Part 5 | A Movement to Make College More Accountable

May 23, 2008

Last of Five Columns; for release May 28 and thereafter. (Editors: Note reference in graf 8 to June 12-13 meeting date). 900 words

by ANDREA NEAL 

The higher education financing system is dysfunctional and in need of reform. So declared the federal Commission on the Future of Higher Education in 2006.Indiana students no doubt agree. At our public residential universities, tuition doubles every 10 years, twice the rate of inflation. As long as demand stays high for a college degree — and it will because a diploma is deemed a necessity these days — universities aren’t under pressure to hold down costs.   

If anything, the competitive forces at work in higher education have the opposite effect. They drive up tuition rates as universities compete for faculty with higher salaries, for top-notch students with merit aid and for consumer-driven student bodies with campus amenities such as recreation centers.
   
It’s a far different world from K-12 education, which must abide by strict funding formulas, external performance assessments and now — thanks to the 2008 Indiana legislature – public referenda before expensive school building projects can move forward.   

Just ask Professor Emeritus Murray Sperber of Indiana University, who has been an outspoken critic of hidden costs in higher education. “My wife is a high school teacher. Every dime has to be accounted for at the micro level,” Sperber says. In higher education? “You better believe it’s not the case.”
   
Change may be on the way.
   
Within a year of the national warning, the State Commission for Higher Education completed a study of its own, “Reaching Higher: Strategic Directions for Higher Education in Indiana.” The document called for a system “more accountable for overall results, more responsive to state needs, more cost effective and more affordable for Indiana residents.”
   
Since that time, working groups on a variety of topics have proposed policy recommendations in six areas including accountability, affordability and college preparation. The commission plans to vote on the proposals at its June 12-13 meeting in hopes of influencing 2009-11 budget discussions. Among ideas on the table:

   
No one has suggested that state lawmakers micromanage our public universities or their spending habits, just that the process become more measurable and visible to taxpayers and consumers.
   
In 2005, the Indiana General Assembly took small steps in that direction with a law requiring the schools to set tuition rates on a two-year cycle instead of annually. In 2007, lawmakers charged the Commission for Higher Education with setting non-binding tuition targets for each university during the budget process. The goal was to improve price visibility for students and make universities less apt to raise tuition dramatically during any single cycle.
   
Universities insist they are doing their part. As part of a survey by the Indiana Policy Review, the four-year residential universities were asked to list some of the ways they were dealing with college costs.
   
The University of Southern Indiana, which was designed from the beginning as a lower priced alternative, remains one of the most affordable four-year colleges in the Midwest and reported, “We have done our part.” Counting tuition, room and board, fees, textbooks and other expenses, students can expect to pay under $12,000 at USI come fall.
   
Purdue University, the priciest college, said it has increased revenues from private fund raising, grants, sponsored programs and other non-student sources and is “expanding communication efforts to ensure educational costs are as transparent as possible.”
   
Ball State said it is “working hard to mitigate the impact of rising faculty salaries on student tuition and fees by securing more private gifts and grants to help fund the university’s various operations.”
   
Indiana University is in the first year of a five-year program to cut $2 million per year in administrative costs and shift that money to financial aid. It’s also launched a task force to monitor operating costs and to conduct an intensive analysis of administrative services.
   
Indiana State is looking “to determine programs that should be eliminated, revised or merged due to low enrollments. As a result, we plan to narrow our academic programs from 214 to approximately 150. We have reallocated dollars internally to align resources with strategic initiatives and have eliminated faculty and staff positions where possible.”
   
In the past, our universities have been too quick to blame declining state subsidies for the growing tuition burden paid by students. Yes, subsidies are declining as a percentage of the total higher education budget. But taxpayer appropriations in Indiana have gone up steadily for the past decade: $1.3 billion in 2000, $1.5 billion in 2005,  $1.8 billion in 2009.
   
The real problem is that universities have not tried to spend less. As the federal commission pointed out, “Institutions are spending more money. . . . Next to institutional financial aid, the greatest growth has been administrative costs for improvements in student services (including state of the art fitness centers and dormitories).” Making matters worse are “lack of transparency in financing,” and “inadequate attention to cost measurement and cost management within institutions.”
   
Those practices must come to an end. In coming months, Indiana universities will have a chance to step up to that challenge.

Andrea Neal, an adjunct scholar of the Indiana Policy Review and a former editorial page editor of the Indianapolis Star, teaches history at St. Richards School in Indianapolis. Contact her at aneal@inpolicy.org.



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