Politics

July 18, 2016 By B. Baylis Leave a Comment

The Business Model of All of Higher Education Is Broken, Part III – Tuition and Fees

In this current post, I return to the discussion of the Business Model of All of Higher Education. In a previous post, The Business Model of All of Higher Education Is Broken, I introduced the five sources of revenue for Institutions of Higher Educations(IHEs): 1) Tuition and fees; 2) Fundraising, advancement and development efforts; 3) Endowment income, appreciation, interest and dividends; 4) Auxiliary enterprises; and 5) Governmental appropriations. In this post, I had originally planned to consider all of those sources of revenue in one post. However as I began to work with that idea, I found the explanations growing too large for one post. In addition, no matter how hard I cranked the revenue generating machine for each revenue source in an attempt to create additional funds, I discovered that increasing the effort in any given area did not produce a commensurate return on investment (ROI). Therefore, I decided that I needed to expend more time and coverage in this series to each source of revenue to give it the analysis I felt it deserved. Thus, I have decided that I will begin to plan to cover each of the revenue sources individually in separate posts. As I get into the ins and outs of the revenue source, I may have to add more posts. I begin this process with the source of revenue with which all students and their families are most familiar, Tuition and Fees . It is also the revenue source that the general public most clearly associates with Institutions of Higher Education (IHEs).

The revenue from tuition and fees obviously depends upon enrollment. This means that there are really only five ways to increase the useable revenue from tuition and fee. These five possibilities are:

increase the tuition and fees, thus increasing the base amount each student pays;
increase the number of students paying the tuition and fees, i.e, increase tuition-paying enrollment;
decrease the discount rate on tuition, thus decreasing the average amount of institutional financial aid given to enrolled students;
change the model of teaching and learning in order to increase the efficiency of the use of this revenue stream;
do a combination of two or more of the above at the same time.

With points 3 and 4 above, I apologize for sneaking the expenditure side of the business model into the conversation. However, much of the general public acts as if it believes that tuition and fees cover the cost of a college education. This is definitely not the case, and has not been the case since the beginning of formal American higher education in the mid-17th century. Since this rabbit trail would take us deep into the expense side of the budgets of IHEs, I will leave the exploration of this topic to another post. I will devote the remainder of this post to just addressing the issue of increasing tuition and fees. I will cover the problems of increasing the number of students, decreasing the discount rate and changing the model of teaching and learning in additional posts. I will also address the four other IHE revenue sources in additional posts.

When IHEs announce tuition increases each spring for the following fall, it is usually met with varying degrees of disdain. Students, parents, the general public, as well as federal and state governments are already enraged at the current level of tuition and fees. The data are clear. Tuition and fees have increased at rates exceeding the annual general inflation rate for years. Just at the suggestion of another increase, the reaction varies. It runs the gamut from a reluctant acceptance to a loud murmur to a campus uproar and rebellion.

The following three charts use the same data extracted from the College Board Pricing Trends, which has the most comprehensive collection of data on college pricing trends. Although the charts are based on the same data, they give us three different pictures of the history of Tuition and Fee Increases over the past 40 years. Why have I chosen to present this information in three ways? It is to try to help my readers understand that there are different ways to look at the same data and that one’s first impression may not be the only or best way to view the subject.

The first chart is a 40-year history of tuition and fee increases in “current dollars,” i.e, the average list price of tuition and fees for all colleges in a given segment weighted by full-time undergraduate enrollment. These list prices are compared against the 40-year average increase in list prices. The current dollar tuition and fees are the prices that students, their parents, and government officials will see first. These are the dollar figures against which everyone reacts. The first impression from the graph is how similar the tuition and fees were for all three segments in 1975. Based on the scale of this graph, it is almost impossible to distinguish the price of the four-year, public institutions and the two-year, public institutions. Although the private, four-year institutions were more expensive, on the scale of this graph, in 1975 they did not appear “that much more expensive.”

CHART 1: History of Tuition and Fee Increases Compared Against 40-Year Average Annual Increases

The second impression that this graph conveys to me relates to how the actual increases fall below the projected increases based upon the 40-year average annual increase. This means that the early increases were less than the average annual increases and it took quite awhile for the actual increases to catch up with the average annual increases. It appears that the sharp increases in both public and private four-year schools occurred in the period from 2000 to 2010. This would coincide with decreased support from government appropriations for financial aid.

This graph clearly gives the impression that the gap between the three segments has grown significantly. This is the feeling that students and their parents get when they start looking at colleges and the tuition prices. The fourth and fifth impressions that this graph gives me revolve around the two-year public institutions. The first of these impressions is how much more affordable this choice seems compared to the other two choices. The second impression is how close to a straight line the actual increases appear. To me, and many other commentators and critics of higher education, this raises the spectre of whether these institutions “know the secret” for holding down tuition increases.

The two primary conclusions that many will draw from this graph are: 1) the two-year, public institutions are the most affordable choice for an education; and 2) the four-year, private institutions have had uncontrollable tuition increases over the past 40 years.

The second graph, entitled Growth Factors of Tuition and Fees from 1975 to 2015 Across College Segments, Selected Academic Years, portrays the same data that the first graph did, but gives a very different slant to that data. This chart tells us how fast tuition and fees grew. Surprisingly, it says that the time to double has been relatively constant. In rough terms throughout the 40 years from 1975 to 2015, it has generally taken 15 years for tuition in any of the college segments to double.

CHART 2: 40 Years of Tuition and Fee Growth Factors

SInce the blue bars representing the public, two-year institutions increase in height the most consistently, this is another verification of the steady, almost constant rate of growth of tuition and fees for the colleges in this segment. During the first 20 years, I find it very interesting to note that the public, two-year institutions increased their tuition and fees at the fastest rate, while public, four-year institutions at the slowest rate. In the second half of the 40-year period, the growth rate of public and private four-year institutions shot up, far out stripping the two-year public institutions. Does this represent a shift in public funding priorities for higher education?

Although the growth factors were very close since the private four-year institutions started out with higher tuition and fees, doubling the higher rate increased the differential. Thus, the actual dollar spread in tuition did indeed produce growth.Two different graphs give you two different pictures.

The third graph is entitled the Five-Year Percentage Changes in Tuition and Fees Across College Segments, From 1975 to 2015. This graph plots the percentage change in tuition and fees over five-year periods from 1975 to 2015. This graph gives one a very different picture of tuition and fee increases over these 40 years. The overall trend of data points in this graph are actually decreasing. This doesn’t say that tuition and fees are decreasing. What it says is that the rate of change is slowing.

CHART 3: Five-Year Percentage Change in Tuitions and Fees, 1975 to 2015

Looking at the three different sets of points and lines joining those points, it is not surprising that the blue points representing the two-year, public institutions show the least variation. That confirms what we have seen in the other two graphs. The red points show the most variation away from a straight, decreasing line. The four-year, public institutions have been the institutions most affected by the whims of state legislatures or governors. Again, even though the rate of increase for private, four-year institutions is slowing down, don’t look for the public, four-year institutions to catch them in list price anytime in the near future.

Chart 1 hit me right between the eyes. To those who can remember, I challenge you to go back to your college days and put your tuition and fees into an appropriate year in the chart. For some of us we will have to add lines at the beginning of the chart. My experience would extend the chart another 10 years to the left. In the early sixties at the flagship university in a small state, I never paid more than $175.00 annual tuition plus $10 lab fees per science course, which usually added $20 or $30 per semester. Since computers were just coming into use, as a mathematics and physics major I had to pay a $25 per semester technology fee for the right to put my card decks in the hopper each night and come back the next morning to get the print out from the pin-fed line printer. In addition, as a commuter, I had to pay $50 per semester for a “hunting license” to try to find a parking space in an on-campus parking lot. Thus, my total annual tuition and fees bills were less than $550. My textbooks and supplies were less than $150 per semester. I lived at home, and my mother never charged me anything for room and board, because I took care of everything around the house since my father died during my freshmen year in college. Gasoline averaged about $0.30 per gallon, and I spent maybe $10.00 per week to keep my car in gas, and $25 per week for coffee and lunches. Thus, my total out-of-pocket expenses to go to college were less than $2000 per year, or $8000 for my entire undergraduate education. If you subtract the $6000 in scholarships that I won or was awarded, my B.S. degree in mathematics cost me less than $2000 out of pocket. Even in early 1960 dollars, that was entirely possible to pay for out of summer or part-time school year earnings. For my four years in graduate school, I had a fellowship that paid tuition and living expenses. I didn’t pay one nickel out of pocket for my Ph.D. I graduated in eight years of schooling, with a B.S. and a Ph.D.in mathematics, with a wife, a child, a house, two cars, money in the bank, NO DEBT, and an offer of a tenure track job! In today’s world that would be definitely an anomaly. According to CNN, for the most recent year for which data is available, the undergraduates of the class of 2013 walked off the commencement stage with an average debt of $35,200, while Ph.D. graduates “stumbled” off the platform with an average debt of $57,600. Among Ph.D.s, more than 28% had debts of more than $100,000. The average J.D. and M.D. graduating from Law School and Medical School respectively, had a debt of more than $140,000. Much has been written and debated about the debt bubble that has overtaken or is overtaking American higher education. It looks like I have created at least one more blog post on the Debt Bubble.

Why does this picture look so bleak? I believe it looks bleak because we could be on the verge of very bleak times for higher education. American higher education is heading for a perfect storm, unless it changes course or one or more components of the storm change direction. A perfect storm is the confluence of events which individually may not necessarily be dangerous, but the combination of these events creates a potentially disastrous situation. Here, too, I am taking you to the suspenseful edge, and leaving you to dangle. The perfect storm will be another post in this series on the broken business model of American Higher Education.

http://www.hamiltonproject.org/assets/legacy/images/uploads/thp_image_uploads/charts/college_cost_large.png#college%20cost%20chart%20520×520

May 1, 2016 By B. Baylis Leave a Comment

The Business Model for Higher Education is Broken, Part II

In Part I of this series on the business model for higher education, we postulated that higher education must be operated as a business. I begin this post by reinforcing that assumption by referring to two articles. The first one is the blog posting According to the Duck Test, Higher Education is a Business that I wrote and published here in By’s Musings in August 2010. I began that post by relating an incident that occurred on the farm next door to our home as I was growing up. I remember vividly one instance when the farmer, completely frustrated with his broken down tractor, was yelling and screaming, and calling the tractor a “piece of junk,.” and threatening to send it to the “tractor graveyard.” From my experiences of watching and working with my father as he fixed broken machines, I learned that nothing was irreparably damaged. He operated under the principle that anything could be fixed. Our heavenly Father operates under this same principle. From scripture we know that if we confess our sins, truly repent of them, then God the Father will forgive us, cleanse us, repair us and not condemn us. If we confess our sins, He is faithful and just to forgive us our sins, and cleanse us from all unrighteousness. (I John 1:9, KJV) and There is therefore now no condemnation to them which are in Christ Jesus, who walk not after the flesh, but after the Spirit. (Romans 8:1, KJV) When my facial and body expressions questioned the farmer’s judgment, he proceeded to teach me a lesson that I never forgot, and one that I have used many times since then.

The farmer looked at me and said, “Son, do you know the Duck Test?” I hesitated a little and finally said sheepishly, “No Sir, I don’t.” The farmer, with a condescending glance said, “Well you really should, so let me tell you. When I see an animal in the farm-yard that looks like a duck, waddles like a duck, quacks like a duck, swims like a duck, and flies like a duck, I am very confident that animal is a duck.”

In my 2010 post, I went on to delineate many of the ways that Institutions of Higher Education (IHEs) resemble businesses. Relying on the duck test, my argument that institutions of higher education (IHEs) are businesses consisted of the following premises:

IHEs must be incorporated or chartered by the state.
IHEs own or rent property.
IHEs pay taxes or users’ fees.
IHEs have employees, who form or threaten to form unions to gain bargaining power against an entrenched management known as the administration.
IHEs must pay their employees wages at or above the federal or local minimum wage.
IHEs must pay FICA for all employees, except those excluded legally. If the institution doesn’t pay FICA, the employees are required to pay FICA as self-employed individuals, making those individuals businesses.
IHEs must provide medical insurance consistent with federal or local laws.
IHEs must meet all federal and local compliance regulations placed upon businesses.
IHEs offer products or services to individuals. Whether, you label those products or services courses, credit hours, instruction or an education, the institutions collect money in exchange for those products or services.
IHEs compete for students (just like businesses compete for customers).
Just like a business, the expenses of a given IHE can only exceed its revenue for a limited period of time. It doesn’t matter whether the IHE is classified as a not-for-profit or for-profit organization. If its expenses exceed its revenue for too long, the IHE can be forced to declare bankruptcy and close down.
IHEs are required to undergo annual audits of finances including balance sheets and cash flow sheets, and submit them to the appropriate federal departments, including the Department of Education. In some states, these audits must be submitted to the Department of Commerce.

Since institutions of higher education look, act and speak like businesses, I am very confident that according to the duck test, IHEs are businesses.

The second article I mentioned in my introduction, A University Is Not a Business (and Other Fantasies) is probably the more powerful of the two articles. It was written by Milton Greenberg and appeared in EDUCAUSE Review, vol. 39, no. 2 (March/April 2004): 10–16. Professor Greenberg was professor emeritus of government at American University until his death in 2015. He previously served as provost and interim president at American University, and as such devoted much of his work to developing and rewarding high-quality faculty. Greenberg once said, “College and university teaching represents more than expertise in a scholarly discipline. It means that you are privileged to be part of an extended community that constitutes one of the most important professions in the world.” Provost Greenberg was also known as the most eloquent expert on and spokesperson for the Servicemen’s Readjustment Act, also known as the “G.I. Bill,” which gave veterans across the country access to federal money to pay for higher education after it was passed in 1944.

In Greenberg’s article, he wastes little time in laying out the opposing positions in this war. His opening paragraph sets the stage for the epic battle that was to ensue. The battle lines are clearly drawn.

Academe emerges from—and largely remains within—a culture that sees only a remote and sometimes hostile relationship between its activities and the economic system. This view takes the form of an often-heard campus expression: “A university is not a business.”

Greenberg begins his attack with the two Washington Post December 2003 articles, “The Lesson Colleges Need to Learn,” and “An Educating Use of Business Practices.” These articles were written by one of their leading business columnists, Steve Pearlstein. Pearlstein committed the “ultimate sin” in the eyes of the academy by questioning the efficiency of teaching the “same course” on many different campuses using many different faculty of varying calibre. Pearlstein suggested the unthinkable: greater efficiency and perhaps better learning could occur by using a simple technology like CDs to provide the same superior lectures by superior lecturers to all students across the many different campuses. Pearlstein came under general hostility and heavy fire from the higher education establishment, which considered learning “too special to be run like a crass business enterprise.” You can’t use the word efficiency in the same sentence with learning.

Greenberg continued by noting that although the usual readers of the EDUCAUSE Review had probably heard, and possibly even uttered, that same thought many times, this was most likely the first time it appeared on the front page of the business section of a leading U.S. newspaper. Pearlstein had done the unthinkable. He challenged one of the basic tenets of the academy right in front of the general public. How dare he do this? Higher education was one of the untouchable foundational columns of our society. It was beyond the pale of criticism or suspicion. It held such a position of high esteem that people didn’t dare question the academy or what it did. They trusted the academy. However, here was one of the leading newspapers in the country, raising doubt. This was treason! This was war! Faculty took to the streets, and joined the barricades. They raised their torches of the “true light” and shook their fists at this interloper who had the courage to question their legitimacy. How could higher education be a business? The guiding principle of the business world was antithetical to everything for which academy stood. What standard was this pariah attempting to foist on the academy? Simply stated the principle was “the hierarchical and orderly management of people, property, productivity, and finance for profit.” Greenberg didn’t let up his attack. He continued by noting that in his observation, the ” ‘not a business’ mantra arises on a campus whenever an administrator expresses concern over a program that is losing money or whenever a governing board suggests that the faculty be better managed or supervised in their work. Any mention of such matters will call forth the faculty judgment that the administration has a corporate mentality and is treating the university like a business, the ultimate sin.” The implication was clear. Faculty had the truth. Everyone else, especially those outside the academy, had to have faith in them and trust them. Here we had the first chink in the armour, the first admission from someone of stature, that essentially all IHEs were essentially faith-based institutions.

To be fair, Greenberg attempts to present another side to this argument by appealing again to the Washington Post for his ammunition. This time he turns to an October 2003 op-ed piece, “When States Pay Less, Guess Who Pays More?” by two economists, Robert Archibald and David Feldman. In their article they claim, “Our universities are not inefficient institutions on a bad business plan. Their administrators understand that a college degree is the ticket to the 21st-century economy. There is a crisis in higher education today, but it’s not well-publicized tuition spikes. It’s the long-term decline in political and financial support for the idea that all students should have access to higher education, regardless of ability to pay.” At this point Greenberg leaves the revenue side of the equation and focuses his attention on the expenditure side. Since we’re not looking at the expenditure side in this blog post, we’ll leave Greenberg’s arguments for later posts, However, to whet your appetite for a good debate, at this point I include his closing statements: “…how the academy perceives itself matters. If higher education is to lead its own renewal, it must think about its people, its property, and its productivity in business terms.”

I am sorry Professors Archibald and Feldman, but our universities are grossly inefficient and operate on a very bad business plan. If you consistently have more expenditures than revenues, and you know your projections for increases in expenditures far outstrip projections for increases in revenues, then you have a bad business plan. We can (and probably will) debate why your education model is the very best model available. Before we proceed to the expenditure side of the equation, we will still have much to discuss concerning the revenue side. I am sure that we will end up debating many questions about the sources and potential magnitude of revenue sources. The debates will continue to expenditures as we argue about the manner in which we are using our given resources and, possibly of greater importance, how we should use them. To my readers, I apologize for adding argument after argument, seemingly complexifying this issue unnessarily. However, I am very interested in this topic and feel very strongly about it. Oliver Wendell Holmes Jr. reportedly said, “I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.” Friends I am seeking simplicity, but I am afraid we will have to battle through complexity to get there.

April 22, 2016 By B. Baylis Leave a Comment

Public Education: Public or Private Good?

In American education and political arenas, this question has unquestionably been front and center under the bright, spot lights and cameras during the recent presidential debates. In the P-12 scene it has also been a focal point of many contentious state and local election discussions and contests. I found the history of this hotly debated question very fascinating. This is not a new political or educational argument in America. It has been an issue for America’s schools since the 17th century.

The question “Public Education: Public or Private Good?” is very simply stated. However, it is really an extremely devious and furtive question. To begin to answer the question, we must have a firm handle on the five important concepts that comprise the heart of the question. These terms and concepts are: 1) Public; 2) Public Education; 3) Goods; 4) Public Good; and 5) Private Good. We will begin to parse these five terms in this post. Once we have a grasp on these concepts we will continue the discussion in future posts, attempting to unravel the tricky nuances that are fraught with danger. In so doing, we will immediately find that we have jumped into a snake pit of poisonous vipers, which have intricately woven themselves into a sliverly web worthy of any Indiana Jones movie.

I hope we will not be like the unsuspecting pilgrim trying to find the mother lode of inexpensive, high quality education, who comes upon a tree loaded with delicious looking Granny Smith apples. One of these green apples is especially appealing. It is hanging from a low branch, just in the reach of our intrepid seeker of truth. This potentially, prize-winning apple is crying out to the unsuspecting traveler, “Pick me; eat me. I am delicious!” However, as soon as the hand reaches out to touch the prize apple, it feels the fangs of the green snake hiding among the leaves.

Returning to consideration of our five concepts, let’s begin with the question:”What do we mean by public?” There are two primary answers to this question. The first is a more formal answer. Public refers to the collective whole, or the state. When we use the term state, we usually mean the government, whether it be at the local or national level. In the United States, we have a problem with this term since, we have divided up our land and people into a large unit which we call the country. We then subdivided that large unit into smaller units which we call states. States are further subdivided into units which are usually called counties, cities, and towns. Most of the time when we use the term public to refer to one of these units, we are referring to the governing body of that unit. The second answer is more informal. In this usage, we will refer to the people that compromise the unit as the public. How do we distinguish which definition we are using? It depends upon the context of the situation. Public law is concerned with political matters, including the powers, rights, capacities, and duties of various levels of government and government officials. A park that is owned by the state, and open for use by anyone is called a public park.

What is “Public Education”? The quick answer is that it is education under the control of and financed by the state. At the primary and secondary levels, this definition usually suffices to distinguish public from private educational entities. It is more complicated at the post-secondary level. We will work on breaking out and explaining the intricacies of this conundrum in a subsequent post. However, for the sake of this post, let us assume that we can distinguish between public and private post-secondary institutions.

“What is a good?” In economic terms, “A good is a material or service that satisfies a human need or want, or provides utility to people.” “Public Goods” are those goods which are controlled or dispensed by the general public, usually in the form of the government. “Private Goods” are those goods which are controlled or dispensed by individual, private citizens.

In trying to formalize and tighten up the analysis of the role of the government in dispensing public goods, the first economist who attempted to define “Public good” was probably Dr. Paul Samuelson, winner of the 1970 Nobel Prize in Economics. His world famous textbook Economics was initially published in 1948. In all its various editions, it is one of the top ten best selling book of all times. It is currently in its 19th edition. When I took Economics during my sophomore year in college, my professor had selected this classic as the textbook for the course, because Samuelson had been his instructor in his college days.

An academic paper published by Samuelson in 1954 may have one of the greatest pedantic titles of all times. The title was “The Pure Theory of Public Expenditure”. The paper appeared in the Review of Economics and Statistics, Vol 36, No. 4. In his paper, Samuelson suggests that his predecessors neglected the very important point of optimal public or government expenditure in their economic analyses. To remedy their omissions, Samuelson defined two categories of goods:

Private consumption goods: goods which are distributed according to individual preferences, primarily focusing on the consumption side, but also including the preferences of the individual producers and providers
Collective consumption goods: “goods which all enjoy in common in the sense that each individual’s consumption of that good leads to no subtraction from any other individual’s consumption of that good,”

Subsequent economists labeled Samuelson’s “Collective consumption goods” as “Public Goods“. They broke Samuelson’s description of the definition of collective or public goods up into two distinct characteristics:

Non-excludability: “..enjoy in common” meant that It was impossible for the government to exclude non-payers from consuming the good.
Non-rivalrous: The “no subtraction” concept was translated into the idea that consumption by one individual does not exclude any one else from consuming the good.

Today’s economists employ national defense and clean air as two standard examples of public goods. One of the basic illustrations of the principle of non-excludability involves national defense. The federal government can’t reasonably deny an individual national protection, and adding one more individual under the protective umbrella of the military doesn’t subtract any protection from anyone else. It should be clear that pure public good and goods that are strictly private are mutually exclusive. The difficulty comes when we begin to see that there are very few pure public or private goods. This is a topic for another post.

Samuelson considered the concept of a public good as the most essential component of his economic analysis in the allocation of governmental resources, and central to his theory of an optimally functioning welfare state. He did admit that people would be “tempted” by their “selfish desires” to revert to acting on their private goods appetite, thus making it very difficult to come to a point of optimal public consumption. When he formulated this theory in the mid-20th century, he conceded that there was no “magical adding machine” that could do all of the calculations necessary to solve the mathematical, optimization problem at the heart of his theory. However, he wishfully added that huge strides were being made in the realm of computing machines, which he hoped one day would arrive at a solution. We’ve come a long way in the past 70 years in computing capabilities. However, we still haven’t found Samuelson’s silver bullet. The perfect welfare state, utopia, is still an illusion. However, on the other side of the coin, the state governed by peoples’ selfish desires is a maelstrom of gigantic proportions. Is there a solution somewhere in the middle where we live and thrive together?

Returning to the question that began this discussion: Public Education:Public or Private Good? Many commentators since Samuelson’s ground-breaking work have tried to force public education into the category of a public good. They argue that providing everyone a free education “has to advance society.” Unfortunately, public education does not meet the two uncompromising characteristics of a public or common good. Public education does meet either the non-excludabilty or the non-rivalrous criteria. Why is this the case?

An individual can be excluded from receiving an education at the public’s expense in many different ways. Some of these ways are subtle, and others are very blatant. To enter the temples of learning, you have to be an “authorized person.” What keeps people from being authorized? In one word: Discrimination. Before you go running off, crying FOUL!, there is legal and illegal discrimination. There is ethical and unethical discrimination. There is proper and improper discrimination.

Discrimination is just the process of separating things into two or more categories. When colleges admit some students and reject others, they are discriminating among students. It is an educational truth: Some students shouldn’t be accepted into some colleges. Even with an abundance of assistance, some students would not be able to do the work to succeed at Harvard University. The DoE actually encourages colleges to discriminate on the basis of academic ability. For a given student to receive federal or state financial aid, the college must demonstrate that the particular student has the ability to do college level work at that given institution, and can benefit from the degree program in which the particular student might enroll. As a student progresses through their college career, they must maintain satisfactory progress as defined by the DoE, or their given institution if the institutional criteria are stiffer than the federal criteria. There are three parts to the federal satisfactory progress criteria. The first criteria is that students must have a grade point average of at least a “C” or its equivalent by the end of their second year of enrollment. The second criteria is that students must complete their degree or certificate within a maximum time frame measured by attempted credits equal to 150 percent of the number of credits required for their primary degree program. The third criteria is that a student complete (earn) a minimum of 67 percent of the credits they attempt in order to remain eligible to receive student financial aid. If a student fails to meet any one of the above criteria, that student is denied federal and state aid. For many students, denial of federal or state aid is tantamount to dismissing the student from the institution.

Students are excluded for academic reasons from every institution of higher education, even those that label themselves “open admissions.” If a student does not have a high school diploma or its equivalent, then that student is routinely excluded. Other forms of exclusions may not be for academic reasons. Students adjudged to be a danger to themselves or others may be prohibited from enrolling. If they have already enrolled, they may be dismissed. At many public institutions, sexual offenders or sexual predators may be prohibited from enrolling, and again, if they have already enrolled, they may be dismissed.

By definition, rivalry could be considered a form of exclusion. If consumption by one individual prevents another individual from consuming the product, the second individual is excluded. College enrollment is obviously rivalrous. There are only so many spaces to be taken. When all the seats in a given class are filled, the class is closed, and no more students are permitted to enroll. This is the way that colleges have operated for many years. This has particularly been the modus operandi since the middle of the 20th century. In many states, this is a big problem. Students need certain classes to fulfill the requirements for their programs. The students believe that the college has “promised” to offer those classes, according to schedules laid out in the college catalog or advising manuals. When the students try to register for the classes, they discover that there are not enough spaces for them. What are the reasons for this form of discrimination and exclusion of students? This also will be a topic for a forth coming post.

So what do you think? What’s your definition of public good? Is there really such a thing as a public good? If so, is public education a public good? Should it be available to everyone without charge?

November 25, 2015 By B. Baylis 1 Comment

A Proposal for Changing the Definition and Expected Behaviors of a CEO

In organizational theory, the abbreviation CEO usually represents Chief Executive Officer. “What is a Chief Executive Officer?” “What does he or she do?” The CEO is the highest corporate officer of an organization. This individual is in charge of the total management of the organization. The simplest answer is that the CEO is the boss! All areas of the corporation and all individuals within the organization work under the ultimate direction of the CEO. What are some of the differences between terrible CEO’s and great ones?

What does a bad CEO say and do? The negative pictures of a CEO usually begin with a monster screaming orders at the employees.

“The last quarter was a disaster! It better not happen again!”

If the ogre is not yelling at everyone, then the cutthroat is making the poor employee who made a mistake walk the plank.

“That’s it! I’ve had enough of your mistakes. You’re fired!”

Many times the bad boss is a micromanager, who must control every aspect of the organization, and approve every decision in detail.

“The buck stops with me. This is my company. You will do it my way! Let me see what you’re doing!”

Bad CEO’s are often notorious for manipulating individuals in order to get their own way. They treat people like they are toys or puppets.

“You’ll dance until I say you’re done. Next time I tell you to do something, you’ll do it immediately, without question.”

Terrible CEO’s have lost the respect of their employees. How can you tell when a boss has lost the respect of the employees? Figuratively and literally, the employees turn their backs on the boss. They may follow orders, but their hearts aren’t in it.

“What are you idiots doing? Why isn’t anyone paying attention to me? Look at me when I’m talking to you, I’m your boss!”

If that’s what a bad boss does and says, what does the good boss look like? The good boss is a true executive officer who sets the vision and direction for the ship. The good ship’s captain is the individual whose very presence on the bridge commands respect.

“Be alert, the enemy has been spotted in the area. We’re in imminent danger. Every one to battle stations. Change course to 90 degrees. Engines ahead, full speed.”

The capable CEO must act like a coach of a winning athletic team. The coach serves from the side line, and many times behind the scenes, teaching and encouraging the players.

“Great tackle! Be ready to jump into the passing lane. Watch the quarterback’s eyes, just like you do in practice.”

Research has shown that high performing organizations have a set of ethical standards that are well publicized across the organization, known and followed by everyone. In these organizations, the CEO is the standard bearer and sets the moral tone for the organization.

“Do I take the shortcut, just this one time? I probably won’t get caught. NO! This organization, my reputation and my life is built on doing what is right.”

The good CEO encourages everyone in the organization, builds up their self-confidence, and urges them on to higher standards.

“This is great work, you two. I really like your proposal for the new ad campaign. Do you think we could tweak the sales goals just slightly?”

A great CEO empowers people, and enables them to be all that they can be.

“I really liked how you turned this failing store around. I think you have the right stuff. I want to make you district manager.”

The CEO definitely needs to be the Chief Executive Officer, the individual who helps formulate the vision of the organization and leads the management of its operations. However, the CEO also needs to be the Chief Ethics Officer, the individual who helps define the values of the organization, and sets its moral and ethic tone. The CEO needs to be the Chief Encouragement Officer, the individual who is constantly encouraging people to continually strive to do their best and achieve great things. In addition, the CEO must be the Chief Empowerment Officer, the individual who enables or authorizes individuals to do what they can and be who they are meant to be. These building blocks fit together to form the Leadership Pyramid.

In my next blog post, I propose that there is at least one more function that a CEO must fulfill. The excellent CEO must be the Chief Eleemosynary Officer of the organization. You don’t know what eleemosynary means? Neither did I until I started looking for E-words to fit in the title CEO. I’m not telling you yet what the word means. You’ll either have to look it up or wait until my next post.

November 28, 2014 By B. Baylis Leave a Comment

Which Would You Find More Acceptable in Your Back Yard, a Toxic Waste Dump or a Murder of Crows?

Are you kidding me? Who would want a toxic waste dump in their back yard? However, who cares about crows anyway? Crows are noisy, dirty birds. They are omnivorous. They eat anything that comes along. They can devastate a garden or a crop of corn before it can be harvested. Few people worry about eliminating these nuisances from their backyards. Right?

This fourth post in my NIMBY series is the second example of a first pick alternative. More of that a little later. I begin by explaining the second half title of this post. “A murder of crows” is an expression that goes back to at least the 15th century. It is a poetic expression that refers to a group of crows. The phrase was included in “The Book of St. Albans”, a compendium of collective nouns, published in 1486.

The term murder of crows may have come from several traits of crows. They will eat anything that they find available, especially carrion. However, if they come across a nearly dead or helpless animal, no matter its size, they are not above picking the animal to death. This includes their own species. When crows are sick or dying, their companions will pounce on the poor brother to finish him off, and then make a meal of him.

The second trait that might suggest calling a group of crows, a murder of crows, is their annoying, raucous calls. This is especially true when a group of them seem to be taunting each other with the calls. How many times have a group of kids playing noisily been chastised by a parent, yelling at them, “Knock off the noise! What are you trying to do, kill each other?”

A 1998 movie written and directed by Rowdy Herrington, named “A Murder of Crows” is part of the inspiration of the title of this post. In his suspenseful thriller, a disbarred lawyer steals the unpublished book of a dead man and publishes “A Murder of Crows” as his own work. The book tells the story of the murder of five unscrupulous lawyers. The title is derived from a reference in the book to the murdered lawyers as crows.

I have indicated that this post will deal with a choice between toxic waste dumps and a murder of crows. Where am I getting this comparison? It comes from a joke on one of the late night television shows. I don’t remember which show, but I do remember the joke. The comedian began his routine by referencing two national reports.

The first listed the location of all the toxic waste superfund sites by state in 2011. New Jersey topped the list with 116 sites. The next closest was California with 98. The 116 sites in New Jersey equaled the total sites for the 25 states with the fewest superfund sites. The second report was a 2012 report of the American Bar Association listing the number of lawyers per capita in each state and district of the United States. Probably not surprising, Washington, D.C. topped the list with New York in second place. What might be surprising is the difference. In D.C., there are more than 800 lawyers per 10,000 residents, or one lawyer for every 13 residents. In New York, there were 84 lawyers per every 10,000 residents, or one lawyer per 120 residents. Thus, in D.C. there are almost 10 times more lawyers per resident than in New York.

After giving out these statistics, the comedian ask the natural question: “Why should New Jersey have the superfund waste dumps while Washington, D.C. has the lawyers?” The quick, obvious answer was: “Washington won the coin toss, but deferred, just like they do with every other decision, until the second half. That gave New Jersey first choice and they took the waste dumps.”

There is a very logical reason why Washington, D.C. has the highest number of lawyers per capita in the country. The main business of Washington, and even the reason for its existence, is to be the legal center of our country. Almost every thing in the city revolves around laws. From writing laws, enacting laws, enforcing laws, interpreting laws, and adjudicating laws, who is better qualified than lawyers? The facetious answer to this question might be, “Anyone, but a lawyer.” The United States is a country of law, governed under the rule of law. Throughout history, the world has seen many examples of what happens when a society descends into lawlessness. This makes lawyers indispensable. However, I’m tempted to paraphrase a line from “Fiddler on the Roof.” “May God bless lawyers, and keep them out of my back yard.”

There are also very logical reasons why there are so many toxic waste dumps in New Jersey. They begin with the history of New Jersey. For many years, New Jersey’s economy has been very heavily dependent upon dirty industries. By dirty industries, I mean manufacturers involved in the production and distribution of potentially harmful products and products with potentially harmful byproducts. New Jersey is the home of a number of refineries, paint and solvent manufacturers, chemical companies, building material plants, automotive-related industries, and electronic-based businesses. In the face of the high industrial concentration in the parts of the state, New Jersey is additionally the home of many farms which can also be major polluters.

Just because the products associated with the pollution are located in New Jersey, why should the waste also be sited in New Jersey? There are three main reasons. The first two are economics and convenience. It is so much cheaper and easier to dispose of waste near to the location it was created. The third reason is actually a form of the NIMBY argument. “Why would other locations want to take New Jersey’s dirty waste? I don’t want my neighbor’s waste and junk in my back yard.” Thus New Jersey was stuck with its own waste.

I’m not sure I have helped you answer the question: “Which would you rather have in your back yard, a toxic waste dump or a murder of crows?” As a country, both have provided many benefits. Personally, I am leaning toward a murder of crows. Dealing with a bunch of dirty birds is more appealing to me than trading potential health hazards for financial prosperity .

My next NIMBY post returns to scriptures. In the Gospel of Luke, Jesus is under fire from a hostile lawyer pressing him on the issue what was necessary to inherit eternal life. Jesus turned the question back on the lawyer by asking him, “What does the law say? How do you read it?” After a testy exchange, the lawyer asks Jesus directly, “Who is my neighbor?” Jesus responded with the parable of the Good Samaritan. In the post “Who is My Neighbor?” I will discuss the implication of the parable for NIMBY debates in today’s world.

With all the negative interactions in scripture which involve lawyers, I’m having second thoughts about my first choice. It reminds me of an old joke:

Q: Have you heard any “good lawyer” stories recently?

A: I didn’t know there were any?

Do I really want a whole of bunch of loud, obnoxious lawyers arguing in my back yard, spewing their poisonous venom into the air? Maybe the toxic waste dump in my back yard isn’t so bad after all? Is there any difference?

You caught me. I am guilty of hyperbole. Obviously, I have fallen into the trap of dumping all lawyers into the same trash heap. I know, as well as you, that not all lawyers are bad. Many are good, decent human beings, whose work is absolutely necessary for the well-ordered operations of our communities and country. These lawyers should be honored. It’s the bad apples that need to be identified and eliminated.

November 13, 2014 By B. Baylis Leave a Comment

What Makes a Better Neighbor: a Prison or a University?

In February 1980, one of the most horrific prison riots in US history occurred at the Maximum Security State Prison in Santa Fe, New Mexico. Several years later, at an academic gathering in the beautiful conference setting of quaint Santa Fe, the dinner discussion turned to the question of why the main branch of the state university was located in Albuquerque, while the maximum security state prison was located in Santa Fe. An administrator from a college in New Mexico, replied, “As State Capital, Santa Fe had first choice.” When I first heard this comment about 30 years ago, I thought it was a joke. However, I immediately recognized that this one-liner could come in handy in future discussions. Thus, I filed it away in my memory to pull out at an appropriate time.

I will admit that over the intervening years, in addition to employing it myself, I have heard others use the “first choice” quip on more than one occasion in discussions of seemingly anomalous situations. My next post, “Which Would You Find More Acceptable in Your Back Yard, a Toxic Waste Dump or a Murder of Crows?” represents such an occurrence.

When I started this series of posts on the NIMBY syndrome, I figured it was time to pull out this old story and look at it more closely. I thought of three general questions that I should answer. Firstly, are there other state capitals which may have chosen prisons over universities? Secondly, what are positives and negatives for a community having a prison within its environs? Thirdly, what are the benefits and detriments that an institution of higher learning imparts to the community in which it resides?

I quickly discovered that arriving at the answer to the first question was much more time consuming than I expected it to be. I first ascertained that all 50 state capitals had jails, prisons, and/or detention centers of some stripe within their metropolitan boundaries.

Surprisingly, trying to determine how many state capitals hosted state-supported universities also proved a little trickier than I thought. I began by settling on a definition of state-supported university. For my purposes, I looked at institutions of higher education that: 1) called themselves public colleges or universities; 2) offered four-year baccalaureate degrees as the core of their undergraduate academic programming; 3) offered primarily full-time, traditional, residential programs; 4) offered campus housing to students; and 5) garnered a significant slice of their general operating budget from direct state appropriations. In my search I found 41 states that had institutions that met all five of my conditions. Besides New Mexico, the other eight that did not were Iowa, Maryland, North Dakota, Oregon, South Dakota, Vermont, West Virginia, and Wyoming.

The higher education options in the capitals of these nine states present an interesting mix. All nine of the state capitals have for-profit institutions offering non-traditional degree programs for adult students. Four of the state capitals do not have any private colleges or universities that offer traditional four-year baccalaureate programs. These are Des Moines, Iowa, Pierre, South Dakota, Montpelier, Vermont, and Cheyenne Wyoming. Only two of the state capitals, Annapolis, Maryland and Pierre, South Dakota, do not have public two-year community colleges.

Although Annapolis, Maryland does not have any state supported four-year school, it is the home of the United States Naval Academy. As a national military academy, it is not the typical college. First students do not pay tuition. They “pay” for their education by a military service requirement after graduation or separation from the academy. The admissions process is also quite complicated, with the student completing a normal academic application and a nomination application to those individuals or groups that are authorized to nominate students to the national military academies.

Thus, Pierre, South Dakota seems to fall completely outside the normal pattern of educational opportunities in state capitals. There are no traditional college options, either public or private, in Pierre. Students just graduating from high school must leave Pierre and go elsewhere to attend any college.

Therefore, the data suggest that most state capitals have not picked prisons instead of colleges or universities. While 96% of state capitals had state supported, two-year technical or community college, a hefty 82% were also home to state supported universities. Thus, most state provided their state capitals with both prisons and state supported higher education.

Although most economic impact studies give the edge to universities over prisons in providing economic benefits to the surrounding community, there are a few negative blips on the radar screen. In the last quarter of the 20th century, the two unrelated trends of an economic downturn in rural America and the epidemic-like increase in U.S. prison population caused some rural communities to turn to prisons as a basis for economic development. While most economic and employment impact studies look at the increased revenue produced by the universities and prisons, they do not take into account the added costs of increased services required and social disruption.

With all the economic, cultural and educational advantages that colleges and universities provide communities, why would any community embrace a prison before a college or university? There are some economic reasons, but many of the reasons seem to be social. Whereas a college or university is likely to drastically change the culture of a community, a prison is very unlikely to cause any such changes. Colleges may attract a diverse student body that is very different from the community. This can cause tensions among the students and the local residents. Faculty and students are also by nature activists and push for change, while the local residents may be very content to remain in their status quo. College students are also generally free to move about. I once read a newspaper account concerning a community resident complaining about a wild party which spilled over from a college into the surrounding community. It described the scene by saying, “The inmates were running wild.” With prisons, the inmates almost never run wild in the local community. Prisoners are locked up and have little or no contact with the surrounding community.

Once a prison is built, there are few extra demands on public safety services or transportation infrastructure. Once a college is built there are multiple extra public safety or infrastructure concerns. Colleges and universities have numerous, large events with a concomitant influx of visitors, which must pass through the community to get to the campus. Communities are left with the big question of who is going to pay. Since all public and most private colleges are tax-exempt organizations, they do not pay state and local taxes to cover the cost of the common public services that communities must provide like public safety, transportation infrastructure like roads and bridges, and utility infrastructure concerns like water and sewer. To get around the tax questions, some communities have asked college and universities and other tax-exempted organizations to pay user fees to cover what might be considered their fair share of the cost of providing community services.

One other concern with a number of college communities is the disruption that the expansion of a college causes the local neighborhoods. From personal experience, I have seen neighbors very upset with the way colleges have bought up properties and changed the nature of the neighborhood. With public institutions, the use of eminent domain can further alienate the locals.

Why are prisons sometimes considered better neighbors than college and universities? Colleges and universities change the nature of their neighborhood. They are a disruptive force, costing more than they are worth in the opinions of some neighbors. Once prisons are built, they usually just sit there and have no interaction with the neighborhood.