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

Liberal Education, Spring, 2003 by Mary Marcy, Alan Guskin

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.