Monday, March 30, 2015

The Relationship Between PASSHE and PASCU - Part 5

Here are three potential private interests for every governor—regardless of party—for artificially holding down PASSHE tuition rates:

1.       Tuition rate hikes at PASSHE universities can generate negative media coverage for the Governor;
2.       Keeping PASSHE tuition rates artificially low, it was hoped by many Pennsylvania Governors, would force Penn State and the other “State-Related” universities to hold down their tuitions.  That effort has been an abject failure on two scores: a) it failed to hold down state-related tuition rates; and b) the revenue lost to the PASSHE universities as a result of decisions based on political expediency rather than economics is responsible for the failure of the Board of Governors to deliver either end of PASSHE’s statutory purpose: high quality education at the lowest possible cost to the students.”

3.       A third powerful private interest of governors from both parties wanting to keep PASSHE tuitions artificially low is their desire to avoid large financial losses from Pennsylvania’s 529 Guaranteed Savings Plan in which parents can purchase college credits at today’s rates for a newborn infant who won’t go to college for another 18 years.  When those plans were first introduced across America, the economy was so strong and the return on investment was so high that a State could invest those dollars and more than make up for the growth in tuition when those tuition bills would have to be paid 18 years later.  But since the economy slumped and returns on investment have fallen, many states are no longer accepting new applicants to their 529 programs because of the financial losses.¹   

The Pennsylvania Association of State Colleges and Universities (PASCU)
 
The powerful demographic forces described previously, combined with the economic downturn that followed the Great Recession, suggest strongly that the steady decline in State funding to “public higher education” is not likely to be reversed anytime soon, and that what ails the PASSHE Universities and the Students who rely on them will not be solved by wishing in vain for State dollars that, for good reason, are no longer available to those stakeholders who care about and depend upon public higher education.

In other words, in a democratic republic with majority rule, like ours, one sometimes ends up in the minority with regard to key public policy decisions—such as how best to spend limited taxpayer dollars.  Unfortunately, the 30% of American households that can now benefit directly from public higher education constitute a distinct minority as far as additional State funding is concerned.
 
For that reason PASCU’s approach to accomplishing its mission: “To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: “High Quality Education at the Lowest Possible Cost to the Students,” is indefinitely preserved and faithfully delivered,” is not based on futile demands for more State money, but rather on legitimate demands for justice in terms of proper Majority Stakeholder representation on PASSHEs governance boards.
 
The 14 PASSHE universities are already 75% private—as far as funding is concerned.  Those paying 75% of PASSHE’s bills need to have their voices heard by controlling a governance share on PASSHE’s Board of Governors and 14 Councils of Trustees roughly comparable to their funding share. 
Privatization Without Representation

PASCU believes that the relentless privatization of public higher education in Pennsylvania and across America is inevitable due to powerful demographic and economic forces previously described.  
 
But representation is a political matter, one that is subject to change through the ballot box as well as through the intervention of the Federal Courts.  Three decades of ongoing “Privatization Without Representation” in Pennsylvania public higher education is just another name for tyranny.
 
But that awful tyranny is not inevitable if only the Majority Stakeholders decide to be heard, and stand up for themselves.  That’s where PASCU comes in.  PASCU seeks to become the legitimate voice of PASSHE’s Majority Stakeholders who are currently disenfranchised.     

PASCU seeks to promote the legal rights of that segment of society which includes all PASSHE students, parents and donors, primarily alumni who, as a group have provided the majority of the annual funding to the PASSHE System and the fourteen PASSHE universities since 1992. 
According to published reports, 112,000 students currently attend PASSHE universities and 450,000 PASSHE alumni currently live in Pennsylvania.

There would clearly be no need for a non-profit organization of concerned citizens such as PASCU if, in fact, The Board of Governors were delivering high quality education at the lowest possible cost to the students, as mandated by Act 188.  But the Board of Governors is not delivering the Pennsylvania Promise and, for that reason, PASCU is desperately needed to help rectify that grave injustice. 
Act 188 promises “High quality education at the lowest possible cost to the students.”  It is clear² from Chart 9 that students at the 14 PASSHE universities are getting a “dubious quality education” instead of a “high quality education” and, as Chart 20 shows,³ they are not getting it at anything like the “lowest possible cost to the students.”  They are not even getting an “average” financial aid package, which would be an average of a distribution of financial aid packages, ranging from the best (i.e., at the lowest cost to the students) at one extreme, to the worst (i.e., at the highest cost to the students).
In summary, the data show that both ends of public higher education's statutory purpose have suffered.  Specifically, academic quality has been undermined, and twelve years of a politically expedient focus on the “lowest possible tuition,” i.e., “sticker price,” have failed to provide public higher education at anything like the “lowest possible cost to the students,” i.e., “bottom line”—as called for and mandated by Act 188.  And, to make matters worse, PASSHE’s errant policy focus on “lowest possible tuition” saddles poor students with punishing debt and foolishly rewards wealthy students with state subsidies.⁴
 
¹ http://www.bankrate.com/finance/college-finance/college-529-prepaid-tuition-plans-at-risk-1.aspx.
² https://www.keepandshare.com/doc/6794551/privatization-without-a-plan-chart-9-and-caption-january-23-2014-pdf-387k.
³ https://www.keepandshare.com/doc/6802256/privatization-without-a-plan-chart-20-and-caption-january-29-2014-pdf-390k.
https://www.keepandshare.com/doc/6777152/pittsburgh-post-gazette-pres-ed-5-7-10-pdf-98k.

Monday, March 23, 2015

The Relationship Between PASSHE and PASCU - Part 4

It is reasonable to ask if the statistical financial aid data from one PASSHE university is similar to that of the others.  A separate analysis was done to compare the financial aid packages of the 14 PASSHE universities with each other using the IPEDS (Integrated Postsecondary Education Data System), which is part of NCES (the National Center for Education Statistics).  That comparison showed that the financial aid packages at California University were typical of those at the other 13 PASSHE universities.
 
The Financial Aid comparison between a typical PASSHE university (California University) and All Institutions in America actually got worse after 2011, the last year of data included in Chart 20.¹
 
Between 2011 and 2013, the financial aid packages at All Institutions improved from 51% grants to 52% grants; and from 42% loans to 39% loans; while at the same time, the financial aid packages at California University deteriorated from 27% grants to 25% grants, and from 65% loans to 66% loans.
 
If PASSHE were to provide financial aid packages equal to just the average package across America, each PASSHE student would save $1,433 per semester, $2,866 per year, and $11,464 over four years!  And that would only bring PASSHE students to the average financial aid package in America, which is nowhere near the financial aid packages needed to yield the “lowest possible cost to the students.”

PASSHE’s Failure to Obey the Law (Act 188)
 
Both of the failures cited previously—the failure to provide high quality education, as well as the failure to provide it at the lowest possible cost to the students—stem from the singularly inexplicable failure of the PASSHE Board of Governors since 2002 to simply obey the law, Act 188,² as written.
 
In simple terms Act 188 says—when it comes to funding—that: 1) the Governor and the Legislature get to decide how much State support the Commonwealth can afford to provide to PASSHE in any given year; and 2) The Board of Governors then gets to decide how high the tuition rates must be set in order “To do and perform generally all of those things necessary and required to accomplish the role and objectives of the System,” as the BOG is legally required to do by Section 20-2006-A(a)(15) of Act 188. 
 
And, presumably, accomplishing the Act 188 statutory purpose of the PASSHE universities: “To provide high quality education at the lowest possible cost to the students,” would be one of the first “things necessary and required to accomplish the role and objectives of the System.”
 
Although the Board of Governors has the legal authority, from Section 20-2006-A(a)(11) of Act 188, “To fix the levels of tuition fees,” and despite the fact that the law does not require or even mention any role for the Governor in the tuition-setting process, the Board of Governors has for the 20-year period between  1992 to 2012 anxiously awaited—together with the 14 PASSHE university presidents—the Governor’s word as to the maximum allowable tuition rate increase for that year! 
 
Why would 20 different Boards of Governors with slightly varying membership defer every year for 20 years to five different governors, both Democrat and Republican—when it came to one of their most important sworn duties—to set tuition rates in such a way as to provide “high quality education at the lowest possible cost to the students?”  Why would they let the Governor decide that issue politically, when Act 188 gives that responsibility not to the Governor, but to the Board of Governors?
 
While the reason must clearly be political—since it always involved the Governor—it is just as clearly not partisan—since it involved governors from both parties serving roughly equal time in office in the years between 1992 and 2012.

Divided Loyalty/Conflict of Interest
 
When elected or appointed officials fail to perform sworn duties, it raises a question of divided loyalty, otherwise known as conflict of interest, which Merriam-Webster defines as “A conflict between the private interests and the official responsibilities of a person in a position of trust.”
 
Earlier, we mentioned a 20-year history of Pennsylvania governors getting directly involved in the annual tuition-setting process for the PASSHE universities, and always with an insistence on the lowest possible tuition, even though the law calls instead for the lowest possible cost to the students, a very different thing.  A specific source of suspicion is that a governor’s preference for lowest possible tuition rates may have more to do with private political interests than his official duties as a member of the PASSHE Board of Governors—the dictionary definition of a conflict of interest.
 
Act 188 does not call for the lowest possible PASSHE tuition, i.e., sticker price.  It calls for the lowest possible cost to the students, i.e., bottom line.  The practice by governors, and compliant BOG members, to focus on the lowest possible sticker price instead of the lowest possible bottom line suggests either that they haven’t read the law, which is very unlikely, or that governors may have a private interest in keeping the PASSHE sticker price as low as possible. 

There are at least three potential private interests for every governor, regardless of party, for artificially holding down PASSHE tuition rates.    
To be continued.

² https://www.keepandshare.com/doc/6772880/act188-pdf-405k.

Monday, March 16, 2015

The Relationship Between PASSHE and PASCU - Part 3


As we saw previously, PASSHE’s statutory purpose, i.e., its purpose by law—from Act 188¹ of 1982—is “To provide high quality education at the lowest possible cost to the students.”
 
Earlier, we defined the “Pennsylvania Promise” to be “The promise freely given—by the Commonwealth of Pennsylvania to the students of Pennsylvania—upon the passage of Act 188 with PASSHE’s very explicit  statutory purpose: ‘High quality education at the lowest possible cost to the students.’”
 
Sad to say, the Pennsylvania Promise to PASSHE students has become a broken promise since 2002, as the following compelling evidence will confirm:
 
PASSHE’s Failure to Deliver High Quality Education

In higher education circles—including the “Rating Magazines” that provide “Rankings” of America’s colleges and universities—the term “high-quality education” is given meaning primarily through a number of proxy measures where, generally speaking, a proxy measure approximates or represents a phenomenon in the absence of a direct measure of that phenomenon.

E.g., average faculty compensation has been widely used as a predictive proxy measure for academic quality. Similarly, E&G (Educational and General) revenue/FTE student has been used as a predictive proxy measure for the quality of the educational experiencewhich includes academic quality—but goes on to include other educationally enhancing amenities such as technology, travel, internships, facilities and equipment, all of which—just as with faculty compensation—require financial resources.
The best evidence for the failure of the PASSHE Board of Governors to deliver high quality education to PASSHE students since 2002 is seen in Chart 9 on Page 35 of the book Privatization Without a Plan
 
That chart depicts the trend in Total E&G Revenue/FTE student over the past 30 years, where the revenue is expressed in (constant) 2013 dollars, thereby eliminating inflationary effects over time. 
 
Note from Chart 9 that Total E&G revenue is the sum of two parts: State appropriation/FTE student, plus Tuition + Fees + Other (TFO) Revenue/FTE student.   Tuition and Fees are the monies paid directly by students, while “Other” Revenue includes private scholarship dollars often provided by alumni donors.
 
As a proxy measure for the quality of the total educational experience—including both in-class and out-of-class aspects—changes in the Total E&G Revenue/FTE Student also reveal how the quality of that experience has varied over the past 30 years, as the relative shares of State appropriation/FTE student on the one hand, and TFO revenue/FTE student on the other, rose or fell.
 
Note that appropriation/FTE student fell steadily (from $7,386 to 3,679), while TFO revenue/FTE student increased steadily (from $4,347 to $9,864).  For the first 19 years of PASSHE’s history, increases in TFO revenue/FTE student more than overcame the decline in purchasing power caused as appropriation/FTE student fell.

But in the next 11 years, the annual increases in TFO revenue/FTE student were not large enough to overcome the precipitous drop in State appropriation/FTE student.  And as a result, the proxy measure for the quality of PASSHE’s total educational experience has fallen sharply.                                                                                                                                                                                                                                                                                                     
The highpoint in Total E&G Revenue/FTE Student—and inferred educational quality—occurred in 2002 and came to $15,115/FTE student, a figure that was 30% higher than the $11,734 figure recorded on day one of the PASSHE system on July 1, 1983.  By 2013, that statistic had fallen to $13,544, a figure that is only 16% higher than the 1983 figure, meaning that the funding and policy trends of those last 11 years have undone half the quality gains of the previous 19 years!

Chart 9 and its caption make it clear that, for the first 19 years of PASSHE’s existence, tuition revenue per FTE student increased sufficiently to more than make up for the decline in State appropriation per FTE student, thereby increasing the total E&G revenue/FTE Student from $11,734 to $15,115.
It is equally clear that in the subsequent 11 years, TFO revenue per FTE student did not increase fast enough to overcome the much steeper decline in State appropriation/FTE student, thereby allowing the 19-year gains in the quality of the educational experience to be eroded by half. 

PASSHE’s Failure to Deliver Education at the Lowest Possible Cost to the Students
While measuring “high quality education” requires a dependence on “proxy measures,” establishing the “lowest possible cost to the students” is directly measurable in terms of comparisons with national data.

Evidence” for PASSHE’s failure to deliver education at the lowest possible cost to the students is best seen in Chart 20 on page 66 of the book Privatization Without a Plan
 
As seen in Chart 20, direct comparisons of student costs may be obtained from organizations such as The College Board which collects data from each institution in America and computes averages for “All Institutions.” Chart 20 provides a direct comparison over a six-year period between the average financial aid packages provided by one PASSHE university, California University of Pennsylvania, and those provided by “All Institutions”—where 75% of all college students in America attend public universities.
 
To be continued.

¹ https://www.keepandshare.com/doc/6772880/act188-pdf-405k.
² https://www.keepandshare.com/doc/6794551/privatization-without-a-plan-chart-9-and-caption-january-23-2014-pdf-387k.
³ https://www.keepandshare.com/doc/6802256/privatization-without-a-plan-chart-20-and-caption-january-29-2014-pdf-390k.

Monday, March 9, 2015

The Relationship Between PASSHE and PASCU - Part 2


We began last time with “A Brief History¹ of the Fourteen PASSHE Universities,” and concluded with a partial list of relevant definitions needed to understand the relationship between PASSHE and PASCU:
Definitions (continued)

Privatization Without a Plan:  The rapid defunding of public higher education by the State in the absence of an effective plan to preserve and deliver the Act 188 statutory purpose: ‘High quality education at the lowest possible cost to the students’—despite the ongoing loss of State funding.  See Privatization Without a Plan² by Angelo Armenti, Jr., Ph.D., to see why only PASCU, the Pennsylvania Association of State Colleges & Universities can save the 14 universities from policy-induced financial death spirals.
 
Privatization Without Representation:  The rapid defunding of public higher education by the State (the Minority Financial Stakeholder), which shifts the cost of education to the Students, Parents and private donors, primarily alumni (the Majority Financial Stakeholders), while the State retains 100% control of PASSHE’s governance seats where all key decisions affecting all stakeholders are made.
 
PASCU:  The Pennsylvania Association of State Colleges and Universities (PASCU) is a nonpartisan, non-profit organization founded in June of 2012.

PASCU’s Mission:  To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: “High Quality Education at the Lowest Possible Cost to the Students,” is indefinitely preserved and faithfully delivered.
Declining Public Support for Public Higher Education:  When public higher education first began in America in the mid-nineteenth century, it was seen as “a public good” that benefitted everyone and was therefore worthy of public, i.e., taxpayer, financial support.  The low tuition levels that this public policy allowed made public higher education accessible to virtually all students, even those from less than affluent families.  Even as late as 1950, State appropriation in Pennsylvania still provided some 90% of the cost of public higher education while tuition revenue provided just 10%.  But by 1983, the respective funding shares had changed to 63% from State appropriation and 37% from student tuition.  By 1992, the State share of public higher education funding fell below 50%, and by 2013, the respective funding shares had sprinted to 25% from the State and 75% from the students, parents and alumni donors.
 
From Public Good to Private Good: Today’s respective funding shares of public higher education in Pennsylvania (with State appropriation providing 25%) suggest that public higher education is now seen as “a private good” that benefits the student much more than the State, thereby justifying the 75% - 25% split in funding shares, with the students, parents and alumni donors paying the much larger share.
 
Majority Rule in a Democratic Republic:  In a democratic republic like America, majority rule plays a dominant role in deciding all public policy questions.  And the seismic shift in funding patterns in the 65 years between 1950 and 2015 is readily explainable in terms of the demographic changes that occurred in America during that period.  In the 1950 census, the percentage of households with at least one person 18 or younger living there was 57%.  At that time, a majority of voting households in America could still benefit directly from public higher education and, as a result, elected officials from both political parties provided substantial funding to public higher education to fulfill voter expectations. 
 
By 2010, the percentage of households with at least one person age 18 or younger living there had fallen to 34%; by the 2010 census, it had fallen to 30%.  By 2010, 70% of the households in America could no longer benefit directly from public higher education—and, very likely, the citizens in those households almost certainly didn’t want their taxes raised to send someone else’s son or daughter to college.
 
No doubt sensing this enormous change in public sentiment on the part of their constituents, elected officials from both parties, with responsibility for State budget decisions, changed the State’s funding priorities to match the wishes of the majority of their constituents—precisely as designed and expected by America’s founders in creating our democratic republic.
 
The “new demographics,” with fewer young people in most households, is often described as “the aging of America.”  Pennsylvania’s spending decisions in a recent 20-year period show, as one would expect with an aging population, that public higher education funding plummeted and only two budget categories grew: Corrections (prisons) and Medicaid, i.e., areas dealing with crime and health care.³  
 
The Pennsylvania State System of Higher Education (PASSHE)

The two greatest changes to the 14-University PASSHE system in its first thirty years of existence, from FY 1984 to FY 2013, involved a 58% increase in FTE Student Enrollment (from 71,091 to 112,180), along with a 50% decrease in State funding per FTE Student (from $7,386 to $3,679) in constant (2013) dollars.
 
The 50% decrease in State dollars per FTE Student was accompanied by a 127% increase (from $4,347 to $9,864) in the private dollars paid per FTE Student via tuition and fees, in constant (2013) dollars. 
 
These two conflicting trends⁴ create dilemmas for PASSHE Universities and PASSHE students—more and more students to educate and fewer and fewer State dollars with which to educate them.  This makes it difficult for the Universities to deliver the statutory purpose of ‘High quality education,’ and also makes it difficult for families to pay for that education which is not at ‘the lowest possible cost to the students.’
 
At the same time, PASSHE’s resident undergraduate tuition grew by 94% (from $3,318 to $6,428) in constant 2013 dollars, putting great pressure on students to pay their tuition and fees.  The average annual tuition increase (in constant dollars) comes to 2.31% per year, compounded over 30 years.    

During the course of those 30 years, the State share of PASSHE’s budget fell from 63% to 25%, while the share paid by the students, parents and donors, primarily alumni, grew from 37% to 75%.
 
To be continued.
 
¹ https://www.keepandshare.com/doc/7509814/a-brief-history-of-the-14-passhe-universities-march-8-2015-pdf-185k.
² http://www.amazon.com/Privatization-Without-Plan-Leadership-Pennsylvania/dp/1491295244/ref=sr_1_1?ie=UTF8&qid=1408368767&sr=8-1&keywords=angelo+armenti.
³ https://www.keepandshare.com/doc/6716812/privatization-without-a-plan-chart-10-and-caption-november-24-2013-pdf-415k.
https://www.keepandshare.com/doc/6726973/privatization-without-a-plan-chart-8-december-3-2013-382k.

Monday, March 2, 2015

The Relationship Between PASSHE and PASCU


The Pennsylvania State System of Higher Education (PASSHE)

PASSHE is the 14-University system of taxpayer-supported institutions of higher education that includes Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock and West Chester Universities.
PASSHE’s statutory purpose, according to Act 188 of 1982 is: “To provide high quality education at the lowest possible cost to the students.”

The Pennsylvania Association of State Colleges and Universities (PASCU)
PASCU is a non-partisan, non-profit association of citizens founded in June of 2012 that is committed to preserving the historic purpose of public higher education in Pennsylvania so that individual students, communities, and society at large may be enriched in perpetuity.
 
PASCU’s Mission is: “To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: ‘High Quality Education at the Lowest Possible Cost to the Students,’ is indefinitely preserved and faithfully delivered.”
 
The relationship between PASSHE and PASCU has aspects of both harmony and discord as seen below:
·         PASSHE’s Act 188 statutory purpose is: “To provide high quality education at the lowest possible cost to the students;” while PASCU’s mission is “To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: ‘High Quality Education at the Lowest Possible Cost to the Students,’ is indefinitely preserved and faithfully delivered.”
·         Despite the great similarity in their purpose and mission, PASSHE and PASCU are philosophical opposites.  PASSHE, launched in 1983, may be seen as the Thesis (or original idea); PASCU which began three decades later in 2012 may be seen as the Antithesis (or rebuttal to that original idea).
·         PASCU is philosophically opposed to PASSHE because of overwhelming evidence that PASSHE has not delivered high quality education at the lowest possible cost to the students in recent years. 
·         PASCU’s opposition to PASSHE, however, is not personal but philosophical and rational.  
·         PASCU believes that PASSHE’s current 100% political leadership is guilty of: 1) failing to deliver PASSHE’s statutory purpose; and 2) refusing to acknowledge publicly that it has any obligation, intention or plans to deliver PASSHE’s statutory purpose, as mandated by Act 188.

As shown in the first bullet above, PASSHE’s statutory purpose and PASCU’s mission are almost word-for word identical to each other.  The central idea in both statements is “high quality education at the lowest possible cost to the students,” creating the impression that PASSHE and PASCU are in agreement.
Note however, that the only material difference between the two statements involves an additional five words which appear in PASCU’s mission “…to ensure that PASSHE’s statutory purpose is ‘indefinitely preserved and faithfully delivered.’”  These last five words describe the entire core of the disagreement.
PASCU believes and alleges, based on compelling evidence, that the PASSHE Board of Governors has not delivered PASSHE’s statutory purpose to the PASSHE students for many years; hence PASCU’s inclusion of the words “faithfully delivered” in its Mission.

PASCU also believes and alleges, based on compelling evidence, that the PASSHE Board of Governors has not preserved PASSHE’s statutory purpose for many years, as documented by its apparent longtime unwillingness to either publicly utter the words “high quality education at the lowest possible cost to the students,” or to include those words in its most recent Strategic Plan “2020: Rising to the Challenge.”
The compelling evidence just alluded to will be presented in detail in what follows.

A Brief History of the Fourteen PASSHE Universities
 
Act 188 of 1982 is the enabling legislation that created the public corporation now known as the Pennsylvania State System of Higher Education (PASSHE), which controls the 14 “PASSHE” universities.
 
The 14 PASSHE universities initially came into existence as individual private institutions between 1837 and 1893.  They were subsequently purchased by the Commonwealth of Pennsylvania in the years after 1910.  They were initially called “State Normal Schools;” in the late 1920s their names were changed to “State Teachers’ Colleges;” in the early 1960s their names were changed to “State Colleges;” and finally in 1983 their names were changed to “State Universities” [except for IUP which achieved its university status in 1965, some eighteen before Act 188 conferred university status on the other 13 institutions. Along with the name changes prior to the passage of Act 188, the missions of the 14 institutions evolved steadily in the years since their founding. 

Definitions
Pennsylvania Promise:  The promise freely given—by the Commonwealth of Pennsylvania to the Students of Pennsylvania—upon passing Act 188 with PASSHE’s very explicit statutory purpose.
The Pennsylvania Promise is “High Quality Education at the Lowest Possible Cost to the Students.”
 
Majority Financial Stakeholders:  The PASSHE students, parents and private donors, primarily alumni, now collectively provide 75% of PASSHE’s annual operating revenue.  Students and Parents provide 70% of the annual operating revenue while private donors now provide 5%, primarily through scholarships.
 
Minority Financial Stakeholder:  The Commonwealth of Pennsylvania, in the person of the State’s elected and appointed officials, now provides 25% of PASSHE’s annual operating revenue.
 
Majority Governance Stakeholder: The Commonwealth of Pennsylvania, in the person of the State’s elected and appointed officials, continues to control 100% of PASSHE’s 174 governance seats at the tables where all key PASSHE decisions are made.  That includes 20 out of 20 seats on the Board of Governors, as well as 154 out of 154 seats on the Councils of Trustees at the 14 PASSHE universities.
 
Minority Governance Stakeholder:  The PASSHE Students, Parents and Private Donors, primarily Alumni, control 0% of PASSHE’s 174 governance seats.  
 
Funding/Governance Disparity:  The disparity between the Funding Shares and the Governance Shares of different financial stakeholders.  For example, the Minority Financial Stakeholder, the State, has a funding/governance ratio of 25%/100%, while the Majority Financial Stakeholders, the Students, Parents and private donors, primarily alumni, have a funding/governance ratio of 75%/0%.

Privatization: A rapid defunding of public higher education by the State.  This defunding is happening to varying degrees all across America and results from powerful forces, both demographic (primarily an aging population) and economic (a weak recovery with high unemployment and stagnant wages). 

To be continued.

Monday, February 23, 2015

If Elected Officials Cared about PASSHE Students, What Would be Different? - Part 6

The Purpose by Law of the PASSHE System of Fourteen Universities

Based on official news releases over four years, PASSHE leaders can’t or won’t bring themselves to commit publicly to PASSHE’s statutory purpose¹ according to Act 188:  “Its purpose shall be to provide high quality education at the lowest possible cost to the students.” (Emphasis added.)
 
Recall from Merriam-Webster that “When used in law, the word ‘shall’ describes what is mandatory.”
 
Quoted PASSHE leaders, as we saw last time, will occasionally make a passing reference to “quality education” while almost never citing “high quality education” as a critical part of PASSHE’s purpose.
 
PASSHE versus Act 188 on the Subject of Cost
 
Even more revealing is the fact that PASSHE leaders rarely if ever utter these other words from PASSHE’s statutory purpose: “…at the lowest possible cost to the students.”
 
Instead, as we saw last week, PASSHE leaders take the following pathetic stabs at what Act 188 requires:

·         “…affordable education to our students.”

·         “…the most affordable cost possible.”

·         “…the most affordable cost available.”

Recall that these three statements have been included in official PASSHE news releases covering the last four fiscal years (2012 to 2015).  One can only assume, therefore, that these words, attributed to Guido Pichini, Chair of the PASSHE Board of Governors, reflect PASSHE’s official policy position on “cost.”
 
Recall that PASSHE’s new (2014) Strategic Plan “2020: Rising to the Challenge,” also makes no mention of PASSHE’s Act 188 statutory purpose: “To provide high quality education at the lowest possible cost to the students!”
 
Rather, PASSHE’s new strategic plan reveals that—despite Act 188—the PASSHE Board of Governors is taking a totally different path; one that ignores the PASSHE students and pursues the following Vision:
 
“The Pennsylvania State System of Higher Education seeks to be among the nation’s leading systems of public universities recognized for (1) excellence, relevance, and value in education; and (2) responsiveness to regional, state, and national needs through its programs, service, scholarship, and research.”
 
Note that there is no public commitment neither to “high quality education,” nor to any intention of providing that education at “the lowest possible cost to the students.”
 
The Cost to Whom?
 
To speak clearly about the “cost” of something, one must specify the entity that will pay that cost.
 
For example, the cost to a manufacturer of producing a certain car is one figure.  The cost to the person purchasing that car is a quite different, and larger, figure.  In order for the manufacturer to earn a profit and therefore remain solvent, the cost to the purchaser must be larger than the cost of production.    
 
Note then that both entities, the car manufacturer and the car purchaser, are both naturally concerned about their respective costs, but would also be wise to be concerned about the cost to the other entity.
 
The car manufacturer that can keep costs low—while maintaining car quality—will also be able to keep the cost to the purchaser low, while still being able to make a profit and remain in business.    
 
In the PASSHE system of 14 universities, the cost to PASSHE of producing a college graduate with a particular degree is a certain figure.  The cost in tuition and fees to the purchaser of that college degree should, on the average, be the same figure.  That’s because most educational institutions function on a “non-profit” basis, meaning that the cost of production and the average cost of purchase are equal.
 
Note that even in the world of non-profit higher education, which includes not only private colleges and universities but also PASSHE—which Act 188 created as a “public corporation”—both the producer and purchaser of the education in question will be concerned about their individual and respective costs. 
 
The producer of a college education (PASSHE in this example) must be concerned about both the quality of the education provided and their actual cost in providing it.  The purchaser of a PASSHE education must also be concerned about the quality of what they receive, as well as their cost in receiving it.
 
So even in a non-profit higher education setting, where the costs to the producer and purchaser are equal, for purposes of clarity one still must answer “The Cost to Whom?” question.
 
Act 188 Speaks Clearly on the Subject of Cost

Act 188 is a model of clarity on the subject of “The Cost to Whom?”  Act 188 mandates that PASSHE’s statutory purpose is: “To provide high quality education at the lowest possible cost to the students.”

PASSHE Speaks Obscurely on the Subject of Cost

PASSHE news releases with quotes from Board of Governors’ Chair Guido Pichini on “cost,” don’t differentiate between the cost to PASSHE as opposed to the cost to PASSHE students.  That leaves one to wonder “To whom is the cost of education—according to PASSHE—supposed to be affordable?”
 
Since neither PASSHE’s leader nor PASSHE’s Strategic Plan is willing to quote Act 188 on that subject—which unambiguously specifies the lowest possible cost to the students—one can only conclude that the PASSHE Board of Governors is committed to keeping affordable the cost of education to PASSHE, but not to individual PASSHE students!
 
Obscurity is the Refuge of Incompetence
                                                                                                                 Robert Heinlein³
 
When the Chair of the Board of Governors of PASSHE, a large ($1.5 billion) public organization, engages in obscure public statements about cost for four years in a row, that is a concern.  When those obscure public statements about cost are at odds with the clear language of Act 188, the law that created and ostensibly guides the operations of PASSHE, that is a major concern.
 
But when the statement of “Vision” in PASSHE’s official Strategic Plan contradicts the clear language in Act 188 as to PASSHEs statutory purpose, that moves beyond concerns to a potentially public scandal.
 
To be continued.
 
¹ https://www.keepandshare.com/doc/6772880/act188-pdf-405k.
² https://www.keepandshare.com/doc/7490741/strategic-plan-2020-rising-to-the-challenge-10-14-pdf-2-1-meg.
³ “Obscurity is the Refuge of Incompetence” may be a modern day version of an old Russian Proverb: “You can’t write in the chimney with charcoal.”

Monday, February 16, 2015

If Elected Officials Cared about PASSHE Students, What Would be Different? - Part 5

Malfeasance by the PASSHE Board of Governors
 
The following assertions were put forth last week regarding PASSHE governance board members:

·         “All 20 members of the PASSHE Board of Governors, and all 154 members spread across the 14 PASSHE Councils of Trustees, have taken a public oath of office that requires them to obey the law.”

·         “The PASSHE Board of Governors has since 2002 openly & shamelessly failed to live up to that oath.”

·         “Public officials commit ‘malfeasance’ when they do something illegal, unlawful, or contrary to law.”

·         “The malfeasance by the PASSHE Board of Governors is easy to document because the flawed actions by members of the Board of Governors violate not just the spirit but the letter of the law.”

·         “The details of that violation of the letter of the law (Act 188) involve, among other things, PASSHE leaders publicly acting as if the law requires the Board of Governors to maintain ‘the lowest possible tuition,’ i.e., sticker price, when in fact Act 188 explicitly requires them to maintain ‘the lowest possible cost to the students,’ i.e., ‘the lowest possible bottom line!’”  (Emphasis added.)

“Your words become your actions.”
                           Mahatma Gandhi
 
The degree of alignment between words and actions is quite revealing.  When actions are contradictory to or substantially different from ones words, deception is often indicated and may in fact be involved.  
 
But when ones words and actions are totally aligned, it suggests that the actions were intentional, and that the results of those actions were, in fact, the intended results 
 
In this case, we have provided compelling evidence from official PASSHE data which proves that the statutory purpose of Act 188, ‘High quality education at the lowest possible cost to the students,’ has not been delivered by the Board of Governors to the PASSHE students since 2002.
 
It logically follows that the actions taken by the PASSHE Board of Governors—the decision-makers of record—are the cause of PASSHE’s failure to deliver ‘High quality education at the lowest possible cost to the students.’  We will now attempt to ascertain if the results of those actions were in fact intended.
 
To do that, we must consider the words of PASSHE’s leaders and compare them to Act 188¹ in regard to PASSHE’s statutory purpose: “High quality education at the lowest possible cost to the students.”   

In Their Own Words

·         Quotes from the PASSHE News Release² of June 30, 2011: “Despite the severe fiscal challenges we face, we are committed to offering high quality, affordable education to our students,” said Board of Governors Chairman Guido M. Pichini.” (Emphasis added.)
 
“Affordable education to our students” is different from “the lowest possible cost to the students.”
 
·         Quotes from the PASSHE News Release³ of July 9, 2012: “This action demonstrates our ongoing commitment to our students and their families, and to the Commonwealth,” said PASSHE Board of Governors Chairman Guido M. Pichini. “PASSHE universities will continue to offer high-quality education at the most affordable cost possible.”  (Emphasis added.)
 
“The most affordable cost possible” is different from “the lowest possible cost to the students.”
 
·         Quotes from the PASSHE News Release⁴ of July 9, 2013:  “It is very important to our students and their families that we keep our tuition affordable,” said Board of Governors Chairman Guido M. Pichini. “With this action today, PASSHE universities will continue to provide outstanding value, combining high-quality educational opportunities with the most affordable cost available.”  (Emphasis added.)
 
The “most affordable cost available” is different from “the lowest possible cost to the students.”
 
·         Quotes from the PASSHE News Release⁵ of July 8, 2014: “’PASSHE universities offer tremendous value to students and their families, providing a unique combination of high-quality educational opportunities and the most affordable cost available,’ said Board of Governors Chairman Guido M. Pichini.”  (Emphasis added.)
 
The “most affordable cost available” is different from “the lowest possible cost to the students.”

PASSHE’s New Strategic Plan

The first paragraph of the January 23, 2014 News Release announcing the Board of Governors’ approval of PASSHE’s new Strategic Plan, “2020: Rising to the Challenge,” reads as follows:
 
“Harrisburg – The Board of Governors of the Pennsylvania State System of Higher Education (PASSHE) today approved a new strategic plan that will enhance and expand student learning opportunities and ensure the Commonwealth receives the greatest possible return on its annual investment in the System and its 14 universities.”  (Emphasis added.)
 
Note the Board of Governors’ concern about the Commonwealth’s return on its “minority” (25%) annual investment in PASSHE.  However, no concern is cited about the return on the majority (75%) investment each year by PASSHE’s “Majority Stakeholders,” i.e., by PASSHE’s students, parents and alumni donors.

Act 188 vs. PASSHE’s New Strategic Plan

Here is a direct quote from Act 188:
 
“Section 20-2003-A. Purposes and General Powers
(a) The State System of Higher Education shall be part of the Commonwealth’s system of higher education. Its purpose shall be to provide high quality education at the lowest possible cost to the students. The primary mission of the System is the provision of instruction for undergraduate and graduate students to and beyond the master’s degree in the liberal arts and sciences and in applied fields, including the teaching profession.” (Emphasis added.)

This paragraph from Act 188 contains two key sentences: the 2nd sentence describes the “statutory purpose” of PASSHE’s 14 Universities; and the 3rd sentence describes PASSHE’s “primary mission.” 
 
Below are two direct quotes from PASSHE’s new Strategic Plan that parallel Act 188’s two sentences:
 
“VISION
The Pennsylvania State System of Higher Education seeks to be among the nation’s leading systems of public universities recognized for (1) excellence, relevance, and value in education; and (2) responsiveness to regional, state, and national needs through its programs, service, scholarship, and research.”
 
Note that the text under “Vision” in the Strategic Plan is totally different from the first sentence of the “Purposes and General Powers” section of Act 188.  It makes no mention of Act 188, and totally leaves out PASSHE’s statutory purpose: “It’s purpose shall be to provide high quality education at the lowest possible cost to the students.”

“MISSION
‘The primary mission of the System is the provision of instruction for undergraduate and graduate students… in the liberal arts and sciences and in applied fields…’
Act 188 of 1982”
 
Note that the text under “Mission” in the Strategic Plan is a redacted version of the second sentence—Left out are these words from Act 188: “including the teaching profession.”

To be continued.

² https://www.keepandshare.com/doc/7490737/passhe-news-release-june-30-2011-pdf-129k.
³ https://www.keepandshare.com/doc/7490738/passhe-news-release-july-9-2012-pdf-133k.
https://www.keepandshare.com/doc/7490739/passhe-news-release-july-9-2013-pdf-133k.
https://www.keepandshare.com/doc/7490740/passhe-news-release-july-8-2014-pdf-147k.
https://www.keepandshare.com/doc/7490741/strategic-plan-2020-rising-to-the-challenge-10-14-pdf-2-1-meg.