Several Experts Respond to
“The Cost of Undergraduate Education at a Research
University”
by Charles Schwartz
which is posted at
http://ocf.berkeley.edu/~schwrtz
(compiled, with commentary, November
27, 2005)
A) UC’s Vice President for
Budget, Larry Hershman, wrote me a letter,
dated December 21, 2004; it is posted at http;//ocf.berkeley.edu/~schwrtz/HershmanLetter.html
. This responds to an earlier version of my work; it is quoted from
twice in my long paper and is discussed more in “Financing the
University – Part 8”.
B) UC’s President Robert Dynes
commented on my work during an interview
published by the San Francisco Chronicle (9/25/05);
Q: The university says that it costs more
than $15,000 to educate undergraduate students and that the state is
underwriting much of that cost. But Professor Charles Schwartz
calculates that the actual cost is closer to the $6,000 that
undergraduates are paying in tuition. Schwartz is saying that the state
is basically subsidizing [only] graduate students and the faculty.
A: It is not true. The concern is
that people like to think about separating the cost of educating
undergraduates and the cost of educating graduate students. What's not
folded in there is having undergraduates in research laboratories. I'm
actually deeply concerned about graduate support and that we haven't
paid enough attention to finding support for graduate fellowships to
keep us competitive. We are not subsidizing. Charlie Schwartz just
isn't right.
This silly reply is discussed in “Financing
the University – Part 9”.
C) In August, 2005, Ralph Nader
wrote a column about my work. A
journalist of my acquaintance contacted a well-known academic expert on
higher education and asked for comments on that. Here is the
emailed response, which was provided to me.
Without reading the
Schwartz articles, I can say that trying to separate the costs of
undergraduate education from graduate education and research within a
research university runs into the technical problem of cost analysis
where joint production occurs. There is no unambiguous way to
allocate shares of joint inputs and their costs to specific outputs,
such as undergraduate instruction. Thus, an inevitable
arbitrariness haunts any such numbers, and reasonable people can look
at the same data and reach different conclusions regarding how costs
should be allocated. That criticism would apply equally to Dr.
Schwartz's $6,648 estimate, and the University's $15,810. Neither
is obviously right, and another reasonable method could come up with
yet a third number, which would also not be obviously right.
"True cost" in such situations is a metaphysical will o' the wisp.
That said, the concerns expressed at the bottom of the
article about a rising tuition spiral, lost access for low-income
students, and increased stratification among institutions and students
are very real, and should be a concern to all of us. But trying
to use ambiguous cost data to get to those issues is not the right way
to go. Those are clear concerns for public policy, period.
Perhaps the right way to think about the allocation
question is to examine the balance between undergraduate education and
graduate education and research. One might argue that California
has over-invested in the latter relative to the former, e.g., was a
10th U.C. campus at Merced really a wise investment, as opposed to
providing more space and opportunities for undergraduates?
This appears to be a well-ingrained view among
experts – that there is no objective way to disentangle the cost of
undergraduate education from other missions at a research university
(the “joint production” problem). This expert is at least candid
in admitting that he did not read my paper; thus he is probably unaware
that I was able to use data from an official faculty time-use study to
resolve that joint production problem.
D) I contacted the
editor-in-chief of a highly respected journal and
asked him to consider my paper. He sought opinions from some
informed reviewers. Here is the first response (dated September
7).
I've now had your paper
looked at by someone who is very familiar with cost-of-education
estimates. A formula for doing that was worked out by an expert
committee of NACUBO under the chairmanship of Richard Spies of
Princeton. It is pretty conservative, based on the A-21 cost
study and focusing on Instruction and Departmental Research. It
allocated faculty time 2:1 toward graduate students, and left
departmental research in on the premise that the institution pays for
it and it has an impact on what gets taught. Excluded were
"community facilities -- like the athletic plant, museums, etc. -- even
though they arguably have an impact on the quality of the undergraduate
experience. Using this standard formula at ….., by the way,
tuition covers about 60% of the cost of undergraduate education.
In your treatment, you leave departmental (non-sponsored) research out
in calculating the 23% of faculty time allocated to
undergraduates. We would disagree strongly with that, because
it's hard to imagine that departmental research does not affect the
nature of the teaching of undergraduates. Capital costs don't
appear in your calculation. Perhaps that's because UC covers
capital construction from another part of the state budget. But
there needs to be some recognition of historical costs, replacement
costs, or depreciation. Professional schools, at least here,
contribute significantly to undergraduate education both through
faculty service on committees, courses open to undergraduates, and
supervising undergraduate theses. We think your exclusion of all
these costs is wrong; the NACUBO study includes them but then applies
the 2:1 allocation between graduate and undergraduate students.
You give the Academic Support category at $1.154 billion, but identify
only about $500 million as relevant. What about the rest?
NACUBO included a much larger fraction of those costs, and your
exclusion looks arbitrary. Finally, you excluded "community
costs", but I think that especially in an institution as large and
excellent as UC they deserve some attention.
In short, I think you took an unnecessarily narrow view of the kinds of
expenses that [can] be attributed to the value of the undergraduate
experience at Cal. If the NACUBO methodology had been applied, I
don't know where the cost-of-undergraduate-education would have come
out -- but I think it would be closer to the published UC number than
yours. That's not to say that the UC calculation isn't open to
criticism, and you make some effective arguments in your piece.
But as it stands it is not a convincing argument for a figure close to
the real level of student fees.
This is the most informed criticism I have
seen; however it is wrong on several counts. First, lets look at
that NACUBO method (see http://www.nacubo.org/x376.xml
). They say:
take all expenditures for Instruction (including support services and
overhead) and for Student Services and then
divide by the total student enrollment to get the cost-per-student of
undergraduate education. They allow counting of graduate students with
a weight of 1.25 (not a weight of 2 as stated above). They
do keep departmental research entirely included with the following
explanation (page 31 of pdf file).
Departmental Research.
Several alternative proposals were considered, but NACUBO concluded
that all departmental research costs should remain within instruction
and student services. Departmental research is vital and has a direct
impact on the value and quality of instruction provided to students.
Any arbitrary attempt to distinguish between departmental research and
instruction ignores the fact that the integration of research and
education is a major strength of the nation’s colleges and universities
and directly benefits undergraduates. Including departmental research
costs within the instruction category is beneficial and appropriate for
all institutions. Liberal arts colleges without major graduate student
populations argue strongly that departmental research contributes
direct educational benefits to undergraduates. Accounting rules used by
research universities to account for federal grants under OMB Circular
A-21 do not separate departmental research from instruction, and
efforts to do so would be extremely burdensome for institutions.
Including departmental research within the instruction category
provides for simplicity and uniformity. No simple and uniform method
for disaggregating such research is available, and it is unlikely that
large research universities could reach consensus on a uniform
percentage that does not contribute to undergraduate education.
Finally, the adjustment for weighting graduate students addresses a
similar problem in the class of institutions most affected by this
issue. After extensive deliberations and consultations on this point,
NACUBO eventually decided that weighting graduate students is a cleaner
modification that will offset any potential overstatement of
undergraduate costs resulting from the inclusion of departmental
research.
It is fascinating to examine this reasoning.
They say departmental research (nonsponsored research by faculty
members) “is vital and has a direct impact on the value and quality of
instruction provided to students.” However, elsewhere in the
report (page 13) they say, “NACUBO never intended its Cost of College
Project to address issues of value or quality;” their objective is just
to evaluate cost. Perhaps faculty research does contribute
something to undergraduate education; but should all of it be counted
as cost assignable to that mission? At a liberal arts college, one
could answer, Yes, because education is the sole mission. But at
a research university one has the commonly stated three missions of
teaching, research and service.
They say, “No simple and uniform method for
disaggregating such research is available”. Well, the official faculty
time-use survey from UC is now presented as a direct and logical
method. If such data it is not available for other types of
colleges, then NACUBO’s method may be the best available; but here it
is for top ranking research universities. If people want to
question the accuracy of UC’s faculty time-use survey, that is
something worth looking into; but don’t pretend that this data does not
exist.
Does counting graduate students (even at 1.25
weight) account for the inclusion of departmental research? At a
private research university, one typically finds the number of graduate
students comparable to the number of undergraduates; but at the public
research universities, undergraduates far outnumber the graduate
students. Yet, UC’s faculty time-use study tells us that faculty
spend about half their work-time at research; So there is a very bad
representation of the truth in NACUBO’s method.
The report from the editor adds the comment,
“it's hard to imagine that departmental research does not affect the
nature of the teaching of undergraduates”. This is a
common-enough belief from my colleagues; but is it true? A survey
conducted by the Princeton Review organization asked undergraduate
students across the country to report on how well their “Professors
Bring Material to Life”: the highest scores were reported at a number
of well known liberal arts colleges; the lowest scores were reported
from our best known research universities (UCLA, Texas, Michigan,
Harvard, Penn, Berkeley, Columbia, NYU, in that order from the bottom
of the list, as published by Andrew Hacker in the NYRB November 3,
2005.)
Further criticisms from the editor’s report
mention a number of contributions to undergraduate education (museums,
professional school faculty) which I thought too small to bother with
and such issues as capital costs and athletic enterprises, which even
Vice President Hershman did not include in his calculation of the cost
of instruction. There is also the following criticism, “You give
the Academic Support category at $1.154 billion, but identify only
about $500 million as relevant. What about the rest? NACUBO
included a much larger fraction of those costs, and your exclusion
looks arbitrary.” That criticism was valid; and I subsequently
added a note to my paper explaining that about half of the Academic
Support expenditures came from the Health Sciences and were therefore
removed from this calculation.
E) At my urging, that editor
sent my paper (actually, a much shortened
version that the editor had asked me to submit) to a second person for
review; and here is what came back from that expert (September
30).
This author’s
accounting methodology is a mystery to me. He can’t punt it all
to “an extensive discourse in a longer paper,” leaving readers not to
know what he’s doing. He states that his calculations arise from
cost-accounting principles and procedures, but I doubt it. His
statement of how cost accounting handles joint costs and joint
production looks simplistic. His call for universities to publish
estimates of undergraduate education alone seems reasonable, difficult
though it may be. Finally, his estimate that an academic year
of instruction for a Berkeley undergraduate can be had
for the order of $7000 just doesn’t have face validity. To
believe this, readers will have to know much more about how he got it
and then, in my view, the methodology will fall apart.
I think you need to consult with someone who has extensive high-level
academic administrative experience and is also an expert on the
economics of cost-accounting. There aren't many of those. ….. is
a senior example who comes to mind.
This comes from a person who is entirely
guided by preformed opinions (he says that my conclusion “just doesn’t
have face validity”) but at least he admits that he didn’t bother to
read my paper and see the methodology explained at length. I did
write to the senior expert he recommended; but that person declined to
comment on my work.
F) I did contact another well
established academic expert on higher
education financing, someone whom I had met a while ago, and got this
response to my paper (October 26).
Thanks for alerting me
to your paper. It is an interesting exercise. It requires the leap of
faith that the synergies of a research university can be disaggregated.
(Some would consider these synergies to be a leap of faith!) I
nevertheless consider those synergies to be important, and to add real
value to an undergraduate education.
However, granting your premise, you have done a meticulous job of
working with the best available data and assumptions. I have one
quibble though, and a rather large one. You have condemned UC faculty
to a 61 hour work week. I do not doubt that the faculty works long and
hard, however I wonder if their compensation is based on so arduous a
schedule. Specifically, I would surmise that the hours beyond 40 that
they work are largely devoted to research--from which they could
augment their intellectual, honorific, and pecuniary returns. Teaching,
of course, has its intrinsic rewards; but I think it reasonable to
assume that UC does not consider this commitment so elastic. In other
words, it would be reasonable to consider the 26 hours per week devoted
to teaching as required work even for a 40 hour work week. If that were
all the state could require, then faculty would be devoting 65% (26/40)
of their paid time to teaching, and about 32.5% to undergraduate
teaching.
I will let you do the arithmetic, but this should increase the per-head
cost of undergraduate education by about 30%. This would produce a less
dramatic conclusion than your 100% figure, but the arguments you offer
against the privatization of public universities would still be valid.
At ….. our u.g. tuition is now …... Tuition pays the entire payroll. I
guess the state pays the utilities.
I replied that his concept of a 40-hour work
week for research professors was absurd, certainly in my own
experience. The University of California has a long standing set of
policies about faculty work and obligations. Here are some excerpts
from the Academic Personnel Manual (found from the UC Faculty Handbook.)
APM 005: University of California
Regulation No. 3 (originated 1935)
Privileges and Duties of Members of the Faculty
3a. The Senate assumes that each of its members is
devoting all his time and energies (his full “working” time) to the
University. Such service to the University includes varied types of
activities, such as classroom teaching, conference with students,
studying and writing, research, committee work, administration, and
public service. Members of the Senate who are not engaged in certain of
these activities will naturally have more time for others.
APM 020: University of California
Regulation No. 4 (originated 1958)
Special Services to Individuals and Organizations
Principles Underlying Regulation No. 4
Faculty Service
To accomplish its aims of providing higher education,
of advancing knowledge and of contributing to the welfare of the State,
the University invites to its faculty scholars whose interests,
learning, and accomplishments give promise of continued effective
service to these ends. The service of the individual member of the
faculty may include varied types of activities, such as classroom
teaching, conference with students, writing, research, committee work,
administrative service, and public service. To these various activities
the relative time allocations will vary with individuals, and for the
same individual at different periods. It is not desirable or feasible
to arrange them in a fixed regimen applicable to all persons at all
times. Teaching is one of the essential functions of the faculty and
the teaching “load” is intended to be moderate to provide time for
fulfilling other obligations, the most evident of which are
professional improvements and scholarly activity.
Certain commitments directly affecting other persons, as, for example,
classroom teaching and administrative engagements, will naturally
involve specific schedule and other obligations, but the University in
general leaves the time allocations of such activities as study,
writing, research, and public service to the discretion of the
individual. It is assumed that Full-Time members of the faculty are
devoting their time and energies (full “working” time) to the services
of the University. (See further, Regulation No. 3)