Frohnmayer's Higher Ed Proposal

Former University of Oregon President Dave Frohnmayer has authored a proposal to permit some of the Oregon University System institutions to break away as one or more public corporations. The proposal is titled “The Coming Crisis in College Completion: Oregon’s Challenge and a Proposed First Step.” It can be found online through here.

(1) Funding: I tend to agree with his general proposal: that some of the Oregon University System institutions (U of O and OSU, surely; PSU, perhaps) should become more independent. We agree that more funding for higher ed is needed We disagree on what to fund.

He argues for more state funding for the to-be-more independent public corporations:

“The principal conclusions of my inquiry should surprise no one. They strongly argue for substantial re-investment in the state’s universities as an urgent priority. A reasonable, sustained appropriation, based on costs of comparator institutions in comparator states, would be $1.55 billion per biennium compared to the current level of OUS funding of $751.5 million. Comparing OUS to national averages of State General Fund per student FTE also signals significant underfunding of $1.059 billion per biennium if funded at the U.S. average. This is a large, even shocking amount, but it also is a fair measure of the neglect for most of the last two decades of this urgent social and educational priority. While structural reform, as next discussed in this report, is essential, it must be accompanied by public reinvestment to make the dimension of difference in fulfilling the state’s crucial need for public access to higher education for all Oregonians.

I argue for shifting from funding institutions, especially those that are more independent, to directly funding student scholarships usable at any Oregon higher ed institution, public or private, or for higher ed online programs so long as the student resides in Oregon. The public corporation institutions will raise tuition to cover their costs. In doing so, they will need to attract full tuition paying students, which means out-of-state, out-of country, or wealthy Oregonian students. This is necessary to preserve these institutions in Oregon. Otherwise, they will become too costly for Oregon to afford and they are not the most cost effective use of limited Oregon higher ed funding.

(2) There is no discussion at all in Frohnmayer’s proposal of the cost side of higher education in Oregon. This is a glaring oversight. I have previously quoted John Robb statement (here):

Costs for collegiate education have increased 4.39 times faster than inflation over the past three decades and has now eclipsed affordability for most households (median incomes have stagnated during this same period) with no appreciable improvement in the quality of graduates.

How can Frohnmayer make a serious proposal without any discussion of controlling high ed costs. If anything, he is advocating increasing them, especially for faculty salaries.

(3) Do investments in higher ed pay for themselves, either in terms of benefits to the individual student or to society more generally? Frohnmayer spends several pages documenting the positive answer, that such investments more than pay for themselves. I am a skeptic. First, to continue the John Robb quote above on the increasing costs of higher ed:

Worse, there is reason to believe that costs of higher education (direct costs and lost income) are now nearly equal (in net present value) to the additional lifetime income derived from having a degree.  Since nearly all of the value of an education has been extracted by the producer, to the detriment of the customer, this situation has all the earmarks of a bubble.  A bubble that will soon burst as median incomes are adjusted downwards to global norms over the next decade.

Second, higher ed performs not only an educational function, but a sorting function. In our meritocracy, higher ed decides who gets the higher paying jobs - for example, who gets into medical schools, law schools, and a whole set of professional programs. Employers use having or not having a college degree, independent of any demonstration of skills, to screen prospective workers. Those with degrees are eligible for better paying positions. So, of course, for these students, college is a good investment, and aggregates of them produce data suggesting that college is a good investment for society. But there are several counter thoughts. These are, for the most part, the bright students. They would probably have claimed the best paying job in any sorting system. And it is far from clear, given the ever increasing costs not mentioned by Frohnmayer, that higher ed is the most cost effective sorting system we could have. Nor is it clear that more education for increasing less bright students will yield the same payoffs for them as for their brighter predecessors. All the better paying jobs are taken. The newer students have less skills to begin with. They will be, probably, more dependent upon larger global economic trends than on any additional skills they have obtained for their economic success.

Third, my own experience with higher ed, especially with its Board and its presidents, suggests that they are not primarily focused on the economic or general welfare future of either its individual students or the state of Oregon. I have tried for three years to get them to increase the number of OUS students studying Mandarin and studying abroad in China. They have taken no interest and have done nothing. This is not a minor issue.

(4) Frohnmayer does mention online learning several times, but dismisses its potential to shake up higher ed. I think online learning is a potential revolution because it reduces the cost of sorting and of transferring skills and knowledge.

Frohnmayer brings up online learning in the context of future facility needs for a growing student population:

“It is, of course, possible that online education and other non-residential strategies could reduce facility needs in some respects.”

At the end of the proposal in listing “next steps,” Frohnmayer adds:

5.  Online education experiments in the public sector have not met with major success to date, although the early success of Eastern Oregon University in this field still stands as a particularly notable national example. The technological, student aggregation, and student support barriers associated with online education are substantial. At the same time, private sector proprietary institutions report initial successes here, albeit with national rather than state-specific student enrollees. More needs to be learned about the viability and costs of these strategies as one possible response to Oregon’s resource shortfall.

He right. Online education is probably not going to be provided by OUS institutions at nationally competitive cost levels nor at scaled up volumes. The issue is not, IMHO, how to make OUS competitive in online ed (although looking at it is ok) but how to give Oregon students access to the national and international online programs that are emerging.

Where’s the OUS effort to learn about online learning as to, in Frohnmayer’s words “the viability and costs of these strategies as one possible response to Oregon’s resource shortfall?”

And, as Frohnmayer closes, “Delay is the enemy of innovation, even of stability.”