Putting a Price on Professors
Over this weekend (October 23-24), The Wall Street Journal had an article entitled “Putting a Price on Professors,” which you can read at
http://online.wsj.com/article/SB10001424052748703735804575536322093520994.html
As a reader of murder mysteries and a fan of the Sopranos, the title scared the hell out of me. After I calmed down, I realize they were talking about something more like economics (a non-violent major) – attempts at cost/benefit analysis.
The main idea is that some states, especially Texas, are trying to determine which college professors, majors and programs make money and which lose money. The accounting methodology is a very primitive version of profit and loss statements, focusing primarily on salary costs. Excluded are revenue from grants and the cost of capital equipment, which makes analysis of the sciences particularly worthless. But at least it’s a crude attempt at accountability, in a financial sense, which is understandable since taxpayers pay for most of undergraduate education. States spend about $80 billion a year on their colleges.
Texas wasted its taxpayers’ money hiring a conservative think tank to do this analysis. It has already been done and the results are freely available. All they had to do was look at the majors and programs of the for-profit colleges. In general, the most profitable programs are professional degree programs aimed at adult students who pay full tuition. As far as I know, there are no science and engineering for-profit colleges.
In the examples given, low tech majors like History and English made money. Science and Engineering programs lost money, except for the example of chemistry. Chemistry may have shown a profit because of lots of big intro courses (everyone wants to be a doctor when they go to college) and lab equipment costs were excluded. The article also seems to imply by example that big lecture hall courses with lots of students (low cost per student) make money while specialized upper-division courses with small classes (high cost per student) lose money. Gee, what a surprise.
One of the reasons for the study is the soaring costs of tuition (scary graph for parents included in the article). What’s not said is that this is the “retail” price; out-of-pocket expenses by students and their kind, wonderful parents have gone up much less. But since Texas and federal taxpayers are footing the bill for much of the increase, it is understandable they are concerned about the lack of “productivity.” Any Econ 101 student could have told them that one of the main reasons for the big increases in tuition is the State of Texas. As long as taxpayers and their elective representatives are willing to foot the bill, why shouldn’t colleges (administrators and full-time faculty) try to maximize their income? There’s a reason why more college presidents have an academic background in economics than any other major.
What’s missing from this is the topic of a prior post on the causes of increasing college costs. Administration costs have gone up much faster than teaching costs.
But, to be fair, colleges have made an attempt to contain costs. Full-time professors are expensive and colleges have tried to “economize” on this cost. To quote from the article:
More instruction is handled by part-time lecturers, who now make up at least 50% of the nation’s higher-education faculty – up from 30% in 1975.
In large universities, much of the “instruction” is actually performed by graduate students.
Which brings us to the related issue of the quality of a college education. Statistics in this article and from other studies indicate a decline in general skills such as literacy, writing and critical thinking. What surprised me was the low graduation rates. According to the article, “just over half of all freshmen entering four-year public colleges will earn a degree from that institution within six years.” I hope they excluded students who transferred. But how can this be? With grade inflation, it is virtually impossible to flunk out. One reason, among many including financial, is that many large universities like Rutgers have cut back on the courses and sections they offer (“economizing” again), which has increased the average time it takes to graduate. And, in Rutgers case, two of the six years are spent trying to find a place to park.
Some states are putting student evaluations of professors online. That should increase the quality of education. Every prof knows the way to get good student evaluations, which are often considered when the prof is up for tenure, is to teach an easy course and give lots of high grades. Students, being rational, do the minimal amount of work to achieve their target grade. And they know that administrators are more concerned with revenue and keeping their jobs than the quality of education. I lost two adjunct teaching jobs because I had the audacity to give some students “D”s.
The article is long and contains a lot more material and controversy than I covered. I hope you read the article and I would be interested in your comments.
_____________________________________________________________________________
Related Posts:
The Costs of Athletic Scholarships
How to Pay for College
How to Succeed in College
The High Cost of Higher Education
http://online.wsj.com/article/SB10001424052748703735804575536322093520994.html
As a reader of murder mysteries and a fan of the Sopranos, the title scared the hell out of me. After I calmed down, I realize they were talking about something more like economics (a non-violent major) – attempts at cost/benefit analysis.
The main idea is that some states, especially Texas, are trying to determine which college professors, majors and programs make money and which lose money. The accounting methodology is a very primitive version of profit and loss statements, focusing primarily on salary costs. Excluded are revenue from grants and the cost of capital equipment, which makes analysis of the sciences particularly worthless. But at least it’s a crude attempt at accountability, in a financial sense, which is understandable since taxpayers pay for most of undergraduate education. States spend about $80 billion a year on their colleges.
Texas wasted its taxpayers’ money hiring a conservative think tank to do this analysis. It has already been done and the results are freely available. All they had to do was look at the majors and programs of the for-profit colleges. In general, the most profitable programs are professional degree programs aimed at adult students who pay full tuition. As far as I know, there are no science and engineering for-profit colleges.
In the examples given, low tech majors like History and English made money. Science and Engineering programs lost money, except for the example of chemistry. Chemistry may have shown a profit because of lots of big intro courses (everyone wants to be a doctor when they go to college) and lab equipment costs were excluded. The article also seems to imply by example that big lecture hall courses with lots of students (low cost per student) make money while specialized upper-division courses with small classes (high cost per student) lose money. Gee, what a surprise.
One of the reasons for the study is the soaring costs of tuition (scary graph for parents included in the article). What’s not said is that this is the “retail” price; out-of-pocket expenses by students and their kind, wonderful parents have gone up much less. But since Texas and federal taxpayers are footing the bill for much of the increase, it is understandable they are concerned about the lack of “productivity.” Any Econ 101 student could have told them that one of the main reasons for the big increases in tuition is the State of Texas. As long as taxpayers and their elective representatives are willing to foot the bill, why shouldn’t colleges (administrators and full-time faculty) try to maximize their income? There’s a reason why more college presidents have an academic background in economics than any other major.
What’s missing from this is the topic of a prior post on the causes of increasing college costs. Administration costs have gone up much faster than teaching costs.
But, to be fair, colleges have made an attempt to contain costs. Full-time professors are expensive and colleges have tried to “economize” on this cost. To quote from the article:
More instruction is handled by part-time lecturers, who now make up at least 50% of the nation’s higher-education faculty – up from 30% in 1975.
In large universities, much of the “instruction” is actually performed by graduate students.
Which brings us to the related issue of the quality of a college education. Statistics in this article and from other studies indicate a decline in general skills such as literacy, writing and critical thinking. What surprised me was the low graduation rates. According to the article, “just over half of all freshmen entering four-year public colleges will earn a degree from that institution within six years.” I hope they excluded students who transferred. But how can this be? With grade inflation, it is virtually impossible to flunk out. One reason, among many including financial, is that many large universities like Rutgers have cut back on the courses and sections they offer (“economizing” again), which has increased the average time it takes to graduate. And, in Rutgers case, two of the six years are spent trying to find a place to park.
Some states are putting student evaluations of professors online. That should increase the quality of education. Every prof knows the way to get good student evaluations, which are often considered when the prof is up for tenure, is to teach an easy course and give lots of high grades. Students, being rational, do the minimal amount of work to achieve their target grade. And they know that administrators are more concerned with revenue and keeping their jobs than the quality of education. I lost two adjunct teaching jobs because I had the audacity to give some students “D”s.
The article is long and contains a lot more material and controversy than I covered. I hope you read the article and I would be interested in your comments.
_____________________________________________________________________________
Related Posts:
The Costs of Athletic Scholarships
How to Pay for College
How to Succeed in College
The High Cost of Higher Education
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