There is no shame in shrinking

Finally, the waive of declining college-age population reached California. For years we were an exception because of the growing immigrant youth. And yet the trend has reached us after all.

The reaction is predictable: public universities are gearing up for a more competitive environment: rethinking their recruitment and marketing operations, developing more appealing programs, reaching out farther to non-traditional populations. These are all good; a little competition helps to boost productivity, creativity, and helps to attune better to the demands of labor market.

The one strategy I do not see is preparing to actually shrink enrollments. The imperative to grow was so strong for so many years, that it maybe difficult to adjust. Yet indeed, if the demographic changes will be as serious as we expect, none of the above strategies is going to not help much. CSU is too big to steal students from the other two public systems and from private institutions. While there are many people with unfinished degrees, not too many of them will come to complete their degrees. And we are not geared up to accommodate all of them.

Organized retreat is the most difficult operation, and yet it is much better than disorganized retreat. As student body shrinks, the staff and faculty body cannot stay the same. We can wait until the next financial crisis, of course, and then go through a very painful fast shrinking ordeal, with hiring freezes, furloughs, layoffs, etc. Or we can try to spell out a mid-range strategy of organized shrinking: evaluating programs, streamlining services, eliminating redundancies, automating workflows, increasing efficiency, etc. Let’s face the fact that shrinking will increase our costs per student while reducing our tuition revenues. Should we at least run a few models for various scenarios? In other words, we can arrive at a smaller size in better shape and avoid painful shocks to the organization.

I fully realize, learning to be a smaller institution is not as much fun as growing. Growing pains are much more tolerable than shrinking pains. The problem is, we may not have a choice whether to experience the latter. If you know you cannot avoid something bad, a responsible thing is to prepare and mitigate consequences. Let’s not talk about modest reduction in size in funeral tones. It is not the end of the world. We are an overcrowded campus with aging physical plant. Perhaps something good can be gotten in the worsening situation?

Poor department, rich department

All public universities have some sort of a quasi-commercial continuing or extended education shops. All struggle to figure out the right kind of incentive for faculty to engage into putting together more of such programs. State funding is never enough, and there is only a limited set of options to diversify revenues. Basically, only three exists: fundraising, grants/contracts, and continuing education programming. The latter is by far the most significant.

Those campuses more influenced by the neoliberal management theories send some of the profits back to those who create and teach CE programs. The logic is simple: create reach and poor, the poor will see how well the rich have it and will try to do the same thus increasing the overall wealth created. In practice, such an approach does not work, and sometimes has tremendous negative externalities.

First, not all departments and not all colleges are in a position to put together a CE program or any other revenue-generating gig. If you a chemistry department, you may occasionally land a commercial contract. If you are in astronomy, it is much less likely. Colleges of business can generate hundreds of thousands of dollars annually by putting together an Executive MBA. Departments like English and Math that work hard at putting all students through gened courses, can rarely offer something to the market. It is not because of lack of effort or creativity. Academic disciplines have very different relations with external markets; they serve vastly different external populations. One should not incentivize luck.

Other issues with fairness arise. For example, who do you share the income with? Is it the individual, the department, the college or the division? If it is a department, most of it may have nothing to do with the CE program that generates revenues. How is getting extra resources fair, if all you did was to be lucky to work with someone who had an idea and has the persistence to implement it? If it is the college, the same problem of rich and poor colleges produces a very inequitable outcome. I have seen more than one group ruined under the pressure of the irrational inequality. A lot of money not only create fertile sole for nepotism, but what is even more important, they create an inevitable mistrust. Dividing a lot of money that results in extreme inequality is a relational bomb. Seeing a very rich neighbor does not motivate the poor department to act (especially if they cannot do much); but it generates resentment.

But also consider other, less obvious side-effects. For strategic re-investment of CE revenues, you need a relative concentration of the funds. You can build meaningful programs with significant resources. When a small department gets their 5 K a year of play money, they will buy a coffeemaker, and a new furniture. I remember in one of my old places we repainted the main office. It was beautiful, but was it consequential? OK, the rich department faculty will go to a few more conferences, including that questionable one in Hawaii in January, organized by who-knows-whom. All of this is nice, but it is not strategy. I former dean-colleague I admire saved money for something like 8 years and built a whole brand-new facility for one of the programs. Yes, his departments got by without a leather chair, but it was a strategic investment that benefited everyone. And unlike another college, it did not self-destruct in acrimony.

Every CE program lets its authors and participants make extra income. No one does this work for free. If this direct compensation is fair, it is already a strong incentive to keep going, and invent new programs. The excess revenue sharing is a more complicated thing, because this money cannot be individual income. It can only come as some sort of PD funds, with a bunch of strings attached. Or it can be spent on buying stuff. As I mentioned, the more concentrated are those funds, the more strategic is its use. For the revenue, solidarity works better than competition. Deans and provosts cannot “keep” the money; they must invest it in something that supports the mission and benefits as many people as possible. Spending money in academia is not easy; it must come with a plan, and it must do no harm.

California Master Plan, and Why it should be revised

In 1960, the Plan was a recognized achievement in higher education policy. Most states and many nations copied it to some degree. It is still a required reading in higher education history and policy courses. It created three large public education systems with distinct missions: Community Colleges, the CSU, and the UC. The plan performed remarkably well, giving broad access while forcing the three systems to stay focused on their respective missions. Community colleges – for all programs below BA, CSU for bachelors’ and masters’ degrees, and UC for everything, including PhD level programming.

The plan has been changing gradually. Some community colleges were authorized to offer a limited number of bachelor’s degrees. CSU’s can now offer four doctoral degrees for practitioners (Ed D in Ed Leadership, DNP in Nursing, DPT Physical Therapy, and AUD in Audiology). Right now, 68 doctoral programs are offered by the CSU, including many joint programs with UC campuses. These recent shifts recognize the realities of the new knowledge-based economy. While in 1960, a tiny minority of workforce had doctoral degrees. In California now, almost half a million people have doctorate degrees. But per capita, the state lags behind 11 other states, including New Mexico and Rhode Island. Within CA, counties vary greatly by the percent of their doctorate-educated populations, From Modoc at .12% to Yolo at 5.12%.

I am not suggesting we need to churn out more and more doctoral graduates regardless of their employment prospects. It is easy to enter the race to the bottom if regulations are completely abandoned. Unfortunately, we know that free market competition does not work in education. If you deregulate higher ed, the Akerlof’s Lemon Law kicks in. At the same time, CSU should continue to expand its degree offerings for fields that we know are short of workers with advanced degrees, and therefore are guaranteed employment. I imagine some of the hard sciences and computer sciences are among them. I know for sure that mental health practitioners and their supervisors are on that list.  While UC had built am impressive range of research-focused PHD programs, those are not going to feed the labor market for practitioners with advanced degrees. It is time we recognize the trend at the State level, and make actual revisions to the Master plan, rather than keep authorizing one degree at a time. An amendment could be simple: CSU is authorized to offer doctoral degrees other than PHD. There is already a robust approval process all the way to the chancellors’ office to approve new degrees, including labor market analysis. I am just not sure it should take a new legislative action every time we do that.