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More on the Public/Private University Resource Gap

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

  • Pennsylvania Governor Tom Corbett announced 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 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 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 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, , 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

New 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 .

State Budget Pressures Continue to Mount

Here are a few interesting and updated resources on the current budget pressures being faced by states across the US:

  • This shows, by state, projected deficits for FY 2012, ruling political parties, number of public employees, and whether most public employees have bargaining rights.
  • This is continuously updated and contains compiled information on municipal debt, pension liabilities, bankruptcy proposals and other issues related to state and local government finances.
  • This compiles information about initial FY 2012 budget proposals for those states that have released them, documenting a fourth year of deep cuts for many states.

GAO Details How For-Profit Colleges Exploit Veterans

The Government Accountability Office (GAO) released a report and recommendations, , ahead of another focused on the conduct of for-profit colleges, this time held by Senator Tom Carper.

The GAO report focused on the DOD Military Tuition Assistance Program, which provides tuition benefits for active duty soldiers. In 2009, the program provided $517 million in tuition assistance to over 375,000 service members of which for-profit institutions received a disproportionate amount. The report addressed two primary points:

  • DOD oversight of schools receiving Tuition Assistance Program funds
  • The extent to which DOD coordinates with accrediting agencies and the U.S. Department of Education in its oversight activities

The Senators the gaps in oversight exposed by the report, and also discussed the fact that Tuition Assistance Program revenue is not included in the calculation to determine whether at least 10 percent of annual revenue comes from non-federal sources, which is required for an institution to be eligible to receive federal student aid. This is a rule that Senator Tom Harkin has specifically mentioned as a target for reform in earlier hearings he has held on for-profit institutions.

Meanwhile, the association that represents for-profit colleges is the US Department of Education in an attempt to block new federal regulations, and House Republicans included an to block the controversial gainful employment rule from moving forward in their recently passed budget.

For past OPBlog posts on this continuing story see:

Supreme Court Hears Arguments in Research Patent Case

On Monday, the Supreme Court 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 (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”). 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 . Notably, former Senator Birch Bayh, co-sponsor of the Bayh-Dole Act in question, filed his own 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.

Harvard Report Challenges Goal of ‘BA for All’

Earlier this month the Pathways to Prosperity Project, based at the Harvard Graduate School of Education, released a final report: .

The report lauds the current goal to increase college participation and attainment in the US, but cautions against a ‘one size fits all’ model of higher education. The authors note that the US currently has the highest college dropout rate in the industrialized world, and they call for a renewed focus on career oriented programs and occupational credentials for the large number of American youth who are not currently served or even ill-served by the traditional two or four-year academic system.

The report provides best practices from around the world, highlights robust programs across the US, and provides a blueprint for greater government and employer engagement in preparing American youth better by developing stronger links between education and employment. The report does not question the value or role of traditional higher education but instead wonders whether we are asking it to be all things to all people and thereby failing a large number of Americans as well as straining institutions.

Higher Ed News Roundup

The below are some of the non-Washington State higher education budget and policy stories that made the news this week:

  • Arizona: was passed out of Appropriations Committee after midnight on Tuesday. The bill surprised many and would effect dramatic change in Arizona higher education should it make its way to law, including replacing the current state funding to institutions with a voucher system that would provide an as yet unspecified amount of money directly to the student, abolishing the Arizona Board of Regents and creating individual governing boards at each institution, and allowing for the addition of more state institutions, including making ASU’s East Mesa campus a freestanding Polytechnic University. Committee chair and bill sponsor, Andy Biggs, said, “I’m trying to get at greater autonomy and greater stability and flexibility to the university heads by having their own boards of trustees.” The universities oppose this measure.
  • Georgia: Budget pressures in Georgia make and eligibility changes to the innovative HOPE Scholarship program likely. The current program is the most generous state financial aid program in the nation as it has no income caps and provides the full cost of an undergraduate degree at any public institution in Georgia for all students with a 3.0 or above high school gpa. Over one third of all resident students currently enrolled in Georgia public institutions benefit from the program.
  • Ohio: Inside Higher Ed pondered the role politics played in the of University System of Ohio Chancellor Eric Fingerhut more than a year before his term was up.
  • Virginia: Major higher education moved closer to the Governor’s desk with both legislative chambers reaching agreement on the this week.
  • Wisconsin: The revelation that Governor Walker was set to propose increased led to some who support increased flexibility, but are troubled by the idea of separating 91̽»¨Madison from the system. A special Regents meeting to discuss the proposal was called for today. In response, 91̽»¨Madison produced a and its anticipated effects to help quell opposition.
  • Washington, DC: The passed by House Republicans contained steep and maximum award levels, as well as for enforcing new Department of Education rules aimed at regulating for-profit universities.

Also note that NYT reporter David Leonhardt published an with the authors of the recent book Why Does College Cost So Much?. We were pretty honored that Leonhardt recommended in the introduction of the piece!

91̽»¨Asked to Model Steep Budget Cuts for 2011-13

Last week, Senate and House Fiscal and Higher Education Committee leadership and the community and technical colleges to identify specific budget reductions at three levels for 2011-13. For the UW, those cut intervals were:  The Governor’s proposed $189.8 million cut, a $218 million cut (Governor’s cut + 15%), and a $246 million cut (Governor’s cut + 30%). For scale, the 91̽»¨received $627 million in state funds for the 2009-11 biennium (Fiscal Years 2010 and 2011).

Potential reductions identified by the 91̽»¨and , although President Wise pointed out in correspondence to campus leadership that some of the examples in the letter,  “…may come to pass, but only as a result of the strategic budget process currently underway, not because of reference in the letter.”

Neither the House nor the Senate Fiscal Committee has submitted their budget proposal for the 2011-13 biennium yet and we do not know how each committee will ultimately handle the UW’s state appropriation. While we have the Governor’s proposed budget in hand, the appropriations process is far from being over. We will continue to post state budget updates to this blog as they develop.

Media coverage of our submission to the Legislature is available , , and .

University of Wisconsin Poised to Receive Greater Autonomy?

Current have dominated press coverage of Governor Scott Walker’s proposed 2011-13 state budget this week. Lost in the shuffle may have been news that the proposal contained a provision that would lead to , the University of Wisconsin at Madison. 91̽»¨Madison Chancellor Biddy Martin has requested that the 91̽»¨System Board of Regents not oppose the move, which she argues would be essential to protecting excellence and access for the state’s flagship campus.

Potential legislation based on the Governor’s proposal is expected to be introduced by Republicans and would be likely to include the following freedoms for 91̽»¨Madison:

  • Tuition setting authority and freedom to manage all funds
  • Authority to implement institutional budget without System approval
  • Ability to recruit, hire and retain employees outside of the state system
  • New flexibility in purchasing
  • Authority to handle its own building projects

The University has sought such freedoms from the state for years, and the article suggests that the chancellor has been working for over a year to craft the current proposal, which she calls the .

For more information about this topic, read our recent and the varying degrees to which it currently exists at the 91̽»¨Seattle and our Global Challenge State peers.

Closing in on a Final Compromise for the FY 2011 WA State Budget

Leadership in both fiscal committees of the House of Representatives and Senate signed a budget deficit. Both new cuts and fund transfers are included in the compromise.

While the budget is not final and both chambers must take a floor vote, the is in near final form. Higher education institutions would not receive direct state funding cuts, but would be asked to backfill a new cut to the State Need Grant (SNG) with institution resources. The 91̽»¨would be directed to use $5,658,000 of internal funds to cover the general fund reduction to the SNG.

Also note that higher education institutions were exempt from a salary reduction (furlough) requirement.

Lastly, the compromise budget did not close the Basic Health Plan but it did make .