Perspectives on the Downturn: A Survey of Presidents

Three in 10 private college leaders say their tuition discount rates are "dangerously high." Three quarters of public college presidents believe online learning can help their institutions increase both enrollments and net tuition revenue. And about a third of all college chief executives, public and private, say they would alter their tenure policies and mandate the retirement of older professors if they didn't have to worry about political blowback on their campuses.

Those are among the many findings of "Presidential Perspectives," Inside Higher Ed's first Survey of College and University Presidents, released today in conjunction with the annual meeting of the American Council on Education. A total of 956 campus chief executives, nearly a third of the 2,900 invited to participate, provided their views, with hearty response from across higher education's sectors and segments (though disproportionately few for-profit college leaders participated).

A report of the survey's results, prepared by Kenneth C. Green -- founder of the Campus Computing Project and a senior research consultant to Inside Higher Ed -- can be downloaded here.

The survey asked campus leaders an array of questions about how they and their institutions have navigated the current economic downturn, the biggest problems they face and the strategies they have used (effectively and not) in response, and which campus constituents have been most helpful (or not). The answers vary widely among sectors and types of institutions in many key areas..

When presidents were asked, for instance, to choose two from among a list of "most important areas/challenges" facing their institutions over the next few years (see Table 1 below), budget shortfalls (62 percent) and changes in state support (42.6 percent) dwarfed other answers for leaders of public colleges of all types (four-year and two-year, doctoral and baccalaureate, etc.). For private nonprofit colleges and universities, meanwhile, rising tuition/affordability (42.2 percent) and increased competition for students (35.3 percent) topped the chief executives’ list.

Those answers -- essentially, "It's the economy, stupid" -- are unsurprising in the current fiscal environment. Public institutions in many states have seen their funding slashed, and private institutions -- which are typically dependent on some combination of endowments, tuition, and fund-raising -- have been forced to lean more heavily on enrollments as investments and contributions dipped, and face price sticker shock from prospective students going forward.

What strategies have the institutions used to respond to the budget crisis many of them face, and have they worked?

By and large, campus leaders say they have turned to the tried and true: community college presidents say they've cut administrative costs (56.5 percent), hired more part-time faculty members (53 percent), and raised tuition by at least 5 percent (48.2). Public doctoral university leaders say they have pruned selected academic programs (71.2), laid off administrators (50.8 percent) and boosted not just tuition (59.3 percent) but also student fees (47.5 percent). And about half of private master's and baccalaureate college presidents report that their tuition discount rates have climbed as they've provided more financial aid to offset their higher tuitions.

Far fewer presidents say their colleges have begun or expanded partnerships with other colleges (28.4 percent), created or extended online programs (33.9 percent) or changed employee health insurance or other benefit levels (25.6 percent).

'Head in the Sand'?

Those results prompted some survey respondents and commentators on the results to fret that college leaders may be underestimating the extent to which the current financial climate represents a permanent shift in higher education financing, and failing to respond dramatically enough.

“I do not see enough acknowledgment of the unsustainability of the business models in higher education,” says William Durden, president of Dickinson College, a private liberal arts college. “It still seems like we’re in the go-go ‘90s, where people think we can expand our way out of this, entrepreneur our way out of this. It looks like a head-in-the-sand approach.”

“For a quarter century, when we had a downturn, we expected things to get back up again,” says Roy Flores, chancellor of Arizona’s Pima Community College. “But for public colleges, the state money we’ve lost is not going to be replaced, ever. But the responses we’re seeing are the same ones we’ve been trying for the last quarter century. We can’t use the same strategies.”

Adds Nancy Zimpher, chancellor of the State University of New York System: "The issues of how we’re going to really reinvent ourselves for what looks like a long haul of self-sufficiency just didn’t get reflected.... Most of the strategies going forward were largely negative, about cutting. There aren’t growth ideas, change ideas, ideas reaching outside our boundaries."

Community college leaders like Flores and Glenn DuBois, chancellor of the Virginia Community College System, say they were struck, for instance, that only 27 percent of two-year-college leaders listed remediation as one of the top two issues facing their institutions over the next three years.

DuBois says that half of the Virginia system’s students are now entering needing developmental courses to prepare them for college-level work, and with additional state money unlikely to emerge, “I am now of the belief that the resources we need to reconcile some of the big issues like that are already in our budget…. As I look at our situation, we are in a position where we have to rethink just about everything we do. But these answers give me a sense that higher education hasn’t embraced this spirit of rethinking.”

Jane Wellman, executive director both of the Delta Project on Postsecondary Education Costs, Productivity, and Accountability and of the National Association of System Heads, says the survey results suggest to her that colleges and universities “are still trying to cut their budgets in fairly conventional ways,” focusing on administrative and other operating costs rather than confronting “fixed costs” such as employee benefits, which are growing unsustainably. In addition to the quarter of presidents who said they were making changes in benefit levels, tiny percentages of presidents listed “unfunded retirement benefits” as among their biggest concerns. “They’re wringing their hands and saying they can’t help it, and just keep spending more money on benefits,” Wellman says.

Durden, of Dickinson, notes that nearly half of private college presidents (48.9 percent) said they had allowed their institutions’ discount rates (the average percentage students receive off the sticker price, reflecting the various forms of financial aid) to rise as one strategy to deal with the downturn, but that only 31.4 percent agreed or strongly agreed that their current rates were dangerously high.

Another independent college president, S. Georgia Nugent of Kenyon College, says she was struck -- and troubled -- that the survey revealed just how much public college presidents seemed inclined to adopt the “high tuition, high aid” business model that has gotten private colleges into such a difficult position.

Almost 60 percent of presidents of public doctoral institutions and half of public master’s college leaders said they had increased tuition by at least 5 percent to replace the state aid they’ve lost, and 23.6 percent of public college chiefs said they would “significantly” raise tuition in the future if they did not have to worry about political consequences. (The total was much higher for public comprehensive colleges: 36.5 percent.)

But ratcheting up tuition will force public colleges either to provide significantly more financial aid (driving up their own discount rates) or to reduce access for low-income students, following in the footsteps of many of their independent-college brethren, Wellman and Nugent say.

“It’s like choosing Charlie Sheen as a role model,” Nugent says. “So many of us in the private sector think our model is broken, that this decades-long reliance on high tuition/high aid is not working. Now [public institutions] are jumping off the cliff like we have.”

Other presidential respondents and commenters on the survey’s results see a brighter picture.

"Several questions assume that all institutions have faced budget pain," the president of one doctoral-intensive university said in answer to an open-ended question in the survey. "Ours, like some others, has never been financially healthier and not had to do any of the things listed on the checklist."

More than a quarter of presidents in all sectors reported having created new, “self-sustaining” programs, 22.8 percent of public college leaders and 17.9 percent of private campus chiefs said they had created new alliances with corporate partners, and a third of all college presidents said they had started or grown their online education programs. And when asked to rate the effectiveness of their various budgetary strategies, the creation of new programs, partnerships with other colleges, and expanding online programs ranked highly.

“It’s clear people are trying to be strategic in what they do,” says Robert Brown, president of Boston University. “Are they taking on the hardest problems that you must take on if you really believe there’s been a paradigm shift” in the financing of higher education? “Most people are not doing those things, because they’re very hard. But it’s hard to tell from the evidence in here whether that’s because they aren’t willing, or because they don’t think there’s been a paradigm shift.”

Nugent of Kenyon calls the presidents' responses on finding new revenue sources and expanding distance education a "ray of light" in acknowledging that "we need to do business differently." But she sees the answers to one question -- asking presidents what strategies they would use if they did not have to worry about the political consequences -- as implying that “we know what to do and don’t have the courage to do it."

Presented with a list of eight possibilities, including raising tuition, cutting funds for sports programs, and increasing enrollment by lowering admissions standards, presidents zeroed in on several tactics related to employment policies: outsourcing campus services (36 percent), mandating faculty retirements (35.8 percent), changing tenure policies (34.5 percent) and increasing teaching loads (34 percent). (Just 15.7 percent of presidents said they would slash athletics budgets absent political considerations.)

“All of those go to personnel, and several of them question our system of guaranteed employment for life,” says Nugent. “It seems to me to reflect calls that we see from the public,” wondering why higher education's work force is structured so differently from every other sector's.

The Faculty as Target

While faculty-related changes dominated the presidents’ wishlists of what they would do without political consequences, there were key differences between public and private higher education. Among public college presidents -- many of whom are facing booming enrollments without money for new faculty slots -- 44 percent would be very likely to outsource more campus services, absent political considerations. And 38 percent would increase teaching loads, while 37 percent would favor altering tenure procedures.

Among private colleges, the top-ranked item was the ability to require the retirement of older faculty members, with 43 percent of presidents saying they would be very likely to do so absent political considerations. (This is a change, of course, that would require a president to overcome not only campus politics, but also national politics that long ago ended the exemption for academe from age discrimination laws.) That was followed by altering tenure policies (31 percent) and increasing teaching loads (27 percent).

Any way you slice the numbers, a significant number of presidents clearly would like to change policies that are highly valued by faculty members. And professors would be well-advised, say several experts on the state of American faculty life, to pay attention to the presidents’ inclinations.

“The responses appear to show a strong predilection to undertake continuing drastic alterations of the terms, conditions and circumstances of faculty members at their institutions,” says Jack H. Schuster, senior research fellow and professor emeritus of education and public policy at Claremont Graduate University and co-author of The American Faculty: The Restructuring of Academic Work and Careers (Johns Hopkins University Press, 2008).

"I think the system is at risk, insofar as faculty and academic work are being pressed very hard under these circumstances,” he adds.

His co-author, Martin Finkelstein, professor of higher education at Seton Hall University, says that he is not surprised to see that many presidents would like to challenge faculty traditions about tenure, teaching loads and so forth. “Scott Walker has given them a lot more room,” he said, referring to the Wisconsin governor whose attack on collective bargaining by public employees (including faculty members) has set off a national debate.

It shouldn’t surprise academics, Finkelstein says, that many more college presidents would like to adjust tenure than would like to save money by, for example, cutting athletics spending. “People outside the university care about athletics, but they don’t care about tenure,” he says. “Getting rid of tenure would be a popular thing to do.”

The questioning by many presidents of traditional approaches to faculty work “says to me that presidents are acutely aware of the need that higher education has to find new models for doing academic work,” Finkelstein says. “You have more students and less money, so they want to find new models.”

Other signs are also apparent in the survey results of a growing distance between faculty members and presidents. Asked which groups of campus constituents have been most helpful in confronting the economic challenges of the last two years, and which groups the presidents expected to be most effective in providing help in the next two years, faculty didn’t fare well.

The presidents have been most pleased with and plan to rely on senior administrators, followed by trustees, deans and department heads -- and only then faculty leaders, as seen in Table 11.

Finkelstein says it’s not shocking that presidents don’t rely on faculty leaders as they once did because they have already largely removed professors from key decisions that have financial implications. That shift, however, is one of which the general public is largely unaware.

For instance, he says that people tend to think of faculty members as still having the most impact on academic programs and academic hiring. But while faculty may still have substantial control over how academic programs are run, and have a “strong and decisive role in hiring,” they have lost control over the financial part of those decisions, he says. For instance, the process of deciding which new academic programs to create has largely moved to administrators. And the decisions about which faculty positions to fill are no longer left to the faculty.

“They have very little control over decisions involving money,” he says.

At the same time, he warns that many faculty members may imagine a “golden age” of faculty-administration interaction that may have existed only at some colleges, in relatively good financial times, and for relatively short periods.

John Thelin, author of A History of American Higher Education (Hopkins) and a professor of education at the University of Kentucky, says it was “very revealing” and also sad that presidents haven’t seen faculty leaders as key helpers in the current economic downturn.

Thelin says that senior administrators simply don’t have as much informal interaction with faculty members as they used to, mentioning prominent university presidents who in the past could be expected to show up regularly for brown bag lunch colloquiums in various departments -- and to be engaged in the topics. Thelin notes that the late Clark Kerr used to talk about the job of provost as being “the first among equals on the faculty,” with the idea that deans saw themselves in a similar position in their divisions. “Now the provosts and deans are lieutenants, not the first among equals.”

Particularly at large universities, Thelin says, there is an entire new layer of administration (the central administration) that didn’t use to be so clearly on top of the various colleges and research centers. “I think many presidents are rather isolated from the faculty, and I wonder how many of them are really comfortable with the faculty,” he says. “The worlds are so removed,” he says, that faculty members can’t be surprised that they aren’t around the table when a president is making key decisions.

Cary Nelson, national president of the American Association of University Professors, says he was not surprised to find presidents seeing their best advice coming from senior administrators and not the faculty. He said presidents know the kind of advice they will receive from different groups.

“It’s first of all a question of what sort of help you want. If you want to close foreign language programs so you can expand the business college or help pharmaceutical companies do drug testing, then senior administrators and trustees may be your best friends,” says Nelson, Jubilee Professor of Liberal Arts and Sciences and Professor of English at the University of Illinois at Urbana-Champaign.

Nelson says that faculty members have a responsibility to look critically at all academic programs and help administrations improve them, and make difficult decisions. “But faculty members cannot be of much help when the shared governance door is shut in their faces, or when full information about campus finances is withheld,” he says.

Other Survey Highlights

The Presidential Perspectives survey asked presidents to rate the effectiveness of their campuses' investments in technology in a range of areas, including student recruitment, alumni engagement and fund raising, administrative services, and instruction. In only one category -- library resources and services -- did a majority of all presidents (and a bare majority at that: 51 percent) rate the technology investment as "very effective." (See Table 13 below.)

There was enormous variation in other realms: 63 percent of community college leaders and 56.4 percent of for-profit college executives deemed their spending on online education programs very effective, for instance, compared to just 27.1 percent of public research university presidents and 34.5 percent of private doctoral university chiefs.

Green, the Campus Computing Project founder and a consultant to Inside Higher Ed on the survey, says it is hard to know whether the relatively low ratings of technology investments suggested true ambivalence from the presidents -- or just acknowledgment of "how much they don't know" about effectiveness. He notes a finding elsewhere in the survey in which presidents -- asked how effective their institutions were in an array of areas -- gave themselves relatively poor marks on "using data to aid and inform campus decision making."

"Presidents are clearly heavily dependent on information systems, and we've all been caught up in the cycle of great expectations and great aspirations," he says. "But here as elsewhere in the survey, the 'How do we know?' question casts a shadow over everything we do."

Nugent, the Kenyon president and a former academic computing guru at Princeton University, had a slightly different interpretation of her peers' answers on the technology question, emerging from her view that technology has become a commodity for campus leaders.

"Imagine that you were to have asked presidents, 'Are your investments in electricity very effective? Are your investments in water very effective?' " she says. "Technology has just become so much a part of our context that we don't necessarily think too much about how well we're using it. It's so pervasive that you don't have the 'wow' factor anymore."

The political environment is much on the minds of many college leaders, and Inside Higher Ed's survey sought to take their temperature as the new Congress was taking office. As seen in the table below, presidents are expecting relatively little from the new crop of budget-hawk-minded lawmakers; in only one area, greater regulation of for-profit colleges, did more than a third of presidents expect Congress to take action (with a whopping 61.5 percent of for-profit college presidents themselves predicting that).

The survey was taken in January and early February, before the new Congress got rolling, and it looks like the presidents may have underestimated the willingness of lawmakers (prodded especially by the Tea Party-leaning freshmen) to cut programs important to colleges. Congress approved a short-term budget for fiscal 2011 this week that would cut spending, and even the White House -- perhaps reading the tea leaves in Congress -- has proposed some retrenchment in the Pell Grant Program for 2012.

Among other findings from the Presidential Perspectives survey:

• Asked to assess their institutions' effectiveness in a variety of categories, campus leaders expressed confidence in their effectiveness at providing undergraduate education (nearly 70 percent said they were "strongly effective"), managing financial resources amid budget problems (76.5 percent), and preparing students for future employment (56.5 percent). They were less upbeat about their ability to secure financial support from alumni, corporations and foundations (under 15 percent) and ensure the professional development of junior professors (24.3 percent), in addition to their reservations about their use of data to inform decisions (35.9 percent).
• Presidents had generally positive things to say about their bosses, the members of their institutions' governing boards. About 66 percent of them agreed or strongly agreed with the statement that "the investment/business savvy of my board helped us manage the downturn" (the number was even higher at private colleges: 78 percent), and an overwhelming majority of chief executives disputed the notion that "board members pushed the institution into overly aggressive investments that exacerbated our financial problems." In the list of campus constituents that were most and least helpful (see Table 11), trustees fared well, appearing either second or third in all sectors.