From Educational Malfeasance to Educational Transformation

On July 12th the California State University Trustees increased tuition by 12 percent for the fall term.  This follows the 10 percent hike last year. Both tuition hikes are blamed on the $650 million in state budget cuts for the Cal State system.  Undergraduate tuition at CSU goes up to $5,178 for fall 2011 or $948 more than it was in fall 2010.

But the budget cuts must not have hurt too badly since the trustees then approved the compensation package for the new university president at San Diego State, a part of the CSU system.  The Trustees approved a $400,000 compensation package for Elliot Hirshman which was 33.6% HIGHER than his predecessor.  Hirshman thus becomes the 29th officer of the Cal State system to make more than $240,000 according to the Sacramento Bee.

Governor Jerry Brown sent the trustees a nasty letter complaining about the size of the increase in salary and dissing them for setting a bad example for other public employees.  Lt Governor Newsome, a member of the trustees voted against the increase and legislative leaders issued press statements with mildly masked threats of retaliation with even more cuts if he CSU trustees approved the package.

They did it anyway.  Why?

The trustees argued that the market for university presidents is fiercely competitive and they must keep up or fall behind.  And let’s face it, compared to corporate salaries for officers of organizations of similar size these salaries are not out of line for their level of responsibility.

But the problem is the universities want it both ways.  They want to be subsidized by the tax payers arguing that the world class education for the next generation of leaders is at stake from persistent budget cuts.  They want to protect their merit increases and bonuses and defined benefit pensions.  We understand that since we all want the same thing.

But competition, the recession and a slow recovery forces business to make tough choices, rationalize costs, and scale back spending to reflect the realities of the economy we have.  The universities hate doing that so they raise tuition and blame it on the State.  The State complains as they are doing now but is secretly happy to see the tuition hikes because it enables the Governor and the Legislature to look good the next year by making more “cuts” in the university budgets.  This is nothing more than a pseudo-tax increase on parents.

There is a solution for this!

IPO the California State University System and the University of California System, and free the universities to compete in the marketplace for students, research grants and faculty.   The State can budget a fixed amount each year for grants to California higher education students for instruction and let them compete for a place in class.  If they can’t find one in the CSU or UC system then the student and his parents can apply the grant to tuition at a private school or out of state.

No drama.  No political games.

The universities are wealthy beyond measure in the creation of intellectual property and if they harnessed the patents and IP and encouraged the faculty to turn it into commercial, revenue producing products, services and expertise the endowment would grow and the faculty would get paid for the time they teach and be free to supplement that teaching stipend from their research work and consulting.

I suspect several things would happen.  First, the attitude of the faculty would become much more entrepreneurial.  Second, teaching would be a priority for those who choose to teach.  Third, students would find many great learning opportunities from the start-ups and work experiences created from that research and entrepreneurship and find taking yoga or underwater basket weaving much less attractive. Fourth, tax revenue and state GDP would grow again as these incubators for learning got back to the business of teaching students what they need to know to be productive citizens.

There ends the rant.

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