Quality Endeavors Issue No. 134
December 2010

The Challenge: Educating More Students in a Difficult Economy

Higher education is in a difficult position. Institutions are faced with financial challenges in the current economy. Families and students are concerned with the cost of higher education. At the same time, there is a call for more Americans to have post-secondary education so they can function more effectively in the global economy.

The College Board has provided extensive research on tuition costs in “Trends in College Pricing”, and “Tuition Discounting”. Donald Heller, Director of the Center for the Study of Higher Education at Penn State, has done additional research in the area of college access and affordability. Given the national situation of a tight economy with little or no new funds for higher education, how can more students be graduated in the coming years?

Two reports address this issue from both the student and institutional perspective. While neither report focuses on doctoral/research (Research 1) universities, both reports make many suggestions regarding reducing expenses and increasing student success. Penn State is already addressing many of the issues identified in the reports, and in those cases, links to related Penn State Web sites are included.

McKinsey and Company’s premise was that they needed to identify highly productive schools and their processes and procedures that could be scaled up without increasing unit cost for graduation. The result of this research and analysis was “Winning by degrees: the strategies of highly productive higher-education institutions”. McKinsey’s first step was to identify the range of cost per degree at nine categories of universities, based on four levels of competitiveness and three levels of degrees granted. Within these nine categories, they identified three categories that serve approximately 50% of the student population: competitive institutions that provide bachelor’s degrees, and institutions that provide either associate degrees or certificates. Within these three categories, they identified eight top performing schools, based on cost per degree. At these schools they found a pattern of five strategies that led to student success.

  • Completion Efficiency
    • Enable students to reach graduation through the use of student cohorts, a student success course, tools to help students plan their path to graduation, and student mentors.
    • Reduce non-productive credits, such as failures, withdraws, or credits taken beyond degree requirements through limiting and tracking course drops by semester, developmental education and partnering with secondary schools, and making it possible to retake just the part of a course that led to failure. Penn State’s Early Progress Reports address some of these issues.
  • Cost Efficiency
    • Rethink instructional design to include incorporating technology into course design and delivery, designing courses centrally, collaboratively developing general education courses, continuously improving courses, or offering a summer semester with the same number of students on campus as in the fall or spring. Many of these design, delivery, evaluation, and improvement initiatives can be found at Penn State’s Schreyer Institute for Teaching Excellence.
    • Improve efficiencies in core supports and services through use of electronic forms, student self-service systems (such as Penn State’s eLion), cross-training, appropriate centralization, and procurement excellence (such as Penn State’s eBuy.
    • Optimize non-core services and other operations, and evaluate which services to maintain and which to discontinue.

In Cutting Costs, the American Council of Trustees and Alumni identify 10 approaches to consider in providing education within the current economy and without increasing tuition significantly:

  1. Use more distance education; require some undergraduate credits to be through online education
  2. Limit capital projects, particularly if they are funded through student fees
  3. Reduce administrative expenses through increased use of technology, outsourcing, and partnering
  4. Partner with community colleges for remediation and to offer collaborative four-year degrees
  5. Form consortia to deliver programs with low enrollment
  6. Reassess the value of travel
  7. Review teaching loads – who teaches what classes with what enrollment (see Penn State’s Strategy 7.1: Improve Instructional Productivity
  8. Reassess the cost of specialized accreditation
  9. Consider alternatives to tenure
  10. Review general education courses to ensure that students are provided the knowledge they need at the lowest possible cost

As noted, the economy is tough and tough decisions need to be made. Penn State has made progress in some of these areas. Further work is guided by the Priorities for Excellence: The Penn State Strategic Plan 2009-10 through 2013-14.

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