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Update on Upheaval in Texas Higher Ed

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Two major developments have unfolded in the days since we posted about recent controversies gripping public higher education in Texas:

  • The UT system released a massive file of faculty ‘productivity’ data that was compiled at the request of a Task Force created by the Regents and subsequently subject to an open records request from a local newspaper. There are questions about the accuracy of the data, as well as concerns about how the information might be used out of context.
  • Meanwhile, controversial Texas A&M chancellor and former chief of staff for Governor Rick Perry, Mike McKinney, has announced that he will retire on July 1 after five years in the job. E-mails obtained through open records requests show that McKinney was heavily criticized from multiple sides regarding the divisive reforms currently championed by a conservative think thank, the Governor and the Regents. The e-mails reveal that Chancellor McKinney not only faced criticism for doing the bidding of these external stakeholders at the expense of the institution, but was also assailed by the would-be reformers  for implementing the changes they are advocating neither strongly nor swiftly enough.

Turmoil in Texas Over Higher Ed Reforms

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Recent higher education reform efforts in Texas, developed by the conservative think tank Texas Public Policy Foundation (TPPF) and championed by Governor Rick Perry, have many wondering how much damage might be done to one of the country’s largest and best public university systems.

The ‘solutions‘ proposed by TPPF, and marketed heavily by  board member and major Rick Perry campaign donor Jeff Sandefer, would dramatically shift even the state’s top research campuses away from research and toward teaching. They cast the student in the role of consumer, basing professor pay and tenure decisions primarily on teaching evaluations, replacing state support to institutions with direct grants to students, creating contracts between students and institutions, and maintaining a distinct line between teaching and research activities and funding.

Mike McKinney, Texas A&M Chancellor and former Rick Perry chief of staff, has already drawn national criticism for creating and publishing a ‘balance sheet‘ that measured the revenue generation of each individual faculty member based on salary, teaching, and grant awards. This exercise, promoted by the Governor and TPPF, resulted in a swift rebuke from the Association of American Universities (AAU).

Next, Governor Perry announced that he wanted institutions to create a BA degree that would cost only $10,000 (compared to the current average cost of over $31,000 at Texas public universities). Widespread skepticism of the ability to create a quality degree that would cost so little did not stop the state’s Higher Education Commissioner from embracing the idea.

Then, a senior fellow at TPPF was given a controversial $200,000 consulting position with the UT System. His appointment lasted 50 days before the concerns of the public, legislators and institutions led to his dismissal.

Now, UT System regents’ chairman Gene Powell has circulated a memo that calls for increasing UT enrollment by 10 percent per year for four years and halving tuition at the same time, moves he claims would make UT the best public institution in the country. These recommendations are in direct opposition to a blue ribbon panel that recommended enrollment at UT Austin be reduced to improve the quality of the undergraduate education there. Judith Zaffarini, chairwoman of the state’s Senate Higher Education Committee, has issued sharp criticism of Powell’s suggestions, saying that his goals are “mutually exclusive”  and “detrimental to the pursuit of excellence.”

As this battle rages, others in Texas are weighing in against the reforms, including  alumni and university boosters. Meanwhile, all of higher education is watching to see if Texas will allow one of the nation’s top public institutions, UT Austin, be so radically undermined.

UC System Boosts Nonresident Enrollment

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Last year, the UC Board of Regents increased the system-wide cap on nonresident undergraduate enrollment from 6 percent to 10 percent based on final recommendations from  the University of California Commission on the Future. Newly released 2011 UC freshman admissions statistics for all nine campuses show how aggressively UC has moved to increase nonresident enrollment as a result.

Like in Washington, steep state funding cuts have forced California’s public research institutions to rely more heavily on nonresident students who pay, on average, three times the price that resident students pay. As a result, the average percentage of nonresidents (international and out of state) admitted to UC campuses has increased sharply in just two years:

  • 2009: 11.6%
  • 2010: 14%
  • 2011: 18.1%

Note that at the ‘flagship’ UC campuses, Berkeley and UCLA, where the applicant pools are much deeper and acceptance rates much lower, the numbers are much higher. At Berkeley, 31.2 percent of admitted Freshman were nonresidents, and at UCLA, 29.9 percent were nonresidents.

However, the system anticipates that nonresident students will ultimately make up less than 10 percent of the enrolled 2011 UC system freshmen class due to an overall lower yield rate among nonresident admits, and due to the fact that the system offered 12,700 Californians who were denied spots at their preferred UC campuses the option of enrolling at the newest UC campus in Merced even though they did not apply there (this move also keeps UC in compliance with the Master Plan, which requires that the system admit at least the top 12.5 percent of California high school students).

UC notes that, like the UW, while they are increasing nonresident enrollment, they continue to hold nonresident applicants to higher academic standards than residents. They also point out that peer institutions such as the University of Colorado, the University of Michigan, and the University of Virginia continue to rely far more heavily on nonresident students,  who comprise  over one third of enrolled undergraduates.

While the move to increase nonresident student enrollment at public institutions is sometimes heavily criticized, the tuition rates paid by these students help institutions keep resident tuition down while maintaining the quality of education despite significant funding cuts.

Quest for Greater Autonomy for Public Higher Ed Continues

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As state legislative season wears on, here is an update on some of the efforts in other states to achieve greater financial and regulatory freedom for public higher education institutions facing another year of steep budget cuts.

  • Virginia: The legislature passed the Virginia Higher Education Opportunity Act of 2011. For details on the major aims of this legislation, see our earlier post. The State Council of Higher Education for Virgina (SCHEV) provides an overview of how the final bill differs from the original bill, including, among other things, the addition of a goal to recognize the unique missions and contributions of different institutions.The Act now awaits the signature of the Governor, who proposed the initial bill.
  • New York:  The Legislature passed a budget that did not include provisions contained in the Public Higher Education Empowerment and Innovation Act proposed by the SUNY system. The Act sought increased autonomy from state processes and freedom in managing institutional resources, especially in light of significant budget cuts since 2008. The state not only decided to include none of the flexibility measures, but hit the system with another $210 million in cuts. Having lost 30 percent of its state funding in three years, this huge network of over 60 campuses is determined to continue fighting to maintain access and quality.
  • Wisconsin: The New Badger Partnership proposed by UW Madison continues to be controversial in Wisconsin. Feeling left behind by the proposal to ‘set free’ the flagship institution, the UW System Regents have endorsed their own proposal, the Wisconsin Idea Partnership, which includes freedoms and flexibilities for all system campuses. The Legislature will consider both proposals in the coming month.
  • Oregon: University of Oregon President Richard Lariviere has made an agreement with Governor John Kitzhaber to put the University’s ‘New Partnership’ legislation on hold for a year in favor of supporting passage of the Governor’s legislation, which creates an independent public university system in place of treating each institution as a  state agency. In exchange, the Governor has signaled an intention to support the University of Oregon’s New Partnership proposal for greater autonomy, including a new financing structure that replaces annual state operating support with a public endowment, in the 2012 Legislative session.

Note that the Washington State Legislature is also currently considering a number of proposals, both large and small, that might lead to regulatory relief and increased autonomy of varying types for the UW. Check out the bills that the UW ‘strongly supports’ and ‘supports’ in the BillTracker for more information on some of these bills.

Report Confirms Deep Cuts to Higher Ed Across US

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The SHEEO State Higher Education Finance report for FY 2010 was released last week. Unsurprisingly, it confirms that the same general pattern in Washington of deep state cuts to higher education funding coupled with steep tuition increases is being replicated in states across the US.

Report Highlights: National Trends

Nationally, on average, state support for public high education per full-time-equivalent (FTE) student declined by about 7 percent between 2009 and 2010, and, at $6,454 per student, is at its lowest level in 25 years. The reports notes that average increases in net tuition revenue of 3.4 percent per student partially offset these budget cuts.

These cuts comes at a time when enrollment continues to grow partly due to more citizens seeking out higher education during the economic crisis. Nationally, enrollment grew by 15 percent between 2005 and 2010. Even when state and federal and increased tuition support manage to stay whole or increase, the report notes that increasing enrollments continue to erode per student funding levels over time.

The report highlights the importance that state support continues to play in education related spending by public institutions even as tuition revenue rises. They acknowledge that this importance is sometimes obscured by the complex finances of large institutions that have many other (non-fungible) funding sources.

Ultimately, SHEEO purports that public and policymaker values are consistent with continued public support for higher education, and they are hopeful that investment will rise again once state budgets stabilize and improve.

Report Highlights: Washington State

SHEEO presents the following averages for Washington State higher education for the 2005-2010 period:

  • 12th in increased enrollment in public higher education (19.2%).
  • 30th in appropriations per FTE.
  • 40th in percent of net tuition revenue as percent of total education revenue.
  • 40th in total educational revenue per FTE.

These numbers are a testament to the comparatively low tuition rates enjoyed by WA residents combined with lower than average state appropriations.

Read the full report for more data, analysis, and methodological details.

More on the Public/Private University Resource Gap

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Two higher education news stories leapt out at us this morning as emblematic:

  • Pennsylvania Governor Tom Corbett announced 50 percent state funding cuts for four-year public institutions. The largest institution, Penn State, would see its state subsidy reduced from $465 million per year to $233 million. The University describes the proposed cuts as devastating:  “A reduction of this magnitude would necessitate massive budget cuts, layoffs and tuition increases, with a devastating effect on many students, employees and their families,” said Al Horvath, senior vice president for Finance and Business. “While we have for many months been planning for a potential state funding cut, we could not have envisioned one so damaging to the future of the University and the Commonwealth.”
  • Meanwhile, in Los Angeles, the University of Southern California kicked off the day with an announcement of a new, record high, unrestricted $200 million gift to the College of Letters, Arts and Sciences. The College will be named after the alumni donors, David and Dana Dornsife, who told the Los Angeles Times that they “had confidence in USC faculty and administrators to spend it wisely.” USC intends to use the money primarily to enhance the humanities and social sciences through faculty hiring, graduate fellowships and research funding.

As mentioned in yesterday’s post about faculty salaries, the growing resource gap between public and private institutions predates the Great Recession, which appears to be dramatically accelerating the existing trend. Read the 2009 Association of Public and Land-Grant Universities (APLU) report, Competitiveness of Public Research Universities & Consequences for the Country, to learn more about this concern: “from 1987 through 2006 revenue per student in private research universities in every revenue category except state funding has grown to be multiples of that available to the publics.”

Public/Private Faculty Salary Gap Widens

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New CUPA-HR faculty salary survey results released today show that faculty at public institutions of higher education, on average, received no salary increase for the second year in a row, while salaries for faculty at private institutions increased, on average, by about 2 percent (compared to also being stagnant last year).

This trend is particularly troubling because the current economic crisis seems to be accelerating pre-existing gaps between public and private faculty salaries.  Inside Higher Ed reports.

Supreme Court Hears Arguments in Research Patent Case

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On Monday, the Supreme Court heard oral arguments for Stanford University v. Roche Molecular Systems et al.. At issue is whether the Supreme Court will agree with the argument made by research institutions to expand the current interpretation of what is known as the Bayh-Dole Act (1980’s University and Small Business Patent Procedures Act), which requires that royalties received from patents awarded based on federally funded research are retained by universities and used to fund research, education, and payments to inventors.

The case originated as a dispute between Stanford University and Roche, a company that required a Stanford researcher to sign a consultant agreement  containing language regarding patent rights (“do hereby assign”) that was stronger than the language contained in the Stanford contract he had signed a year earlier  (“I agree to assign”). Stanford sued Roche in 2005 after they refused requests to acquire a license to Stanford’s patents relating to the researcher’s work.  A federal district court initially ruled in Stanford’s favor, but that ruling was overturned by a federal appeals court, which determined that the Roche contract language  superseded the Stanford contract language, giving Roche a rightful patent claim.

While universities can be more careful with contract language going forward, a Supreme Court decision in favor of Roche could call  into question decades of patents that have provided billions of dollars in royalties to institutions. At the urging of the President and Justice Department, the Supreme Court agreed to hear the case. In addition to the support of the Obama administration, many institutions and organizations have filed amicus briefs. Notably, former Senator Birch Bayh, co-sponsor of the Bayh-Dole Act in question, filed his own amicus brief emphasizing that the federal legislation was never meant to allow ambiguity about whether universities had exclusive rights to patents generated by federal funded research.

Monday’s oral arguments provided no clear indication of how they might rule in the case. A decision is expected by July.