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Western Interstate Commission for Higher Education -- February 1999 |
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Policy in Transition: Information Technology's Impact on the Financing of Higher Education
States are increasingly looking to information technology to help meet higher education's access demands, improve instruction and course content, and enhance productivity. For these goals to be realized, states and higher education institutions must ultimately reexamine their basic relationship, both in terms of policy and finances. While our concern has focused on how to pay for information technology, many in higher education are now also looking at technology's impact on the financing of higher education itself. Many related questions arise - Who should pay for technology and how much? How can technology be used most effectively? How is technology restructuring state and institutional relationships? The forum addressed these and a host of other issues. "This discussion is urgent. The waters that we are sailing are largely uncharted. The questions of how states finance higher education is vitally important nationally, but is even more vitally important in the West." - Richard W. Jonsen, Executive Director, WICHE. Current institutional funding practices also need reform. Institutions, like states, have been prone to fund technology through the "budget dust" left at the end of the budget cycle. More than 60 percent of institutions do not have a long-term financial or resource plan for technology.2 Institutions normally fund individual departments, thereby discouraging collaboration, and assume that by funding faculty, they support the development of technology-enhanced courses. The reality is that faculty may not possess the required skills. Additionally, institutions often operate as if the state's revenue problems were cyclical. There is increasing evidence that states' revenue problems are more structural and intractable. "We are facing an epochal transition in postsecondary education, not just in the state of Washington but throughout the nation, and it is affected by a number of larger megatrends in society. Among them are demographics, a huge explosion - at least in the Western states and Sunbelt states - of students seeking access to the system of postsecondary education as well as life-long learners. Second is finances: fiscal constraints we are encountering are probably long-term and structural, they are not short-term and cyclical. It is a time of smaller government, of living within our means, of the fiscal constraints, of no new taxes. The third major megatrend is technology, and the fourth one is the political pressure for greater accountability and productivity." Wallace Loh, Policy Director, Office of the Governor, Washington Tradition. Perhaps most difficult to change will be many long-standing practices in higher education. For example, growth has traditionally occurred through addition, not reallocation, and technology has been an add-on to current processes, not a replacement for them. Changes are subject to slow, deliberate discussion and often viewed with suspicion. As Brian Roherty of MetWest noted, our traditional instructional model is synchronous, lecture- and classroom-based (see Figure 1), with instructional practices that have not changed markedly in recent decades. Higher education's traditional definitions of quality emphasize (and perpetuate) the existing model: the earning of credits (seat-time), the importance of face-to-face instruction (contact hours), the lockstep progression of students through time-bound courses (time-to-degree), and the amount of funds for instruction (dollars spent/FTE student). Lastly, higher education has become accustomed to a virtual monopoly over the granting of degrees and the certification of learning. New competitors - for-profit institutions, virtual universities, and businesses - are changing the marketplace in ways not yet completely understood. Figure 1
"On the synchronous side (left side of Figure 1), we're used to things like video conferencing and Web streaming, but that's still the conventional model. In the asynchronous domain (right side of Figure 1), you get into hypermedia (video, audio, text, etc.) - all the aspects of multimedia delivered over the Web. In addition to the basic technology, people have now added a layer that electronically matches content to learning styles, which makes the asynchronous side of the model much more powerful. Countries such as Singapore have taken an aggressive lead in both educational and commercial applications that match content to individual learning styles." Brian Roherty, Director, Washington Office of MetWest
Leadership. For states to aggressively tackle the challenges and opportunities of information technology, individuals at the forum agreed that leadership is essential. A champion is needed to generate interest and creative solutions, for the changes ahead for states are no less daunting than those ahead for higher education. States will need to rethink their funding practices. Legislators and campus leaders will need to control their desire for buildings. They must also understand the practical relationship of technology to new capital construction. Increasing access will likely occur through new buildings and information technology in some complex mix. One such model is the many learning centers appearing in states across the West. States will have to find ways to fund collaboration, and the sorts of activities that will move the system forward. That may mean funding personnel - especially technical support staff - and separately funding development for faculty, new courses, and programs. Competencies. States may need to find ways to fund outcomes or competencies rather than FTE students or seat time. That won't be easy, but monies increasingly must be tied to outcomes, such as real gains in productivity, student learning, experimentation, and institutional flexibility. However, states must be willing to loosen their hold on institutions, within sensible boundaries, by granting new freedom in exchange for clear accountability and achieving agreed-upon outcomes. "The ultimate policy is budget. We are accountable to the public. If we cannot explain to the public how we are spending their money, we are facing a very difficult problem. If you look at technology as everything from maintenance to research and everything in between and since we don't have line items for these things, it's easy for the public to believe that the money is being hidden in some way or used differently than anticipated." Dorothy Gottlieb, Colorado State Representative Information. In order to fund the information technology they increasingly need, institutions will need to address several enormous challenges. They must, as Robin Jenkins of Education Securities, Inc., stated, know the full range and extent of current and future information technology costs. Institutions will then need to develop a financing plan for technology, one that incorporates recurring costs, software upgrades, equipment replacements on a set schedule, training, and process redesign. Then budgets must be redesigned, expenditure categories recast, databases reprogrammed, and information made more granular. WICHE's Western Cooperative for Educational Telecommunications and the National Center for Higher Education Management Systems (NCHEMS) are attempting to identify and allocate technology costs in order to answer some of these questions. Their project, supported by the Fund for the Improvement of Postsecondary Education, may also provide some guidance as to how or when to unbundle activities, fund course development separately, or contract for services. Increasingly, institutions will need to examine the trade-off between building and owning versus leasing or contracting. "Very few universities have a handle on how to account for technology costs, how to budget for them, and how to finance them. We need to move to more of a product-costing type of framework to get a sense of how much it costs to present a project. Until we get to that, it's going to be very difficult to really use technology and see where those trade-offs may take place." Robin Jenkins, Co-Manager, ESI Investment and Banking Collaboration. Forum participants were clearly exploring new ways of doing business, including forging creative partnerships with technology companies, other higher education institutions, other types of service providers, and students (such as charging technology fees and requiring computers). As Sally Johnstone, director of WICHE's Western Cooperative for Educational Telecommunications, summed up, higher education cannot solve its problems through acquiring more resources from traditional sources. We must pursue more new and creative approaches to the business of teaching and learning. Incentives. Many participants agreed that institutions and states will also need to aggressively pursue new faculty incentives (including monetary rewards and simple recognition), as stressed by Tad Perry, executive director of the South Dakota Board of Regents. New incentives are needed to encourage different behaviors, such as collaboration, use of shared courses, and receiving another institution's course. Institutions must also seriously rethink their processes and policies, fund experimentation, and restructure where necessary. They may invest in productivity-enhancing course development, pursue quality improvements and cost savings (both in administration and by offering more student services electronically, in a self-service model). They will need to prioritize their activities (both new and existing) and make strategic choices about what courses and services to offer. "The [higher education] environment is changing very rapidly, and it's happening in four areas that are particularly critical:
In that environment, there are some things one does in the short run:
Dennis Jones, President, Student Fees. And students will be asked to do more as well. They will likely pay higher tuition and special fees for technology, and they will buy and maintain their own computers. However, as one forum participant noted, students are also beginning to demand that they pay only for those services they use (rather than the one-price-for-all tuition model under which many institutions currently operate). Students also may be asked to progress through a program of study more efficiently as time-to-degree attracts more policymaker attention. "The speed with which these changes are occurring, the cost, and the complexity of some of these issues tend to have us treat this as a train on its own track. We need to be very clear about what public policy expects to get out of this. We can't think of the technology as a train that runs on its own track - the issues it raises are very fundamental…maybe the policy mechanisms for public finance and governance that have worked so well in the last half century need to be challenged." Pat Callan, President, National Center for Public Policy and Higher Education Deregulation. State policymakers will need to consider changes to policies affecting higher education. As Washington State Representative Don Carlson asked, "What is the continued usefulness of resident and nonresident tuition rates and other barriers to the operation of the marketplace or regional solutions to problems?" Legislative and institutional representatives agreed that states must figure out how to provide greater autonomy to higher education and determine what oversight is necessary to provide the public with the assurance it requires. Larry Isaak, chancellor of the North Dakota University System, encouraged education leaders to work as partners with the executive and legislative branches on these issues. Governance. If there is one urgent message heard from many presenters, it is that change is happening more rapidly, and there will be "the quick, or the dead." Higher education must rethink its own governance structure in order to speed decision making. Or as Dennis Jones, president of NCHEMS, quipped, even though we don't know where we're going, we can't wait to find out. Therefore, each institution must grapple with its own rules, regulations, and bureaucracy to trade control for an environment that encourages and rewards entrepreneurialism pursued in the students' and institutions' interests. Isaak suggested centralizing policymaking but decentralizing certain operations as a way of improving both accountability and the institutions' responsiveness to a rapidly changing marketplace. Policies should allow for experimentation and not be too prescriptive. System Thinking. Institutions must wrest productivity gains achieved through asynchronous delivery of educational modules (see Figure 1). And they must face the financial fact that they cannot "do it all." They must concede when another institution can provide the needed service. Several speakers mentioned the importance of thinking as a system in cases where a system can ensure the public is served, resources are used wisely, and collaboration leads to better solutions. Examples of such system approaches were given by Hans Brisch, chancellor of the Oklahoma State Regents for Higher Education, Dorothy Horrell, president of the Colorado Community College and Occupational Education System, and Lee Todd of Databeam Corporation, who described the Commonwealth Virtual University in Kentucky. To secure their position as an important service provider in the state, every higher education institution must shoulder its responsibility for assisting K-12 education, as many legislators at the forum indicated. Faculty. As Isaak noted, competency in the use of technology should be required of faculty as well as students. Indeed, several participants underscored the importance of policies that encourage, support, and reward faculty in their efforts to learn the new technologies, research how best to use them, revise their courses, revamp their teaching style, and focus on student learning.
This edition of Exchanges was prepared by Katrina Meyer, director of distance learning, University and Community College System of Nevada. Western Policy Exchanges is published by WICHE with support from the W.K. Kellogg Foundation. For more information, call 303-541-0310, send e-mail to CBesnette@wiche.edu, and visit WICHE's home page at http://www.wiche.edu. |
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