Yesterday we has discussed if this idea is viable.  It seems great ideas, but actually not.  During the hearing, one of the professionals who testified presented a table that shows the break-down of cash inflow and outflow.  The Association has a chance to analyze his number.  As attached, we share to the American public our analyses side-by-side with what has been presented on the Senate floor.  Taking all his numbers as they are, here what we found:

1. Unfortunately, the person has made a simple mistake when calculating the total cost of education.  We are all humans, and sure, humans make mistake.  However, with this simple table & calculation, and considering how important the testimony will be and how will it impact community college students in this country, the error seems to be significant.  We are wondering if any of his staff, anyone in the Senate floor, anybody at the American Association of Community Colleges or anyone at Senator Lamar’s office noticed such an unfortunate miscalculation before, during or after the Senate hearing? Wow…
2. We hope the intention is not to understate the cost of education, but an honest calculation error.  Considering the table was prepared in some sort of spread sheet, making such a mistake will be very rare?
3. One can infers that if mistakes were made in a simple calculation, what will happen to institutions that have to manage bigger budget?
4. Partly, based on his study/table, he has suggested the Congress to increase the federal funding?
5. It seems that part of the taken student loans have been used to cover the living expenses?  AAEA thinks this is more important issue to be solved?  Despite DOW has increased about 5000 points under the new administration, there are people experiencing difficulties to meet they basic needs?
6. The Pell number surely has covered the total cost for education ($6,000.00 versus $5,211.00).
7. We are wondering if the Fed Loans such as Pell should also cover students’ living expenses?
8. It seems that his testimony is not consistent with the intend of the hearing related to simplifying the student aids process.  Rather, asking more aids?  So, it is really a different place for that and the timing may not exactly quite right as well.

This BLOG article tries to make it clear for the college students who are thinking or in the process of enrolling in the program as this article has described.  In another attempt, a lawmaker has proposed to link students’ future pay check with the loans repayment program.

The Association has described many times, that the student loans issue can be solved only if the root of the problem is addressed logically, honestly and methodologically.  US student loans explosion has been caused by expensive cost of education, period.  Our research results show administrative expenses make up about 40% of the whole cost.  The two loan repayment programs essentially do not address the root of the issues.  It seems okay, but really not.  Linking loan repayment with future income overlooks and ignores the whole reason behind the current $1.35 trillion student loans. It seems that the whole linking ideas are borrowed from the mortgage loans. While one may have the potential for a capital gain from the property that he or she buys–that never happens with student loans.  Potentially, if one’s earning increases, so does the repayment amount.  However, some States have realized that operational inefficiency from state-owned higher ed needs to be improved.

Many years ago, the Association has reminded US Colleges to be more efficient in managing their institution.  This repeated discussions and outlook were shared again to the public on January 1, 2018.  Today we learned that many other people, either after they read or learn from our BLOG, or based on their own observation has confirmed what we have expected in the past.  If institutions start cutting the cost after their are facing the financial problems, then it is a little too late.

It is not just about cutting cost, cutting tuition, or merger that is important, but the college culture needs to be changed.  How to live up the institution’s mission statement is important.  How to put that mission in every single person’s mind and soul in that institution to reach the organization’s goal is crucial and cannot be compromised.  Apparently, after so many years, the mission statement appeared in the colleges’ website, just a statement and has no effect, because it has no soul or truth–it is just an empty promise or just another marketing gimmick.  Because there is no formal entity (such as SEC in NYSE) to check it–accountability can be compromised, the accreditation agencies, which supposed to do their job, only doing it minimally.  It will take forever for the US to get the issues solved, if it ever happens.  The only source that can accelerate these transformations are providing more and tougher regulations.

People just work for the sake of their own interests, perhaps to get tenured, money, or the benefits that they can get, but may not for the most important stakeholders, which is the students as stated in the institution’s mission, their family and the society as a whole.

In December 2017, the Association have written several articles in its Blog.  These articles were written based on our observations on Hukill’s bill.  Our analyses become a reality in that the law makers in FL have proposed tougher metrics to award state funding to the FL State Colleges which may soon have a new name as well, i.e., FL Community Colleges System, the name most of the administrators have voiced their concerns.  Imposing the new and harsher metrics reflect many things such as:

1. Setting a new and higher academic and financial accountability standards which may have been neglected in the past;
2. Revitalize, the old ways to conduct business, where institutional data have not been used optimally in the decision making process; and
3. In general, to regain public or tax payers’ trust on higher ed system which has been tainted by sub-optimal decisions for so long.  At some points, have negatively affect the students and their family financially.  Example: Increase student loan debts.
4. Statistical modeling will be more challenging.
5. LEAN application becomes a must instead of optional.

Looking at the timing that Hukill’s bill was discussed on the first day of the state legislation session in 2018 suggests the urgency of the Bill.  If it got approved (most likely after several iterations), then there is no much room left for the Colleges to make a meaningful and high-impact strategic change, especially for institutional metrics related to retention, grad rate, enrollment and gainful employment.  IRI V.1 and IRI V.2 may help, only if the institutions already have the IRI experts in-placed to accelerate and accommodate these policy changes.  However, to change the current colleges’ culture may not be easy, it may take years, if it ever happens.  The college shake-up in FL will bring both great opportunities and woes.  However, the Association expects that it will spread like wildfires to the other parts of the US in the very near future as it has been expected/predicted to occur years ago.

Many things will happen, but it can be summed into the following general statement “more challenging year ahead and beyond“, confirmed on 01/23/2018.

1. On the demand side: Less resources are available for degree seekers.
2. On the supply side: Accumulation of excess supply will continue & declining resources (01/25/2018).
3. For Higher Ed institutions: Declining (1/16/18) or tougher (1/18/18) state funding (01/25/2018) regulation (1/25/2018). Note the date added when our prediction is confirmed).

These two main market forces will clean the closet which has been so cluttered due to BAU/status-quo (SQ) attitude which has long characterized the whole system.  The clean up will lead to:

1. Stricter regulations on both federal and state funding.
2. More non state-owned college closures, restructures & mergers.
3. State will consolidate more state-owned colleges under a single roof, eliminating wasteful management and other redundant positions.
4. Risk of college employees lay-off (1/19/18) will increase.
5. Increase public monitoring & scrutiny on accreditation agencies’ quality work.
6. To some degree: tuition-reduction price war will intensify.
7. A bit late, but increasing use of IRI V.1.  However, the use of analytics alone (IRI V.1) no longer will produce best optimal results, unless move on to IRI V.2.
8. Excess demand for professionals with IRI expertise will increase tremendously.

Unfortunately, only a handful or none of the current institutions will change, for the SQ  culture has infected the whole system for so long to a point-of-no return.  None of the participants/players in the system will care, so long their interests (translate $$ and benefits) will not be touched.  The only way to stop these cancerous cells from spreading is by enforcing a combination of the invisible hand, further reduction or harsher on federal and state funding.  The institutions will not make any voluntary & significant efforts to transform themselves for there is no real incentive for them to do so.  The source of change should come from outside such as fed or state. As Hukill statement says, the change is necessary so that they (the colleges) are able to live up their mission.  Therefore, the students can take the right courses, reduce their debts and graduate on time”.  Her statement explicitly reflects and reaffirms US higher ed institutions’ failures and perhaps, implicitly say accreditations’ agency sub-par past quality work.  Sad! Very sad!

Happy New Year 2018!!

A couple of days ago, the Association has written a short article on the possible important higher ed policy changes in the state of FL.  Regardless of what will happen with the Bill, institutions under the System need to make important changes.  Analyzing what is happening and will happen in the US higher Ed, it seems to us that sooner or later the proposed changes will finally be approved by the state lawmakers.  Unless more revenue can be generated by the state from other sources which will ensure future funding will always be available for the state higher ed.  The impact of the proposed changes concerning former graduates’ performance at the 4-year institution where they have transferred to is worth noticing.  For their performance at the (new) 4 year institution will be capitalized as a determining metric in allocating individual institution’s rank under the state’s Performance Based Funding Model.  This aggressive form of institutional accountability new regulation will leave a pretty small room for the institutions to maneuver.  Consequently, more resources and training needs to be devoted into IRI.2.  The State Colleges may not have any other easy way-out, rather than to embrace the change, where current or future policy will be carving around customer’s satisfaction mindset as what we have previously discussed.

As currently as Community College Competitiveness Acts or Hukill’s bill, legislators and lawmakers alike have worked intensively to improve higher ed in the state of FL.  Ranging from funding formula to the Board’s name changes. The Association has discussed such a potential change in its November’s BLOG article.  Changes will not always bring everyone on board.  This article is not about presenting different views, rather to discuss how different institutions under the System will be able to navigate the policy roller coaster, and survive.  Unfortunately, to make a meaningful change, an institution needs to move fast, adaptable and has a rubber-band culture which will adjust to the new environment.  Only those that have such characteristics will survive.  Looking at the past ranking of the State Community Colleges listed under Performance Based Funding report card, it shows a pretty clear picture which institutions potentially may or may not survive the changes.  For those selected few organizations who can overcome the BAU, they still need a clear direction of strategic-path that enables them to move toward the right direction.  This strategic path can only be generated by IRI 2.0, and beyond IRI 1.0.  IRI 1.0 will supplies the strategic information which then can be used further in IRI 2.0.

The answer to the above title is not as easy as one thinks.  It depends on the level or where the restructuring is taken place.  Looking at the recent state-own institution, one can see the restructuring happened at the System Office.  Example: the state of CT and WI have done this, OK is considering to follow suit.  This is a fundamental change, which will impact many administrator positions such as the College president, perhaps potentially with all her or his cabinet members.  SIU in IL is a good example where the restructuring process occurs at the (individual) institutional level.  Most impacted will be Deans and Department Heads.  This morning we learned one of the state-owned institutions in MO is restructuring in a smaller scale i.e., at the program level, where several programs are combined.  The restructuring efforts have the main goal to reduce the administrative cost dues to redundancy, overlaps, and non-contributing value added positions created in the past for different reasons.  But now, the past is the past and embrace the future.  Perhaps, it is long overdue where US colleges have to be managed equally professional as other companies in other industries do.  This will bring a bigger shift in the hiring of the top person and also the Leadership program or major under the Graduate College of Education which traditionally produces such a leader in the past.  This shifting paradigm occurs because the changes in competitive environment and it may take years before one can see the whole US higher ed in better shape.  A new breed of professionals may not coming from the College of Education.  Rather, from a new created program which we will reveal in our next Blog.  Please keep on checking the site.

Under the new administration’s deregulation policy, the manufacturing and service industries seem to work great as shown by the DOW.  New regulation or deregulation are also introduced in the higher ed.  As previously known, any public policy changes will not satisfy everybody.  Both sides seem to have legitimate reasons to oppose or support the proposed new rule.  The focus on this article is not to argue which one is better.  Rather to frankly ask how higher ed institutions will be able to navigate around it?  There is time laps before newly approved policy changes take into effect.  Therefore, there is time for institutions to adjust or prepare themselves.  However, the direction of the adjustments need to be studied carefully, and based on the results of many, but finite options, institutions then make an optimal choice, given its conditions.  First generation of IRI which gained popularity after it was introduced to the public in 2013 by the Association may no longer be an appropriate approach under such uncertainty.  Therefore, we have introduced and shared to the American public the second generation of IRI championed by stochastic simulation.  If the Foxx and Guthrie’s Education Reform Act becomes the law of the land, it surely will have chain reaction effects to many players.

The answer of the above question is pretty straight forward.  Bumpy road ahead for most US higher ed.  Many years ago the Association has predicted and shared of what is coming to the public.  However, only a few take advantages of what we have forecasted based on publicly available data.  Less resources means:

1. Force Colleges to increase tuition.  This is the past sub-optimal and self- destructive policy which may not viable, given the consumers’ awareness,  change in their perceive value on higher ed, and current administration’s higher ed policy.
2. Cut cost and spending across the board, including administrators’ and professors’ fat earning.  Interestingly, some advices have been offered to college presidents’ when they have to let go.
3. Cut employees’ benefits.
4. Lay off, especially for duplicated units on campus that do not relate directly with students services.
5. More work for faculty and staff who are lucky to have a job.  Teaching faculty may teach more than 6 classes in a semester, and competing for research funding becomes a priority from the management.  As results, teaching may not be the first priority, and that quality may be compromised.

The bottom line is that financial stress will increase which may lead to more closures, merger and campus down-sizing.

Campus restructuring will end up with fewer, but stronger institutions.  Some of these institutions such as Brown University has made a great preparation by campaigning to create fund which will be used to replace students loans.  This has an important strategic implication, i.e., only the academically strongest students will be admitted to it’s program.