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Published by: garyrhoad on Sep 22, 2011
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Chart(er)ing the wrong path for Ohio:Favor the rich, disinvest in the rest
Gary Rhoades Professor of Higher Education, Center for the Study of Higher Education,University of Arizona9/21/11
Chancellor Jim Petro’s proposal for “Enterprise universities” (originally called“charter universities”) charts the wrong path for building a strong Ohio. It provides thewrong incentives for universities, favors the wrong institutions, and opens the way towidespread misuse of public monies. It takes Ohio’s universities away from ensuringaffordability and access, from enhancing quality, and from laying the foundation for avibrant, knowledge based economy to replace its declining, rust belt economy. It favorsand features the richest few Ohio universities, which serve a small share of Ohio’sundergraduates, while disinvesting in the rest, which serve the vast majority of Ohio’scollege students. Moreover, the Enterprise University plan eliminates not bureaucraticred tape but clean government policies that were established to prevent government practices that abuse and waste public money.
The wrong incentives
. The Enterprise University plan offers the wrong incentives toOhio’s universities. Consider college affordability. For decades, the burden for the costof higher education has been shifting from the state to the student, as the state hasreduced its investment in higher education. Although Petro’s plan decries students’ debt burden, it will increase that burden by further reducing state support (from 10-20% for universities in the enterprise system), thereby shifting the cost to students. Given that for 
decades, tuition and fee increases have outpaced increases in higher education costs, theconsumer price index, and perhaps most importantly salaries and average householdincome, one might expect Petro’s plan to reverse that trend. Instead, the proposal allowsand virtually requires universities to further raise tuition (3.5%) above important indexessuch as the Higher Education Price Index (a composite inflation index of costs in collegesand universities, which is 2.3% for fiscal year 2011) and the consumer price index (2.0 asof June 2011).1 It also enables them to differentiate tuition, which means increasedtuition for all, and even higher increases for some. Notwithstanding the Board’s 8/11/11news release of the plan, which suggests that differentiated tuition would enableuniversities to discount tuition, in reality, differentiated tuition means increases, notdiscounts (and universities already engage in forms of tuition discounting).
. The Enterprise University plan will not only make universityeducation less affordable for Ohio’s students (and unaffordable for many), it will makeOhio’s colleges less accessible to them. By reducing state support the plan encouragesuniversities to go out of state for wealthier students who can pay higher tuition (and whorequire less financial aid). The incentive is to serve more out-of-state students and fewer Ohioans. The plan will be costly to the state’s citizens not only in the higher tuition thatcomes with similar charter-like proposals, as in the states the plan cites (Colorado andVirginia), where tuition has increased dramatically, but also in terms of Ohio’suniversities serving other states’ students at the expense of Ohio’s students.An undefined “Preeminent Scholars Award Foundation” is briefly mentioned inthe report as a way of attracting and retaining the “best and brightest” students. But suchan idea would channel Ohio monies to out-of-state students and increase the debt burden2
of in-state students. It would follow a “high tuition/high aid” model, as it is known in thefield. Yet this model has been tried for decades at the federal level and in various states,and the evidence is overwhelming and clear: the aid increases do not match the tuitionincreases, and as a result, access for students of modest and lower means is compromised.In fact, the high tuition/high aid model is at the heart of the affordability and student debt problems Ohio and the nation now face.2 The solution is not more merit based, but morefocused, need-based aid, which research suggests is the more effective public policy.3
 Educational quality
. If the Enterprise University plan fails the affordability andaccess tests, will it at least pass the test of enhancing educational quality in universities? No. The plan fails to address key components of quality and encourages unproductivespending on non-educational facilities. Indeed, it will likely reduce educational quality.The evidence on educational quality, whether that is measured by student learningoutcomes or graduation rates, is consistent and clear. We know what works. Full-timefaculty and professionals matter. Engaging with professors and other professionals onacademic issues matters. Money, and spending per student, matter.4Yet nothing in the Petro’s plan addresses any of the major contributors toeducational quality. The plan calls for more Ohioans getting the college education theyneed “to be productive members of society.” (p.3) It calls for improved graduation ratesin shorter periods of time. But it fails to address what is fundamental to this expandedaccess and enhanced quality—the human infrastructure of Ohio’s universities to providea quality college education. It ignores the professors other professionals who educate andsupport the students. So although the plan calls for improved performance, it neither examines nor supports components that would make achieving that mandate possible.3

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