A recent post by Lakehead University economics professor Livio Di Matteo on the excellent “Worthwhile Canadian Initiative” blog raised the issue of “sustainable” universities – not in the environmental sense, but in the economic/financial sense.
“We of course are familiar with the sustainability debate in health care, where health spending growth rates in excess of growth rates in the resource base are seen as a sign of lack of sustainability,” writes Dr. Matteo. “If postsecondary education is not fiscally sustainable, then one would expect to see a similar type of measure.”
Digging up some statistics on postsecondary education in Canada, he finds that, as with health care, spending on postsecondary education in Canada is indeed “unsustainable” given that the average annual growth rate for the period 1990 to 2009 (5.7 percent) exceeds the growth rate for GDP (4.3 percent), provincial-territorial government revenues (4.7 percent) and total provincial-territorial government expenditures (4.3 percent). In fact, postsecondary education spending is growing almost as fast as public health spending.
It is a sobering statistic, considering that – as with health care – most of those involved in postsecondary education continue to clamour for ever more public funding. And yet, again as with health care, it never seems to be enough, especially in light of public pressure to educate ever larger numbers of undergraduates. Universities have responded to cost pressures by, among other things, hiring more contract sessional instructors, increasing class sizes and charging more in tuition, but these practices seem to me to be equally unsustainable in the long run.
This, along with the sense by many that a university degree is losing its value, has led Paul Staton, CEO of Inigral, to claim that higher education will soon be facing the “Great Disruption.” It’s not entirely clear to me what exactly he means by that, but his main takeaway appears to be that universities will need to “embark upon dramatic transformations,” including cost-cutting, in order to survive.
As with the dire warning of a “higher education bubble,” this type of apocalyptic talk leaves me unimpressed. Universities have proven to be one of the most stable and enduring institutions in history and I suspect that they will continue to endure in much their current form for decades to come. Of course, the obvious major change that has occurred in the past 50 years is the enormous growth in the number and size of universities, but their essential form and function remain.
But, going back to the original point, they are also enormously expensive. Mr. Staton appears to believe that the Internet, e-learning and mobile technology will solve the problem, but again I’m unconvinced. I think that face-to-face, campus-based learning will continue to be the major paradigm far into the future.
Nevertheless, I do find it terribly frustrating – as surely do most policy makers, university administrators and faculty – that there aren’t some obvious solutions to bending the “cost curve” and delivering quality education more economically. The search for solutions in the healthcare area seems to have been met with equal (non)success. I don’t know what the answer is. Suggestions?
Straw man: we reject the idea that people who benefit most from health care should pay more for it, as they are often the most vulnerable in all sorts of ways, but why do we dismiss out of hand the idea that those people who benefit most, financially, from their education should, eventually, be expected to put more back into the system? A highly-educated and well-rounded citizenry benefits us all and is a worthy result of the expenditure of tax dollars. The base amount beyond what we are willing to spend, collectively, is supplemented by a revamped loans program. Jurisdictions that choose to pick winners in advance immediately forgive these loans, for certain people or for people studying in certain fields, and everyone else repays on a means test. Jurisdictions that choose to pick winners after the fact offer to forgive these loans for graduates willing to pursue further study in targeted disciplines or work within certain geographical restrictions. This is also the point at which corporate philanthropy would be most effective. Our current funding model contributes to poor results by distracting students, over longer and oft-interrupted programs, from what should be their primary focus. We squeeze the wrong people at the wrong time and wonder why a system that grows more and more costly does not work.