As the BC Government continues to review the Avison report on our post-secondary education system, lots of people are discussing what potential options there are. This is because one of the core requirements of the report is that it can’t recommend adding more money into the system (which was essentially the recommendation of a previous report). So, how do you fix a system where the problem is that it costs more than the government wants to pay? You either find other income or you reduce costs.
The ‘other income’ method was how BC has solved this problem previously. This was done either through (1) raising tuition (see after the tuition freeze was lifted in the early 2000s), or by (2) recruiting higher paying students (such as international students). The other option is philanthropy which is unlikely to solve a systemic issue, but may help individual institutions. International students are being substantially limited by the Federal government, and the system BC uses for developing new programs and setting fees means that the tuition caps limit the creation of new revenue streams through credit programs. Revamping continuing education as micro-credentials could work, and I think it’s an amazing idea, but there are limitations on that as well, especially because for them to have true traction you need employers to understand them, respect them, and, in a lot of cases, pay for them. So it’s a more complex revenue stream, especially because you will run into a race to the bottom in terms of how much you can charge for it, reputation means a lot here. Possible, but harder.
That brings us to costs. Universities really have two main costs: people and things. People includes all costs for employees including staff, faculty, and administration, and includes the contingent employees and contracted services that provide employees for specific duties. Things includes everything from the physical space to the tools, furnishings, and technologies that make it work to the systems and services that keep everything running.
Because people is the biggest cost its been the one most people have been talking about. The staffing cuts in BC have been huge, and they haven’t just been decreases in contingent employees such as cutting course sections and thus sessional faculty. It includes the admin employees let go, the support and student affairs staff that have been laid off, and even faculty members being let go or encouraged to take early retirement. It also includes reductions in contracted services, this looks like less custodial services or cutting food services that don’t make money, and it looks like moving to slightly cheaper benefits. Lots of methods and all of them suck. But those are the slightly faster lever that most institutions have been using.
Things are a lot slower of a change. If you have two campuses then you have a lot of money being spent on duplication. If you have students you need to have some way of organizing them, making sure they pay fees, making sure they get through their programs, providing technology they need to do their courses and for researchers to do their work. This all costs money, and those contracts are usually longer term than, say, a sessional.
Possible Solutions
So that brings us back to what can the government propose to solve the cost problem that doesn’t include them spending more money. In all of the discussions I’ve had with folks over the last months there are two main options people think will be taken.
Option 1: Allow more tuition increases
Option 2: Institutional mergers
Option 1 is rough politically, though there are ways to make it more palatable. They can raise the cap above 2% for a certain number of years, in response to which every institution will set their increase at whatever the top number is. Because they have to. The other way they can do this is allow each institution to put forward a plan for ‘harmonizing’ their tuition fees. Essentially allowing each institution to propose raising their tuition for all programs up to a maximum of their most expensive program. This means that any programs that were brought in at too low of a tuition rate will go up, but any newer programs that are already expensive will stay the same. It will result in making it easier for students to understand the total cost of a program and will make it so two programs which have the same costs would also have the same income.
Option 2 seems quite likely, and the terms of reference seem to ask for a plan on this. But there’s a problem. We’ve seen what option 2 looks like in BC because we have both Thompson Rivers University (University College of the Cariboo plus BC Open University) and University of British Columbia, Okanagan Campus (UBC plus part of Okanagan University College). Institutional merger savings are limited by the same people and things limiters. The people limiter is that institutions do in fact require people to run them. Classes need to be taught and there’s a physical space limit on how many people you can put in a class beyond the capacity limit of a faculty member. Enrolment services needs to keep functioning, student supports still provided, etc. There could be some savings, more on this shortly, but if you merge two institutions and the unions succeed in merging into the higher paid union you have actually increased your costs per employee. The only savings here is if you merge institutions that are essentially duplicating their administration and support staff, or where the work of the administration and support staff of the smaller institution would be absorbed by the administration and support staff of the larger. Probably not a huge savings for merging two institutions, but if you merge a lot of institutions then maybe you’ll have some savings at the end, especially if they have similar wages for employees so there isn’t a massive change in salary per employee.
That brings us to ‘things’ as the savings. You can merge two institutions and cut one of the campuses, and if you do this the people who live where the campus was closed will be mad at you. So that’s not a great political choice. This means few savings for most things. It’s been two full years of austerity now so most of the ‘things’ savings have already been implemented. But there is an area of ‘things’ that could mean savings and that’s software and services. Merging a smaller institution into a bigger one means that the smaller institution probably won’t increase the license cost of the larger institution, or merging similarly sized institutions means some savings by not needing to duplicate the software and services licensing. So a savings there.
Mergers
So what might they recommend? I don’t know. There’s a lot of private information that’s been shared with the government through this report that I have no way of knowing. But, I understand where cost savings *could* happen, so I think they are more likely paths. The biggest paths I’ve heard talked about are mergers. I see three ways forward here.
- Merging colleges – this is the most likely path I’ve heard people say, and I agree that it’s likely. There are a lot of colleges in BC and there could be some savings on the ‘things’ side through merging their technology and closing duplicated sites if they both operate in the same town or city, you’d also have a slight savings from no longer competing, though most of those have already been accomplished, and a slight savings by reducing the number of upper administrators. But there’s no major savings in faculty or student supports because that would mean decreasing students or making the student experience worse. So some savings, and it has a bit of the “something must be done, this is something” energy that governments often look for.
- Merging colleges into a regional university but maintaining their separateness – basically the above, but connecting them to a university so that the larger administration of the university runs the colleges as a sub-branch. This has all of the savings of 1 plus some additional savings because the university probably already has the infrastructure required so more software and services savings and if you keep them technically separate you don’t merge the unions. This also stops the status infighting between college and university faculty members. Most colleges already design their academic focused programs to be directly transferable into the closest university anyway so not much curricular change needed. This probably is the biggest way to have actual savings in the system.
- Merging underperforming universities into bigger universities – this was the option I heard floated the most at the very beginning. And I agree that this is a big move that would signal the government cares about the problem and wants to solve it, but the big universities have high salaries for faculty, and if you do this the smaller university will likely simply just increase the cost of their faculty so any savings will disappear.
So choice 2 is probably the biggest savings, but choice 3 is the most visible change. We’ll see what happens there. But that’s not the only path forward.
Non-Merger Options
Every university and college has tech costs and subscription costs. It’s possible to roll a lot of these institutions together on that side to leverage their buying power (something that happens a lot already). This would require elevating a group like BCNET or any of the other supply chain collaborations to where they become the connective tissue between institutions. This would likely be pushed back against by the biggest of the institutions, but if it was made mandatory for the colleges, institutes, and teaching primary universities it would likely result in some non-flashy savings for the whole system.
In addition, the government funding per student is wildly different at every institution for historical reasons I’m not getting into here. Rebalancing this, even if it was rebalanced by part of the sector (College, Institute, Teaching University, Research University), would be hated by everyone who loses money or doesn’t have any increase in money, and those two groups would be the majority of the institutions and include all of the politically influential ones.
Finally, there’s the path of limiting the private institutions. This path essentially restricts international students to only public institutions, giving them a slight lifeline while causing irreparable harm to the private institutions. While this is a path I’ve heard many in the public system advocate for, devastating private enterprise for the benefit of the public alternative is a controversial move.
Conclusion
So, lots of options, none of them good, but some of them less bad. Of course the best option would be the one they took off the table. If you rebalanced the funding per student in a way that brought every institution up to the level of the top in their part of the sector you’d probably solve a lot of the problems. The government knows this, and has preemptively rejected it.
Mergers are big moves, and the fact that they don’t save as much money as claimed doesn’t come out until after the next election, so it’s probably more likely. Merging the supply chain systems and merging data systems instead of full institution mergers probably saves more money in the long run but it’s less flashy. Merging colleges by region and then putting them under the control of a university in their region probably does both and has some reasonable savings.
Here’s the big question though: what does the government see as the point of all this? Are they trying to save the most money? Make the best system? Support in-province domestic students the best? Support the cities, towns, and regions, the best? Be seen doing something? That is something I don’t know the answer to, but it’s probably the question that really matters in determining what is going to happen.
I’ll write a follow up to this in the Fall when hopefully the report is released.
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