Needed Reforms for Public Higher Education in Texas (and Elsewhere)
Texas faces a massive budget shortfall in the next biennium (somewhere between $15 and $25 billion), and the state’s options are limited by court decisions (K-12 education) and federal mandates (health care). The budget axe will fall disproportionately in the area of higher education. This juncture provides both great opportunities and great perils for the Texas Republican Party. If the Republican legislature simply cuts the higher education budget, without further changes, the university bureaucracies will make the cuts as painful to students as possible, counting on a political backlash from students, parents, and alumni. The GOP could lose the support of an entire generation of youth, perhaps forever.
There is an alternative scenario, however. Republicans could use this budget crisis as a triple opportunity: saving both taxpayers and students billions of dollars, while empowering students to improve their own education by greatly expanding their freedom of choice. By creating a true free market for education within existing universities, our state leaders can harness the power and efficiency of the market to dramatically improve education while eliminating waste and abuse. We can thereby improve access and increase the number of students completing a meaningful degree.
The following twenty reforms would revolutionize higher education in Texas, bringing it out from the centralized, bureaucratic mass-production model of the early 20th century and into a new world of entrepreneurial responsiveness to demand. The first six reforms constitute a single, inter-dependent whole: the Entrepreneurial Professor Model. The remaining fourteen further extend the spirit of the free market, transparency, and public accountability. Each can be implemented incrementally.
The Entrepreneurial Professor Model
1. Tie the salaries of professors and lecturers to the number of students they attract to their classes.
(a) We start with a living wage ($30K) plus benefits.
(b) Any additional salary comes in the form of a tuition-based bonus, representing a fixed percentage (say, 50%) of the tuition income generated by students enrolled in the teacher’s classes, up to a maximum of 320 students per year (960 student-hours). Each instructor may teach up to eight classes per year. Professors engaged in research may derive additional income from their externally funded grants.
2. Tie the salaries of the administrators of colleges, departments, and centers to a fixed percentage (4%) of the tuition income generated by the unit’s total enrollment.
3. Empower both individual professors and colleges and departments to rebate tuition directly to their students, with the costs of the rebates deducted from the salary bonuses of the professors and administrators. In this way, we introduce real price competition between colleges, departments, and professors: all will offer lower tuition rates in order to attract larger numbers of students.
4. Empower professors to hire individual teaching assistants for their courses, with the salaries of the assistants fixed by negotiation and subtracted from the professors’ bonuses. Thus, professors will be competing with one another both for students’ tuition dollars and for talented assistants, with the market determining the tuition rate for each course and the salary for each assistant.
5. Empower each professor to choose which courses within his or her field to teach each semester, and to set enrollment limits, in order best to meet student demand.
6. Apply a fixed grading curve (no more than 15% As, 50% As and Bs, 85% As, Bs and Cs) to all undergraduate courses. Professors whose grades deviate from the curve will lose a corresponding share of their tuition-based bonuses (i.e., they lose the bonus for each student whose grade exceeds the curve). This provides a powerful incentive to eliminate grade inflation and raise academic standards. The higher standards will in turn transform the campus culture, replacing partying with studying. A limited number of honors sections (with students whose grades and scores are a full standard deviation above the average) could be exempted.
Zeroing Out the Direct Appropriations to State Colleges and Universities.
7. Completely eliminate all direct subsidies from the state to colleges and universities (a savings of $17 billion per biennium). In their place, we increase scholarships and college-loan subsidies that go directly to students, and that can be used at any state-certified institution of higher education. This empowers students to choose the college or university that best meets their needs, whether public or private, secular or religious, non-profit or for-profit.
Restore Guaranteed College Loans from Private Lenders
8. The Pelosi-Reid Congress abolished federally guaranteed college loans from private lenders, replacing them with a federal monopoly. This provides Texas with the opportunity to create a competing system of state-guaranteed loans. We can prevent brain drain by limiting the subsidy to those who remain in the state after graduation.
We Texans need to provide our own, independent assessment of colleges, one that opens up the market to more competition and innovation.
Almost, but not quite correct. We Texans… – no.
The market needs to provide its own, independent….
A sort of ratings agency, a Standard and Poors, a Fitch, etc for the universities, the quality of their courses, etc.
ADE
Great idea. Go ahead and do that, and we’ll be glad pick off your best faculty in engineering and the sciences, who have no reason to put up with this sort of nonsense, leaving Texas with anonymous distinguished professors of humanities who spend their time writing Pajamas Media articles.
Let’s see, if this system were in place at Michigan, my boss would earn about 3/16*$18000/student*40 students*.5= $67,500 for teaching quantum physics. Subtract $30,000 for my salary and benefits, leaving $37,500 for his bonus for the semester. He also teaches a freshman Intro to Engineering course, though I don’t have figures on its enrollment or how many graduate students he hired for it, but I’d figure it would probably net him at least $60k, giving him a total bonus of about $100k for the semester, and the next semester will be just like it.
a college education is neither a right nor a necessity. if you can afford one fine, if not work.
I think education costs should not be so high and I totally agree with the publius
An education should be something we all strive for and strive to have our kids get. It only betters our nation. We have other countries bypassing us on the most mundane of things…due to our education system.
Not everyone will be a rock star,invent a computer operating system with a minimal of education etcetcetc. Lower the price of a good education.
an education that we can afford.
Great concept… Applying free market principles to higher education. Thanks for detailing specific steps to achieve that goal. I believe this concept has serious merit. Albeit driven by initially by financial concerns, the long term effect will be a better rounded an more educated member of society. Thank you for sharing!
Much needed nationwide. Senior professors with big salaries will not run off as all other schools are in the same situation financially and most want to hire talented younger faculty…particularly in the scientific, medical and technical worlds. Productive senior professors will have no reason to move and in fact, will attract additional funding to expand their niche and increase their productivity further. This can be a very positive upward financial spiral for this type of faculty.
Publius Audax;
While I agree with most of your suggestions for education reform, (with an exception to item #16), “Abolition of the Core Curriculum”, getting rid of math and science requirements will not, IMHO, improve the quality of the college product. Math and Physics subjects lead students into hard science degrees, which are sorely needed in many of the better employment areas. A BA degree, (Arts and Humanities), will not produce the sort of grads who will become the next generation of geologists and geophysical experts. I would not trust my next 3D seismic exploration project into the hands of a bunch of Underwater Basket Weaving majors. Students at the under grad level usually don’t like to take the hard courses, thus abolition of “Core” requirements would be ultimately destructive.
I would further suggest that greater savings and improvements might be found at the local ISD level. Property taxes are huge in Texas, with the lions share going to support bloated school district administrations. Public schools are the biggest single budget item in most cities, in my town 80% for schools and 20% to pay for the city services. There’s a wealth of fat to be trimmed in that area. Paying a school district superintendent $250,000 a year does not generally improve the quality of the high school grad.
Get a grip, Professor.
Bold and very enlightening concepts. Wish our governor and the legislator would listen to you. This from someone outside the educations establisment who knows our system is seriously deficient and in need of drastic overhaul.
Well, the communists/marxists have succeeded in doling out much largess to professors, some which teach very little, conduct trite research, supress true research (global warming), indoctrinate your children in the glories of marxism, and teach useless courses (black and women studies), do not respond to market forces and hide bizarre theories behind tenure. They even work to supress free speech and hound conservative speakers off the campus. We are bearing the fruit of the 60′s radicals. What have we become?
An interesting idea. Working at a non-US university where students have a free choice of subjects, and having seen some students make sensible, coherent choices leading to sensible, coherent degrees, while others make seemingly random choices, missing what would otherwise be pre- or co-requisite subjects, I’m not sure this is a particularly great idea for the students.
More importantly, what happens to perennially unpopular subjects containing many important threshold concepts, such as thermodynamics?
Numbers 16 and 17 intrigue me. On the one hand, Publius would abolish the sham “core” curriculum, which is really just a set of distribution requirements and therefore no real “core” at all. On the other hand, in #17 he wants every college to have a “core mission” teaching “universal moral principles” by “offering courses” in the “great books” of civilization.
Hmmm. Our academic elites, for the most part, deny that there are “universal moral principles,” or even “great books.” So what you will end up with at best is the same mishmash of distribution requirements, except that students in the humanities will escape having to take even a token course in math or science. That’s the best-case scenario. Just as likely, you will end up forcing students to “improve their morals” in courses that are the equivalent of Maoist re-education camps.
Whether ANY of these plans are implemented or not need to be discussed.
Unfortunately the teacher’s unions, highered.com and a myriad of other ‘education legislationorganizations’ are bogged down by the Ward Churchills’, Kathleen Dixon’s, Richard Zeller’s etc., imbedded DEEEP in their ranks..
David Horowitz’s ‘Reforming Our Universities’ is both a motivating and frightening tale..
It is clear that you really don’t get how businesses work within free markets. Because of this you are missing the whole point with your approach to reforming universities. Trust me, I work in the belly of the beast.
You are trying to impose the same command and control mentality that liberals want to impose on the rest of society, even though you use free market language in doing so. You can’t mandate legislatively the pay structures and incentive systems within a large complex organization such as a university or system of universities.
First of all, many of the programs across the university are interrelated, and cannot be easily separated as separate offerings in a free market. You will get what we refer to in business as localized suboptimization. Parts of the organization will work well for themselves, but the whole organization will not work as well as it could. Even though I teach in business, my students must learn to write well. I can polish their business writing skills, but there are english department faculty that work on their writing skill before they ever show up in my classes. I don’t know how popular those classes are, but we in the business school have determined that our students must have those basic skill before arriving in our programs so that we can focus on teaching them business theory and skills. The demand for English courses is, in part, driven by the demand of our business courses. So, who gets rewarded for creating that demand? Moreover, the cost of different faculty is driven by different markets. Professional faculty (business, engineering, medicine etc.)have job opportunities in industry that compete with the university job market and drive those salaries up, while the non-university job market for other Ph.D.s such as those in English or Sociology is not as strong. Accordingly, the cost to hire an Engineering or Finance professor is considerably higher than that of an English professor. Now consider the incentive tha a centrally set pay per student might offer to each. Teaching a small class in a specialized branch of English Poetry may be a a very desirable job for an English Ph.D., but even a very large class in pathology, might cause an MD faculty to leave for private practice. What is of higher value to the students? To the university?
If you really believe in free markets, then you really need to make the public universities into what they are slowly becoming already…State Branded Institutions, not impose more micromanagement of their already convoluted systems. Let them set their tuition rates, keep their tuition dollars, and decide on the best way to allocate their resources. Right now, most state schools are in a nether region where they cannot change prices without legislative approval, they must offer obscure unprofitable programs to meet diversity or service of public good needs, and they are usually are rebated a budget to run on that is not related to the tuition dollars collected. If the state wants to make education affordable, then they can offer a higher ed grant to every in state student who is attending college.
This frees the university to compete on the whole service package being delivered, and allows and encourages different approaches to serving the needs of students. It could be small intimate classes with the top thinkers in the field (at a premium tuition prices) or a large class with someone who is just competent to teach at that level (at a discounted price) or perhaps some other business model. The market will determine what the best approaches are, and how many of each are needed. As we like to say in the business school, just let us eat what we kill, and we will do the hunting.
The one thing that is missing from this approach is how to address the research and public service aspects of the university that appear to be important to many states, yet are more mandated than market oriented. For instance the large university hospitals that serve, in many cases, as the main trauma centers and the last resorts for the most serious illnesses in their respective states. Perhaps others who work more closely with Engineering or Medicine can offer some solutions for that.
Educational loans are too easy to get.
It is immoral to give a mediocre student greater than a 100k debt that he has no chance of paying off when his vocation is social work or art history.
It is this easy money that has allowed universities to continually raise rates and build more buildings. The Saturn 5 was built by farm boys with slide rules, thin text books, inspired teachers, and a simple black board.
Teach our kids how to make a living…don’t teach them how to be lazy, angry, entitled socialists with a worthless degree.
The fundamental assumption of this article is flawed. Education is not a product or service to be consumed, it is a transformational sequence of events to be fully experienced. The end result is not measured by student satisfaction, but the development of greater student awareness and capabilities. Submitting education to principles designed for consumption-based products and services will result in skewed results, i.e. teachers who are an “easy A” will have huge classes and huge salaries, while others whose subjects demand rigorous work and study will starve. Education is not a market, it is its own entity. Applying market principles will not address the problems of lack of motivation to learn, lack of work ethic, and lack of respect for the intrinsic value of an education. These problems will be solved as part of a society’s culture and require long-term value shifts, not entrepreneurial professors.
Am I wrong or are there only 19 instead of the 20 announced proposals for reforms?