BOHANON: Top-Down Is not the Way to Fix our Colleges

June 11, 2012

by Cecil Bohanon, Ph.D.

The Indiana Commission for Higher Education (ICHE) is encouraging state-supported institutions to: 1) increase graduation rates; and 2) ensure that students graduate in four years. The broader goal is to generate more college graduates in Indiana and more STEM (Science, Technology, Engineering and Mathematical) grads in the mix. As higher education is state-supported, such mandates from the overseers of higher education seems appropriate — he who pays the piper calls the tune. As I understand it, future university funding depends in part on how well institutions of higher learning achieve these goals.

Numerous curricula meetings I have attended and chaired in the last two years have focused on how to streamline university programs to meet the four year requirement. A component of the incipient “strategic plan” of my institution includes “reducing the number of D’s, F’s and W’s” awarded to students. Fewer failing students mean more graduating students and closer alignment of university output to the ICHE goals.

Economists think of the skills and knowledge students receive in higher education as creating “human capital.”  A well educated workforce is unquestionably more productive. A more productive workforce generates higher incomes for those who acquire human capital and even for those who do not. This is the fundamental economic argument for state and federal subsidies to higher education — it is seen as an investment in workforce development that will generate economic returns. An equally important reason for subsidy is to ensure that all qualified students have access to income-improving doses of human capital regardless of their family’s economic circumstances. This narrative informs thinking on higher education policy and is certainly behind ICHE mandates faced by our state-assisted universities and colleges.

But is such a top-down approach the best way to expand and equalize human capital acquisition in Indiana? I say top-down because ICHE acts as a kind of central planner for higher education in Indiana. If central planning is not an effective way of organizing textile production in India why would we think it is likely to be effective in directing human capital acquisition in Indiana? The harsh reality is that many students spend more than four years in college or fail to graduate because they flunk tough classes. Often this is from a lack of discipline, sometimes from a lack of ability or preparation. A simple but perverse way to “improve” graduation rates is to lower academic standards so more students pass tough classes. Surely anyone can surmise the mal-incentive in rewarding degree completion per se.  In a similar vein, as much as STEM seems to be the wave of the future is any individual or committee so wise as to determine which degrees are STEM much less which are best for Indiana students or our future economy?

Twenty years ago I proposed that state assistance be student directed not institutionally directed in an Indiana Policy Review report. (By the way, no one affiliated with this foundation then or now is bound to endorse the content of that study.) The idea was simple: Divide up the current legislative appropriation to higher ed to individual accounts granted to eligible high school graduates. Allow the student and parent-guardian to access her account to pay tuition at the state school of their choice. Free state-assisted schools from legislative and bureaucratic directives. By definition, public support of higher education does not change. The amount in each student’s account approximates the tuition gap currently provided by the state for four years of a student’s education. Once the individual’s fund is exhausted the student has to pay full price for repeated coursework.

That seems a much better way of reducing D’s, F’s and W’s.

Cecil Bohanon, Ph.D., is an adjunct scholar of the Indiana Policy Review Foundation. Contact him at


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