Wed, 7 Jan 1998 07:26:35 -0800 (PST) Wed, 7 Jan 1998 07:26:28 -0800 (PST) Date: Wed, 7 Jan 1998 07:26:28 -0800 (PST) To: (Recipient list suppressed) From: Michael Eisenscher Subject: BusinessWeek: The New University (fwd) Sender: meisenscher@igc.org Here's the BusinessWeek take on modern college education. It's an interesting perspective. Bill >---------- Forwarded message ---------- >Date: Fri, 19 Dec 1997 09:59:02 -0600 (CST) >From: "Harry M. Cleaver" >Reply-To: pfg-ut@mail.la.utexas.edu >To: Progressive Faculty Group >Subject: BusinessWeek: The New University (fwd) > > >---------- Forwarded message ---------- >Date: Thu, 18 Dec 1997 21:51:48 -0600 (CST) >From: Dennis Grammenos >Reply-To: pen-l@galaxy.csuchico.edu >To: pen-l@galaxy.csuchico.edu >Subject: BusinessWeek: The New University > > >BusinessWeek > >22 December 1997 > >----------------------------------- > http://www.businessweek.com/1997/51/b3558139.htm > >----------------------------------- > > > THE NEW UNIVERSITY > > A tough market is reshaping colleges > > > > On an autumn afternoon on the manicured grounds of the > red-brick University of Florida at Gainesville, students > stroll under palms and moss-draped oaks. It's a classic > collegiate tableau--and completely at odds with the radical > vision of the man who presides over the campus from a modest > second-story office. It's not that John V. Lombardi wants to > destroy what he sees. Quite simply, he has to. > > As president of the huge state institution, Lombardi contends > with a legislature that won't let him raise tuition but has > cut university appropriations by 15% since 1991. In response, > ''we have taken the great leap forward and said: 'Let's > pretend we're a corporation,''' Lombardi says. Defying > traditional academic notions, departments now vie openly for > resources. English professors must demonstrate, in essence, > that Chaucer pays the bills using funds as effectively as > engineering or business classes. Departments that meet > quality and productivity criteria win shares of $2 million in > discretionary funding. > > This isn't a universally popular strategy. Some professors > and administrators fear the effects of the new strictures on > academic quality. Many hope it is just a president's passing > fancy. ''Things like this come and go all the time,'' says > John Kraft, dean of the University of Florida's College of > Business Administration. Lombardi understands the dissension > and skepticism. At institutions like his, he says, ''everyone > assumes that we'll just keep churning the paper, and it will > be business as usual.'' > > It isn't--at Florida or at other colleges and universities > across the nation. Behind ivied walls and on leafy > quadrangles, administrators and professors acknowledge this > new reality. Higher education is changing profoundly, > retreating from the ideals of liberal arts and the > leading-edge research it always has cherished. Instead, it is > behaving more like the $250 billion business it has become. > > DISCIPLINE. Universities are rethinking the big lecture > halls, faculty tenure, discrete academic departments, and > other features that have defined traditional institutions for > a century. They are designing curriculums more relevant to > employers, communities, and students. Schools are pursuing > fiscal discipline, forcing accountability on organizations > that for decades have expanded as they pleased. And they're > wiring the ivory towers, creating with technology more > efficient mediums of instruction. > > Why this transformation, in a system still regarded as > unmatched in the world? After all, 62% of Americans today > attend college just after high school, testament to the > American ideal of a highly educated populace. U.S. > universities, moreover, still produce research that extends > the bounds of knowledge and feeds innovation in industry. > > Over the past two decades, though, higher education has > failed spectacularly to live within its means. From 1980 to > 1994, the most recent year for which Education Dept. data are > available, instructional costs per full-time student at > private universities increased 48% in real terms; public > universities upped research expenses by 35%. In the same > time, though, states reduced real, per-student funding to > public universities by 22%. In the private sector, students > from well-heeled families who could pay full tuition > increasingly fled to smaller colleges, taking revenue with > them. > > That has produced an explosion in charges as institutions > have sought to close the funding gap. Average annual tuition, > room, and board at state universities, after inflation, has > jumped 33% since 1976, to $6,349, according to the Education > Dept.; at Ivy League and other elite schools, the going rate > is $32,000. Schools themselves have eaten some of that > increase in the form of ''discounting,'' or student aid, > making up in part for a decline in federal grants. But > students and their families have borne the brunt: Since 1975, > college costs have soared to 20.5% of median household > income, up from 14%. ''We are pricing ourselves out of > Americans' ability to pay,'' says Thomas H. Kean, Drew > University president and a former New Jersey governor. > > The RAND Corp.'s Council for Aid to Education estimates that > mounting college costs, combined with declining real > wages--especially among poor families--and growing > immigration rates, will create a large class for whom college > is utterly out of reach. Given current spending trends and > continued pressure on government aid, predicts the council, > colleges and universities will see ''a catastrophic shortfall > in funding''--a $38 billion gap in 2015 in what they require > to meet expected student demand. To pay the bills, schools > will have to raise tuition or reduce aid--and either action > will shut people out. > > Increasingly, then, institutions find themselves grappling > with a basic tension between quality and access. As resources > grow scarcer, how do they sustain high-level teaching and > research at an affordable price? The dilemma cuts to the > heart of today's knowledge economy, where more than > two-thirds of new jobs require some higher education. > Continued productivity gains and economic growth depend on > keeping such institutions both accessible and pertinent. ''If > we're not matching up [students] and educational > opportunities well, we're going to lose some productive > capacity,'' says Michael S. McPherson, president of > Macalester College in St. Paul, Minn. > > The innovation on university campuses today attempts to > address such concerns. Yet it also is accelerating the > evolution of American higher education into what some experts > say is a two-tiered entity: one system of exceptionally high > quality for those with the means to pay and a second for > those without. > > Robert Zemsky and Susan Shaman of the University of > Pennsylvania's Institute for Research on Higher Education > found in a study of 1,200 institutions that colleges are > sorting themselves into identifiable market segments. > ''Name-brand'' schools provide small classes and well-paid > faculty at high prices. A second, more market-savvy group > offers convenience and user-friendliness--often catering to > students who want quick, cheap degrees to advance their > careers. But these schools spend much less on teaching and > facilities. > > Colleges that flourish, argue Zemsky and Shaman, among > others, will be those that identify a viable segment of the > school population and equip themselves to serve it > effectively. This is a provocative concept, given that, for > decades, big public universities and small private colleges > alike have prospered through breadth, following the models > put forth by Harvard University, the University of > California, and other top schools. Now, ''institutions that > don't do well are those that don't develop a real signature > in the market,'' Zemsky says. > > Rensselaer Polytechnic Institute, which attracts top > technical students across the U.S., fits the brand-name > category. Like many smaller private schools, however, it must > lure enough wealthy students who, by paying the full $27,000 > tab, will subsidize poorer classmates. ''We concluded we were > never going to compete on price, so we had to produce an > experience of demonstrably higher quality,'' says Jack M. > Wilson, dean of the faculty. > > CONVENIENCE. Its first-year ''studio course,'' rooted in > curricular and physical redesign, was meant to set RPI apart > in the marketplace. In new multi-use rooms, built for > $100,000 to $150,000 apiece, students face one way to hear a > professor's short lecture, swivel around to work on lab > equipment or personal-computer programs set up to complement > the lesson, then turn again to work in small groups. > > In an introductory class in circuits, Professor William C. > Jennings begins with a short discourse on amplification. Then > he turns his 30 students loose to wire and test the equipment > behind them, roaming the room to give guidance as needed. > Before last year, he lectured for an hour and a half, and > students went elsewhere to experiment under a grad student. > Students like the merger of two settings. ''You don't really > know what's going on until you do it yourself,'' says Melissa > Postolowski. > > RPI can't say yet if students in studios actually learn more; > physics students in the new classes tested no higher than > those in conventional lectures. But the consolidated design > calls for fewer faculty, freeing professors to create new > courses and contribute to revenue-generating projects that, > with administrative cuts, have helped reduce the school's $25 > million backlog of long-term maintenance and investments by > more than half. More important, the changes have created a > buzz, and campus visits by prospective applicants are up 49%. > > Portland State University, alternatively, has positioned > itself in the convenience sector by meeting head-on the new > demographics of higher education. Traditionally the neglected > stepsister of much larger and better-financed state > universities, it saw state assistance slip to 49% of its > total budget, from 65% in 1991. At the same time, attrition > grew among its diverse collection of older, lower-income > students, many of whom come ill-prepared academically. > > Cuts of support staff and middle management saved $3.5 > million a year. But PSU also sought to create academic > coherence for students who most often had picked courses > because they happened to meet at the right time. The answer > was University Studies, a program developed with advice from > local businesses that hinges on group work and technology. At > its heart is Freshman Inquiry, a selection of > interdisciplinary, yearlong courses that meet five days a > week. Einstein's Universe, for instance, is taught by > professors of physics, dance, and history. Students, required > to work in groups, discover the theory of relativity but also > read and write about the philosophical, historical, and > artistic context of Europe in the 1930s. Graduate-student or > upper-class mentors help to ''model'' freshmen who have never > confronted serious homework or class participation. > > For some, the curriculum was a shock. ''I expected to be > going to lectures and writing 10-page papers,'' says David > Hall, a senior majoring in business and information systems. > Faculty, too, had to change stripes, having to confront many > students who had never read an entire book. ''The attitude > used to be that students either could cut it or couldn't,'' > says Susan Hopp, director of student development. More than > 80% of students who enrolled last spring in Freshman Inquiry > returned for classes this fall--a record. > > RPI and Portland State, both of which are among six schools > recognized by the Pew Charitable Trust for innovative > restructuring, are years ahead of most institutions. Many of > their peers, by contrast, are just starting to come to terms > with the monumental change they will need to survive and > compete. In the public sector, especially, that confrontation > is proving traumatic. > > Florida's Lombardi, for one, still is smoothing out his > plan's kinks. The university's ''bank,'' whose funding model > discourages large classes, initially penalized the college of > business for TV teaching, even though TV students test as > well as those in conventional classes. English professors > worry that creative writing and other courses requiring very > small classes will cost their department funding under a > system that strictly measures faculty-student productivity. > > RESENTMENT LINGERS. For now, Florida's faculty is giving > Lombardi the benefit of the doubt. In other states, > resistance has been fiercer. Faculty at the University of > Maine forced Chancellor J. Michael Orenduff to resign in 1995 > after he proposed a distinct, accredited institution for > satellite-TV learning. Resentment lingers at the University > of Illinois four years after reform that, using 25 > productivity and performance measures, seeks to rationalize > programs and reallocate the savings. Loyola University of > Chicago President John J. Piderit sparked an outcry from > professors recently by referring to students as > ''customers.'' > > Such protest isn't baseless. Professors and administrators > alike are justly concerned about financially motivated > strategies that risk eroding quality or reducing education to > a pro forma exercise in professional credentialing. Often, > though, the angst appears to be a function more of > uncertainty with the dramatically shifting terrain. > Academics, typically trained at traditional research > universities, aren't prepared, for example, to teach in > interdisciplinary courses that cross old department lines. > > Either way, they have little choice but to learn to deal with > change, because new competition--unencumbered by tenure, > departmental politics, or legislative oversight--is coming > fast. The number of corporate ''universities,'' formed by > business to offer in-house job-related training, has jumped > from 1,000 to 1,400 in five years. Former junk-bond king > Michael R. Milken, along with Oracle Corp. CEO Lawrence J. > Ellison, has invested $500 million in Knowledge Universe, a > for-profit company aiming to capture a $10 billion slice of > the education market, from toys to advanced degrees. Its > joint venture with Tele-Communications Inc. could provide the > backbone for cable-TV distribution of university classes. > > Cable entrepreneur Glenn R. Jones has created College > Connection, offering students Internet access to inexpensive > degree programs from 13 institutions including his own, > entirely electronic International University. College > Connection, with 7,000 students, is growing at 30% a year, > says Jones, whose Knowledge TV offers college courses to > viewers around the world. This, he says, is a > ''cyber-university.'' ''Your classroom can be your house, > your trailer--anywhere you have a computer.'' > > Indeed, much of the convenience segment has been spurred by > technology. Using the Net or interactive TV, schools can > reach vast numbers of students in many locations at once, > with little or no investment in new bricks and mortar. All > told, 1.3 million Americans are engaged in some sort of > electronic higher education, says researcher InterEd Inc. > > Does it work? While educators agree that such technology > delivers courses to students who otherwise would go without, > they worry that electronic coursework is often rudimentary, > with little attempt to account for quality or effectiveness > and scant opportunities for intimate contact with a > professor. > > CHEAP TICKET. Yet many students are prepared to sacrifice > such experiences in return for a few quick rungs up the > career ladder. The University of Phoenix understands this, > perhaps better than any school. Its mother campus--basically, > two modest office buildings--sits off a traffic circle > opposite Phoenix Airport. There are no dormitories, no > library stacks, no cafeteria, no labs, no gym. And no kids. > The hundreds of students who stream into dozens of spartan > meeting rooms each weekday evening for four-hour classes > range in age from 23 to 60. > > With 58 campuses in 12 states, Phoenix' enrollment, now > 42,000, is growing 20% a year--even though it accepts only > adults who work full-time and offers classes only at night or > online. Students meet twice a week for six weeks per course > and get credit for ''life experience'' toward bachelor's and > master's degrees, mostly in business and information > technology. Teaching faculty, entirely part-time and > tenureless, come from industry and teach from a standardized > script. Annual tuition averages $6,500. > > It may be, as critics call it, McEducation. But students love > it. ''This way, I finish in the same time as I would if I'd > quit my job,'' says Demario Walton, 24, a Motorola Inc. > employee pursuing his MBA. Investors love it, too. Shares of > Apollo Group Inc., the university's corporate parent, trade > at 23 times their value in 1994. ''We will be the first > national university,'' says founder John G. Sperling, a > raucous 76-year-old former Merchant Marine and union > organizer (with a Cambridge University doctorate) whose stake > in Apollo is worth $484 million. ''We intend to operate in > every major metropolitan area of the U.S.'' > > Phoenix thrives so conspicuously because it acknowledges a > profoundly changed higher-education market. It and the other > new venues stand to win a big share of the surge in college > enrollment expected over the next decade as Echo Boomers > emerge from high school and as more adults seek continuing > education. Many of these students, unable to afford the cost > of a full-time program, will start college older, seeking > part-time classes that fit into job schedules. > > Colleges and universities must confront this new > competition--and the changing demographics, economics, and > technology behind it. And they must adapt rapidly. The great > risk is that, having opened its doors to most comers, the > huge, centuries-old system will shut people out--sending > students instead to nimbler rivals. Milken, Jones, and > Sperling will be happy to accommodate. > > By Keith H. Hammonds in Troy, N.Y., and Susan Jackson in > Portland, Ore., with Gail DeGeorge in Gainesville, Fla., > Kathleen Morris in Phoenix, and bureau reports > > ------------------------------- > > Copyright 1997, by The McGraw-Hill Companies Inc. All rights reserved.