Moody’s Blues

The time for bold action by university leaders is now, the credit agency says.

On the 16th of January, Moody’s Investors Service issued a report entitled “US Higher Education Outlook Negative in 2013.” Inside Higher Ed followed with an article on the findings in the report the next day. The report, and the article, were sobering reading for university administrators, and, in some quarters, more than a little frightening.

Moody’s, one of the three major credit rating agencies worldwide, has downgraded its outlook for the entire U.S. higher education sector from stable to negative. Based on a careful analysis of data over the past several years, Moody’s concludes that there is “mounting pressure on all key university revenue sources, requiring bolder actions by university leaders to reduce costs and increase operating efficiency.”

The party is over. Actually, it’s been over for quite a while, but now all the guests have finally left, and we are faced with cleaning up quite a mess. Are we up for it?

“Reduce costs?” “Increase operating efficiency?” These are things higher education has never done well. To be sure, drastic cuts in the state appropriations to public institutions in recent years have required sometimes draconian responses, but, because appropriations cuts tend not to come with a lot of notice, these campuses have, in effect, been faced with a succession of crises. Crisis management is quite different from long-range planning. Thus, while the budgets of these public institutions have been cut, the results have rarely reflected fundamental changes in how the university or college does its business. That is, expenses have been reduced, but, too often, so has the quality of the educational experience.

So what’s the answer? Tom Friedman, in his New York Times column on the 27th of January, says the answer is MOOCs – massive open online courses. This is a game-changer, in his view. The idea of hundreds of thousands of people all around the globe being simultaneously enrolled in a single online course, typically taught by a big name, is captivating. Using technology to create access to higher education – for free – does, indeed, sound like a game-changer.

But is it really? People who have no access to higher education at present may benefit greatly from MOOCs – but are today’s currently enrolled students (or their younger brothers and sisters) going to drop out of college (or not enroll in the first place), and instead rely on MOOCs in lieu of a standard degree? Probably not – unless they are left with no affordable alternative.

One such alternative may be the $10,000 degree, advocated more than a year ago by Governor Rick Perry of Texas, and endorsed more recently by Governor Rick Scott of Florida. Some of the former community colleges in Florida, now authorized to offer some bachelor’s degrees, have accepted the challenge of creating a $10,000 degree. Will we see students flocking to register for a bargain basement education, not yet tested in the market? Probably not – unless they are left with no alternative.

Let me be clear: I am not suggesting that college presidents dismiss the threat of MOOCs or $10,000 degrees as pale imitations of what their colleges have traditionally offered, and therefore conclude that they are no threat at all. Rather, I am suggesting that MOOCs and especially $10,000 degrees are the outgrowths of the deep frustration, and even anger, on the part of the public, elected officials, and at least some members of the academic community (those who developed MOOCs) at the unwillingness or inability of traditional higher education to deal meaningfully with the problems of cost and rising debt, as well as the inherent value of the degree as measured by the ability of graduates to obtain well-paying jobs that actually require a college education.

So here’s what we are doing at Roger Williams University:

Cost Containment

  1. Freezing tuition for four years for the entering classes of 2012 and 2013 (let’s start addressing affordability by not making the problem worse);
     
  2. Replacing dollars that would have come from tuition increases by expanding Summer Session and Continuing Studies; and by increasing philanthropic efforts (it is important we demonstrate that cost containment does not mean a reduction of resources for teaching);
     
  3. Beginning to shift institutional financial aid from merit to need (former MIT President Charles Vest said it best: “Admit on merit; award on need”);
     
  4. Assessing each program and function, both academic and non-academic, on the basis of revenue generated and dollars expended, and devise strategies to maximize revenue and minimize expense;
     
  5. Looking for ways to combine various small administrative units to increase efficiency and reduce cost.

Increasing Educational Value

  1. Creating more opportunities for interdisciplinary teams of project-based learners (in the last 18 months, since we created the Community Partnerships Center, we have had over 400 students – about 10 percent of our student body – involved in civic and nonprofit based projects – and that is only one example of our commitment to project-based learning, which we think of as internships on steroids);
     
  2. Expanding our commitment to study abroad (we now have created project-based learning experiences overseas);
     
  3. Increasing our efforts to enroll minority and low-income students (we must prepare all of our students to succeed in an increasingly diverse society);
     
  4. Encouraging students to have significant exposure to both the liberal arts and professional programs (liberal arts majors are urged to minor in a professional field; majors in the professions are urged to minor in one of the liberal arts. Graduates with strengths in more than just one field have an advantage in obtaining the best jobs).

There’s more, of course. Still in the pipeline is the idea of the flipped classroom, where students master content through online work, and the class hour is used by the professor to ensure that the students have true comprehension of what they have studied – and we hope to find a way to freeze tuition indefinitely, by continuing to expand alternative revenue streams.

At RWU, we are assiduously working for the best possible set of answers to “Moody’s Blues.”

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Categories: Affordability, Economy, Mission & Purpose, Politics & Policy
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