Higher Education Programs

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Summary

February 1993

In recent years, the Legislature has taken various actions to encourage the systems to differentiate their missions, reduce program duplication, and improve instructional efficiency and effectiveness. The 1991 Legislature mandated a merger of the state university, community college, and technical college systems, effective in 1995, partly to streamline and coordinate programs. During the past six years, the Legislature has also given HECB more authority to review proposed and existing programs.

Nevertheless, continuing concerns about program duplication prompted the Legislative Audit Commission to authorize a study in April 1992 looking at this issue, as well as broader issues of program efficiency and effectiveness. We asked:

• How many similar higher education programs exist in relatively close proximity, and what evidence is there of unnecessary duplication? What cost savings could result from restructuring duplicate programs?

• How do instructional programs compare on general measures of efficiency and productivity, such as costs per student, student/teacher ratios, graduate placement rates, and size?

• How effectively do the higher education systems and Higher Education Coordinating Board review instructional programs, and what roles should they play in future program reviews?

Each of the systems has taken steps in recent years to improve instructional efficiency and effectiveness, partly due to increasing state budget constraints. There have also been important management initiatives, such as the technical college system's formation of multi-campus regional colleges and the University of Minnesota's strategic planning process. However, the state's current financial condition requires the higher education systems to make more hard choices, and we hope that this report provides constructive direction.

As used in this report, the term "program" refers to an academic or occupational discipline in which an institution offers coursework. We focused primarily on disciplines in which institutions offer degree or diploma programs, but our analysis of community college and university efficiency also examined disciplines in which institutions do not offer degrees.

Programs at Community and Technical Colleges

Of the state's 18,500 sub-baccalaureate graduates in 1990-91, 96 percent were from community and technical colleges. Most of the remainder were from the University of Minnesota's Waseca campus (which closed in 1992), and its Crookston campus (which the University hopes to transform into a four-year campus).

State law authorizes Minnesota's 18 community colleges and 3 community college centers to offer programs in which all credits are accepted for transfer by baccalaureate institutions. Graduates of community colleges usually receive an "associate" degree, which full-time students can complete in two years. In occupational fields, associate degrees combine technical training with general education requirements. In 1990-91, about 44 percent of community college graduates received degrees in occupational fields, and the remainder received degrees that provided general liberal arts and sciences preparation for transfer to baccalaureate institutions.

Minnesota has 18 technical colleges with 34 campuses. Statewide, technical colleges offer more than four times as many occupational programs as community colleges. Technical colleges offer associate degrees, but state law authorizes these colleges to offer training only for occupations that do not require a baccalaureate degree. Most technical college students are in one- or two-year "diploma" programs comprised primarily of technical coursework. Increasingly, diploma programs are requiring students to complete a limited number of applied courses in fields such as communications and math.

Student/Teacher Ratios

About three-fourths of community and technical college disciplines have fewer than three full-time-equivalent faculty per campus, so measures of costs per student are very sensitive to differences in teacher salaries. Because of this, we think that student/teacher ratios are the best measure of efficiency for most technical and community college instruction. Faculty salaries and fringe benefits represent 74 percent of technical colleges' direct instructional expenditures, and 95 percent of community colleges'.

In 1992, the technical college system had 15.9 full-year-equivalent (FYE) students per full-time instructor, compared to 17.6 students per instructor for occupational fields in the community college system. In fields offered by both systems, community colleges had more students per teacher than technical colleges in accounting and secretarial disciplines, but fewer students per teacher in practical nursing. <FN - Throughout this report, we examine costs and student/teacher ratios for instruction in various "disciplines." For example, enrollment data for the accounting discipline includes all students who take accounting courses, regardless of their major. Also, the accounting costs we report are the costs for providing courses in the accounting field and do not include the costs of non-accounting courses that accounting majors must take to earn degrees.> We estimated that the state would have saved $1.6 million in 1992 if technical college accounting and secretarial fields operated at the student/teacher ratios of comparable fields in community colleges. The state would have saved about $200,000 if the community colleges provided practical nursing instruction at the average ratio of similar programs in technical colleges.

The 1983 Legislature mandated that the technical college system eliminate programs with ratios "significantly below" 17 students per teacher in non-health programs, and 12 students per teacher in health programs. Two years later, the Legislature repealed this requirement and asked the technical college system to set its own standards. The system's subsequent policy called for a minimum of 14 students per teacher in non-health programs, and 10 students per teacher in health programs. The 1990 Legislature eliminated the requirement for staffing standards, and the system replaced its staffing standards with an allocation formula intended to encourage efficiency. We found that:

• About 21 percent of technical college programs had student/teacher ratios below 14:1 in both 1991 and 1992.

We think it is reasonable for the technical college system to increase student-teacher ratios above the 1992 systemwide average of 15.9 percent. Increasing this systemwide ratio for non-health programs to 17:1, which we recommended in a report 10 years ago, would save the state $4 million annually. <FN - A systemwide ratio is not a minimum ratio for individual programs. It is the average ratio of all programs, so the system could achieve a 17:1 ratio if some programs operated below this ratio.> Alternatively, if each technical college non-health program achieved at least a 14:1 student/teacher ratio, the state would save $2.7 million annually. <FN - There is some overlap in these savings estimates and the ones noted earlier for accounting and secretarial programs, so the estimates should not be added together to determine cumulative potential savings.>

Unlike technical colleges, the community college system has never had standards on minimum student/teacher ratios for programs. Instead, this system has relied on its method of allocating funds and its strategic planning and review process to encourage efficiency. Excluding health-related fields that are intended to operate with about 10 students per instructor, we found that:

• About 15 percent of community college occupational disciplines had fewer than 14 students per instructor in both 1991 and 1992.

In addition to offering occupational courses, community colleges provide instruction in a variety of liberal arts and sciences disciplines. It is not unusual for small colleges to have less than one or two full-time-equivalent faculty in many of these disciplines, and we found wide variation in student/teacher ratios. For example, three colleges averaged 15 students per teacher in economics courses over a three-year period, while two colleges averaged over 40 students per teacher in economics. Although community colleges need to provide comprehensive liberal education to fulfill their missions, we think that the system office should periodically review disciplines with low student/teacher ratios.

Graduate Placement Rates

The success of occupational programs depends largely on how many graduates find jobs related to their training. The 1983 Legislature required the State Board of Technical Colleges to eliminate programs if, "in the absence of compelling reasons to do otherwise," fewer than 51 percent of its graduates found jobs that were closely related to their training. The 1985 Legislature repealed this requirement, asking the technical college system to develop its own standard. The technical college system has reviewed programs that placed less than 51 percent of their graduates in each of three consecutive years. However, because of the small number of graduates in most technical college programs, the placement rates vary considerably from one year to the next, and relatively few programs have failed to meet the system standard. We think it is more appropriate to examine cumulative placement rates over a two or three year period, especially in the case of small programs.

The 1991 Legislature required HECB to coordinate a uniform graduate followup reporting system for occupational fields. We think that HECB has proposed a method of calculating placement rates that is superior to those now used by the technical and community college systems. For example, unlike the approach now used by the technical and community colleges, HECB's approach will count as "available" for employment those graduates who are unwilling to relocate or who take unrelated jobs by choice.

Using a methodology similar to the one proposed by HECB, we found that:

• Systemwide, technical colleges successfully placed 74 to 79 percent of their 1989-91 graduates, and community colleges successfully placed 78 to 83 percent of their occupational graduates. <FN - The high and low estimates reflect different assumptions about graduates who continued their education. The high estimate assumes that all graduates who continued their education were not available for employment, and therefore are not counted in the placement statistics. The low estimate assumes that graduates who continued their education were available for employment, as in the case of graduates who continued their schooling because they could not find work.>

• Between 5 and 11 percent of technical college programs had three-year average placement rates under 51 percent. We estimate that about 11 percent of community college occupational programs had placement rates below 51 percent. <FN - The community college estimate assumes that 50 percent of graduates who continued their education were available for employment. We discuss the basis for this assumption in Chapter 2 and provide information on placement under alternative assumptions.>

Program Duplication

We looked at the extent to which similar programs were available within close geographic proximity of each other. We found that 18 percent of Minnesota's sub-baccalaureate programs have a duplicate within 20 miles, 27 percent have a duplicate within 35 miles, and 50 percent have a duplicate within 60 miles. Program duplication is much more common in the Twin Cities area than in the rest of the state, as shown in Table 2. We found that:

Most program duplication occurs within the community and technical college systems, rather than between systems.

For example, we identified 432 programs that have a duplicate program from the same system within 60 miles, compared to 103 programs that have a duplicate program from another system within 60 miles. Most of the inter-system duplication is in accounting and secretarial programs.

Program duplication is not necessarily a bad thing, and can be justified by high student or employer demand. To determine instances of unnecessary program duplication, we examined student/teacher ratios and placement rates for duplicated programs. As shown in Table 3,

• About 10 percent of community and technical college non-health programs have a similar program within 35 miles and have low student/teacher ratios or low placement rates. We estimated that the state could have saved nearly $1 million in fiscal year 1992 by increasing to 15:1 the student/teacher ratios of programs with low ratios that were within 35 miles of similar programs.

Programs at State Universities and the University of Minnesota

Minnesota has 10 public campuses that offer baccalaureate degrees: three campuses of the University of Minnesota and seven state universities. These institutions awarded more than 16,000 baccalaureate degrees in 1990-91 in about 230 fields of study. In addition to baccalaureate instruction, these universities (particularly the University of Minnesota's Twin Cities campus) also offer post-baccalaureate instruction and fulfill important research and community service roles.

Program Duplication

In contrast to our analysis of sub-baccalaureate programs, we did not evaluate baccalaureate program duplication using commuting distances of 20, 35, and 60 miles. Only two of Minnesota's public four-year institutions are within 60 miles of each other. More important, baccalaureate institutions serve fewer "placebound" students than the two-year colleges, and it is common for students to change their residence to attend a university. Thus, we looked at baccalaureate program duplication from a statewide perspective. We found that:

• There is considerable program duplication among Minnesota's baccalaureate institutions, but much of this duplication is necessary to provide basic arts and sciences education consistent with the mission of comprehensive universities.

Although universities must offer coursework in traditional liberal arts and sciences fields, it is possible that some departments in these and other baccalaureate fields are inefficient or ineffective. Some might be offering degree programs or specialized coursework in fields where they should primarily offer introductory coursework. For this reason, we looked at program size, cost, and graduate placement.

Program Size and Cost

Academic administrators generally agree that university departments and programs must achieve a certain "critical mass" of students and faculty to be efficient and offer high quality instruction, although we heard differing opinions on what constitutes minimally-acceptable program size. For example, most administrators agreed that individual baccalaureate programs need at least three faculty to be viable, but the University of Minnesota's College of Liberal Arts suggested in 1990 that its departments with fewer than 10 faculty should be reorganized to improve efficiency and effectiveness. We found that:

• Within Minnesota's public institutions, 11 percent of departments that primarily provide undergraduate instruction have fewer than three faculty, and 26 percent have fewer than five.

Since 1983, the public higher education systems have started nine new engineering programs, and the number of campuses offering engineering increased from one to five. We found that the new programs are much smaller than engineering programs elsewhere in the U.S., and have graduated only about one-third of the students originally projected. These programs have also had much higher costs per student than originally projected, and their costs per student are 70 percent more than the engineering programs offered at the University of Minnesota's Twin Cities campus. Engineering programs require considerable investment in facilities and equipment, so their costs per student are closely related to program size. We concluded that the decision by the Legislature and higher education systems to add these programs at multiple sites has been an expensive one. A 10 percent reduction in the cost of the new engineering programs would save the state $450,000 annually.

As we evaluated baccalaureate program costs, we focused most of our attention on the costs of "upper division" instruction. Upper division courses are directed primarily toward juniors and seniors, and their costs reflect institutional choices to offer specialized coursework in fields, rather than providing only introductory or general education courses. Table 4 compares the upper division costs of various fields commonly offered in universities. We found that the University of Minnesota's Twin Cities campus had lower costs per student than the state universities in most liberal arts fields. State universities had lower costs than the Twin Cities campus for teacher education, business, chemistry, biology, and computer science, but higher costs for mathematics, physics, and engineering.

Within particular academic fields, we found considerable variation in costs per student among state universities. For example, we found that 19 percent of state university departments had costs per student more than 40 percent above the system average in their respective fields in 1990-91. A 10 percent expenditure reduction in these departments would save the state about $800,000 annually. While degree programs in some of these fields are essential to the universities' missions, we think that institutions should consider restructuring or eliminating high cost programs in selected instances.

Because of restrictions in university tenure codes and faculty contracts, it is more difficult to achieve immediate cost savings by eliminating baccalaureate programs than by eliminating programs at technical and community colleges. Administrators have interpreted the University of Minnesota's tenure code to prohibit faculty layoffs even in the case of campus closings. Under the state university faculty contract, administrators cannot lay off tenured faculty members with at least 20 years of service in the system. Because of these restrictions, it is especially important for the systems and HECB to hold programs accountable during their early years of existence.

Graduate Followup

While technical colleges regard preparation of students for employment as their main function, baccalaureate institutions view this as one of many functions. Nevertheless, one important measure of the success of undergraduate programs is the extent to which their graduates find satisfactory work or continue their education. We found that:

• There is considerable variation in the graduate followup data collected by baccalaureate institutions.

A baccalaureate field with noteworthy placement problems is teacher education, which is offered by nine public universities. The percentage of teacher education graduates finding full-time teaching jobs dropped from 61 percent in 1981 to 41 percent in 1991. We found that:

• The decline in teacher placement rates resulted from an expansion of programs--especially in state universities--that was larger than the job market could absorb.

Program Review

Each of the higher education systems has developed its own approaches to program review. The systems have scrutinized their instructional programs more closely in recent years, partly reflecting tighter state budgets. There have also been important management initiatives such as the technical college system's creation of regional colleges, the community college system's student success program, the state university system's development of quality indicators, and the University of Minnesota's strategic planning and budget reallocation. The single most important program change in recent years was the University's decision to close its Waseca campus in 1992, which the University estimates could eventually free up more than $6 million annually for reallocation.

Despite these efforts, there continue to be instances of unnecessary duplication, inefficiency, and ineffectiveness among Minnesota's wide array of higher education programs. The State Board of Technical Colleges is the only public governing board that has adopted a system standard for evaluating the efficiency or effectiveness of existing programs, and its single standard for graduate placement rates has been, in our judgment, too lenient. We think the use of reasonable standards for efficiency and effectiveness by all four systems could potentially save several million dollars annually, or make this funding available for reallocation.

The Minnesota Higher Education Coordinating Board (HECB) has had authority to review proposed and existing higher education programs since 1971. During most of this time, HECB's role has been advisory. The Legislature gave HECB authority to "approve or disapprove" new programs in 1987, and extended this authority to existing programs in 1991. We looked at HECB actions between fiscal years 1981 and 1992 and found that the board approved (or gave a positive recommendation to) 92 percent of all requests for new programs at public institutions, and never rejected a proposal. Institutions withdrew their proposals in eight percent of the cases, usually because of questions raised by HECB staff.

• The Higher Education Coordinating Board has not effectively used its authority to review existing programs.

HECB's ability to review programs has been impaired by its lack of a reliable statewide program inventory. The individual higher education systems have not maintained sufficiently accurate inventories, nor has HECB provided the guidance necessary to correct this problem, until recently. It remains to be seen whether the inventory developed in 1992 by HECB and the systems can be kept accurate and up to date.

In late 1992, HECB outlined a process for reviewing existing programs on an annual basis. In our view, this new policy is unfocused and provides the higher education systems with little guidance about what constitutes acceptable program review. Also, HECB has not developed practical criteria to guide its own decisions about when to "disapprove" existing programs.

Recommendations

Program review is a necessary activity for institutions, governing boards, and the Higher Education Coordinating Board. An important challenge for Minnesota higher education is to identify distinct roles for each. We think that institutions and system offices should continue to do most of the program review activity, but ultimate accountability should rest with the governing boards and HECB. Campus administrators, who are responsible for implementing program changes, acknowledge many of the issues discussed in this report. However, they often encounter campus resistance to proposals for program restructuring or elimination, and we think they need encouragement from system administrators and governing boards.

In 1995, the governing boards for the state university, community college, and technical college systems will be replaced by a single board, the Higher Education Board (HEB). This will reduce the number of public governing boards in Minnesota from four to two. To the extent possible, we think HEB should establish common standards for evaluating occupational programs at two-year colleges. Meanwhile, HECB should focus more attention on program comparisons between the state university and University of Minnesota systems, which will continue to operate under separate governing boards.

As shown in Figure 1, we envision a system of program review in which: (1) HECB sets general program review guidelines for all four public higher education systems and outlines the types of specific performance standards it expects systems to have, (2) the systems adopt performance standards for evaluating individual programs, and (3) the systems regularly monitor the performance of all of their programs, while HECB periodically evaluates programs in selected fields. Toward this end, we recommend that:

• In 1993, the Higher Education Coordinating Board should develop guidelines to help the higher education systems evaluate the performance of their programs.

• The governing boards or system offices should adopt standards for evaluating the efficiency and effectiveness of programs or departments. The system offices of the technical college, community college, and state university systems (and eventually the Higher Education Board) should periodically compare program performance among institutions. The Higher Education Board should begin developing program review standards that will take effect in 1995.

System offices should ask institutions to justify programs failing to meet the standards, and could then eliminate, restructure, or further examine these programs. In the case of programs that are unique in certain ways or not easily compared to peers, system offices could ask institutions to establish benchmarks for evaluating the programs' future performance. The University of Minnesota has proposed such benchmarks for its Crookston campus, and should consider developing them for other academic programs as part of its 1993 strategic plan. Chapter 4 offers some additional recommendations for data collection and program review.

The governing boards should review how they allocate funds and try to incorporate incentives for program efficiency. However, we do not think the systems should rely solely on funding incentives to encourage better program performance. System offices should still periodically measure program performance against governing board standards.

To improve program oversight by HECB, we recommend that:

• The Higher Education Coordinating Board should approve new programs on a probationary basis and review the programs for final approval three to five years later, depending on program length.

• In addition to granting probationary and final approvals, HECB's program reviews should consist primarily of (1) reviews of multiple programs in strategically selected fields, and (2) analyses of fields in which the state has a surplus or shortage of graduates. HECB should ensure that the systems establish reasonable program review standards, and should ask each system to annually update its program inventory.

• The technical college system should measure placement rates using HECB's proposed method. The State Board for Community Colleges should adopt similar measures for occupational programs, and should adopt placement standards.

• The governing boards for two-year colleges should consider more stringent standards for student/teacher ratios and placement in programs that duplicate others nearby.

• The Legislature should consider extending its requirements for a post-secondary graduate followup system to all baccalaureate programs, to be coordinated by HECB. Information on non-occupational programs could be collected and published every five years.

• As part of the graduate followup reporting system, HECB should collect wage data every three to five years for occupational fields.

• The Legislature should ask HECB to prepare a report for the 1995 legislative session on the merits of consolidating engineering programs, including a cost analysis.

• HECB should ask institutions with high-cost teacher education programs to (1) evaluate the potential for cost reductions, and (2) set benchmarks for future program efficiency and effectiveness.

Finally, this study focused primarily on programs leading to degrees or diplomas, but two-year colleges also offer many individual courses in fields in which they do not offer such programs. We think there may be opportunities for cost savings through better coordination of similar courses at nearby institutions and recommend that the Higher Education Board evaluate course-level duplication.

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