But first, a brief PSA
It is crucial that members of the university community show up for the Board of Regents meeting on December 5, when they will vote on the Chancellor’s proposal to eliminate four academic departments full of students and faculty. If you wish to speak, please plan to arrive around 8:00-8:30 to sign up and plan to be there for a while. If you can’t be there all day or don’t wish to speak, please join the rally outside.
Now on to your regularly scheduled blog post.
In which we examine one department to explain the bad-faith arguments behind the department cuts
Imagine looking at your household budget and deciding that someone in the family needs to move out because they cost a lot to feed and clothe, and they have been spending too much on ice cream. Now imagine that when you calculated how much this family member costs, you never accounted for the money they bring in to the household from their job. And imagine that all the ice cream they bought was because you yourself invited several people over for ice cream. On top of all that, your household budget is not even that bad. And your credit rating is still in the top 8% of all Americans.
This is a pretty apt analogy for what is happening with the Department of Educational Administration, which Chancellor Bennett–assuming he is still chancellor when you read this–has slated for total elimination. The budget is not as bad as he says because he failed to account for departmental revenue when determining its cost to the University. On top of that, the so-called “metrics” are faulting the department for an NU system employee benefit.
The Structural Deficit: Myth vs. Reality
A structural deficit occurs when permanent revenue is less than the ongoing operational expenses. Permanent revenue includes state funding and tuition. In normal times, the “facilities and administration” (F&A) portion of federal grants can be considered permanent.
State aid for public higher education has declined, not just in Nebraska, but around the country. Nebraska’s state aid has remained stronger than other states, yet it is the flagship campus of Nebraska that is claiming to need to cut academic departments, even when other states are making it work. Penn State isn’t cutting Statistics or Atmospheric Sciences, despite having extremely low state budget support. Our peer institutions are keeping their Schools and Colleges of Education intact.
For R1 universities, the F&A from federal grants has become a predictable source of revenue brought in by faculty winning grants. While F&A revenue can only be used to reimburse universities for the costs of research administration and facilities, it frees up other revenue for other expenses. Like teaching.
Federal grants have notoriously gone through the wringer under the Trump administration. We don’t know how many grants have been lost at UNL, nor how much F&A revenue has actually declined. This, like many other basic budget facts, has not been made clear to the campus community, even those who are being told that a budget crisis requires cutting departments.
What we do know is that in several cases, the courts have reversed the administration’s reduction of F&A rates, and some grants have been reinstated. We also have reason to expect that this federal funding fiasco is not yet resolved, and universities may be restored to prior levels of funding under the next administration, if not the current one. In other words, we lack sufficient information about cuts to grants to conclude that this has caused anything approaching a crisis at UNL, much less a unique crisis that requires haphazard amputation. This is particularly true given that UNL lags behind our peer institutions in federal funding, something for which we are being constantly verbally flogged. In this situation, that leaves us on stronger financial footing than our peers as we are less at the whims of the current presidential administration.
Even if these reductions in revenue are terrible, even if they have created a “structural deficit”? Well, not really, since every university has a structural deficit in which state aid plus tuition plus F & A does not fully cover operating costs. A structural deficit is, in fact, the normal state of being for a university, despite its scary-sounding name. It isn’t an emergency state; it is the normal state of a university. That gap is filled by less predictable revenues, such as fees for service and donations. When those things dip, a university might need to dip into the reserves, and only when those reserves are gone does a university enter a state of financial exigency, that is, the university is in danger of not making payroll. Across the country, financial exigency, that is, literally, we are about to not make our payroll, is the only acceptable to remove tenured faculty members without just cause for royalty f-ing up.
Notably, neither NU nor UNL administrators have used the phrase “financial exigency,” only “structural deficit.” To go back to our analogy, this is like claiming to your family that the household budget is terrible without showing them the math, and then concluding that some of them are going to have to move out even though you’re sitting on some savings that are meant to be spent in down times, such as when the federal government keeps trying to defund universities by screwing with their research grants.
The NU bylaws also allow for the firing of tenured faculty for “bona fide” program closures. Hence, the much ado about metrics, even though no program identified for closure falls below the number of students required by the Nebraska Coordinating Commission for Postsecondary Education. That is the bar for a bona fide program closure. It has not been met by any department.
Program Revenue
The proposed program cuts do not account for revenue generated by departments. This is so outrageous, cynical, and contemptuous of the university community that it bears repeating. The rationale for cutting departments does not account for the money the departments bring in.
How much money do they bring in? This, like so much else about the budget, is left for faculty to guess.
One major source of revenue is tuition. Recently, a much-needed 5% tuition increase was passed by the BOR after years of tuition freezes. This money did not go to UNL faculty salaries, which have been frozen.
Across communications, there has been no consistency. Is the savings from cutting EDAD $2,000,000 or $1,690,000? To which the response from the admin has essentially been, crickets.
When faculty in Educational Administration tried to find out their revenue, they got a lot of different numbers. They simply wanted to know what cutting their program actually saves when the tuition they bring in is accounted for. So they went student by student in their two doctoral programs, three master’s programs, and assorted certificate programs to identify what tuition and fee rate they might possibly pay. In-state? In-state with the 15% tuition reduction for working in a low-income school and/or having a prior degree from UNL? In-state but getting tuition remission as part of their employment at UNL, UNO, UNK, or NU? Out of state? Don’t forget that $200 a year international student fee!
To return to the analogy:
“Bob, sorry, you’ve gotta go. You are too expensive to feed.”
“Huh? What about all my income? I have it go directly into the bank account you manage. How much did I bring in?”
[Shrug.] “Who knows. Guess you’ll have to find your old pay stubs and birthday checks from your grandma and figure it out.”
Value is More than Money
When EDAD added up the various tuition rates paid by their 256 graduate students, they estimated that their tuition revenue is somewhere between $1,233,000 and $1,470,000. Indeed, many students in EDAD don’t pay tuition (although they do pay fees) because they work at UNL, UNO, UNK, or UNMC. However, as the highest-rated online Ph.D. program in the field, EDAD brings many doctoral students who pay the full out-of-state tuition for a doctoral degree. The innovative Ed.D. program also attracts out-of-state students, both in higher ed and P-12 education. Again, those students pay the full out-of-state tuition for their 60+ credits to earn a doctorate.
The first value-add here that doesn’t show up in the bottom line is the contribution EDAD makes to the career trajectory of faculty and staff across the NU system. And while you might shrug and say they can go elsewhere in NU, au contraire, my friend, UNL’s EDAD department is the only Ph.D. program in the field in the state (necessary to climb the academic and administrative ladder) and the only Ed.D. in higher education in the state. Those employees, whether they work in the office creating new microcredentials at UNO or in the speech and language pathology program at UNL, would have to LEAVE Nebraska to seek a Ph.D. Dollars to donuts, those students are never coming back because they will find permanent positions in the universities where they found a job to support their doctoral studies and not come back. Turnover of faculty and staff is costly, and certainly has not been considered in program cuts. NU is benefiting from the fact that its employees want to learn even more about NU’s own industry, and yet the Chancellor is actually faulting EDAD because so many employees are using the benefit at EDAD!
It turns out, though, that given the revenue generation of other students in EDAD, the actual cost per year for providing 18 credits of graduate coursework as part of the NU benefits package for a single student is $6,300. That means a quarter of the cost of providing a top-tier graduate education to NU employees is subsidized by EDAD’s other students.
Some universities actually count the tuition waivers in a department’s revenues. If UNL chose to do that, the revenue of EDAD would increase by approximately $666,290. But the real value, again, is that it supports career development for folks who are advisors in UNO and UNL’s Business Colleges, the assistant director of recruitment at UNL, directors, managers, and so on, and contributes to their retention.
The second value-add here is less obvious and less easily translated to dollars. To rejoin the AAU, UNL will need to show breadth and quality of graduate programs as a Phase I indicator. All the departments identified for cuts are graduate-heavy (and Grad Council voted to retain all of them). And UNL will need to demonstrate its high numbers of Ph.D. grads as a phase II indicator. One of the highest Ph.D. enrolling departments, yeah, that’s on the list for elimination. There definitely will not be consequences for that down the line.
Is this merely insane or malicious?
“Bob, look at this outrageous amount of money you spent on ice cream!”
“Well, yeah–you invited everyone over for ice cream, so I had to get ice cream for everybody.”
“How can we possibly keep you around when you waste money like this?”
New Costs Instead of New Revenue
The administration still thinks it is going to retain the Master’s in Higher Education, just, ya know, in some other department, taught by some other people. EDAD estimates that it would cost approximately $484,000 annually. Want to know how many master’s in higher ed students likely pay any tuition? It’s a mere handful. Without the doctoral programs, the P-12 master’s program, and the community college certificate to offset the costs, that program really would be a money sink. While retaining this master’s program would support staff recruitment and retention, it is not likely to be the money generator administrators thinks it is.
Meanwhile, the industrious faculty created several new certificate programs, microcredentials if you will, last year to help increase their enrollment. One certificate was not brought to the regents for a vote by David Jackson and returned with no reason given. It is estimated that the program would bring in $84,000 or so annually, with a ready-made market in the form of the largest school district in the state, OPS. The department was told an innovative accelerated master’s program with ALEC would be too complicated to administer by graduate studies. Never mind that there is a 2-2 veterinary medicine program with a university in an entirely different state. They estimate that program would provide another $84,000 in revenue (that is about the salary of one associate professor in the department, not including benefits, just for scale). Another certificate program approved at the college level is estimated to bring in $272,000, and new undergraduate courses, a further $30,000.
Rather than implement these innovative programs developed by leaders in their field, the administration would rather fire 15 faculty members and somehow scrounge up faculty from who knows where to teach a master’s program that probably is not going to be revenue-generating, even if it does support staff retention. Huh?
What About the Mystery Money at Varner Hall?
If this is genuinely the financial emergency it’s being made out to be, what do we make of the 28 million dollars with zero full-time employees (FTEs) in Varner Hall? Perhaps some positions are going unfilled, but surely those could be eliminated just like unfilled positions in departments? Departments, which, as a reminder, do the core work of the university’s mission: teaching, research, service, and outreach. But what about a single budget line of $11 million with no FTEs? That is literally $11 million sitting around doing nothing.
This is a significant budget mystery, is it not? Millions and millions of dollars at the central administration, earmarked for nobody to do nothing? Shouldn’t such things be accounted for–clearly, transparently, to the university community and the relevant bodies of faculty governance–before insisting on the machete?
Perhaps that money in that one line, amounting to twice what the Chancellor (incorrectly) says it costs to run the departments that are slated to be chopped, could be used to literally buy time to allow the departments to try the revenue-increasing activities they have proposed? Especially since considering the four departments’ revenue in the equation reduces any savings to, well, an amount relative to the loose change in your car’s center console and in your couch cushions.
“So anyway, Bob, it’s been nice knowing you, my brother, but I have no choice but to kick you to the curb.”
“What’s that sticking out of your pocket?”
“Oh, this? Why, that’s just my golden money clip that contains so many hundred-dollar bills I haven’t even tallied them up yet. Oh, yes, also your most recent paycheck.”
“Can’t you… I don’t know, use that money to pay the mortgage? Or start by counting it?”
“Sorry, no can do. The curb beckons you, Bob. There is no other choice. I am glad we came to this agreement together.”
End scene.
