The Honors of Inequality, Part II

For example, honors students on full scholarships at regional, tuition-dependent colleges often have degree completions rates similar to all undergraduates at Ivy League institutions. At the same time, to subsidize the honors program, those tuition-dependent colleges charge non-honors students tuition that more closely approaches the list price. In addition to the differential tuition charges, the institution then allocates a greater share of its instructional costs to the honors program to support smaller class sizes, team teaching, honors college programs, and other specialized services for honors students — expenditures entirely subsidized by revenues derived from the tuition of students who are not eligible for the honors program. Thus, while honors students appear to be the most successful due to “academic preparedness,” in effect the hidden subsidies in tuition and instructional services for the honors programs likely plays a substantial role in the inequity of student outcomes at a particular institution. Outsourcing Student Success, Nov. 7, 2015

The Shell Game of Academic Preparedness

In early March, 2016, Diverse: Issues in Higher Education published an article drawing attention to the plight of first-generation college students in higher education, particularly at nonprofit institutions. The authors argue that college and university administrators “engage in unethical practices to balance their budgets” by accepting “‘marginal’ students” who are eligible for federal financial grants and loans to pay tuition but “cannot handle academic requirements and drop out, saddled with debt.” The authors further indict “the ‘shell game’ many college administrators play, in which they use Pell Grants to supplant institutional aid that they would otherwise have provided to financially needy students.”

Focusing on private not-for-profit colleges in New York, the authors do not provide a clear motive for the state’s colleges to adopt “uncaring and unethical policies, which are also bordering on illegal practices.” As nonprofit organizations, balanced budgets merely ensure the institutions sustain operations and remain open for the education of the state’s students. Moreover, there is nothing inherent to the process of balancing college budgets that renders a college degree an “impossible dream for most first-generation college students.” Lastly, there is little financial reason to allocate institutional funds “to recruit wealthier students… [by] offering them generous scholarships.”

While certain that administrators’ business practices “discredit academe,” the authors do not seem terribly eager to scratch beneath the surface of college performance and student success: for them, it is enough to cast aspersions at the professional and moral fitness of college administrators to explain the current state of higher education.

Academic freedom and shared governance, however, make the faculty equally culpable for the current state of higher education in the United States. At most colleges and universities, direct instructional costs remain the single most significant expenditure in the delivery of a college education. Largely under the control of faculty, the academic distinctions within the college curriculum and the disparities in the costs of degree programs present a fundamental challenge to equitable educational services to first generation and underrepresented college students.

When a college balances its budget, the administrators make their own decisions, but they do not make decisions at their leisure or under circumstances they choose for themselves. Administrators make decisions within priorities and curriculum existing already, given and transmitted from the faculty.

Consider, for example, the basic differences between an honors student and a so-called “marginal” student entering the same college for the first time (i.e., two first-time, full-time freshmen). As we briefly alluded to in our piece, Outsourcing Student Success, freshmen in a college honors program often receive a double helping of subsidies from non-honors freshmen at the same institution. For the comparison, we will focus on the basic statistics at a single institution in the New York state area, which we will name as Mid-Atlantic University.^[1]

Mid-Atlantic University, a private, coeducational, nonsectarian institution of higher education, offers its honors-eligible student an annual full-tuition scholarship if the student designates Mid-Atlantic University as his or her first choice institution, presumably on the Free Application for Federal Student Aid. Recipients must participate in the Honors and Merit Fellowship Program, described as “intimate classroom settings of no more than 20 students… with faculty in thought-provoking discussions that will challenge and transform” the students. The honors student is afforded a study abroad opportunity and a faculty mentor on research leading to an undergraduate thesis in a major. The “extra-curricular” Merit Fellowship entails visits to local cultural events and destinations, capped with an annual Mid-Atlantic University Honors Conference where the honors student may meet notable academics and luminaries: “Both academic and social, the Honors Program is a unique intellectual community that offers exciting opportunities for personal growth.”

In contrast, Mid-Atlantic University also welcomes a “marginal” student whose family earns $0-$30,000 and somehow scrapes together the $23,955 to cover the net price of attendance at the College (2013-14). At that cost, the “marginal” student will likely be greeted by a few of the 412 adjunct or part-time faculty members since many of the 258 full-time professors dedicate time to honors, upper-division and graduate degree courses. In lieu of a full-time professor fostering a unique intellectual community, the Mid-Atlantic University Promise will provide the “marginal” student a Success Coach who “will be there for [him or her] through graduation.” The Success Coach provides the “marginal” student “everything [he or she] need[s]—from academic and career counseling to campus activities to financial aid!” In addition, if the “marginal” student enrolls in the optional “first year seminar,” he or she will be mentored by “classroom and library faculty members working in collaboration to foster student learning.”

The college’s literature captures the evident difference in enthusiasm with which Mid-Atlantic University greets an honors student in comparison to a “marginal” student based on nothing more than the premise of academic preparedness and honors eligibility (1200 SAT, 24 ACT). Nonetheless, the real travesty will be found in the academic departments’ budgets.

The honors student who receives the coveted “annual full-tuition scholarship” pays $0 per credit hour to attend college. At the same time, the “marginal” student pays $798.50 per credit hour ($23,955 divided by 30 credit) to attend college. Whereas Mid-Atlantic University provides a complete financial plan and the funds for the honors student to attend college for free, the marginal student is met with a Success Coach who will help the student “construct a financial plan to fund [his or her] education” after enrollment.

How, then, does Mid-Atlantic University pay the per credit hour costs of the honors student’s education?

In the most recent finance report to the federal government, Mid-Atlantic University reported that almost 99% of its scholarships are unfunded ($43,699,086), only 1% funded ($475,462). This means the scholarships provided to honors students come directly from the annual operating budget, not the college endowment. Mid-Atlantic University, like other tuition-dependent institutions, derives most of its revenues from tuition. Consequently, in our two student scenario, the costs of educating the honors student directly comes out of the tuition collected from the “marginal” student — that is to say, the approximately $800 per credit hour paid by our “marginal” student for a college education covers the cost of educating both the honors student and the “marginal” student.

Moreover, when considering the quality and class of services to support an entire Honors College, as Mid-Atlantic University has, the honors student further receives a larger share of the direct and indirect instructional expenditures. The full, tenured professors who teach honors classes, mentor honors students, organize honors cultural excursions, and host Honors Conference cost vastly more than the adjunct professors, librarians, and Success Coaches who support “marginal” students. In fact, with team teaching, individual study stipends, remissions to administer the honors program, etc., etc., the per-credit expenditures for instruction for the honors freshman likely approaches 3-4 times the per-credit expenditures for instruction of the “marginal” freshman. If all tuition paid by the “marginal” student went to core expenditures^[2], the college then pays $600 to $640 per credit hour to educate the honors student and only $160 to $200 per credit hour to educate the “marginal” student.

In other words, an honors student pays $0 per credit hour to receive $600 per credit hour of educational instruction and mentorship, while the “marginal” student pays $800 per credit hour in return for no more than $200 per credit hour of educational instruction and success coaching. Should we wonder that the so-called “marginal” students are far less likely than the honors students to complete a college degree at Mid-Atlantic University? Is it the difference in the academic preparedness of the students or the differential in tuition/expenditures per credit hour at the institution that influences the probability of degree completion?

While starkly apparent in the contrast between a single honors student and a single “marginal” student, the inequalities in revenue generation and instructional expenditures by academic program runs throughout the entire curriculum offered by faculty at a college or university. Many programs in STEM, education, computer science, etc., cost far more to deliver than the average freshman course. In the humanities and social sciences, the number of declared majors in fields like history, philosophy, and religious studies may be so low that the per-credit costs of instruction from a full-time professor in an upper division course can be ten times more costly than the average freshman course. In addition, as the National Study of Costs and Productivity routinely shows, graduate and doctoral programs contribute substantially to the overall costs of a department’s instructional expenditures. In the practice of academic freedom and disciplinary autonomy, faculty who are more concerned with who they teach than why they teach, and those who are more focused on what level of student they teach more so than what quality of education they provide, contribute in untold and numerous ways to the inequality of educational services offered on American college campuses.

At Mid-Atlantic University, the most recent data show that the freshman retention rate is 75% and the six-year graduation rate, only 41%. Very likely, the salaries and benefits of faculty who teach in highly specialized areas — such as Special Education and Literacy at the doctoral level — are paid in part from annual revenue derived from the Pell grants of “marginal” freshmen who do not complete a degree at the college. Deplorably, those same faculty — who reap the greatest benefits from the rampant inequalities from the delivery of honors, upper-division, and graduate curriculum — often blast their admission offices for admitting first-generation freshmen who “cannot handle academic requirements,” as the authors in Diverse exclaim when playing their shell game of academic preparedness.

College students across the country have these two figures associated with their college education: tuition paid per credit hour and instructional expenditures per credit hour. While the former can be calculated with basic information from the tuition bill and scholarship offer, the latter remains largely unexplored in the literature on college success.

Notably, the American Council on Education (ACE) and other higher education associations representing the leadership in higher education are moving toward a resource-based understanding of student success. Recently, ACE in conjunction with TIAA Institute, released a report calling for “rethinking the university’s ‘business model.'” The report recommends that college and university leaders illuminate the “black box” of college expenditures by creating “models that that describe how resources are applied to particular activities in sufficient detail to allow in-depth understanding of what’s being done at what cost…” The report draws attention to the practice of “cross-subsidy” in instructional expenditures from lower divisions courses to upper division and graduate courses (see Table 1, p. 21). At the macro-level, sufficient evidence exists that revenue from freshmen and sophomores is allocated to the instructional expenditures for juniors, seniors, and graduate students, raising questions about how the disparities in faculty resource allocations across the curriculum contributes to attrition during the first two years of college.

In essence, what the recent ACE report calls for is an integration of student success, financial aid, and academic program review data at the student-record level – the data originating in a full-service institutional effectiveness and planning office. With those sets of records, a college or university is able to account for each student’s tuition paid per credit hour and instructional expenditures per credit hour for their college education. Consequently, the economic inequalities in the nation’s college education system would become wholly transparent and the incredible subsidies to “academically prepared” students would become readily known. As the authors of the ACE report note, “this challenges the traditional view that internal data should be held closely in order to avoid criticism and second-guessing.” Resistance to transparency, however, extends across the institution — from faculty to human resources to financial aid — and the stakeholders who find themselves threatened by transparency direct animosity toward others, oftentimes the admissions officers and chief executives. Needless to say, the evolution of a new business model in higher education based on financial transparency will be difficult to affect.

Recent activism suggests that underrepresented undergraduates already sense the inequalities of investments in honors, graduate, and other low-enrolled, high profile programs on their campuses. To date, though, activist students have not drawn a line from the iconography and climate on campuses to the inequality in the allocation of instructional and faculty resources to courses and programs at colleges. While the activists have proven successful influencing administrators to reflect on the overt symbols of inequality and historical racism on campuses today, at some point they must also target the curriculum policies and faculty resource allocations that perpetuate structural racism in higher education.

If students redirect their activism to a call for transparency in higher education instructional expenditures as advocated by the ACE, then first generation and other underrepresented groups may very well set the course for equitable student success in the colleges and universities of tomorrow.

Continue with Part III…