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From the Eyes of the President: On the Cost of Education

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The higher education landscape, in my mind, is not sustainable. I think it’s a model from the past that does not align with the economy of the 21st century. I think we’re seeing the cracks everywhere. We have decreasing enrollments, we have spiraling costs, large amounts of capital debt and we have a large number of graduates who do not fit the needs of the economy. These are real issues that we’re seeing everywhere in higher education, and they are the things we have to address.

How successfully are America’s postsecondary institutions meeting the workforce needs of today’s economy?

They’re clearly not meeting the needs to the extent that is required. Last year, on our campus we had 1,400 employers with 3,000 jobs for 400 graduates. There’s a huge skills gap in America, and it’s being exacerbated by the number of Baby Boomers who are retiring. In some cases, 30 to 40 percent of the current workforce is eligible for retirement or is going to be in the next few years. So, set aside industrial expansion; just meeting current employment needs is beyond the capacity of the system we have now.

In fact, we have a large number of unfilled jobs in America. These are good jobs—in many cases, they are manufacturing jobs that have family-sustaining wages, good benefits, and allow employees to drive the economy, buy homes, buy cars, take vacations. At the same time, we have a large number of four-year college graduates who are living at home with huge amounts of debt and working in low-wage jobs with few benefits because the skills and education that they received did not give them the types of competencies that are required in the workforce today.

According to government data published by Edvisors.com, the average student loan debt was $35,000 for the Class of 2015, up from $15,000 in 1998. To what do you attribute the explosion in loan debt?

The financial aid system can’t meet the spiraling increases in costs of tuition and fees that we find in higher education, and I think it is the result of a couple of things.

Higher education took on more capital debt than any other sector of the economy over the last 40 or 50 years, including healthcare. We went on these huge spending sprees. We have these huge performing arts centers and athletic facilities. We have incredible amenities, climbing walls, lazy rivers, restaurants, cafés, individual bathrooms, individual apartments. These things cost money, and the bills are coming due.

The other thing that I see is the exponential growth in administration. Some of that is in response to the huge amount of compliance that is a burden to all of us. These rules and regulations are often well-intentioned, and we have to comply with them, but we’re not given any money to do that. In general, higher ed responded by adding large numbers of staff. But this huge growth of administrators has added to the costs. It used to be, you had one dean of students. Now you have a Title IX director, inclusion and diversity staff, and others. You’ve got information technology people who are vice presidents now with many people reporting to them. We have provosts, associate
provosts, deans, assistant deans, assistant department
heads and a million administrative assistants.

Those things together—the amenities race and the increase in staff who are not directly involved in teaching—have driven these costs to the point that they are not sustainable any longer.

In what ways is Thaddeus Stevens intentionally different than typical postsecondary institutions today?

We start with our mission. Everything is based on the mission of the institution, the legacy of our founder, Thaddeus Stevens, and the principles he espoused and lived by.

And we measure everything that we do. That’s the only way we’re going to know if our performance is matching our purpose. Are we institutionally effective? We create objective performance measures across every activity area of the institution that are derived directly from the mission, and we establish goals based on that.

That starts with our most important thing, which is our learner outcomes. When students come to our campus, we test them across the board on their technical skills as well as what we call general education skills—problem-solving, critical thinking, English, math. We establish that baseline.

We take no credit for the knowledge that they brought to the campus. Two years later, we do the exact same thing, and we measure them again. We take all the credit in the world for what happened over those two years.

That is how we talk about the value that we add to students in an objective, empirical way. I don’t know of anybody else who is doing that. I hear people at other institutions talk about the broad knowledge, critical thinking and problemsolving skills their students obtained while they’re there, but they can’t demonstrate that. And they don’t share that information. We share that information with our faculty—the good, the bad and the ugly—and we post that information our website.

...higher education is mismatched with the needs of the economy, to me the only way we’re going to be able to accomplish that is
through information...

I think that’s what’s different about our model. It’s mission-driven, it’s outcome-driven and we measure everything that we do.

How have you been able to sustain your performance over time?

We’re an anomaly in the higher education landscape today. We had had 2,800 students apply last year—that’s 300 more than the year before—for 700 openings. Our cost per student based on our state appropriation went down $800 last year, because we increased enrollment but maintained costs. And then we’re placing 90-some percent of our graduates, with many of our programs at 100 percent. In our business model, all of our programs here have to have strong outcomes. They have to be able to produce graduates who get jobs in their field with family-sustaining wages. Graduates have to be satisfied with the education they got, employers have to be satisfied with our graduates, and we want to know where they are five years after they graduate. And if programs don’t perform, then we don’t have them anymore, and we create other programs that can do that. And finally, our programs are shaped by, and we have an intimate relationship with, our employer base.

We intentionally use technology to keep our costs down. We have one of the lowest faculty to staff ratios that you’re going to find anywhere. We have very little in the way of administration. We really try to use technology to gain the advantages we need.

Do you feel other institutions could replicate this model?

Every higher education institution has a different purpose. Two year institutions vs. one-year institutions vs. four-year institutions vs. tier 1 research institutions, we have different missions. But one thing that we should share in common is performance.

We should share the performance of our programs to prospective students and their parents. And if those are good outcomes, then I think the federal government and the Commonwealth of Pennsylvania should invest in those things, as I think parents and students would. I think it’s only fair to disclose this information to people so they can make informed decisions about the education they are about to embark on. If I was investing in a car or a home, I would want to know as much as I could about them. I think those elements of our model are applicable across the board—whether you are a Tier I institution or a one-year proprietary school.

Over 90 percent of students say the reason they go to college or postsecondary education is so they can get a really good job when they graduate and have a good life and provide for their families. So, if our programs aren’t doing that, then we’re not going to have those programs. And if you don’t measure your programs, you don’t know. If you go to other institutions and ask them for that information, they say they don’t have it.

They have information about a lot of things that I don’t think are important—like the speed of their athletes in the 40-yard dash, what’s on the menu, how many climbing walls they have, and all their amenities. That’s interesting information, but it’s not the
primary reason you’re going to school.

What advice would you give to young people considering a postsecondary degree today?

Ask good questions. If you’re looking at us and comparing us to another institution, we might not be the right fit for you. But the critical questions are: How many students started this program, and how many graduated? How many grads got jobs in their
field? What was their median starting salary? How satisfied were they? How satisfied are their employers? Where are they five years after graduating? And how much student loan debt did they have at graduation?

Do you see any signs that the system is changing?

If we, as a nation, are going to try and solve this issue in a broader context, that higher education is mismatched with the needs of the economy, to me the only way we’re going to be able to accomplish that is through information. Publishing the performance of programs for students and parents won’t cost anything, really.

And that’s the only way we’re going to create movement to align higher education with the needs of the economy. It can’t just be money. With all the things that are facing our nation, and facing the Commonwealth of Pennsylvania today, the pie is not going to get any larger. You have a lot of things vying for those monies.

You have K-12 education, you have infrastructure issues, you have healthcare with an aging population, and you’ve got
higher education in there with everybody else.

To me, the most politically feasible thing is to stop funding intuitions or using historical funding patterns but to fund programs based on their performance.