Big Public U - Cruisn' for a Brusin' (Regarding Undergraduate Education)

On Thursday in the penultimate class of the semester we were covering the Shapiro-Stiglitz "efficiency wage" model.  In that model workers receive a wage premium as incentive to encourage them not to shirk.  As I had already made an online video to go through the technical details of the model, in class I spent time on interpreting the model and contrasting it with other models we've covered during the term.  In particular, I informed that students that with knowledge work, shirking isn't the real issue most of the time.  Instead the real concern is "the alignment problem."  Most employees put in substantial effort, but they often do so while focusing on activities that management would prefer they'd ignore.

We dug a little deeper into why this is.  At first the students didn't see it, so I tried to set up a scenario where the issue would play out in a more obvious way.  I suggested that the students consider a long time employee who has a supervisor relatively new to that job.  The long time employee does his work based on habit and/or on where he feels he's competent.  At one time, what that employee did was aligned with the organization's mission.  But times have changed, and the supervisor wants what employee to move onto something else, which is more consistent with current circumstance.  The employee resists, partly because the employee will be a novice at the new thing.  In this setting the students began to understand why alignment is such an issue.

In my view, there is a big time alignment problem at public research universities, such as Illinois.  When I started, back in 1980, tuition was a pittance.  For that reason and because the mission of the university clearly has research first and foremost, there was benign neglect of undergraduate education.  For the real go getter students and the extremely bright students, there were opportunities for deep engagement in learning.  These students took advantage of those opportunities and got a reasonably good education.  The rest of the students, a much larger fraction of the overall population, got a mediocre education.  But the rest had the same opportunities to privilege themselves.  They just didn't avail themselves of the opportunities.  Elsewhere I've termed the model a grab-the-brass-ring approach. It is an approach that made perfectly good sense when tuition was modest, which it was for the first twenty years or so of my time at Illinois.

Tuition is still modest, in a relative sense, as compared to private universities we regard as peers, Northwestern providing a notable example.  But in an absolute sense attending the U of I is no longer inexpensive.  In-state tuition (the base rate) for an entering freshman this year is in excess of $12,000. In real terms, this exceeds the private school tuition my parents paid when I went to college (first at MIT then, after I transferred, at Cornell).

To get a sense of what's been going on in aggregate I took a look at UIUC revenue data made publicly available at the OBFS site. (Each report presents data for the system in aggregate first.  That is followed by data for the individual campuses.)  I then did a comparison between FY 2008 and FY 2015 numbers for the Urbana campus.  (In the 2008 table there was some garbling of the labels for the line entries.  I believe what I did is correct but there could be an error as a consequence of this garbling.)  Two lines are highlighted, the general revenue fund (State Tax dollars) is in red and the Income Fund (tuition and fees) is in blue.   The comparison is intended to make plain that reliance of the campus on tuition dollars has gone up, fairly dramatically in such a short period of time, while reliance on state support has diminished in both a relative and an absolute sense.  Further, it is expected that state support will decline substantially after the new Governor takes office.

The hyperinflationary increase in the base tuition rate is but one component of the increase in tuition revenue for the campus.  Other components are:

• An increase in assessed fees.
• An increase in tuition surcharges for certain colleges.  (For Business and Engineering the surcharge is about $5,000 for an entering freshman.)
• An increase in the number of international students who are paying tuition at a rate that slightly exceeds the out-of-state tuition rate (which is itself roughly double the in-state rate).  
• Some expansion of professional Masters level (big bucks) programs.
• An increase in the overall student population.  (See the Campus Profile, starting on line 3600.) 

It would be good to have a breakdown of the increase in tuition revenue on a component by component basis, to assess the importance of each individual component.  I don't have that here.  What I can report is that roughly half the undergraduates are in the College of Liberal Arts and Sciences (where there is no tuition surcharge).  For those from Illinois who are candidates to apply to LAS in the future, the relevant issue is the rate of growth of the base rate tuition plus the assessed fees.  (I am abstracting here from room and board costs, which clearly do matter for attending but which don't tie in so readily to the quality of the formal education the students are getting.) 

As tuition and fees continue to rise in real terms, the grab-the-brass-ring approach increasingly looks like the wrong model, though we remained aligned to it.  Indeed, the increasing reliance on non-tenure track faculty and other economy moves seems to be pushing more and more towards an income inequality view of undergraduate education, where the elite students command the lion's share of the educational resources and the other students get bubkes.  If a kid and his family expect the kid not to be an elite student, why pay for that sort of education?  Any sensible realignment would devote more educational resource to the typical student.  The issue is how to do this in a way that actually improves learning yet without costing an arm and a leg. 

One way to think of the issue is in terms of teaching loads.  When I started back in 1980, there was a four course load in Economics (two courses each semester).  Further the expectation for a typical faculty member is that there would be and equal split between undergraduate and graduate teaching.  From what I know of the department (not that much at this point) the load is now three courses and tenure track faculty expect at least two of those to be at the graduate level.  I really don't know what these teaching loads are around campus, but it should become a topic of discussion.

Teaching loads in any one department naturally reflect what these loads are like at peer institutions nationally.  If they become less attractive at Illinois than elsewhere, we'll lose the better faculty to our competitors.  Presumably, this is what explains the move from four courses to three that I mentioned above.  So a move back to four would have to happen at competitor institutions as well as here.

Let's say that could be accomplished.  The mix of offerings would have to change as well.  My sense is that it would have to move to something like 2.5 undergraduate courses and 1.5 graduate courses.  (Meaning either that some years the instructor would teach 3 and 1 and other years the instructor would teach 2 and 2, or some instructors would stay with the old balance while others would be primarily undergraduate instructors.)  Further, that extra .5 undergraduate teaching would be targeted at courses for first-year students taught in small class (seminar) format.  The aim would be for each first year student to get at least one seminar class.

This isn't the only adjustment needed to get effective realignment, but it is the simplest one to discuss.  The need is self-evident.

In my class I've told the students that research universities are weird as organizations because the faculty act like they're the boss rather than like employees.  As bosses they should be pushing for realignment in the direction of where the revenue is coming from.  As employees, they like the old way of doing things.

Something has got to give.