The Erosion of Quality and Value in the PA State System for Higher Education

The data suggest that the legislative philosophy regarding the benefits of taxpayer funded higher education has changed as more and more of the cost is borne by students and their families. The state system is enrolling more students faster than it is hiring faculty and building capacity to teach. In addition, the system has not added faculty to keep pace with the increase in enrollment and the faculty category that has increased the most are relatively less credentialed and experienced temporary and instructor rank faculty. Students are being taught by more part time instructors with little to no incentive to invest additional time in university service, scholarship, or student advisement beyond their contracted course. While paying more and being taught, advised, and mentored by fewer advanced faculty, students are experiencing more crowded classrooms and computer labs, more students per academic advisor, and increased difficulty finding classes during registration.  Any savings from hiring cheaper labor resources has been offset by relatively large increases in the number and compensation of management and administrative employees. Combine all of these trends and the outlook for the state system and Millersville University to maintain their reputations as competitive, quality, public higher education institutions is in serious jeopardy.

It appears that across the country, states are squeezing their higher education budgets. Most associate these problems with efforts to deal with the effects of the recession. In addition, many states like Pennsylvania are constrained by constitutional balanced budget requirements forcing them to make spending cuts during tough economic times. No doubt tough economic conditions require sacrifices. However, a closer look at the data for our state system suggest that the recent recession may only be exacerbating pre-existing trends that have been and will continue to slowly deteriorate the quality and value of an education from a state system school -even after we recover from the recession. Some of these trends have been going on for over a decade. Is this evidence of years of mismanagement by the state legislature and Board of Governors who are making decisions for the entire system in the isolated and politicized environment of the state capital? Or is this evidence of a conscious change in philosophy regarding the commonwealth’s commitment to higher education? Maybe it's evidence of both.

The following paragraphs are meant to help provide perspective and to educate students, parents, and taxpayers as to the significant trends that are shaping the future of Millersville University and the state system. Some may look at the evidence and argue that Millersville is not like other state system schools and that we are somehow immune to these trends. Yet growing student and faculty concerns suggest these trends have already impacted the campus and that it will be increasingly difficult for Millersville to offer a quality education in this environment. The following paragraphs do not offer solutions nor do they address the serious budget problems resulting from our recent recession. However, by understanding the trends of the last decade, students, parents, and taxpayers may be able to make more informed decisions regarding future policy and leadership in a way that can restore the value and quality state system schools are known for.

Trend #1
The Erosion of Value: The Hidden Shift in the Cost of Attending a State System University

In economic theory, there are two basic rationales for explaining why government (taxpayers) should provide funding for what appears to be a service where all the benefits go to the individual. The first argument is that a more educated citizenry is a more productive and healthy citizenry and although the student collects most of the benefits in the form of a future job and salary, other state residents benefit from the overall increased productivity and economic output of a more educated and healthy population. The rationale is that since we all benefit, it would be in our best interest to subsidize higher education to encourage more people to get a college education to grow an even bigger economic pie. The second argument for taxpayer funding of higher education is that if everything were left to the free market, very few students would be able to afford a college education because of a market failure in student loan markets. Very few lenders, and only at very high interest rates, would lend money to students for a college education with no collateral simply based on a promise that they will study hard, get a good job, and pay the lender back in a few years. Students from wealthier families may not have a problem securing a student loan, but the vast majority of students now attending our state system universities would not be in college if not for taxpayer assistance. Hence, all states have either state owned or state supported colleges or universities. In PA, we have both.

However, times have changed and students attending state system schools like Millersville and the other 13 schools that make up the Pennsylvania State System for Higher Education (PASSHE) are paying significantly more for their education than did students in years’ past. In addition, government or taxpayer support for higher education is significantly lower. Yes, it is true that the appropriation for the state system has increased from $400 million in 1997 to almost $500 million in 2009, but these numbers alone hide the fact that there are more students attending state system schools and the effects of inflation.

In the graph that follows, you will see four lines that represent the two sources of funding for a student’s education, tuition & fees and the state appropriation from taxpayers. These figures are presented in actual dollars and in real dollars (inflation adjusted) per student. During the 1983-84 academic year, students paid $4,770 in tuition & fees (green triangle line) and received $3003 per student in state appropriation (blue diamond line). These lines represent actual dollars in each given year. By 2008, students paid $12,700 in tuition & fees and received $4600 per student in state appropriation. In other words, in the mid 1980's, the state appropriation represented 38.6% of the full cost and by 2008, the state appropriation only accounted for 26.6% of the full cost. Certainly, the cost of higher education has increased but the data suggest that policy makers and taxpayers have different attitudes about the public's commitment to higher education.

The other two lines adjust actual dollars for changes in the rate of inflation using the Consumer Price Index (CPI). In other words, the inflation adjusted dollars tell you how much money you would need in a given year to buy as much education as you did in the previous year given higher prices. If students are paying more out of their pocket than the inflation adjusted amount, it suggests they are being overcharged on an inflation adjusted basis. If students receive less from government than the inflation adjusted amount, then they are being under subsidized.
From 1984-1991, the amount of revenue coming from tuition & fees increased and remained consistent with the rate of inflation. Then, around 1992, the amount of revenue from tuition & fees began to rise faster than the rate of inflation. This opened up a gap of approximately $2000-$2500 per student between what students were actually paying in tuition & fees and what they needed to pay had tuition & fees just kept pace with general inflation.

From 1984-2000, the state appropriation per student remained consistent with the rate of inflation. Then, round 2001, the inflation adjusted appropriation per student began to decrease. This opened up a gap of approximately $1500 per student between the appropriation needed to keep pace with inflation and what they actually received from the government. This trend can only be seen once you account for increasing enrollments and the rate of inflation.

For over 10 years, the state government has underfunded the state system and shifted more of the burden on to students. By the end of the 2008 school year, students were contributing over $12,700 in tuition & fees while the inflation adjusted amount was just over $9,800. In addition, they were receiving approximately $4,600 in state funding while the inflation adjusted amount was $6,200. As compared to students of years’ past, current students are over paying by almost $3,000 and are under funded by almost $1,600 per student - the hidden shift that has increased the burden on students and families and eroded value for today’s students.

Trend #2
The Erosion of Quality: Increased Use of Temporary and Instructor Rank Faculty to Teach Courses

Faculty applying for promotion must show that they are outperforming the majority of their peers in the areas of teaching, scholarship, and service. Beyond the obvious measures of performance in these areas, faculty also have to show that they are involved with students beyond the classroom by being an academic advisor, advising research projects and honors theses, advising clubs and organizations, mentoring athletes, and advising co-ops and internships. As an incentive to become a better teacher, a more prolific scholar, or a more involved member of university governance, a promotion in rank comes with a pay increase.

Faculty in the instructor rank are generally not eligible for tenure or promotion. Many of the faculty in the instructor rank are considered the equivalent of temporary part-time employees. Part-time temporary instructors do not receive benefits. If we only take into account pecuniary costs, instructor rank faculty are significantly cheaper to employ and allow the university system to accept additional students at a lower instructional cost per student. However, instructor rank faculty relative to tenure-track faculty are generally less likely to have a terminal degree, are generally less experienced teachers, have little or no expectation of scholarship, and are less likely to be involved in university service. If we take into account the quality of educational services and the increased advisement and service burden on tenured and tenure track faculty to fill the non-teaching role of the instructor, all while enrollments are increasing, the full cost of instructor rank faculty is considerably higher.

Over the last 10 years, enrollment in the state system has increased 18.2% while the total number of teaching faculty has only increased 5.2%. Out of the four ranks of faculty, the number of assistant, associate, and full professors has increased only 1.8%. Full professors, those professors with generally the most experience and academic achievements actually decreased by 4.9% over this period while the number of instructor rank faculty has increased by 36.3%. Out of the 247 faculty hired between Fall 99 and Fall 08, over 66% were temporary instructor rank faculty. Cleary, the trend in the state system has been to add or replace relatively expensive tenured and tenure track faculty with relatively inexpensive instructor rank faculty.

Putting the issue of quality aside, hiring less expensive labor resources might make sense if students and parents were paying less to be taught by more instructor rank faculty, but they are not. If we take into account the full cost of instructor rank faculty, students, parents, and taxpayers are not getting the same quality education but are paying more for it.

Trend #3:
The Erosion of Quality II: The Increasing Number and Cost of Management and Administrative Personnel

Management and administrative employees provide essential services to students and faculty and are critical for the university’s operations. But one has to ask if the trends that follow are in keeping with the essential mission of the institution and continued taxpayer support.

Management employees represent university presidents, provosts, vice presidents, and deans. SCUPA employees represent administrative positions in, for example, financial aid, registrar’s office, residence life, admissions, career services, and academic services. From 1999-2008, the number of management employees increase 24.2% while the number of SCUPA employees increased 28.9% (recall that enrollment in the state system increased 18.2% during this period).

Over this same 10 year period, total personnel expenditures (salary and benefits) increased by an average of $29,368 per management employee, $19,532 per SCUPA employee, and $20,380 per faculty employee. Hence the data show that the number of management and administrative employees is growing faster than faculty employees and enrollment. In addition, their share of personnel expenditures per employee is growing faster than faculty employees.

In 1999, 18.6 management and administrative personnel were employed to provide services to every 1000 students in the system. Despite many technological and informational advances during this period like online class registration and online college and financial aid applications, more management and administrative personnel were employed per 1000 students. By 2008, 19.7 management and administrative employees were employed for the same 1000 students (refer to the table below). In contrast, the number of faculty employees per 1000 students has declined. In 1999, 46.6 professors were employed to provide educational services to 1000 students. By 2008, only 39.2 were employed.

If you include instructors (the employee group with the largest percentage increase), there are still fewer instructional employees per 1000 students today as compared to 1999. Conclusion, students and parents are incurring more of the financial burden to attend a state system school only to be taught, advised, and mentored by fewer advanced faculty.

Conclusion

In summary, the data suggest that the legislative philosophy regarding the benefits of taxpayer funded higher education has changed as more and more of the cost is borne by students and their families. The state system is enrolling more students faster than it is hiring faculty and building capacity to teach. In addition, the system has not added faculty to keep pace with the increase in enrollment and the faculty category that has increased the most are relatively inexpensive, less credentialed, and less experienced temporary and instructor rank faculty. Any savings from hiring cheaper labor resources has been offset by relatively large increases in the number and compensation of management and administrative employees. Students are being taught by more part time instructors with little to no incentive to invest additional time in university service, scholarship, or student advisement beyond their contracted course. While paying more and being taught, advised, and mentored by fewer advanced faculty, students are experiencing more crowded classrooms and computer labs, more students per academic advisor, and increased difficulty finding classes during registration. Combine all of these trends and the outlook for the state system and Millersville University to maintain their reputations as competitive, quality, public higher education institutions is in serious jeopardy.