Project on the Future of Higher Education: teaching and learning in a climate of restricted resources. (Featured Topic).

Mary Marcy

The Project on the Future of Higher Education has a particular place in the higher education framework. When Alan Guskin and I started talking about it, we realized that there were many powerful policy initiatives going on at the big picture level: Pat Callan's work at the National Center for Public Policy and Higher Education, a futures project at Brown University, and projects like Greater Expectations that look at major policy issues for higher education. At the same time, there are a number of programmatic initiatives, like learning communities and service learning that are powerfully influencing our teaching and learning processes.

What we felt was missing was the view from the institutional level: How do institutions respond to the external environment and its pressures while also trying to implement creative and innovative ideas for quality teaching and learning?

When we started this project, we believed that the economic climate was not going to get better and, in fact, could get worse. That was about two years ago, and we thought we were making very dire predictions at the time-- things like 15 to 20 percent budget cuts over ten years. Although we would like to have been wrong about that, we appear to have been too right in the sense that these issues came about rather quickly--too many institutions are facing 5 to 10 percent cuts right now.

How can institutions survive such a fiscal climate? How do we increase student learning and maintain the quality of faculty work-life in a climate of restricted resources? This is the question we are trying to address through the Project's Institute on Higher Education.

The Institute is a group of some of the most creative thinkers and practitioners in American higher education, which meets regularly to address the challenges facing our institutions. Our initial response to the question of the future of teaching and learning in an austere budget environment includes the following framework:

* We believe we cannot balance budgets on the backs of the faculty, something that too often happens in tight budget times. We do not assume that hiring more part-time faculty and non-tenured full-time faculty will resolve our problems.

* We believe that student learning is at the center of our work, and we need to maintain and build on the powerful increases in understanding of student learning gained over the last few years.

* We assume that available financial resources are not going to get better in the near future.

We want to begin this analysis with a closer look at the present economic realities of higher education, since that drives the capacity of our response. The National Governor's Association says that state governments are facing "the worst fiscal conditions since World War 11," and forty-eight of the fifty states face budget deficits, many of them very profound. And this problem is not confined to state governments. Private giving to colleges and universities is steady or declining. Some of that is probably a post 9/11 reaction, but few analysts expect a return to a robust fund-raising and stock market environment any time soon.

The Governors' Association says that there are some long-standing structural problems-- like an eroding tax base and an explosion in health care costs--that are the major causes of the deficits. Hence, the current fiscal situation is not a simple, cyclical phenomenon, but is long-term and structural. The Council for Aid to Education (CAE) looked at this problem a few years back and did some projections based on the likely revenue and the growth of costs in higher education. It projected that if costs and revenues continued their rates of growth, by the year 2015 there would be a $38 billion shortfall in U.S. higher education; that is, a 25 percent shortfall for our needs.

Another approach is to consider the Higher Education Price Index (HEPI) and compare it to inflation. The HEPI has consistently grown past the rate of inflation; the cost of higher education has grown at almost double the rate of inflation for most of the last two decades. To return to the CAE's report of 1997, "A sector whose costs grow faster than inflation for an extended period ultimately reaches the limits of available resources."

The point of the Project on the Future of Higher Education is not to look at these numbers and feel helpless, but to ask how we can create a hopeful future in this environment. If this is indeed what the future looks like in terms of revenue, how can we hold onto the things we value? How do we maintain faculty vitality and increase student learning in a climate of restricted resources?

We started by asking: What is the tangible impact, in dollars and positions, for institutions facing these financial circumstances?

What the reality might look like in this economic environment can be seen in the following three tables, making fairly conservative projections. We took three different institutions, using real budget numbers, and assumed that the HEPI will increase at 4 percent and that net tuition (after discounts) and other revenues will increase at about 2 percent. What we end up with is a 2 percent gap per year in real dollars. For purposes of this discussion, we're holding student enrollment flat. We realize these measures are not precisely what would happen; the idea is to show what institutional resources might look like after a decade of such cuts. Then we can ask how an institution can creatively respond to such a future, rather than have continual erosion in quality and a continuing increase in workload for faculty and staff.

A representative public comprehensive university starts out with an annual budget in real dollars of $73 .5 million and roughly 7,500 students. This 2 percent reduction per year becomes, over a decade's time, an 18 percent cut in real dollars. We chose this scenario because a 2 percent cut is the level most campuses instinctively believe they can absorb or muddle through. However, if campuses take this approach year after year, we believe there will be long-term erosion in the quality of faculty work and student learning. These trends have already started: increased hiring of part-time and non-tenure full-time faculty, significant increases in workload, larger class sizes. But because it's being done year-by-year, we miss the big picture--and what could happen in the long term. Over time, the erosion in faculty support and real dollars is significant. This is a scenario for a typical public comprehensive university.

Two other overviews at other types of institutions show similar data. First, a typical private liberal arts college (see Table 2).

We still assumed an annual 4 percent HEPI increase, and we assumed a 2 percent net revenue increase from tuition and endowment--even as we recognize that many endowments are actually losing money right now. If these fairly conservative assumptions are played out over a decade, the campus experiences a cut of more than $4 million in real dollars and a cut of twenty faculty FTE.

And, finally, we looked at an urban public university with the same trends (see Table 3). We used the budgets of real institutions for all of these projections. This is a real-life institution that has already suffered significant cuts leading up to the current year-in the past seven years they've seen a decrease of 3 percent in tenured faculty and an increase of 136 percent in part-time faculty--and that's before we start looking at a future of reduced resources. When we apply our HEPI and revenue projections for a decade to this campus, we see a real dollar loss of over $24 million.

We use these illustrations because we believe it is imperative that colleges and universities plan for the future, or they will find themselves in a situation that erodes the quality of student learning and faculty work-life--larger class sizes, increased workload, continuing increases in non-tenure and part time faculty. We believe most campuses now face a choice between trying to ride out a very difficult financial situation with little change (and the possibility of real damage to the institution), or to consider engaging in more fundamental, and ultimately more hopeful, changes in the way faculty teach and students learn. Alan Guskin discusses these ideas in more detail.

Alan Guskin

One of my favorite quotes is from Charles Handy. It really applies very nicely to higher education. He writes, "It is one of the paradoxes of success that the things which got you there are seldom those things that keep you there. And this is a very hard lesson to learn." The implication of Handy's words is that if the underlying societal conditions remain the same, successes of the past should continue on for the future. But, if there are major changes, then those things that got us where we are won't keep us there. In higher education, we've been very successful. The danger lies in believing that past success will continue in the context of powerful external changes.

The issue is how to respond to our changing environment. One institutional response is what we might call "muddling through." (See Table 4.) The muddling through response is one that makes an assumption that most of us make: that our problems are short term, that they're serious, but they're cyclical. And at bottom there is a belief that "this too shall pass."

In this scenario we assume that we do not need to change the present educational delivery system: courses, calendar, and the structured way that we teach. Secondly, we believe that all of technology is an added expense. We have good evidence for this assumption. It is the approach we've typically taken with technology. Third is that present administrative systems are effective. The fourth assumption is that any changes to faculty/staff work will lead to overload or workload increases.

If an institution accepts these assumptions, how does it respond? Ratcheting up fundraising is one way to deal with the problem. When there's a financial problem, the solution is always perceived to be raising more money. Or, make forceful presentations to state legislators. Or, increase tuition to the maximum possible. That's what has been going on all over the country.

Another response is to focus on increasing enrollment. The assumption is that with more students, the institution is going to be better off financially. But this is true only if expenses are held down and, by implication, present faculty and staff are more productive. Other muddlingthrough approaches (and they are not all bad strategies) are refinancing debt, contracting out, collaborating with others on selected setvicesuand hoping a lot. All these incremental approaches sometimes work; when they do it is often for short periods of time. But if they don't work it can be dangerous for the institution.

An alternative

There is an alternative to incremental change and hoping for the best. It is what we call a transformative, rather than a muddling-through, approach. What would it look like if an institution really tried to respond over the long term? The underlying assumption is that we have a long-term problem that is not going away in one, two, or three years-and probably not going away in five years.

If we assume that our financial challenges are not short term, we are then challenged to take a fresh look at some of our most basic processes of teaching and learning. While this approach suggests more fundamental change, we believe it also offers a more hopeful future for the quality of faculty work-life and for meaningful student learning. There are ten principles we consider when looking at more fundamental change.

The first and the most critical principle is creating a vision of the future. Most institutions have similar basic visions and missions, usually amorphous, not directive. Yet, in order to move to a future, we need to have a vision for where we're going. The challenge is how to get clarity about where we think the institution should be ten years out, in a reduced-resource environment, with a commitment to student learning, and a commitment to quality faculty work-life.

One way to generate such a vision is to ask a very basic question: Given what we know about the likely social, economic, and technological realities of the future, if we were creating this college or university today, what would it look like? After that, we actually get down to some tough realities. (See Table 4.)

One reality is that most people, including presidents, don't know where all the money is being spent at their institutions; in fact, less than 50 percent of the resources of institutions go into eductional processes and structures. Where is the money going? Why is it going there, and who knows where it's going? Our second principle is to face the necessity of zerobased budgeting, to require every unit of the institution to justify its budget, guided by the vision of the future and clear priorities of the institution-and then make that work every year.

The third principle is to audit and review all the administrative and student services systems in order to look for those activities that are essential and those that are not. This principle calls for taking a hard look at what is really needed in the administrative and student affairs areas and, then, to eliminate as much of the non-essential activities as possible and restructure the essential ones to increase their cost effectiveness and efficiency. Much of the savings in these areas will be the result of not only reducing non-essential services but also redesigning systems utilizing sophisticated technology and cross-training of staff.

A fourth principle is to audit and restructure the curriculum in order to focus the curricular offerings on supporting the institution's vision of the future. In doing so, we need to determine which programs are essential to implement the institutions vision and, then, to substantially reduce or eliminate the nonessential. The basic point is that the most precious resource in the academic area is faculty time-not money. How can we maximize the use of faculty time? And how can we use that time most efficiently to maximize student learning?

Principle five asks us to take a close look at how technology can be effectively utilized throughout the campus. There are many ways today in which technology can be used costeffectively; there will be more in the future.

One example is the experimentation going on in redesigning large, multi-sectioned introductory courses. In the last few years, thirty colleges and universities in this country are restructuring large courses using technology, while also saving money, maintaining or increasing student learning, and increasing faculty satisfaction. There are a good many innovative ways to integrate technology into our institutions to improve our processes and save, rather than cost, money.

Principles 6 and 7 deal with restructuring the role of faculty including integrating other campus professionals more directly into the educational process and recognizing student learning from all sources in which student learning occurs. We should use all individuals who are able to contribute to student learning in a systematic way, and we should recognize that learning takes place in many arenas besides the classroom. These two principles point to a key issue: How do we assess what students learn? If we are going to recognize a broader range of student learning and involve other professionals in the instructional process, then we must have a means for assessing student learning independently of a classroom setting and an individual faculty member.

Principle 8 assumes that all students can succeed and, therefore, we should develop the support systems to enhance the likelihood of their success. For example, student success can be supported by bringing teams of professionals into the educational process, and by using continuing feedback from ongoing assessment of student learning.

The need to assess student learning from multiple sources utilizing campus-wide common criteria is an underlying assumption of this Project, and is embraced in Principle 9. There's also a critical issue of utilizing continuous assessment for students as they go though the educational processes.

Finally, Principle 10 emphasizes the importance of restructuring the educational delivery system. We need to unlock the present way in which we educate students. We need to design an educational delivery system that includes more than courses, that integrates the many ways in which students can learn, that includes alternatives to calendars which require students to learn in twelve to sixteen week blocks, and that assesses student learning in new ways.

These principles represent the ongoing work of our Project, and represent a first step in an evolving conversation. The external environment and the experience of many of our campuses suggest that we have some very difficult days ahead. While our work cannot change the flow of resources to higher education, we believe a willingness to begin a discussion about fundamental change in our institutions does offer hope for a meaningful future for faculty, for students, and ultimately for our campuses.

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TABLE 1

Ten Year Budget Scenario for a Public Comprehensive

                           2002
         Total Anual   $ per Student      Annual       Faculty
          Budget in      FTE (7667      Budget in     FTE 2% Cut
Year     Real Dollars  students FTE)  Actual Dollars   per Year

2002-03   73,598,000      $9,599        73,598,000       386
2007-08   66,526,763      $8,677        81,258,139       349
2012-13   60,134,924      $7,843        89,715,561       315

10 year change is--18% ($13,463,076 in real dollars)

All chart projection based on: Annual HEPI=4%;

Annual Revenue Increase=2% No increase in student enrollment

Tabe 2

Ten Year Budget Scenario for Private Liberal Arts/New American College

                       2002
         Total Annual  $ per Student  Annual          Faculty
         Budget in     FTE (2000)     Budget in       FTE 2% Cut
Year     Real Dollars  students FTE)  Actual Dollars  per Year

2002-03  24,400,000    $11,700        24,400,000      133
2007-08  21,151,747    $10,576        25,835,491      120
2012-13  19,119,504    $9,560         28,524,469      109

10 year change is --18% ($4,280,496 in real dollars)

Table 3

Ten Year Budge Senario for an Urban Public University

                           2002
         Total Annual  $ per Student      Annual       Faculty
          Budget in     FTE (13,072     Budget in     FTE 2% Cut
 Year    Real Dollars  students FTE)  Actual Dollars   per Year

2002-03  134,848,000      $10,316      134,848,000       692
2007-08  121,891,912      $9,325       148,883,088       625
2012-13  110,180,634      $8,429       164,378,960       565

10 year change is--18% ($24,667,366 in real dollars)

TABLE 4

Potential Institutional Reaction

                                          Transforming the
                  Muddling Through        Institution

Assumptions       Short-term, very        Long-term problem
about the Fiscal  serious, permanent      requires long-term
Environment       consequences            solutions

Assumptions       The present             Present curriculum
about Needed      educational delivery    will have difficulty
Change            system is unchangeable  surviving with quality

                  Technology is an        Not changing will
                  added expense           undermine the quality
                                          of faculty work-life
                                          and student learning

                  Present practices       Private fund-raising
                  are necessary           will not offset
                                          losses

                  Change in faculty       Tuition increases
                  ans staff work          cannot offset
                  will lead to            funding shortfall
                  workload increases

                  Past calls for          Technology can
                  fundamental reform      improve teaching,
                  were not necessary      learning, and
                                          processes without
                                          adding workload
                                          or financial burdens

                                          Increasing student
                                          enrollment will
                                          not solve basic
                                          problem

Actions           Incremental changes;
                  selective cuts and
                  layoffs based on
                  priorities; no changes
                  in delivery system

                  Hire inexpensive
                  faculty; increase
                  workload

                  Ratchet up fund-
                  raising

                  Increasingly forceful
                  presentations to
                  state legislators

                  Increase tuition to
                  the maximum allowed/
                  feasible

                  Focus on increasing
                  enrollment

                  Refinance debt

                  Contract out/
                  collaborate on
                  selective services

                  "This too shall pass"

Create a vision of future: identify a focuses, limited mission with
major themes

Transforming                Transforming
Organizational              Learning Systems
Systems

Audit and restructure       Integrate technology
budget allocations
                            Restructure instructional work and
Audit and restructure       integrate all relevant professional
administrative and student  in the educational process.
services systems
                            Recognize student learning from
Audit and restructure       all sources
curriculum
                            Emphasize student success and
                            student learning

                            Create a culture of assessment

Restructure educational delivery system: courses, credit hours, academic
calendar

RELATED ARTICLE: 10 Principles to consider when looking at more fundamental change

(1.) Create a vision of the future: identify a focused, limited, mission with major themes.

(2.) Audit and restructure budget allocations consistent with focused mission and major themes

(3.) Audit and restructure administrative and studenr services systems to support major themes and reduce costs

(4.) Audit and restructure the curriculum to reduce and focus curricular offerings to support major themes

(5.) Integrate technology in a manner that enhances student learning and reduces faculty workload.

(6.) Restructure instructional work to integrate all relevant campus professionals in the educational process

(7.) Integrate and recognize student learning from all sources.

(8.) Emphasize programs and systems that enhance student success and student learning

(9.) Create a culture of assessment

(10.) Restructure educational delivery system: courses, credit hours, and academic calendar

Institute on the Future of Higher Education

The Institute on the Future of Higher Education is a group of leading thinkers and practitioners in U. S. higher education who are engaging the question: "How do we enhance student learning and faculty vitality in a climate of restricted resources?" They are developing models for undergraduate education that offer hopeful yet tangible and realistic ideas for institutional vitality. www.pfhe.org/institute1.htm

Michael S. Bassis

President, Westminster College

Edgar Beckham

Senior Fellow, Association of American Colleges and Universities

Estela Mara Bensimon

Professor of Higher Education and Director of the Center for Urban Education, University of Southern California

Johnetta Cross Brazzell

Vice Chancellor for Student Affairs, University of Arkansas

Marie Eaton

Professor and former Dean, Fairhaven College of Western Washington, University National Learning Communities Project Fellow

Peter Ewell

Senior Associate, National Center for Higher Education Management Systems

Richard Guarasci

President, Wagner College

Devorah Lieberman

Vice Provost and Special Assistant to the President, Portland State University

Kathleen O'Brien

Vice President for Academic Affairs, Alverno College

William M. Plater

Executive Vice Chancellor & Dean of the Faculties, Indiana University Purdue University Indianapolis

R. Eugene Rice

Scholar-in-Residence and Director, Forum on Faculty Roles & Rewards, American Association for Higher Education

Barbara Leigh Smith

Co-Director of the National Learning Community Project, The Evergreen State College

Carla J. Stoffle

Dean of Libraries and Center for Creative Photography, University of Arizona

Carol A. Twigg

Executive Director of the Center for Academic Transformation, Rensselaer Polytechnic Institute

Alan E. Guskin

Co-Director & Senior Scholar, Project on the Future of Higher Education, University President Emeritus, Antioch University

Mary B. Marcy

Co-Director & Senior Administrator, Project on the Future of Higher Education Antioch University

MARY MARCY is co-director and senior administrator, and ALAN GUSKIN is co-director and senior scholar of the Project on the Future of Higher Education at Antioch University. Copyright held by the authors.