Productivity Gains and Cost-Effectiveness in Higher Education

1. Productivity Gains and Cost-Effectiveness in Higher Education Is There an Issue? What are Realistic Goals and Strategies for Achieving Them?

2. 2006 SHEEO Annual Meeting Anchorage, Alaska July 21, 2006 Robert C. Dickeson

3. Is There an Issue? Inattention to Cost-Effectiveness Affects: • Affordability of Higher Education • Capacity to Deliver Higher Education • Achievement of State Goals

4. Affordability • Price increases outpace inflation and families’ ability-to-pay • 400,000 students/year foreclosed by price (ACSFA) • Full-time, low-income students dropped 36 percent in eight years (NPSAS) • Financial aid mis-allocations

5. Capacity • State-by-state differences • Shortages exacerbated by traditional models • Costs lengthen time-to-degree

6. State Goals • Economic development • Quality of life • Foregone incomes/revenues • Foregone opportunities

7. Realistic Goals & Strategies? • Goal 1: Cost of Attendance should be within reach of family ability to pay • Goal 2: State & institutional aid should be targeted to those most in need, not to those who are going anyway

8. Realistic Goals (Cont’d) • Goal 3: Institutions should be freed from unnecessary policies, rules and regulations that impede efficiency • Goal 4: Cost savings should be directed to reducing tuition

9. Realistic Goals (Cont’d) • Goal 5: The preparation and readiness crisis should require new P-16 partnerships that work • Goal 6: Institutional mission creep should be arrested and program resources reallocated

10. Realistic Goals (Cont’d) • Goal 7: States and institutions should reduce or eliminate “hidden costs” • Goal 8: States should reward success in, as well as access to, higher education

11. Realistic Strategies: FIT THE SOLUTION TO THE COST DRIVER

12. Cost Driver: Colleges are Labor-Intensive Strategies • Require program prioritization • Free institutions from costly state personnel systems • Shift from tenure to multiple-year contracts

13. Cost Driver: Heavy Regulatory Burden Strategies • Cut needless regulations and reporting requirements • Cut required state services that are not cost-effective

14. Cost Driver: Specialized Accreditation Strategy • Rein in unnecessary accreditation

15. Cost Driver: Students and States Paying Twice Strategies • Get control of remediation • Fix accelerated learning policies • Fix transfer-of-credit policies

16. Cost Driver: One Price Fits All Strategy • Initiate differential program pricing

17. Cost Driver: Admitting Students Who Aren’t Ready Strategies • Get serious about high school graduation requirements • Admit only students who achieve New Basics Curriculum

18. Cost Driver: Hidden Costs Strategies • Establish minimum number of faculty to constitute a department • Establish program outcome goals and eliminate programs that don’t meet them • Tighten up degree requirements

19. Hidden Costs (Cont’d) • Stop abuse of released time • Reduce or eliminate redundancy

20. Cost Driver: Traditional Delivery Model Strategy • Incentivize new models of delivery • Western Governors University • Rio Salado College • Proprietary Models • Distance Learning Options

21. Cost Driver: Decisions Made in Isolation Strategy • Align state decisions about fiscal policy, appropriations, tuition-setting and financial aid

22. Cost Driver: Unrealistic Appropriations Due to Structural Deficits Strategy • Align state revenues with anticipated state needs

23. Robert C. Dickeson • rdickeson@charter.net • 970-586-9409