Could it make sense to get rid of scholarships?

Today I got the final bill for my daughter's fall semester. After scholarships and loans it is a relatively small (though still plenty large) amount of money.

It got me thinking, though, about what people actually pay for college. Especially in private institutions, few students pay the full sticker price. Instead each student pays some variant, with a big chunk of the tab being reduced by scholarships or other sorts of financial aid that students do not need to repay. Colleges monitor the amount of reduction (the "discount rate") very closely. The conventional wisdom is that a discount rate set too high reduces income for the college; one set too low discourages students from attending because it is too costly.

I wonder what would happen if instead of managing a discount rate, campuses just cut the tuition cost for all students by the discount rate and stopped giving out scholarships.

On the financial end it seems like ending scholarships would simplify the budget process. But I am more interested in what would happen to the make-up of the student body, and to their learning. Here are some surmises about the results of ending scholarships:
1. The campus would get fewer top academic students who normally take up nearly all of the full-ride scholarships.
2. In their place would come a more diverse range of students--more middling academic students, more students intrigued by the institution's offerings, and more first-generation students who would have been turned off by the high sticker price.
3. Students might end up paying less as a whole since they would not be subsidizing other students' attendance.
4. Aggregate retention, graduation, and other assessment numbers would decline modestly at first, since high achieving students are those most likely to be retained, graduate in 4 years, and be engaged in the life of the campus and they would make up a smaller proportion of the student body.
5. The campus would re-allocate resources away from programs serving high performing students (honors programs, targeted recruitment, etc) to the student body as a whole.
6. The re-allocation of resources and attention would eventually return agregate performance measures to previous levels.
7. Disaggregating these measures, though, would show improvement in the performance of students in "at-risk" groups.
8. The linkage between cost and quality would become clearer, since the cost to all students, the expenditures on all students, and the results of all students would become more clearly linked.
9. The campus would be forced to present itself and carry itself in different ways. It would no longer be so easy to trumpet its inputs (entering student GPA, SAT scores, fancy buildings, etc.) but it would be easier to focus on its mission and clearly describe cost to the public.

Are these 9 assumptions correct? Are there other likely outcomes? Is there anything that would make the risk of getting rid of scholarships worth the outcomes (which to me look positive over time)? Would it make sense at your campus?

Five models of free higher education

There are at least five models of free or very low cost higher education in the world. Talk in my part of the higher ed world attends a lot to one of them--technology-enabled (or web-based) online education. The conversation about cost and quality ought to pay attention to all of them though, so that it can borrow from those that work best. Here they are:
1. technology makes it cheap--The University of the People is one of the most visible examples of free online institutions. Even more common are free online courses or learning materials (about which I have blogged a great deal).

2. government makes it cheap--This is the model in much of Europe, where once a student is accepted to university, tuition is free. (Given how limited access is to top universities in Europe, this variety looks a lot like #3.)

3. government makes it cheap for certain students--This is a more common model in the US, where many states offer full-tuition scholarships to valedictorians, or to top students.

4. subsidies make it cheap--BYU, BYU-Idaho, and BYU-Hawaii are all examples of universities that are inexpensive because their sponsoring organization--the Church of Jesus Christ of Latter-day Saints, subsidizes tuition dramatically.

5. endowments and alumni make it cheap--Cooper Union, Berea College, and Deep Springs all fall into this category. Each has a sizeable endowment which is used to provide free education to those who are admitted. Alumni giving is high.

From just a cursory look, it seems like only #5 provides both high quality and low cost (though #4 does a decent job as well). There are all sorts of reasons for this. Here are some: these schools are small, students are highly dedicated, their cultures focus on the duties that a free education imposes on its recipients, the co-curriculum and the curriculum are tightly woven so that it adds up to a holistic experience, schools and students are budget conscious (with many/most working on campus), their missions are strong, they had founders whose vision continue to shape the school.

If institutions are focused on reducing cost and raising quality they might profitably move in this direction

A personal note

Learning at Westminster is by (my) design a blog of small essays about issues in higher education. It is also, in the words of one commenter, "dry (in a good way)." Dry, usually. In a good way--occasionally, I guess.

So let me step outside of my regular blog persona (or perhaps it is an anti-persona) to say that my wife and I are taking our oldest daughter to college this weekend, and the prospect has left me in a heightened version of my typical emotional state--optimistic, afraid, and likely to be surprised by whatever happens next.

Too much talk about college in the HE administration world is about programming, retention, curriculum, etc. I talk it all the time. I tell parents about Westminster's strengths, I mentor their kids. My courses carefully incorporate college-wide learning goals, active pedagogies and the like. I work to make sure that my institution does the best it can to help its students learn and become what they ought (and what they want).

Let me just acknowledge, though, that as a parent taking my kid to school, programs, curriculum, campus culture, support systems, faculty preparation, student loans, and the rest get me only barely beyond cold comfort. At a basic level, they don't touch on the things most on my mind--my daughter is leaving, we hope we've been good parents, and there is little but uncertainty and exploration ahead.

Co-ops, citizen action, and lifelong learning

A few Senate Democrats, hoping for a compromise on health care reform, have floated the idea of health care co-ops instead of a "public option" as a counter-balance to for-profit health insurance. The notion has received a good deal of mockery, from scions of the right and the left.

Skepticism from Mike Leavitt (right) and Paul Krugman (left) is a sure sign that there is something worth paying attention to in the proposal. Timothy Egan's op-ed on successful co-ops past and present suggests why. It turns out that co-ops can bridge the right and the left in a way that other options can't.

The appeal of co-ops is three-fold: 1. co-ops are democratic in purpose and function, relying as they do on joint ownership by their members, a notion that appeals to the left; 2. co-ops are essentially businesses. They aim to buy from and sell to people who often become part-owners of the organization. Ownership is an idea the gets most traction from the right today. 3. historically they have been created to resist the power of big businesses and/or big government, especially when the "bigs" work together. Here is a notion that appeals to both right and left.

What does this have to do with education? A couple of things. In the first flowering of co-ops (during the populist era), co-ops were part of a broader movement that included a powerful effort to extend education to people of all ages. The grange movement built halls throughout rural America. There, traveling speakers taught residents about agriculture, politics, and advocacy. Much the same ethos drove reformers like Jane Addams whose settlement houses extended the idea of educational co-ops to include college students and early forms of service-learning and community-based research.

Second, educational co-ops exist all over the place today. They are mostly hidden from discussions about education, but pre-schools across the country use this model to meet the needs of families and ensure some input from parents. Meanwhile, community education efforts maintain much of the same educational focus as early educational efforts among grangers and settlement houses did.

Given the routine complaints about how public schools and higher ed fail to serve the needs and wishes of parents and communities; and the widespread skepticism of government's role in improving education, perhaps educational co-ops ought to get another look. Their focus on life-long learning and governance by stakeholders, coupled with their place in-between government power and the power of big business might add much to our effort to improve not just schooling but education.

Why don't great options make great systems?

The town hall health care blow-ups have gotten attention mostly as theatre and "decline of America" hand-wringing. But like many great confrontations, they have brought paradoxes to the fore. And paradoxes are valuable things. One of the most valuable paradoxes is this: how can we simultaneously have "the best health care in the world" and a crumbling health care system? (The same paradox exists in lots of fields--best lawyers but horrible legal system, best athletes but horrible national physical fitness, etc.)

Educators are familiar with this paradox because we have it too. How can we have great teachers, (or programs, or schools, or universities) and at the same time a system of schooling that by all accounts is falling short? Here are some possible explanations, all of which are in circulation in both the health care and education debates:

1. Discrimination--The best educational options are available overwhelmingly to white, well-off people. If you have money, you can afford the best (teacher, lawyer, doctor), if you don't then you get underfunded, overcrowded schools.

2. Bad information--You have to know about the best options to know how to take advantage of them. Even the wealthiest often get bad (health care, schooling, whatever) because access to information is uneven and options are hard to judge.

3. Crisis-mongering--Perhaps the gap between the top option and the system isn't that large, but it is in the interest of some people to make it seem that way.

4. Bad choices--It isn't the system that is ineffective, but the day-to-day choices of the people acting in the system that are ineffective. If people want good outcomes, be they in health or education, they need to make and stick to good choices.

I imagine that all of these explanations have some power, especially in the national debates. But they cover up a few other explanations that I see popping up frequently in my work. Here they are:

1. Innovation is a sign of excellence--whether in health care or in higher education, the new thing gets the most attention. This isn't bad in itself, but it does lead to situations where excellence does not become widespread because leaders have already moved on to the next new thing. This is particularly true with pedagogy, but also with other parts of higher education. Without staying with an innovation for a long time, it is impossible to understand how it can spread out to the rest of campus, or the rest of the system.

2. Excellence is designed not to work at a system level--think about honors programs, or athletic teams, or undergraduate research. These aspects of higher ed are rarely designed to serve all students, or even to produce lessons that can be applied across the campus. When was the last time that a campus, seeing that honors students flourish in team-taught classes, decided to make that resource available to all students?

3. There is no such thing as a system--This is my particular hobby horse. We talk all the time about health care systems, or school systems, or campus communities. But are they really systems? Are the pieces connected? Do they give feedback? Do they have ways of self-correcting? Almost always they are not. Just as there is no meaningful connection between Harvard Medical School's cutting edge cancer treatments and the doctors who treat regular people in Pleasant Grove, UT, so is there no system that works together (even without overall leadership--I'm not calling for the creation of a "President of all Higher Ed" position) as a whole.

Without an actual system, there is no way that the two parts of the paradox--excellent options and poor systems--can even be considered together.

Trust, Creativity, Schoolmaking, and The Beautiful Tree

One more plug for James Tooley's The Beautiful Tree, an account of the ways that very poor people around the world are creating their own schools, in many instances better than the ones offered by the state.

Tooley is a libertarian, and some of his book contains the traditional libertarian praise for markets as the makers of good schools. In a time of economic collapse also brought on by something called "the market" it is tempting to toss out his argument for no other reason than that.

But it is worth being precise when we talk about education. And in this case, the market that created these schools, and the market that brought about the sub-prime crisis are hardly the same. In the school market in India, and Kenya, and Ghana, and China the market might be better called a voluntary association. In them, people who care about poor kids, and who are poor themselves, decide to do something about education. So they talk to the parents of kids they know. And they set up a school. Parents pay for it, to be sure, and in that sense it is part of the economic market. But the school's success relies on trust between parents, kids, and the school-makers. And from that trust flows creativity, and endurance, and commitment, and learning.

One lesson the book taught me--the United States needs more schools because it needs more school-makers.

Efficiency, Cost, and Small Educational Organizations

Outside of education, small organizations get a lot of praise for being efficient with their resources--they adapt well, move quickly, and because in small businesses everyone needs to know a bit about everything, they innovate as well. They do only a few things, but they do them well. Let's call this the responsive model of efficiency.

As businesses get larger they trade many of these efficiencies for economies of scale, which at the production and systems levels mean some cost savings. You can make widgets cheaper (or sell them more cheaply) if you produce (or sell) millions of them. Software is cheaper per employee if you get an enterprise-wide solution. Managers are cheaper if they manage more employees, etc. Interestingly, this often means better quality in the products, since standardized processes lead to standardized outcomes.

In education, it is largely the economies of scale version of efficiency that wins out. Put dozens of schools in a district and administrative costs per employee go down. Put dozens of students in the classroom and the cost of instruction, per student, drops. (Interestingly, though, quality doesn't improve. It would be interesting to know if in big systems, though, quality became more standardized.) We'll call this the scale model of efficiency.

Small schools (especially colleges), on the other hand, pride themselves on their willingness to avoid economies of scale. They are proud of their small classes. They have majors with only a handful of students in them. They offer tiny versions of all of the programs you would find at bigger schools. And their costs are high, as they make the case that small programs mean big quality. In public schools you see this tendency most clearly in charter schools who eschew system efficiency for the ability to do what they think best for their students.

It seems like higher education ought to be more thoughtful about efficiency. Rather than accept the responsive or scale model of efficiency, they ought to blend them. Here is the mix I think would lead to low cost and high quality learning:
1. Narrow curriculum (responsive)--small colleges ought to take advantage of their intellectual connections and offer a narrow, focused curriculum rather than offer every major under the sun. Doing so saves money and it allows for meaningful connections to develop between faculty and across the band of disciplines. It also permits the sort of intellectual innovation that happens in focused small businesses.
2. Universal pedagogy (scale)--If colleges think that their model of education really works, they ought to employ it across the board. Students should come to expect that every class will include a group project, or that service-learning happens in every year, or that faculty focus on asking questions. A universal pedagogy allows for improvement across the board. It also allows the campus to specialize, and by so doing, distinguish itself from the big, "we do it all" schools. Finally, it permits savings--no need for a projector in the ceiling of every room if PowerPoint presentations don't exist on your campus.
3. Standardized Core Content/Large Lectures (scale)--These days content is essentially a commodity. Campuses ought to take advantage of that fact, and treat it as such, either by ensuring that every section of physics, for example, includes the same content, or by delivering core content to very large groups of students. It saves money and ensures reliability across the organization.
4. Small activities (responsive)--while content is a commodity, meaning-making is a specialty. As such, students ought to have access to a wide range of meaning-making experiences so that the best meaning for them (be it about physics or about themselves as humans) emerges from their small activities. Note that I say small, not individualized. Small groups allow students to have the same opportunities for collaboration and innovation that their faculty do.

I don't mean to suggest that efficiency is the sole window onto cost and quality, but it may be a useful one, especially if schools can get past the idea that economies of scale is the only way to low cost, or that ignoring them is the only route to quality.