns were largely transferred to member accounts under the system's money match program, leading to runaway liability growth. Reforms in 2003 addressed some of those issues, but the financial crisis in 2008 put the system in a new tailspin.
The pension system currently has a deficit of some $16 billion, with 74 cents in assets for every dollar in liabilities. The funded ratio is higher -- 81 percent -- counting the money public agencies borrowed and forwarded to PERS to prefund their contributions. But employer contribution rates are calculated using the lower number.
Compounding the problem, since 2003, public employees in Oregon no longer make direct contributions to the fund, leaving taxpayers on the hook to cover more of the cost when investment returns fall short, as they have in the last decade.
Oregonian PERS coverage
* Read past stores and view the online database. 
That point was hammered home Wednesday, when a procession of respected Wall Street strategists invited to a special meeting of the Oregon Investment Council delivered a universally gloomy view of global market returns for the foreseeable future. Across the board, the panelists told the five-member citizen's council that oversees pension fund investments that global debt levels remain historically high, consumption is tapped out, and corporate earnings growth would be anemic.
Rob Arnott, chairman of Research Affiliates LLC, told the OIC that forecast investment yields based on standard financial models were at their lowest level in 80 years. A portfolio made up of 60 percent stocks and 40 percent bonds is expected to bring in about 2.2 percent annually.
Given those figures, he said the 8 percent earnings assumption used by most public pension systems is "ridiculous."
The 8 percent figure is talismanic in Oregon. Tier One PERS members, hired before 1996, are guaranteed an annual return on their individual pension accounts equal to the assumed earnings rate. The 8 percent rate in effect since 1989 has become a touchstone of the pension reform debate.
Lowering the rate would reduce benefits for a big swath of PERS members, saving money. Paradoxically, however, it would increase taxpayers' annual costs as the system turned to government agencies for more money to fund current benefits and amortize the system's deficit.
Costs are already going up. Employer contribution rates doubled last July and will increase again by 50 percent next July, skimming another $1 billion from government budgets statewide. The PERS Board voted last July to keep the assumed earnings rate at 8 percent. A majority of the board expressed doubt that the system would hit the 8 percent mark, but they were loath to saddle employers with more costs.
Oregon's pension actuary has estimated that a 0.25 percentage point decrease in the assumed earnings rate would demand another $140 million in annual contributions by employers statewide.
In his letter Wheeler said the state could mitigate those added costs by making other accounting changes, such as "increasing the amortization timeframe by which gains and losses are recorded to be more consistent with the average length of employment."
It's not clear what impact that would have on the overall health of the system.
In the meantime, he suggested the PERS Board should make two additional changes. The most significant would be lowering the annual cost of living adjustments on retirees' pensions, currently a maximum of 2 percent. Wheeler's COLA proposal wasn't specific, but such a change might limit the inflation adjustments to the first $25,000 of a member's benefit, saving money while preserving benefits for retirees with modest incomes.
He also suggested eliminating a pension benefit for retirees who move out of state. PERS members currently receive extra benefits to cover their income tax liability in Oregon. The Legislature eliminated that benefit for all retirees after 2011 in the last session, a very limited savings. Wheeler's suggested change might eliminate the benefit for all out-of-state retirees.

Wednesday, July 25, 2012

Democrats Warn of Harm to Education From Across-the-Board Budget Cuts

The Chronicle of Higher Education
Education Secretary Arne Duncan joined Senate Democrats on Wednesday in warning of dire effects on American schools and colleges if Congress cannot reach agreement on a way to avoid across-the-board budget cuts set for January.
Some $1.2-billion in threatened cuts, known as sequestration, are scheduled under an agreement last August by Congress to force down the size of the federal budget deficit. Along with deep cuts in federal aid to local schools that could cost 15,000 teaching jobs, the effects on higher education would include the loss of about 2,200 research grants and snarls in the processing of federal student aid, Mr. Duncan told a Senate hearing.
"Essentially we're playing chicken with the lives of the American people," the secretary told lawmakers at the hearing, held by the Senate Appropriations subcommittee on labor, health, and education issues.
The subcommittee's chairman, Sen. Tom Harkin, a Democrat of Iowa, issued his own report at the hearing, a 180-page tally of the specific effects Congress can expect if it does not find an alternative to the sequestration cuts.
Among a range of cuts in educational and health benefits for millions of children and young adults, sequestration would mean that 1.1 million fewer students would be served through the State Grants for Career and Technical Education program, 110,000 fewer low-income students would receive Supplemental Educational Opportunity Grants, and nearly 52,000 fewer students would get Federal Work-Study money, Mr. Harkin said in his report.
Sequestration would have "destructive impacts on the whole array of federal activities that promote and protect the middle class in this country," he said.

Bipartisan Concern

Members of both parties created the sequestration mechanism last August as part of a temporary settlement of a bitter dispute over the size and shape of the budget. In a bid to force compromise, Democrats accepted that sequestration would include a series of domestic programs and Republicans agreed it would include cuts in defense spending.
As the effective date of sequestration draws near, however, members of both parties are showing concern. Along with the protests from Mr. Harkin and other Democrats, some Republicans have begun urging that the Pentagon now be exempted from the sequestration process.
Mr. Duncan's appearance before the subcommittee on Wednesday consisted largely of fellow Democrats' endorsing his concern over the pending cuts in education and other programs. The secretary was followed by a four-member panel that consisted of local school superintendents in North Carolina and Texas, the head of a community-aid group in Virginia, and a strategist with the Cato Institute, a prominent libertarian think tank.
The Cato official, Neal P. McCluskey, offered the most robust defense of cutting education spending, arguing that federal data show it produces little value. Mr. McCluskey cited federal statistics indicating that the performance of American students on internationally comparable tests has not increased in 40 years, while per-student spending has grown 375 percent over that period.
He also cited a 1998 report by Austan D. Goolsbee, a former economic adviser in the Obama administration who is now a professor of economics at the University of Chicago, suggesting that the main benefit of increasing federal spending on scientific research is that it raises wages for researchers.
"Like aid to students," Mr. McCluskey said, "the benefits seem largely to accrue to those employed by the money, not to society or the people the aid is intended to help."
Democrats largely left the comments unchallenged. Mr. Harkin did question Mr. McCluskey's conclusions, but directed his most lengthy complaint to a disagreement with Mr. McCluskey over rates of fraud in the Head Start program.

Survey provides insight into who enrolls in fully online programs and why

Inside Higher Ed
 July 25, 2012 - 3:00am
The average student pursuing a postsecondary credential completely online is a white, 33-year-old woman with a full-time job and a household income around $65,000 per year, according to a new survey sponsored by two companies involved in online consulting.
This woman is likely to be studying business -- the chosen field of 34 percent of students who are, recently were, or soon plan to be enrolled in fully online programs, according to the survey. Business administration and management, a popular avenue for students across all of academe, is far and away the most popular degree among the survey respondents, enrolling a greater percentage of fully online students than STEM fields, the social sciences, and the humanities combined.
“Schools simply cannot offer enough business programs if they want to attract large numbers of online students,” write the authors of the survey on behalf of its sponsors.
Carol Aslanian, senior vice president of market research services at Education Dynamics and a co-author of the study, said in an interview that she is not worried about flooding the supply side by recommending that every institution expand its online business offerings. "You don't tell a pharmacy to stop selling toothpaste just because every pharmacy is selling toothpaste," she said. But it will become increasingly important that institutions find a niche within the market to distinguish their business programs from the pack, she added.
The sponsors of the survey have skin in the game. One, Aslanian Market Research, which is part of Education Dynamics, provides consulting services to colleges formulating an online strategy; the other, Learning House Inc., helps colleges build online programs. The survey, carried out by a Denver-based research contractor, used a sample of 1,500 adults who are, recently were or plan soon to be enrolled in fully online programs. The margin of error was 3 percent.

The data offer insight into other trends, as well. As in most other areas of higher education, women dominate the market for fully online programs; 70 percent of respondents to the survey were women, and 60 percent were white. Just shy of 20 percent were black, and 8 percent identified themselves as Hispanic. A solid majority, 60 percent, were employed full-time; 20 percent had part-time jobs; and 19 percent were unemployed (with 12 percent actively looking for work).
The survey results affirm the demand for online pathways to non-degree credentials such as certificates and licenses. More than a quarter of the respondents said they were interested in a certificate or licensure program. In their take on the figures, the authors of the study -- Aslanian and David Clinefelter, chief academic officer at Learning House -- noted the buzz around “stackable” credentials and similar certificates designed to signal specific skills and aptitudes.
“As interest in competency-based learning rises, so will the demand for short-term, career-oriented, and compressed certificate study,” they write.
Another phenomenon to which the survey attests is the tendency of online learners, despite their desire to be able to learn outside the confines of time and space necessary to taking courses at the nearest college campus, to favor institutions that are located physically nearby. About 80 percent of respondents to the survey live within 100 miles of a physical presence of their preferred online program.
This figure includes not only traditional college campuses but also “service centers” for highly distributed institutions such as the University of Phoenix, which has 250 such centers nationwide. In any case, online students seem to place a high value on being able to drive to a physical plant if they want to, even if their courses are fully online.
When choosing an online institution, the respondents said they value reputation above all else, with price tag coming in a close second. And while respondents gravitated toward nonprofit institutions at a rate of 65 percent, for-profit institutions captured more than a third of the fully online market, with Phoenix alone registering a 15 percent share. “It is noteworthy,” the authors add, “that approximately 17 percent of respondents did not know what type of institution they attended.”

Vermont group proposes making more of flagship university's board private; could it happen in Oregon?

Inside Higher Ed
 July 25, 2012 - 3:00am
By Kevin Kiley
 A group of influential Vermont leaders thinks $40 million shouldn’t buy a majority stake on the University of Vermont’s governing board.

That’s roughly how much the state appropriates to the university every year. But the group says that’s not enough. These days, state appropriations make up less than 10 percent of the university’s overall revenue, while tuition makes up about half.
In a report released last month, an advisory group convened by Vermont Governor Peter Shumlin to study the relationship between the University of Vermont and the state recommended that the state alter the university’s governing board composition to include more members who are not appointed by politicians, a shift they say would help the university when it comes to raising money and creating partnerships with outside entities.
The current board structure, put in place in the 1950s, has 25 trustees: Nine appointed by the legislature, three appointed by the governor, nine private trustees who elect their replacements, two students, and two ex-officio members (the governor of Vermont and the university president). That means political appointments outnumber “private trustees,” which the report says is a problem for the university. “This structure is out of balance in relation to that state appropriation and does not reflect the interest of the university or the true relationship to the state,” the report states. “Further, the limiting size and make up of the board hinders UVM’s ability to raise its profile within the state and nationally, raise needed dollars and recruit future trustees and supporters.”
“A lot has changed in the 60 years since the state last took up this question of the relationship between the state and the university,” said Nicholas Donofrio, former executive vice president for innovation and technology for IBM and chairman of the committee that made the recommendations.
In the past few years, as states have decreased appropriations for higher education, institutions have tended to argue that they should also be freed from some state legislative control and regulatory burdens. The Vermont board proposal reflects a different path, with individuals starting to question whether the state should also step out of governance. State lawmakers’ influence on the University of Virginia’s governing board – despite the state's shrinking investment – was a major issue during the university’s controversy last month, when the board forced the resignation of the university's president, a move that went against the wishes of many other university stakeholders.
The Vermont proposal also reflects a novel idea that control of an institution’s governing board might not be the best way for a state to influence the direction of the institution. In most states, lawmakers simply appropriate money and leave it to the institution to determine how most of those dollars are spent. The Vermont proposal argues that the state might make a better "return on its investment" if it invests directly in the programs it wants to see grow while letting private dollars -- tuition, philanthropy, and corporate investment -- support the rest of the institution.
The proposal has not generated much talk in the state so far, with only a few media outlets even reporting on it. But is likely to be controversial when the state legislature convenes in January, said Philip Baruth, a University of Vermont faculty member who is also a state senator. Baruth and other faculty members said they oppose the idea of decreasing the public's voice in university governance and letting the governor and other lawmakers, rather than faculty members, determine exactly how the university should spend the limited state dollars it receives.
Shumlin has said that he will do everything in his power to make the report’s recommendations come to fruition. Other recommendations in the report include removing a restriction that in-state tuition be 40 percent of out-of state tuition, targeting state appropriations to STEM fields, and creating a long-term loan forgiveness program to keep graduates in the state.

Who Gets a Seat?
Current Board Structure:
-Nine trustees appointed by legislature
-Nine trustees who elect their replacements
-Three gubernatorial appointees
-Two students
-Governor of Vermont
-University of Vermont President

The University of Vermont is rare among public institutions in that some of its board members are already appointed outside the political process. Most public university boards are composed entirely of political appointments, with perhaps one or two seats reserved for the president and faculty and student representatives. According to a 2010 survey conducted by the Association of Governing Boards of Universities and Colleges, 80 percent of public university board members were appointed by elected officials, most often by a governor with legislative approval. Another 5 percent were elected directly by voters.
The University of Vermont’s board structure is an outgrowth of its winding historical path through public and private status. The university began as a private institution, but started receiving public funds in 1865 after the state established a land-grant institution at the university. The private and land-grant components remained separate until 1955, when the entire university became an instrument of the state, creating the current governance structure.
The fact that the university has altered its board composition and the state-university relationship might make it easier for Vermont to adopt the recommendations than would be the case in states where universities have been under state control for their entire history.
A handful of other institutions also mix public and private board elements, mostly by virtue of history. Only 8 of the University of Delaware’s 28 board members are politically appointed. Pennsylvania State University’s board comprises five ex-officio members (mostly statewide office holders), six members appointed by the governor, nine trustees elected by alumni, six members elected by state agricultural societies, and six members selected by the rest of the board.
Clemson University’s 13-member board consists of six political appointments and seven self-perpetuating members, meaning the private members are in the majority. That structure was a condition in Thomas Green Clemson’s will that the state had to accept in order to receive his estate and create the university. That structure has recently created controversy.
Problems of State Influence
Donofrio said the relationship between the state of Vermont and the university has been unsatisfying for both parties for several years. University administrators and faculty members complain that the institution is not getting enough financial support from the state and lawmakers saying that the university won’t invest in areas that would grow the state’s economy.
In a speech last November, Shumlin said the state was “falling short of our goal of maximizing our return on state investment.” Since taking office, Shumlin has been critical of some university spending priorities. He has said the university should spend more on science, engineering, technology and mathematics. Even with a majority of board members, lawmakers have not been able to steer the direction of university funds to the programs they support.
The committee that drafted the proposal argues that there are better uses for those seats. Donofrio said politically appointed board members have different priorities than do “independent” board members. As universities come to rely on private sources of revenue, politically appointed board members take up seats that could go to individuals who could bring more money to the university. The Burlington Free Press found that self-perpetuating board members tend to give more to the university than those appointed by lawmakers.
More than fund-raising, however, Donofrio said politically appointed board members are reluctant to deal with many of the issues that boards these days have to deal with, such as finding new sources of revenue, cutting costs, and creating new partnerships. “They’re not going to help you fund-raise,” he said. “They’re not going to help you deal with these thorny, nasty, controversial issues. That’s not what they’re there to do.”
Donofrio serves on the governing boards of his two alma maters, Rensselaer Polytechnic Institute and Syracuse University, as well as the Board of Regents for Higher Education in Connecticut. He also served on the Spellings Commission. He said the significant decrease in state support for higher education means that more public universities should push for independence on their boards.
“The bulk of people in the United States who receive a higher education are not educated in top schools,” he said. “They are educated in state-sponsored schools, and those are places that are under siege and under attacks these days.”
Faculty members at the University of Vermont argue that the connection between the university and the state is already too weak, as evidenced by the reduced appropriations. They say removing public accountability from a larger share of the board will only weaken the connection. "What Virginia and Penn State show is that we need more accountability for boards, not less," said Nancy Welch, an English professor at the university.
Peter McPherson, president of the Association of Public and Land-grant Universities, said that while the proposal's recommendation to change the composition of the Vermont board might make sense for Vermont, such proposals could move universities away from their public purpose, which he argues would be bad for all parties. "It would be a major loss to society if, in effect, that public purpose was lost because the public no longer had a role in governing the institution," he said.
A report released last month by the National Research Council said the decrease in state support for public research universities, which produce the majority of Ph.D. students and conduct the majority of federally funded research, was a major threat to the country's research excellence. "We've been in the business of trying to get the states to give us more money, not give them an excuse to give us less," McPherson said.
Changing the Relationship
The Vermont report also expressed a belief that the state is more likely to achieve its goals by investing in particular areas, rather than trying to steer the institution from a board level. Instead of investing in the university's general fund where the use of that money would be determined by on-campus administrators, the report says the state could tie appropriations to specific programs. “The state should pay for what it wants and expect excellent outcomes for those investments,” the report states. For the near term, the report says the state should “[t]arget state appropriations to high priority state interests, including STEM, agriculture, health, and natural resources.”
“This strategy would lead to positive outcomes and lead to transparency and clarification of what the state expects from UVM,” the report states.
McPherson said he doesn't think this is a good path. Most states already earmark a significant amount of funding for particular purposes, he said. Tying state funding to particular programs could lead to decreased funding for other parts of the university that are still vital to the institution's public mission.
Vermont is not alone in questioning the structure of the university's governing board.
Earlier this year, several current and former University of California administrators proposed giving each of the system’s 10 institutions their own individual boards. Currently, the system operates under one 26-member statewide board, with each member appointed by lawmakers. The administrators proposing the change said the local boards would help each campus generate new revenues, such as private philanthropy, out-of-state tuition, and corporate partnerships.
That proposal received a cool reception by the system’s current leadership and state politicians.
During the debate at the University of Virginia, faculty requested a seat on the university’s board, questioning the necessity of having all political appointments without having other stakeholders’ views represented.
Donofrio said the Vermont committee will reconvene in about six months to evaluate the state’s progress toward implementing the recommendations.

Tuesday, July 24, 2012

Turkey Arrests Public-Sector Unionists Under Broad Terror Law

Working In These Times
 By Stephen Franklin
Turkish police use a water cannon to break up a protest by members of the Confederation of Public Service Workers (KESK).   Adam Altan/Getty Images

ISTANBUL, Turkey—They were upfront and loud, not unusual behavior for discontented labor unions anywhere.
They had complained about the puny wage increases the Turkish government was offering its public workers. Nor did they like new education laws that they claimed hurt students and teachers. And they had voiced their views about plenty of government polices affecting not just workers.
But early one morning last June when police raided the homes and offices of members of the Confederation of Public Service Workers, (KESK), rounding up 69 union leaders and activists, their arrests had nothing to do with labor-law violations.
They were charged under Turkey’s terror laws with have having links to the Kurdistan Communities Union (KCK), an alleged planning wing of the outlawed Kurdish Workers' Party (PKK). Thousands of Turks have been swept up in arrests aimed at the KCK, according to Turkish newspapers.
In no time Turkish labor groups along with international unions protested the arrests, saying the union members, nearly all of who are Kurdish, have nothing to do with terror. Rather, they say, the government is punishing them for their exercise of free speech as well as their opposition to its policies.
“They are not being investigated for anything related to terrorism,” says Emma Sinclair-Webb, Human Rights Watch’s Turkey representative.
The heart of the problem, Sinclair-Webb says, is Turkey’s anti-terror laws. They are “very broadly drawn,” allowing the government to easily link people to terror groups. “You only have to go to a demonstration,” she says, to be snared in the government’s dragnet.
And as battles with Kurdish militants have grown and tensions increased between the government and Turkey’s Kurdish minorities, Turkish journalists and human rights activist say the government is targeting more and more Kurds whose only crime is their sympathies.
Indeed, Metin Iriz, the labor group’s attorney, says that all but two of the arrested union members are Kurds. Women account for about 20 of those arrested.
“There’s no proof. If there is, they (the government) would tell us,” says Iriz. “They were arrested because of the Kurdish problem…. The government is cleaning up the Kurdish opposition.”
But a Foreign Affairs Ministry official, noting that KESK is an anti-government union, refuted the claim that the union leaders are being wrongly held. He pointed out that a court had rejected appeals for their release from lawyers who had argued there was no concrete evidence. Because documents in the case have not been filled, the official added that the government could not comment about the charges.
Since the arrests, however, six more union members have been arrested and seven released pending the court case, according to Turkish news reports.
KESK is the third-largest federation of public sector labor unions with about 250,000 members, according to Iriz. It represents teachers, nurses, doctors, transportation workers and government employees. Driven by a strong leftist stance, it has often clashed with the right-leaning government and suffered a series of arrests of its members in recent years.
While the Turkish economy has boomed in recent years, Turkish unions have steadily shrunk to about 10 percent of the workforce, according to Turkish journalists and labor experts.  In its latest report on human rights in Turkey, the U.S. State Department noted “government restrictions and interference limited the ability of unions to conduct their activities, including collective bargaining.”
As for the fate of the arrested union leader and activists, attorney Iriz was pessimistic.
“They will wait in jail for two years before their cases come to court and they will get 11 years in prison,”

Berkeley Joins edX

 Inside Higher Ed
July 24, 2012 - 4:18am
The University of California at Berkeley is joining edX, which was recently formed by Harvard University at the Massachusetts Institute of Technology to offer MOOCs, or massively open online courses. The Berkeley announcement comes a week after Coursera, another provider of MOOCs by elite universities, announced a major expansion. In the announcement from edX, the three members are now referred to as the "X Universities." In a statement explaining the choice of edX, Robert J. Birgeneau, the chancellor at Berkeley, specifically noted the nonprofit model at edX. "We are committed to excellence in online education with the dual goals of distributing higher education more broadly and enriching the quality of campus-based education. We share the vision of MIT and Harvard leadership and believe that collaborating with the not-for-profit model of edX is the best way to do this," he said.

Higher Education Bubble: Helium, Part 2

The Chronicle of Higher Education

July 23, 2012, 8:12 am
The bubble-psychology of the consumer who holds fast to the belief that every bet is an investment; the mesmerizing allure of the prestige college that can dazzle parents to overlook the meretricious quality of the education it provides; the exigency-driven tuition hikes at public universities; the gamesmanship of college tuition—these are parts of the bubble as it currently exists (see Part 1), but they aren’t what drives its expansion. What is inflating the bubble still further is federal policy on grants, loans, and loan-forgiveness.
But even as the bubble inflates, there is a growing collection of sharp objects—the jackknife of online education, the hatpin of tax increases, the razor of state budget cuts, and the dart of public disenchantment—that threaten the whole thing.
President Obama made clear within a month of his taking the oath of office that he wanted to see a massive expansion in the number of Americans who attend college and who earn college degrees. His stated goal, from which he has never wavered, is to make the United States by 2020 the nation with the largest percentage of college graduates in the world. To do so would require more than doubling the current number of students enrolled in college from 19 million to something close to 40 million.
I have written extensively (Supersizing, College for All) about his implementation of this policy, and will summarize only briefly. One major tactical step toward advancing this program was consolidating federal control over federally guaranteed student loans. This was slipped into the Patient Protection and Affordable Care Act the week before it passed without any debate. Obama has used this new level of control to expand federal aid, offer short-cuts to loan forgiveness to graduates employed in certain sectors (see More Better Citizens), and threaten reductions (Price Controls) in access to student-loan dollars for colleges that raise tuition faster than he would like. At the same time, his Department of Education has waged regulatory war on the for-profit colleges that have attempted to provide alternative means for students to attain college degrees.
These steps taken together have given colleges and universities (except the for-profit ones) the confidence to continue their heedless expansion. More Pell grants, more student loans, and a president urging virtually everyone to go to college adds up to the prospect that, no matter what a college degree does for the graduate, vastly more people will line up to pay for one.
An even more powerful inducement for massive expansion is the lure that easy money for student loans will turn into still easier money as the loans evaporate into loan forgiveness. To a student hesitating about loading up on federal loans, this must sound irresistible.
The confidence of those who manage colleges and universities, however, is shaky. On one hand, they are enthusiastic about the government’s easy-money policy for higher education, but on the other hand they can see that the costs are far greater than can be covered though Pell Grants and federal loans, and they see mounting price resistance on the part of students and parents.
One possible answer is to persuade the federal government to fly to the rescue with billions of dollars of new support for campus infrastructure. In June 2012 the National Association of College and University Business Officers (NACUBO) teamed with the American College and University Presidents’ Climate Commitment to issue a white paper, Higher Education: Leading the Nation to a Safe and Secure Energy Future. The report calls for various ways in which the government can help to finance “investment in sustainable technology for the country’s colleges and universities.” Given the fiascos of Obama’s “investment” of public funds in ventures such as Solyndra, Beacon Power, and Ener 1, one might think this isn’t the best time to float the idea that intensive development of alternative energy is the best way to deploy public resources, but it isn’t hard to see why higher-education dreams of advancing “sustainability” in a manner that multiplies financial resources. I will have more to say about this in a post titled Green Acres (coming soon).
Who Cares What the Rich Think?
Efforts such as the “safe and secure energy future” gambit notwithstanding, the higher-education bubble like all bubbles will eventually deflate—perhaps slowly, but more likely in a swift collapse. It is impossible to say exactly when this will happen but easy to see how.
Since the bubble depends on sustained spending by the affluent and the upper-middle class who pursue prestige college admissions and are relatively indifferent to sky-high tuitions, the sharp object in closest proximity to the shimmering surface of the bubble is the financial insecurity of this cohort. When wealthy parents begin to look at the price of higher education in the spirit of wondering whether a framed degree from Prestige College is worth the expense, the prestige will vanish and with it the ability of the Admissions Office to treat applicants as beggars at the table.
The long-simmering recession and minimal growth period of the U.S. economy hasn’t yet really unsettled this affluent group, but there is something on the horizon that could do just that: substantial tax increases. State taxes are going up because the states have to balance their budgets. Sales taxes are increasing, as in the various state decisions to force Amazon.com to collect sales taxes. But the key tax increases will come in the form of the increase on marginal rates that will follow the end of the Bush-era “tax cuts.” President Obama wants the rates to kick in for individuals earning $200,000 per year and families earning $250,000 per year.
There are roughly two million American families that are in that income bracket. They would face several new taxes: a three-percent increase to 36 percent on income up to $398,350, and a 39.6 percent rate on income beyond that; and new higher rates on capital gains and dividends. The capital gains tax will jump from 15 percent to 23.8 percent. These increases won’t much bother the superrich, but they will hit the prestige-minded affluent families who drive the bubble pretty hard. They will also pay, as of January 1, a .9 percent increase in the payroll tax to support Medicare—and as yet an unknown set of costs imposed by the new health-care system.
I know, I know. The academics reading this have few tears to shed for people earning upwards of a quarter of million dollars a year. But it is not sympathy that I would summon; it’s self-interest. In the ecology of higher education, these families are the sequoias. They provide the canopy and the shade in which much of higher education flourishes. That is, they pay those high tuitions for their children to attend the supposedly elite institutions, and in so doing they validate the principle for everyone else that those extraordinary high prices are legitimate. The family earning $100,000 a year and willing to scrape and borrow to pay tuition does so in confidence that it is buying something that is worth a lot. And much of that confidence arises from seeing that the (relatively) wealthy are willing to pay for it too.
Taxing away the financial optimism and security of the affluent will very likely change the behavior of the not-so-affluent too. And those relatively wealthy folks are going to feel a lot less so by this time next year.
The affluent families—the HENRYs (see Part 1) as well as the over-250K earners—are already mindful that the kinds of jobs they thought their sons and daughters would step into after graduation have thinned out. Wall Street isn’t hiring liberal-arts grads anymore. The Dodd-Frank Bill has mopped up the jobs in the financial industry and the country has reached its carrying capacity of law-school graduates, large numbers of whom are now going jobless. (The law-school version of the higher-education bubble looks particularly dire.)
Between the prospective curtailment of income and the already here loss of high-paying post-graduate jobs, I suspect that we will see within a year or so a new challenge for American higher education. It will become a lot harder to fill those classes at the upper-end expensive colleges—though, of course, not the pinnacle colleges and universities. Harvard, Princeton, CalTech, MIT, and a handful of others will fill their classes with very talented students. Elsewhere, colleges will be giving hard thought as to how maintain market share.
The recent brouhaha at the University of Virginia was essentially a foreshock of the bubble. Members of the board, however ineptly, were trying to figure out the situation. President Sullivan and the UVa faculty, not so much. Their reluctance is perfectly understandable. No one really wants to give up residential liberal-arts curricula taught by scholars/teachers as the primary model of college instruction. But a half century of trying to scale up that model and to make it the basis for mass higher education hasn’t worked very well. It created colleges and universities addicted to grandiose building programs, out-of-control spending, administrative bloat, grade inflation, falling academic standards, incoherent programs of study, and a larger percent of students who gain next to nothing intellectually from their time in college. That’s not a UVa problem in particular. It is the general condition of things in American higher education, and no one really has an answer to it.
Cheap federal money can bribe a lot of less-affluent students to attend college, but state finances will remain hard-pressed for years to come, and that means real tuitions at public universities will continue to rise, narrowing the tuition price-gap with the private colleges.
The bubble, when it collapses, will cost a lot of academics their jobs. We have too many colleges enrolling too many students; as that situation shifts, we will have fewer faculty positions to go around.
Could the bubble resolve in some more benign way? Of course. There must be alternative scenarios. But it is hard to imagine any of them that don’t eventuate in Americans engaging a broader devaluation of the college degree. It was hyped. When the people who took the hype most to heart wake up, they won’t be kind to the salesmen.
The Shocks to Come
I am writing about what I think will happen, not what I would like to happen. What I would like is for American higher education to come to its senses about the quality of teaching it offers, the need for college curricula rooted in the civilization that has sustained the university for more than a millennium, respect for rigorous intellectual inquiry and genuine scholarship, and the recognition that while the university can serve many purposes, to flourish it must set standards. It cannot be an all-purpose institution. And to the extent it tries to be an all-purpose institution, it is destined to fail both as an intellectual undertaking and as a viable social enterprise.
There is, however, a form of post-secondary education that is perfectly well suited to being an all-purpose institution. It is one that allows for infinite customization to the interests and ambitions of the student. It is unmoored from the archaic conditions of traditional study, the limits of how much one instructor can do, and the complications of trying to blend teaching, scholarship, and character formation. I am speaking, of course, of online education. And I am only one of many who see it as the ultimate destroyer of the higher-ed bubble. Online education lets the students who want to opt out of college but who still need a credential to leak out of the system of colleges and universities.
Of course, colleges and universities are doing everything they can think of to capture these students by enrolling them in their own online programs. It seems unlikely to work as a long-term approach, mostly because classroom and online instruction are not just different ways to deliver the same thing. They represent fundamentally different concepts about what education should be. The online world is an avenue to instruction—some of it of extraordinary high quality—but nearly all of it divorced from the context of intellectual and personal community. Of course, residential colleges and universities these days typically do so poor a job in fostering intellectual and personal community that many students might not notice the difference. That’s one of the results of the bubble: a university that has fragmented intellectually and embraced an ethic of personal alienation.
Which is just one more reason why, in time, the online option will steal away so large a segment of the market that higher education will have to abandon the model. We may well reach the “almost everybody goes to college” threshold that President Obama extols, but it will be “college” in this new sense.
In Sum?
Too many students are going to college—too many for their own good, but also too many for the good of college itself. The institution has overextended itself and can no longer achieve its deeper purposes. But having grown accustomed to the wealth, influence, prestige, and political support that have come its way by trying to be an omni-purpose institution, higher education has no will to re-size itself. It likes the experience of being an ever-expanding bubble. And it is doing all that it can to summon political support to continue the expansion.
The hard facts, however, are that the expansion cannot continue indefinitely. It will hit not walls, but pins. The affluent finding themselves less so will reassess whether the prestige of well-regarded college and university degrees is worth the price. The somewhat less affluent will notice the defection and wonder whether they too have viable alternatives. The students primarily interested in workplace credentials will find that online education is good enough. And the result will be a humiliating decline in what once seemed an impervious institution.

Two-Fifths of Parents Expect Children to Cover All or Most College Costs

The Chronicle of Higher Education

July 23, 2012, 2:45 pm
If you don’t need a weatherman to know which way the wind blows, then you surely don’t need a survey to know that many Americans are fretting about paying for college.
But how prevalent is that anxiety? According to a new survey, 74 percent of adults with teenagers considering college want to help their children pay to enroll, but 75 percent are either very worried or somewhat worried about their ability to do just that.
The survey, commissioned by Discover Student Loans, also found that 39 percent of parents expect their children to pay for all or most of their college education. Nearly half (48 percent) expect their children to cover some of the costs. If their child had to rely on student loans, 22 percent of parents said it was very likely that they would help repay the loans, and 33 percent said it was somewhat likely.
And where will most of the money for college come from? Twenty-eight percent of parents said the bulk would come from student loans; 24 percent said they would rely on family savings; and 12 percent cited a 529 savings plans.
Respondents were also asked about the reliability of various sources of information about paying for college. The big winners—picked by 47 percent of parents—were college financial-aid offices.

College Leaders and Labor Organizers Spar Over Graduate-Student Unionization

The Chronicle of Higher Education

College Leaders and Labor Organizers Spar Over Possible Graduate Student Unionization

Briefs filed with the National Labor Relations Board on Monday differed sharply in their view of a potential board decision to allow the unionization of private colleges' graduate-student employees in two cases involving New York University. While union advocates said such a move would simply recognize the reality of how private colleges depend on graduate-student workers, private colleges and their supporters warned the board that it appeared poised to change graduate education in ways that would curtail academic freedom and sabotage relations between students and their instructors.
"It is no exaggeration to state that the future of American private graduate education is at stake in these cases," argued a brief submitted by Brown University, which faces the prospect of the board reversing a 2004 decision that prohibited the unionization of its graduate-student assistants.
The American Council on Education joined several other higher-education associations in arguing, "Students enroll in graduate school to complete their higher education, not to work for wages. Their relationship with the university is fundamentally one of a student and teacher, not master-servant."
On the other side of the issue, the Graduate Student Organizing Committee of the United Auto Workers, which is seeking the board's permission to unionize graduate-student assistants at New York University and its affiliated Polytechnic Institute of NYU, argued that the board has been denying such college employees the same basic rights allowed other workers in refusing to let the students unionize. "There is simply no reason why one cannot be both a student and an employee at the same time," its brief said.
The board's solicitation of the briefs—in itself controversial—came as a result of its decision to revisit its 2004 Brown University decision at the behest of union organizers at New York University and Polytechnic Institute. In 2001, NYU became the first private university in the country to recognize a graduate-employee union. But the labor-relations board subsequently held in its Brown ruling that graduate assistants should not be thought of as workers because they "have a primarily educational, not economic, relationship with their university." New York University refused to renew the contract with its graduate employees when it expired in 2005. A regional NLRB official opened the door for the board to revisit the Brown decision by holding last year that some of NYU's graduate assistants have "a dual relationship" with the university that is "both academic and economic," and actually could be considered its employees.

Fight Over Freedoms

The Graduate Student Organizing Committee's brief says the board's 2004 ruling "cannot be reconciled" with a long history of board decisions recognizing various categories of student workers, such as apprentices, as employees under the National Labor Relations Act. "Like apprentices," it says, "graduate student workers are engaged in education while simultaneously performing services for an employer designed to prepare them for their post-graduation careers."
With its holding that graduate students should be thought of as students, and not employees, the Brown decision "also suffers from a fundamental logical flaw that has tremendous potential to distort thinking about academic employment," the brief says. "We all have several identities including our personal, family, demographic and job characteristics," the brief said. "No one would think to question whether someone can be both a father and an employee at the same time, or to create a balancing test to try to determine whether an individual is "primarily" a father or "primarily" an employee."
In addition, the brief argues, the Brown decision relied "on unsubstantiated and unsupported speculation about damage that collective bargaining might cause to academic freedom and student-faculty relationships." It argues that the unionization of graduate-student employees has not had negative consequences—an assessment that is disputed in briefs filed by private colleges and higher-education associations.
Brown University's brief argues that characterizing its graduate assistants as employees "would undermine the fundamental nature and purpose of this model of graduate education." It says such students "are admitted to a graduate program—not hired into a program," yet would likely have pay dues or fees to their union "in order to retain their student status" if the 2004 decision is reversed. It characterizes academic freedom and graduate-student unionization as irreconcilable, saying there is "no empirical research whatsoever suggesting that collective bargaining could be reconciled with the right of faculty to establish degree and curricular requirements at private institutions of higher education."
A brief filed by New York University argues that the board's decision to solicit outside advice on questions decided in the Brown case suggest that the board intends to use the New York University and Polytechnic Institute cases "as a vehicle to make sweeping changes in settled law regarding graduate students at the nation's private universities." It accuses the board of heading in such a direction "based not on any new evidence or arguments, but solely on its changed political composition," which flipped from majority-Republican to majority-Democratic when President Obama succeeded President George W. Bush.
New York University's brief also alleges that the collective-bargaining agreement in place there before 2005 led to the filing of multiple union grievances threatening its academic autonomy.
"Petitioners urge a cynical view, that the university is just another big business, that graduate students are no more than wage earners, and that using graduate student teachers and researchers is merely a cost-saving measure," argues the brief that the American Council of Education filed in conjunction with the Association of American Medical Colleges, the Association of American Universities, the College and University Professional Association for Human Resources, and the National Association of Independent Colleges and Universities. It argues that "the essential nature and mission of the university has not changed," and continues to depend on the university's academic freedom to make decisions on educational matters. "The academic student/teacher relationship is, and should remain, removed from the issues that our labor laws address," the brief says.

Too Wide a Net?

The regional NLRB official who suggested that New York University's graduate students could potentially be thought of as employees held that graduate-student adjuncts, research assistants in all disciplines, and graduate students in certain part-time hourly jobs share common interests that would entitle them to belong to a single bargaining unit, if their unionization were allowed.
New York University's brief challenges the idea that the unionization of research assistants should even be a consideration in the case, arguing that they do not provide services in exchange for compensation and are simply performing the research required by their academic programs. The union's brief argues that research assistants at NYU and Polytechnic Institute should be considered employees because they perform work under the university's direction and are paid for it.
The briefs submitted to the NLRB also disagree over the question of whether the unionization of resident physicians at medical colleges, which is allowed under a 1999 NLRB decision involving the Boston Medical Center, represents a precedent that supports giving graduate students the right to collectively bargain.
The Committee of Interns and Residents, a national organization of unionized resident physicians affiliated with the Service Employees International Union, argues in a brief submitted to the board that predictions such unionization would hurt medical education have been proven wrong. It argues that, contrary to assertions that unions would wedge themselves between resident physicians and those training them, "unionization has led to greater collaboration between residents and their employer-hospitals in ways that have improved training and patient care."
The brief filed by the American Council on Education and other associations argues, however, that the Boston Medical Center precedent does not buttress the union's case. It said the NLRB has previously refused to apply the Boston Medical Center precedent to disputes involving the unionization of graduate students, because the medical residents covered by the Boston ruling had already earned their degrees and did not have the same educational relationship with their institution that graduate students have.