Outgoing UL Head Moffett Leaves Behind Some Wisdom The Leges Should Absorb

An editorial posted last night by the Lake Charles American Press staff on the future of higher education – and the insights from the outgoing head of one of the state’s university systems – is worth discussing, as it points out some of the flaws the state legislature needs to fix.

The president in question is Randy Moffett, and he’s retiring as head of the University of Louisiana system. Moffett is exasperated, as all of the state’s college administrators seem to be, by the constant struggle for state funding and the roller-coaster nature that funding produces. And as he departs for new challenges he offers a few morsels for thought the folks at the state legislature probably ought to take heed of. Plus some that maybe they shouldn’t, to be fair.

First, Moffett says, the legislature needs to get out of the business of regulating tuition at state universities.

“I think we need to move the tuition issue from the Legislature.

“We’ve tried. Let our schools operate, to a degree, like a private enterprise, which is where they’re heading,” said Moffett, who served as president of Southeastern Louisiana University before taking the UL System post. “The best example of controlling costs and managing those are your auxiliary services on campus like housing and food services.

That’s not regulated by the Legislature, and no university president in his right mind is going to price himself out of business … . Let the market drive it.”

Hear, hear.

The legislature has shown itself incapable of managing the universities’ money, which is hardly a surprise given they’re a tiny piece of a $25 billion state budget driven by politics more than smart planning.

And the political risk of getting out of the tuition business is vastly overstated. Certainly, removing controls on tuition would lead to some increases – and parents of college kids would certainly gripe to their legislators about it.

But perhaps not in all cases. As Moffett says, let the market drive it. For some of the state’s universities, it might make sense to lower tuition and attempt to position themselves as low-cost providers.

That, of course, probably involves a greater degree of freedom for individual campuses than system administrators like Moffett would be predisposed to granting. But running a tightly-governed system of higher education like Louisiana has tried to do for decades hasn’t exactly produced the kinds of results we want.

At the end of the day, though, tuition is a price. That’s all it is – it’s a price for a college education. For the legislature to attempt to set that price is for them to repeat a mistake public officials never seem to learn to avoid. Stop fighting Mother Nature and let providers and consumers work these questions out on their own.

Moffett puts his bureaucratic hat back on with his next suggestion, though…

The risk there is that if colleges are given more latitude to raise tuition, state lawmakers may be tempted to cut state funding of the universities.

According to Moffett, funding of post-secondary education has flipped from 62 percent state funds and 38 percent self-generated funds to 62 percent self-generated funds and 38 percent state funds.

Higher education and health care are the two big-ticket items that are not constitutionally protected from cuts, hence Moffett’s push to provide that benefit for higher ed.

The American Press editorial staff says constitutional protections for higher education funding aren’t realistic, and they’re right. If anything, we need to remove constitutional protections from things which are already protected rather than try to protect anything else. A lack of freedom to prioritize the budget in the midst of difficult fiscal times means those items which do have to take cuts get hit a lot harder than they otherwise would. And furthermore, protecting higher ed in the budget only means college administrators have less incentive to run a tight ship.

We continue hearing that this “funding flip” in which general fund dollars are being exchanged for self-generated dollars is somehow a bad thing. That doesn’t make a lot of sense – by now it ought to be obvious that a state legislature whose revenues depend on the ever-changing price of oil and dynamic, economy-dependent items like sales and income tax collections is in an exceedingly poor position to guarantee a revenue stream to its colleges. Given that reality, self-generated funds are infinitely more reliable and, one would figure, more desirable than to go begging at the legislature for one’s daily bread.

Sure, if you could fix that by putting higher ed funding in the constitution that might sound like an answer. In reality, there’s no way that would work. How would you guarantee that funding? By use of a formula? What if the formula becomes outdated or otherwise isn’t any good? And what happens when there isn’t enough money to satisfy that formula? Does the constitution then mandate a tax increase to fix the funding problem? Because we all know that won’t work.

Not to mention that the delivery systems in higher education are becoming out of date. The days of the big brick-and-mortar campus are coming to a close, and the market is clearly shifting toward a more online model which allows students more flexibility and the ability to work while in school. As such, Louisiana’s idea to have 14 public campuses for a population of four and a half million looks even less viable. Protecting funding for campuses in the state constitution which need to be merged or dropped anyway just isn’t smart.

So Moffett gets docked for that one. Nice try, but he was more on point with the tuition idea.

He does better when he suggests a revamp of how TOPS, the state’s college scholarship program, is run.

He believes requirements for TOPS eligibility should be increased.

“You’ve got students that get TOPS from year to year based on admission standards, but not the admission to their four-year university. That makes no sense to me,” he said.

But it’s an Everest-like mountain to scale, since it would take a vote of the Legislature to change TOPS, a notion that Gov. Bobby Jindal has opposed.

Our idea on TOPS has long been that it be converted into a graduated scale of scholarship grants. For example, since Louisiana’s public colleges graduate just 38 percent of their students within six years, some number a little less than that – we chose 30 percent – ought to be afforded the opportunity to earn a TOPS scholarship.

What we’ve suggested is that Louisiana provide a scholarship large enough for full tuition and basic expenses – say, $15,000 – for the top five percent of the applicants to the program, and something a bit less, like perhaps $10,000 – for the next ten percent. And then something very basic, like $5,000, for the next 15 percent. After that, if you’re not in the top 30 percent of the applicants to the TOPS program, you’re on your own.

How the applicants are scored and ranked is a matter we leave to others, but whatever works is fine. If the TOPS admissions office prefers to go heavy on standardized tests, core grades, extracurricular activities, geographic or demographic balance – that’s fine. So long as politics and who-you-know can be kept to a minimum, we’d actually be OK with the TOPS administrator being a gubernatorial appointee or maybe subject to a board and then the program having a large degree of autonomy to process and score applicants.

But since it’s cheaper and generally more effective to route more marginal students through community colleges, we would suggest that TOPS add grads of the community colleges to the applicant pool and come up with a way to rank somebody who got a degree from a community college with a good GPA among the better applicants – because it’s relatively more efficient to put someone through the local JUCO for a couple of years if they’re not a sure shot to make it through a four-year school, and once they’ve gone through the JUCO program they’re only two years removed from a four-year degree, so if they bomb out at that point they’ll waste less of our tax dollars in doing it.

What this would do is to make the state’s colleges compete to either attract the best students with more bells and whistles, or to provide a more slimmed-down and purposeful education for those students who have less money attached to them. Does this mean LSU probably attracts the top five percent to the exclusion of the rest of the state’s colleges? For the most part, yeah. But that does a couple of very necessary things for LSU. For one, it makes LSU hard to get into – and as a top-end university it can compete favorably with other flagship universities without having to worry about funding from the legislature. A generous TOPS scholarship for LSU’s students means the state would be providing ample funding for LSU without the university having to out-lobby the rest of the state’s colleges to get it. We already know LSU isn’t interested in throwing its competitors under the bus; you’ll never hear that from LSU officials when these budget debates get cranked up, and it’s hard to blame them for not rocking that boat even though LSU suffers most from Louisiana being overbuilt with public four-year schools.

But a $10,000 scholarship is still a nice chunk of change for schools like ULL, UNO and Louisiana Tech to fight over. They can certainly fulfill a decent regional mission with that kind of funding, and we like the idea that they’ll have to compete to get it.

And a $5,000 scholarship is still a relatively high-end figure compared to what a full award in the program is now.

The difference is that you can get a TOPS scholarship without doing much more than displaying a pulse and a high school degree, which Moffett recognizes. TOPS awards begin at a 20 on the ACT and the completion of 19 core curriculum units with a 2.5 GPA. That’s a joke. It’s hardly a competitive program rewarding high achievement, and it also doesn’t incentivize the state’s public institutions to pursue better students.

What we’d propose is much higher TOPS spending, but on a program built to demand that high school and community college students bust their rear ends to earn college money. And we would take most of the general fund money that currently goes to higher education and route it through this new, turbocharged TOPS.

We’d go further than Moffett in revamping the program, but we agree completely with him that paying $3,000 or $4,000 or even $5,000 in scholarship money for a 2.5 and a 20 is a perversion of what TOPS was established to do. And while Jindal doesn’t want to change TOPS, the guess here is that if TOPS is re-engineered to make college entrance more competitive and higher, if perhaps more flexible, standards are established which satisfy his stated objectives of routing more marginal students into community colleges and driving better achievement and graduation rates at four-year schools, which Jindal has rightly characterized as a better return on the state’s investment, he might be more amenable to such a change.

And another idea of Moffett’s makes a good deal of sense as well.

Moffett said higher education institutions should be allowed to keep a fund balance during years of surplus, which has been rare of late.

Because of the financially strapped state budget, the UL System has cut 217 academic programs, furloughed employees, incentivized retirement, restructured administrative offices, increased admission standards and expanded partnerships with community colleges and online degree programs, Moffett said.

To a large degree, those programs aren’t all that different from the way proponents of a strong national defense describe the military – namely, it’s quite easy to make cuts and draw down your activities, but it’s a lot harder to build them back again. Without opining on whether some of the things the higher ed administrators have been forced to cut should have been enacted in the first place, you’re not likely to build great institutions on a one-step-forward, two-steps-back basis. Allowing the institutions to bank money they don’t need helps to soften the blow in a bad year, but more than that it would incentivize them to run a tighter ship in the good years rather than run out and blow every last dollar left in the budget at the end of the fiscal year like a typical government agency does.

And if Louisiana’s fiscal times improve in the future, perhaps this could serve as a mechanism for doing something about Louisiana’s pitiful endowment figures among the public institutions.

LSU’s endowment, as of June 30 of last year, was $538 million. That’s an alarmingly poor number – it’s better than Ole Miss’ $469 million and Mississippi State’s $395 million, of course, but LSU has to be made of a little stronger financial stuff than the Mississippi schools are if it’s going to compete nationally among flagship schools.

The National Association of College and University Business Officers put out a report last year ranking the endowments of various universities and systems, and Louisiana ranked disastrously. The LSU System’s endowment was scored at $692 million, which placed it 107th among the entities surveyed. And LSU didn’t rate as well as Tulane, which placed 74th with a $1.014 billion endowment. One wouldn’t expect such a smaller school in such a threatened position since Katrina to have that big an advantage on LSU, but it does.

And compared to LSU’s main SEC competitors, Tulane pales. Vanderbilt’s endowment is $3.4 billion, Florida’s is $1.3 billion, Alabama’s is $995 million, Kentucky’s is $916 million, Tennessee’s is $848 million, Arkansas’ is $789 million, Georgia’s is $746 million. LSU does rank ahead of South Carolina ($494 million) and Auburn ($472 million), but that means the state’s pride and joy ranks 8th out of 12 schools in the conference to which it compares itself.

Things will only get worse with the addition of Texas A&M ($7 billion) and Missouri ($1.1 billion).

That’s LSU. Moffett’s University of Louisiana system, which wouldn’t be expected to have a huge endowment given the mission of most of its campuses, is far, far worse. In fact, it isn’t even listed in the NACUBO survey. If you go through the web sites for the individual campuses within the UL system you’ll find information on how to donate, but if you can find an actual report of how much money any of them have or how much the system as a whole has, you’ve got better research skills than we do. We can’t seem to find any hard evidence of substantial endowment at any of the UL institutions.

And if you don’t have any endowment, you’re completely at the mercy of the legislature. This is no way to run higher education. Allowing the colleges to hang on to money they can squirrel away and put into their endowments might actually help UL-Lafayette catch up to Ramapo College of New Jersey or Cedarville University of Ohio, for example, sometime this decade.

On the whole, Moffett’s suggestions would help to move the state’s higher education delivery forward. They should be heeded. Except for that business about putting college funding in the constitution, of course.



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