Alma mater gets a clue: university as marketplace

Alma_mater_at_columbiaMany of the country’s stronger universities are actively discounting tuition. These rebates, which can be thousands of dollars, aren’t coming from endowments or government grants. The colleges are dipping into their own tuition revenue—essentially taking from students who pay full freight and giving to others. And it is the high achievers rather than the needy students who are getting a good chunk of money.  (Wall Street Journal yesterday)

Economic actors, even universities, are rational creatures. So why are they discounting the price of the “product.”  It can’t be to drum up more business. They’re oversubscribed as it is.  I think it’s to create more generous alums. Down the road, better students should enjoy more accomplished careers, earn bigger incomes, and give bigger gifts to alum mater. It’s a long term bet, but universities are well positioned for long term bets.

Would this be the time to think about quality control? There is no point bringing better students to campus, if we are going to inflict a substandard education on them. They will graduate unhappy. Or they will just leave and end up giving their alum dollars someplace else.

So it’s time to do something about those academic dead beats. You know the ones I mean. (If you don’t have them as colleagues, you had them as teachers.) Almost every department in almost every university has academics who just gave up years ago. Usually, they don’t teach very well. Usually, they hardly think at all. Now in mid-career, they appear to be struggling to qualify as late entrants in that rather large club identified by George Bernard Shaw. “Most people would rather die than think. Most do.”

Bad teachers have gone largely unchallenged for many reasons.  Clearly, tenure is one. But incompetents have been tolerated to some extent, I think, because it’s hard to figure the real cost of the damages they inflict.

We can change that. Let us figure out how much a bad teacher costs a university. This will give a Dean something she can use. She can sit Dr. Lunatic down and say, “Dr. Lunatic, we’ve run the numbers. And it is clear to us that you have cost this university a small fortune in alumi giving, and, clearly, its only going to get worse. If we add to this your salary costs, roughly $140,000 a year, you are one expensive son of a gun and a luxury we can no longer afford.”

Ah, the discipline of numbers. Let us find this figure and post it imaginatively above the heads of every incompetent. Let us fix it there, so that it shows when he or she is sitting at the Faculty Club, walking across campus, and pretending to look something up in the library. Call it a “price on their head.” Not what the bounty hunter can win, but what the institution will lose.

First, a “lifetime value” calculation: the student, who for modest discount “x” in tuition, brings in an additional “y” in alumni gifting each year multiplied by the number of years he/she survives after graduation, adjusted for the upturn and downturn of income over time.

Now, a “lifetime damage” calculation. Dr. Lunatic teaches the intro course twice a year. (His department is punishing him for being a lunatic.) That’s 1000 students a year. Let’s say 1% of these students were given a discount to attend. Now of these 10 students, one is so appalled by Dr. Lunatic that she leaves the university immediately. (This is only a tiny fraction of the larger class but the whole of her alum generosity must be charged against Dr. Lunatic’s account. If her life time value is, say, $40,000, Dr. Lunatic is on the hook for a nifty sum. If it happens that the student in question goes on to enjoy the career of a Carly Fiorina, well, Dr. Lunatic, you have my permission to shoot yourself. Multiply the (non-Fiorina) alumni cost and Dr. Lunatic’s “lifetime damage”  (on this score alone) is around $12,000,000. Talk about a price on your head.

Of the remaining nine students in the intro course, three will leave before graduation, the victim of all the Dr. Lunatics to whom they have been exposed. (Dr. Lunatic only gets partial credit here.) The remaining six students will split. Half of them will forgive the university their Dr. Lunatics and give as many alumni dollars as they would have given in any case. (Dr. Lunatic dodges a bullet thanks to undergraduate cluelessness. He is in short the beneficiary of the very cluelessness that it was his charge to dispel. Sometimes incompetence is it’s own reward and more.) The remaining three will give at smaller than expected funding levels, each more punishing than the last. Or something.

What does this add to Dr. Lunatic lifetime damage calculation? I haven’t clue. But someone out there must know how to run with these numbers within acceptable limits of approximation. I will happily give you the floor. Or, if you prefer to remain anonymous, I will post your wisdom and take your secret to my grave.

You can see what I’m hoping for here: a concrete number that clarifies the real costs of academic incompetence. As it is, university presidents, college deans, and department heads don’t have much leverage. Sure, it’s clear to everyone that Dr. Lunatic is a one-man wrecking machine in the classroom but until someone demonstrates the costs of this incompetence, it is hard to muster the administrative will to do anything about it. We need to shadow him on campus with that value that shows his real costs to the institution. Call this is a shame function. It makes us feel better but it doesn’t materially change the world and certainly not Dr. Lunatic.

But there is a larger opportunity for leverage. If we can get this number right, we can calculate not only the costs inflicted on alumni support created by Dr. Lunatic, but the amount that must be laid at the door of university administrators who refuse to move against him. Now we have a metric that can be used to assess performance in the high offices of the university. Dr. Lunatic has no shame. If he had, he would have restored himself to usefulness years ago. But Dean Robertson?  Actually, she has pretty active sense of pride. If we say she is costing us hundreds of thousands of alumni dollars by suffering Dr. Lunatic, there’s a pretty good chance she will do something about it. 

Yes, in my dreams.


 Anonymous. 2005. Unlocking the Special Codes. Wall Street Journal, June 14, 2005, p. D7

Image above: Alma Mater on the campus of Columbia University.

13 thoughts on “Alma mater gets a clue: university as marketplace

  1. Pingback: SCSU Scholars

  2. amoeda

    Interesting. I’ve read tons of complaints from academics that good teaching isn’t rewarded (only research and publication is) but this is the first one I’ve read about bad teaching not being punished. Do you feel that the stick is a better tool for this job than the carrot, and if so, why? In any case, isn’t the link between bad teaching and apathetic alums (or good teaching and generous ones) pretty difficult to prove? At least, I don’t know of any proof that eliminating bad teaching is more lucrative than say, eliminating bad cafeteria food, crappy dorms or those self-esteem-battering low grades. I’m all for raising university teaching standards for lots of reasons (and the tenure process seems badly broken) but can you make the case on solely economic grounds?

    P.S. Thinking back to that Lawrence Summers/Yalies in the Yard post from a while back, I can’t help but notice the scorn you seem to have for the organizational culture of academia. Being about to re-enter academia myself, I’d like to know what inspires you to get so, uh, un-Canadian in your posts about it. Should I be afraid? Is is worth hoping for change?

  3. Ed Batista

    Perhaps I was blessed by unusually good professors, but the few complaints I have about my education have nothing to do with poor teaching and everything to do with poor administration and management. Even the worst professor has a passion for their subject, however faded, and as a student you’re stuck with them for a few months at most. In contrast, far too many university staff are unmotivated clock-watchers who wouldn’t understand “customer service” if it bit them in the ass, and they can make a student’s life hell for four years and more.

    This is also a public/private sector issue. I went to grad school at a private university, where I couldn’t have been happier–and I paid dearly for the privilege. My wife has two public school graduate degrees, and every year they found a new way to set the bar lower for incompetence.

    I don’t know how to make it happen, but I’d love to see students’ increased power as consumers translate into greater leverage over university services and administration, not just the professoriate.

  4. Ennis

    Simpler explanation – they’re boosting the reputation of the place. It’s like a club letting in models for free so that they can keep a long line of plebes outside the velvet rope.

  5. Matt

    I think your logic is OK, so far as it goes, but frankly the quality of teaching has absolutely nothing to do with why the university I attended will never see a dime of voluntary money from my pocket. Even if I’d had _profoundly_ bad experiences with professors (I didn’t…the worst description I could apply to any member of the faculty I had contact with was “mediocre”), I could forgive that.

    What I can’t forgive is an institution that behaves like a confidence artist during the admission process, a used car dealer during the financial aid process, and a loan shark during the years immediately after graduation…but then, years later when I finally reassemble the remnants of the life they shattered in my early 20s and start making real money, wants me to think of them as a charity.

    Much as I believe the concept of “tenure” creates perverse incentives, it is not in fact the tenured faculty that are the reason I’ll never give them another cent…it’s the behavior of hired staff who could be replaced at any time with no legal trouble and nobody whining interminably about centuries-old traditions.

  6. Grant

    Amoeda, These creatures are already thoroughly indulged so it’s not clear that carrots would help. As to my fits of bad tempered about the academic world, I guess it reflects my view that many people in the social sciences are simply not working very hard. This at the very time when our culture appears to be a state of almost constant reformation. This means the very people who should be on the job are quite often out to lunch. So, yes, I do not envy you your return to the big house of higher education. Thanks! Grant
    p.s., and your comparison is an excellent one. Canada and universities exhibit the same complacency, the same refusal to put their house in order.

    Ed, great point, students as consumers should be more demanding, the trouble is most everyone is grateful to get out alive that they are disinclined to begin demanding better programs, teachers and schools. Academics are not above making them pay for their “impertinence.” The fact that consumer protest would be so read is good evidence, I think, of how far universities are removed from the real world. Thanks, Grant

    Ennis, I wondered about this when I was writing the piece. (And the “models” comparison is an excellent one, better than anything I came up with.) But it wasn’t clear to me how better students “spruce up a place.” After all, they are not, as models are, evident to the eye. They actually make a school more demanding for the regular students, so they “cost” something on this dimension. It is try that they will likely be more distinquished alums and that will create a reputation effect for the university. But I think alma mater would rather have the money! Thanks, Grant

    Matt, dude, nice meta-metaphor! And yes this seems to be a consensus: that bad administration and policy does more harm than bad teaching. The fact that these faults are still evident, when the universities has no longer term committment to the offenders, is another indication of how badly out of sink universities are with a quality management point of view. Thanks, Grant

  7. Supergenius

    Personally, I don’t think I was able to judge at 18 years old whether my prof was “bad” or I was just not as smart as I had previously thought.

    How would you define a bad professor? Who would rate them? Maybe an exit interview to anyone dropping a class? Columbia U. already lets students rate the professor after the course is over (at least the Engineering school did). I never knew what happened to them after I filled it out.

    I agree with poster amoeda – none of my undergrad professors had any incentive to put more than minimum effort into intro classes. Lectures were from a textbook, problem sets recycled year after year, and grad students to actually answer students questions. Only a few broke this mold.

  8. Ennis

    Grant – you’re thinking too far in the future. One major function of a university degree is as a signal to employers about the quality of the student. You have smart students at community colleges and dumb ones at MIT, but an employer, looking at the two degrees, will figure that somebody coming from MIT is more likely to be smart than somebody from a community college. You see where I’m going with this, right? Smart students enhance the brand.

    As long as a university keeps pumping out smart students, its degree will be valued by employers. It doesn’t matter if these students were smart when they got to the university or (as the university pretends) that they were made smart by the teaching.

    Applicants put a higher value on schools that will help them get a better job. They want to go to a school that graduates smart students. Dumb students aren’t too worried about classes being too hard – Teacher Course Evaluations keep classes easy (anybody who challenges their students too much gets marked down by the marketplace), and you can always find enough “gut classes” to get by. No, they want to be surrounded by smart students so that they can get the benefits of having people think that they’re smart, even if they’re not. Dumb students love being associated with a smart brand.

    What’s in it for the university? Donations right now, by worried parents who want their kids to get in. Money goes to universities with strong brands because it helps to buy admissions. My roomate admitted that he got into the university only because his father was a prominent alumni organizer (I also think his maternal grandfather was a donor). Also, alumns love giving money to schools with strong brands b/c it rubs off on them. Giving money to Harvard reminds everybody else that you went to Harvard. Giving money to Party U is wasted – if you want a rep for partying, your money is better spent throwing great parties than buying a dorm for others to party in.

    Sorry this is rambling. In sum:
    1) admitting, and therefore graduating, smart students makes the diploma more valuable to employers
    2) there are always lots of easy / crowd pleasing classes at a university because junior profs are concerned with their course evaluations

  9. Grant

    Supergenius, I agree, when I came through college and was exposed to bad lectures (and lecturers) I always assumed “it must be me.” Mind you, I had the attention span of someone with a very short attention span (my nod to Monty Python, a formative influence at the time), so it probably was. But kids these days (whatta ya gonna do) they have grown up in a culture that works feriously hard to make everything perfectly transparent. Movie audiences suffering incomprehension never say, “It must be me.” They just blame the director. I am hoping this has made them newly impatient with their proofs. I can dream. Thanks! Grant

  10. Grant

    So you admit better students and they graduate to impress employers who are more inclined to hire all your students which makes your degree more valuable…and better students come as a result. I think just bringing in good students is probably not enough. You have to make sure the bad students dont finish, otherwise their performance cancels out that of the good students, and you are bad to zero. And I think the university is generally speaking too spineless to flunk anyone out (or even given them a C). But then I am venting the spleen again. (Note to self…use a urinal.) Thanks! Grant

  11. Ennis

    I’m sympathetic to your frustrations with the academy, and with grading. You’re right that B- has become the old C, and many places don’t even hand out D’s any more. However, this still sends a signal about the quality of a student, which is why students complain so mightily when they get a formerly respectable B.

    Perversely, some institutions that value teaching highly also downplay grades. MIT has a pass/fail freshman year. At HBS (where you once taught, and where people tell me teaching is very important) I was told that 80% of the students get Bs. Maybe only elite institutions can do this though. The name on the diploma is good enough for employers, don’t don’t care so much what grades you got while you were there.

    Presumably this means that you have to start rejecting some dumber applicants if you want to enhance your brand. That, and you hope that the smarter students teach the dumber ones. Lateral learning is very important.

    [I can’t believe I’m defending the system … ha!]

    — E

  12. Ennis

    Tyler quotes Mark Thoma on grade inflation:

    “My study finds an interesting correlation in the data. During the time grades were increasing, budgets were also tightening inducing a substitution towards younger and less permanent faculty. I broke down grade inflation by instructor rank and found it is much higher among assistant professors, adjuncts, TAs, instructors, etc. than for associate or full professors. These are instructors who are usually hired year-to-year or need to demonstrate teaching effectiveness for the job market, so they have an incentive to inflate evaluations as much as possible, and high grades are one means of manipulating student course evaluations.”

    This substantiates my argument that student feedback and market mechanisms for ascertaining teacher quality are a very important factor in grade inflation. Or maybe this is just academics playing “blame the adjunct.”

  13. steve

    I think the correct model for alumni giving is that the total remembered experience and current outreach drive contributions. The TMR is not that affected by bad or mediocre teachers–classes are a small part of college for most students and the only classes they remember are the really good or really hard ones.

    There is no question that using student evaluations, filled out on the last day of class, as a kind of American Bandstand rating for instructors (“I give him a 5 because he has a good beat but you can’t dance to him”), makes untenured faculty pander to students in various ways. Unless colleges use delayed evaluations (say, 2-3 years after graduation) and/or standard comprehensive exams that departmental majors must pass, there is no way to tell who the good teachers are.

Comments are closed.