A couple of weeks ago we read about Corinthian Colleges closure, and today we learned yet another story on for-profit colleges’ continued financial struggle.  If you think this is worse, you need to wait until the real waves of colleges’ closures or mergers yet may happen in the near future. It won’t take a rocket scientist to figure out how aged the industry is and how critical structural changes in the US higher education are happening right at this moment and how Adam Smith’s invisible hand is working to restructure the industry.  Again and again, the Association has published so many research findings, based on NCES data that showed the possibility of colleges’ closures are imminent.  American public should not be surprise that such college closures are happening right now.  If Harvard University with $32.7 billion endowment is seeking public support to raise $6.5 billion on top what it already had, what does Harvard’s capital campaign mean? What are the reasons that motivate the campaign in September 2013? And what kind of challenges that other US higher education institutions with less than $100 million endowment are facing in the midst of decreasing student enrollment, low student retention, graduation rate and the possibility of CAR implementation in 2015 academic year?

Please let us know what do you guys think?

In a relatively short period of time, IRI or education analytics has been regarded as the future paradigms and tools by US higher education institutions to survive the sea of uncertainty and competition.  These paradigms considered as the ultimate approaches to answer recent phenomenal structural changes that are happening in the industry.  The new mindsets and the need of education analytics are flourished as evidence from recent job postings.  The question that one may have is what kind of tools that an institution could apply such new mindsets in her or his organization?  We will focus on three available tools in this blog.  Short comparisons will be given below on either to invest in SPSS, Tableau or SAS?

1. Many of our readers and registered members asked which one of the tree tools mentioned above can be used to accomplish their IR/IE jobs more efficiently.  The Association answer, in general, it depends on what one tries to accomplish.  The most important reason why we such three tools in the market is because each tool has a unique feature that none of the other has SPSS has been used and very popular in the past because it is more user friendly.  For those who do not know how to write codes and less knowledge about statistical theories prefer this tool than others.  The danger of using such tool without knowing exactly how the programs work and the underlying statistical theory behind it is imminent.  SPSS will give you answers, but are they the right and correct answers?  Many institutions have posted the results of their students’ satisfaction survey or end of semester course survey based on Likert scale.  Sadly, these colleges take the statistical mean (average) on the Likert scale type of questions (Starting on page 8, as examples).  These mistakes were made because of the poor statistical knowledge of the researchers.  When using SPSS to upload the data, it automatically changes the respondents’ answers into numerical values.  However, the software also explains the variable in a different tab.  If the researcher do not know the concept (the type) of data, she or he will surely make this important mistake.  Committed such flaws are not unique and only can be found in higher education profession.  The most respected consultant in the industry was found to commit the same errors.  If these mistakes found in the consultant’s report, one only can imagine what kind of effects they have and how they might impact its clients.
2. Tableau is easy to use–just point and click.  Therefore, it is gaining popularity in more recent years, especially to help the IE tasks get completed.  This software produces different trend reports in graph format which are easy and pleasing the eyes of the readers.  As we may all know, administrators and college decisions makers alike love to see colorful reports.  Most of these campus decision makers are busy and may not have the statistical rigor to digest all the numbers.  Therefore, they love to see the graphs.  One needs to be aware that the stories behind the graphs still need to be interpreted correctly.  Some of them can be very difficult to digest and may tell many stories and different strategic implications.  One may not be able to conduct hypotheses tests to basically answer the fundamental questions that the administrators are looking for. The IRI Office can capitalize Tableau’s nice features in such a case.
3. SAS is the way to go in the future for statistical analyses as well as to generate different reports.  However, one needs to have proper training to write codes that produce the results.  Generating one graph could take the researcher to write 10 to 20 lines of codes.  However, once it is done, she or he can apply the same codes and with proper modifications one can generate other graphs as well.  If we look around, professionals with the SAS skills are more incline to work in non-education industry such as finance and banking, pharmaceutical companies or manufacturing.  Education industry may not be able to compete with other industries in term of compensation.  The person with SAS experience, however may not have previous experience working with higher ed data.  The one that has both experience and other elements of the IRI, also known as education analytics is the best fit to be employed.  However, they are not many around right now yet.

As we have mentioned, different tools may have different applications.  One thing that we do know, that recent dynamic changes have pushed and therefore added the intelligence dimension which has never existed before into the IR/IE profession.  This is another one clear reason why IRI or education analytics is the way to go in the future.

AAEA has noticed sudden spikes on hiring professionals to fill both IR and IE positions.  At the same time, the job requirements as spelled out in the advertisement are more rigorous and demanding compared to what they were in the past.  However, some of the job postings still stress so heavily on the reporting (old IR), instead of IRI (Institutional Research Intelligence).

It surely shows that some of the US higher learning institutions have finally realized that BAU will no longer relevant to cope with recent dynamic changes in the economy, federal government policy, consumers’ preferences, availability of resources and global market.  But for some, they still try to learn how to cope with the new developments.  Federal financial aids regulations and less favorable reactions of the American public on skyrocketed college cost increases have played important roles that may have caused negative effects on higher learning institutions’ operating revenue and their budget situation.  Therefore, one may witness more possible future merger and college closures in the US.

When resources are declining, the institutions are forced to find ways to reduce operating cost, then they turn to the IR professionals to help them to find the answers.  However, traditional IR professionals are not specifically trained in financial management, budgeting or accounting.  If the person who is holding the position never learned about these new skills in the past, then one will see big gaps and problems to find the right person who has all the IRI elements.

In other words, the traditional IR Office which commonly works with VP for Academic Affairs is now also required to work closely with VP for Finance and Administration (VPFA).  Likewise, the VPFA will not be able get the job done efficiently without collaborating with the IRI (New IR) Office.  But, there are not enough people out there who have both the IRI skills and experiences.  It is hard enough to find professionals who understand the concept of categorical data, statistical modeling and who have both SAS programming and Education Analytics skills.  And now, the same professionals need to understand Financial Ratios and how to read the Balance Sheet and P/L Statement correctly, Managerial Accounting, Strategic Management and Budgeting as well.

It is truly an exciting moment to witness such big changes that are happening in the education industry.  When the CAR (College Affordability Rating) and other performance based funding are implemented by both the federal and state agencies, one will notice other such big waves.  This wave of changes will not that far from where we are now.  If the CAR will be implemented as it was planned in 2015 academic year (a good chance it will), then one will notice even greater corrective and policy changes made within the institutions.  This is especially true, if the institution’s rating (AAEA’s version of CAR) is only BBB.

AAEA will comment on recent closure of Corinthian Colleges.  In early 2012, the Association has studied the possibility of US college closures in the future.  In this study, we have applied the new Institutional Research Intelligence (IRI) or Education Analytics paradigms, instead of the old approach.  The results have been shared to the American public (1454 pages pdf file) in AAEA’s website.  Detailed of the analyses are also available in the first published Education Analytics (IRI) book ever written in the US i.e., Institutional Research Intelligence: Go beyond Reporting.   We have to mention that what has happened to Corinthian College is not unique or random.  If one looks closely to our published research, she or he might be able to make inference what the future pictures of most US colleges will be.  Instead of reactive, AAEA is proactive.  The Association tries to anticipate what will happen to the US higher education not based on fortune-teller and baseless type of analyses.  Rather, AAEA does and complete the studies (1475 pages pdf file) based on IRI paradigm on real historical data published by US Department of Education/NCES.  These ten-year historical data were reported by each college in the US (Title IV institutions) who has received any type of federal funding such as Pell Grant or federal student loans for their students.  In our paper which was presented at 2012 North Carolina Community Colleges Annual Meetings in Raleigh and at 2012 South Central SAS Users Group Annual Meetings in Houston, TX. We have urged US colleges to use data-driven approaches rather than BAU in the decision making process which is rarely or applied or even thought before.  Needless to say that only a handful people have the background to carry out the comprehensive IRI paradigm.  These big leaps of paradigm shifts in the Institutional Research profession are not supported by enough people with the IRI skills to make it happen.  Realizing such a gap, some US colleges are moving away from the traditional Institutional Research and start to recruit folks that have enough IRI background and name the position as Business Intelligence.  Until the US has enough human resources with the IRI background, its higher education industry, tax payers, parents and college students will possibly and always suffer from sub-optimal decisions made by the college decision makers.

AAEA would like to make continued comments on what the US College Presidents opinion on current and future US education system.  The College Presidents say that reformers pay too much attention on cutting college cost than finding new ways to change the model of teaching and learning as summarized in the Chronicle’s survey results.  The Association believes that both objectives need to be done simultaneously.  Finding the new and improved model of teaching and student learning efficiently is the main goal of reforming and revitalize the US higher education.  Those two objectives are complementary to each other and they are not mutually exclusive.  Reducing cost of education cannot be justified or achieved by lowering quality of teaching and student learning. It is one of the College Presidents’ jobs to achieve such two important objectives at the same time.  However, the Chronicle’s survey confirms AAEA’s previous statistical study in that most, if not all US College administrators did not applying minimum cost mindset in managing their institution.  AAEA has applied econometric analyses to estimate the cost function in the US higher education industry.  However, it does not exist.

The important notes that the Association would like the readers to think about.

1. The fact of the matter is that over many years federal, state and non-profit organizations have sponsored many studies that aimed to find ways or models to improve teaching and learning at US Colleges.  Therefore, the US College Presidents’ opinion as expressed by the Chronicle’s recent study may reflect total failure of those research projects.  In other words, the results of such research are not applicable.  It is just good in theory, but cannot be applied in the real world or are they just another academic exercise?
2. AAEA recent studies found strong positive statistical correlations among administrative or overhead cost, college cost and student loans increases.  While point one above has been handled and given significant attention and research funding in the past, the tax payers are hoping that students’ learning are improving overtime (this is another maintained hypothesis that need to be proved).  On the other hand, college cost increases and the out-of control of student loans growth seem to be ignored for many years.  Only until recently when the Association starts raising the issues; make its analytical studies available to the American public and when the student loans passed the $1 trillion mark, then the interests on such topics are growing.  The American public starts asking the questions and wanted to know the reasons behind student loans and college cost skyrocketed.  AAEA has revealed the results based on Delta Cost data and rigorous statistical analyses.
3. By reading the overall results, it seems that the Presidents are not up-to-date or fully aware on what has happened at the operational level of their institution.  The results could be different if the studies are directed toward the Chief Operating Office, the Provost or person who actually runs the show.
4. Point 3 above may lead one to make a deduction that most College Presidents in the US are holding a PR or a ceremonial position only.   He or she may know the big picture, but may not have hand-on or detailed knowledge to actually manage the institution.  Somebody else might be the “true” administrator.
5. The sampling error could have been committed on the Chronicle’s recent studies such as identifying inappropriate target of audience to answer such important issues.  This may result of inflating the measurement errors.  For example, perhaps, somebody else i.e. the administrative secretary filled out the survey for them?  As said before, it is important to conduct the validity and other tests before publishing the results.  Do the questions asked on the survey measured what they are intended for, or other systematic errors have been done as discussed in the Classical Test Theory?

Please let us know what do you guys think?

The Association obtains survey results on US college administrators’ opinion on the change issues facing by the industry as reported by the Chronicle of Higher Education.  The results of the survey confirm past and recent studies which have been conducted by the Association of American Education Analytics. Some of the general conclusions made by the study may statistically be inappropriate (incorrect).  AAEA also questions if alpha, inter-rated reliability, validity and other forms of standard required tests have been applied on the constructs and the results.  Readers need to be aware of such possible flaws.

Specifically, AAEA would like to make the following comments on the Chronicle’s study, assuming that the methodology research is appropriate and that the sample (20 % response rate) represents the “true” population.

1. Low response rate could reflect many things such as the respondents care less about the importance of the survey or it can reflect that majority of the college administrators (Presidents) do not know what to say or do not want to give the true answers or it could simply show that they are confused and do not have any clue what is going on and where the industry and the country’s higher education system are heading to.  Perhaps, the above mentioned reasons occurred and are motivated by a “play safe” strategy because they are afraid of losing their current position?
2. The results are reported based on four-category of Likert Scale.  However, the report could be made better, more informative and may lead to a better understanding of the respondents’ opinion if more rigorous categorical statistical analyses such as CMH hypothesis tests are conducted on the collected data.
3. Most of the respondents agree that a drastic change needs to be done.  However, it seems very clear that they do not know the direction to go as reflected from their answers.  The majority of US college administrators think that the “politicians” are the true agent of change who can bring change on-campus.  In other words, the majority of them is waiting for the politicians to tell them what needs to be done?  We need to caution readers that the general statement made by the Chronicle may not completely true since the respondents can be classified into two groups of samples i.e., non-profit private and state colleges.  Again, Chi-square hypotheses tests need to be carried out in this case.
4. Point 3 above may tell us that a wait-and-see strategy is adopted in most US campuses.  Lack of initiative may again reflect the “play-safe” strategy.  They just do not want to take even the smallest calculated risk to change the organization that they are managing?
5. Point 4 may tell us that the American public has to be more patience to see significant changes that they have hoped for.  College education cost may keep going up.  It may not be impossible that one may see by the end of 2014 the accumulation of student loans will reach a new record of $2 trillion.
6. Point 5 above may lead one to believe that if no one can and is willing to make a drastic change then the only possible entity that can take the responsibility is the government.  Therefore, the Satisfactory Academic Program, College Affordability Rating and future compliance audit (which relate the compliance test results to college accreditation and/or disbursement of any type of federal funding and financial aids) should be welcomed by the US college administrators.  But, we have all heard that may not be the case?  Then the question that one may have is what does the college administrators really want to do?  Do they have the motivation to make the US higher education to be more affordable and that to make the US as a country to be more competitive in the world or do they try to maximize their own utility function with the expense of others?  Perhaps, the answer is yes.

Please tell us what do you guys think?

Needless to say that while the United States of America will celebrate its 238^th Independence Day, more working class in the country is losing its financial independence.  Positive correlation of college cost and student loans may have created, accelerated, contributed and caused the problems to occur.  If a do-nothing policy continues to be adopted in the future and no policy puts in place to control and redirected higher education cost and student loans problems, then one might expect more citizens of the country will financially be more dependent on the availability of public assistance programs.

Happy Fourth.  Please let us know what you guys think?

Independence Day is celebrated every year on the 4^th of July.  While the Americans enjoy the freedom, it seems that the majority of the population has also lost its financial independence.  The loss of financial freedom can be created by many factors; perhaps the economic system may have played special roles.  While Adam Smith’s concept of invisible hand suggests a free economic system with insignificant of government’s intervention, it may not be completely true in the case of US higher education.  The industry has been let-alone for hundreds of years.  Data suggest that giving too much freedom without rigorous control system will create chaos.  For example, letting the for-profit corporation to participate in the education industry has perhaps created more problems than its expected good.  It surely will cause excess supply of education services.  If the growth of demand for higher education in the US is less than the growth in the supply side, it certainly will cause problems.  Sooner or later, it will increase the risk of college closures or mergers.  In such a case, Adam Smith’s invisible hand paradigm predicts the outcome very well.  Two well-known cases occurred just recently which show how negative impacts might occur.  Apparently the invisible hand does work well in the US higher education system.  Though AAEA has not done statistical analyses, one may have to prove the maintained hypothesis of possible positive relationship between skyrocketed cost of education, student loans and the policy to let the for-profit corporation to participate in the industry.

Happy Fourth.  Please let us know what you guys think?

The Association has discussed the potential of college closures due to future dynamic changes in the industry.  Therefore, AAEA has urged US colleges to promote sound business model.  However, greed is very difficult to control.  It may lead to products and services overpriced and cheating as well as lies are common strategies which have contributed and caused student loans to increase at an out-of-control rate.  As reported in the media today, recently another for-profit institution with 75K students potentially will have to shut down its operation.  This is not a random event.  The American public will hear more of the same stories in the near future.  As the regulator increases its due-diligent, compliance and audit efforts on higher institutions that have received some sort of government funding such as Pell Grant or student loans, more colleges (for-profit or not-for-profit entities) in the US will be forced to close its operation.  It will start with for-profit colleges followed by other types of institutions as well.

AAEA’s assessments pointed out to about 519 institutions which are in obvious trouble for their liabilities (financial obligation) are much higher than their assets (what they actually own and able to pay).

Please write us what do you guys think?