Marquette University adopts vision to raise its profile

[Eldon]

If education were run like a business, its costs would be in line...which isn't even close.  Keeping the gravy train rolling has sent things out of whack.  Fact is, colleges and universities are in for some very tough years as their consumer face and ability to pay changes drastically in the coming years.  Reducing costs for example to shift to more virtual teaching and learning. Widening student based via the web to worldwide, recruitment of Asian students, especially India and China, are all needed to survive.

This chart is damning...

http://www.businessweek.com/articles/2012-08-23/college-tuitions-1-120-percent-increase

Good chart, but I can't help but wonder if it's a result of the coincidental meteoric rise in technology.  Arguably, technological advancement happened at about the same time and possibly (and I emphasize possibly) the same rate as the cost of a college education.

I look at this chart and wonder, what drove up the price?  Did supply decrease?  No, there are probably just as many colleges as there were in, say, '02, if not more.  Did demand increase?  My bet would be yes because more technology requires a more educated workforce.  A point that some emphasize as the (main) cause of any income inequality that we currently have in the US.

Another reason for the extremely drastic change in slope around '02, and also coinciding with the rise of the internet and technology more generally, is the introduction of for-profit colleges.  These "schools" brought more demanders into the market for education while charging them outrageously high prices for tuition.  I'm not sure how big a factor these for-profit "schools" are in increasing the overall cost of higher education, but my guess is that their effect is nothing to shake a stick at.

[Dr. Blackheart]

Good chart, but I can't help but wonder if it's a result of the coincidental meteoric rise in technology.  Arguably, technological advancement happened at about the same time and possibly (and I emphasize possibly) the same rate as the cost of a college education.

I look at this chart and wonder, what drove up the price?  Did supply decrease?  No, there are probably just as many colleges as there were in, say, '02, if not more.  Did demand increase?  My bet would be yes because more technology requires a more educated workforce.  A point that some emphasize as the (main) cause of any income inequality that we currently have in the US.

Another reason for the extremely drastic change in slope around '02, and also coinciding with the rise of the internet and technology more generally, is the introduction of for-profit colleges.  These "schools" brought more demanders into the market for education while charging them outrageously high prices for tuition.  I'm not sure how big a factor these for-profit "schools" are in increasing the overall cost of higher education, but my guess is that their effect is nothing to shake a stick at.

I agree...the market was willing to pay a premium for higher education...but like housing and the financial markets, it was a market based on speculation fueled by the government granting access to easy cash, and no real tangible wealth in kind was generated, and the economy crashed behind it.

The Great Generation returned from war to the GI Bill which allowed the common man access to higher education.  This led to the generation of Baby Boomers who are the most educated in history.  Who then saved and earned via dual incomes (they were whiter collared parents) for their kids' college.  However, in upcoming years, the new generation of college students, who are classified as minorities today, will be the majority. Latinos will be the largest segment of kids under 18 in the not too distant future, a good percent of whose parents are immigrants, and of lower incomes.  Asians, especially for higher education, will be a key student group...in some schools today in California, Asians are the majority of students.  The ability to pay and the ability to attract/recruit these students are imperatives. And cost control is needed as ability to pay will shrink as the bubble gradually bursts.

On the the other hand, the MU student body looks very similar to when I attended years ago.  There is a lot more diversity yes, but the students today are an extension of a parental node.  MU really needs to go back and rethink their vision...they are just assuming the market bubble will continue unchanged...and they can continue to get a bit better to what they have always done versus being adaptable while staying within their core mission.

[GGGG]

I think the greatest reason for the dramatic change in slope around '02 was a huge decrease in state government support for higher education.

The reason being that the dramatic decreases in tax revenue left many states holding the bag with a lot of bills to pay and not many good short-term answers.  And higher education was one of the few state agencies with an alternative revenue stream...and that is tuition.

If my memory recalls, the State of Indiana decreased support by about $110M in about a two year timeframe during that time...and increased tuition revenue by about $75M. 

[BM1090]

Tuition at Marquette is roughly $33,000 plus another $10,000 for room and board for Frosh/Soph. Everyone that applies to Marquette is automatically applying for an Ignatius scholarship. These scholarships range anywhere from $3,000 per year to $14,000 per year. Marquette also offers many scholarships to students who have come from Jesuit highschools, and offers more financial aid than I can see from other state schools, including Wisconsin and Illinois.

Quick comments and a question about scholarships...

As a high school senior, I applied to Marquette where I was accepted and granted an Ignatius scholarship of $6,000 per year and entered into the honors program, despite a mediocre high school GPA. My GPA was somewhat offset by an ACT score in the 95th percentile. I chose to attend UW-Whitewater over Marquette simply because I didn't have the money to pay for Marquette and was intent on graduating college loan-free.

My question is: Does everyone who is accepted into Marquette receive a scholarship of some sort? I've wondered for the past four years what I did to warrant that scholarship.

[keefe]

And those career politicians are doing a great job.

Bravo!

[keefe]

If my memory recalls, the State of Indiana decreased support by about $110M in about a two year timeframe during that time...and increased tuition revenue by about $75M. 

I love this math. If a business did this the shareholders would be up in arms. The profit motive demands accountability. Civil servants will never understand that.

[GGGG]

I love this math. If a business did this the shareholders would be up in arms. The profit motive demands accountability. Civil servants will never understand that.

Not exactly sure what you mean by this.  Explain further?

[keefe]

Not exactly sure what you mean by this.  Explain further?

Revenue Stream A decreases by $110MM.

Revenue Stream B increases by $75MM.

The enterprise has a net reduction in revenue of $35MM. I know how PepsiCo or GE Cap would expect that to be managed. Not sure how a state college in Indiana sees it.

[GGGG]

Well, we had position cuts...many unfilled positions simply weren't filled and a number of people were laid off.  This resulted in larger class sizes and other issues.

[keefe]

Well, we had position cuts...many unfilled positions simply weren't filled and a number of people were laid off.  This resulted in larger class sizes and other issues.

At PepsiCo you are expected to deliver a 15% return. Minimum. This is non-negotiable. Not doing so costs you your job. And carved into stone at Purchase, NY is the commitment to Wall Street to double earnings every 5 years. And not being profitable? Nothing loses you your job faster.

GE has a policy of eliminating the bottom 10% of performers every year. A GM who loses money is gone. GE has a rule implemented by Jack Welch. If an enterprise is not the segment leader or does not have a clear plan for becoming so within GE expectations of return then the company exits that business. And people lose their jobs for not performing. 

State universities are not profit making enterprises. But they need to be able to deliver a quality product on time and within budget. If a state university offers a product that cannot generate the requisite level of revenue to meet costs, and then cuts the quality of product rather than charge what is necessary to deliver that product, then the enterprise should be deemed non-competitive. (Especially when, despite cuts in quality, the enterprise still loses money!!) And if there is not a financially sound answer for addressing that condition then the enterprise should close.

This is free market capitalism. Asking the tax payers to bail out a school that is not competitive in the market place is ridiculous. The days of subsidizing failure should be over. That is what would happen at PepsiCo. Or GE.  Unfortunately, that doesn't always happen in the public sector. Hopefully, the taxpayers will rise up and say enough.

[GGGG]

State universities in Indiana have very limited authority to set their own tuition...and at the time it was capped by the state legislature.  Furthermore, since financial aid didn't increase at the federal or state level, the idea of raising it further didn't make a lot of sense.  You do realize that the reason public universities keep their tuition low is because they get money to subsidize their operations right?  It isn't the other way around.

This is what people mean when they say you can't always compare the business world to government.  When you have a legislature that mandates a great deal of how you operate, you can only do so much. 

[keefe]

These are obviously atypical examples.  Anybody can make any path of life seem like the best path if they only cherry-pick the exceptions.

These are examples of the traditional notion of a classical liberal arts education. You likely have little experience with Wall Street but most houses will hire a lit major from Middlebury or Bowdoin before they hire the finance major from Ball State. It is far from atypical. It is just not typical of your experience.

[1990Warrior]

At PepsiCo you are expected to deliver a 15% return. Minimum. This is non-negotiable. Not doing so costs you your job. And carved into stone at Purchase, NY is the commitment to Wall Street to double earnings every 5 years. And not being profitable? Nothing loses you your job faster.

GE has a policy of eliminating the bottom 10% of performers every year. A GM who loses money is gone. GE has a rule implemented by Jack Welch. If an enterprise is not the segment leader or does not have a clear plan for becoming so within GE expectations of return then the company exits that business. And people lose their jobs for not performing. 

State universities are not profit making enterprises. But they need to be able to deliver a quality product on time and within budget. If a state university offers a product that cannot generate the requisite level of revenue to meet costs, and then cuts the quality of product rather than charge what is necessary to deliver that product, then the enterprise should be deemed non-competitive. (Especially when, despite cuts in quality, the enterprise still loses money!!) And if there is not a financially sound answer for addressing that condition then the enterprise should close.

This is free market capitalism. Asking the tax payers to bail out a school that is not competitive in the market place is ridiculous. The days of subsidizing failure should be over. That is what would happen at PepsiCo. Or GE.  Unfortunately, that doesn't always happen in the public sector. Hopefully, the taxpayers will rise up and say enough.

The flagship university of my state has basically adopted some sort of business model.  We have lots of vice presidents running around and lots of other people with corporate sounding titles.  They all make significantly more than the most important people to the university's function, the professors not to mention the grad students who work as slaves.  They outsourced the dormitories and are massively expanding the number of students admitted.  They do not care about the fact that their graduation rate is horrible.  They have it all figured out.  Just put as many warm bodies into outsized classes and take their tuition which of course mostly comes from student loans.  The fat cats continue to make out like bandits.  I really am concerned for the students and the state.  I hope you can understand why.

[keefe]

State universities in Indiana have very limited authority to set their own tuition...and at the time it was capped by the state legislature.  Furthermore, since financial aid didn't increase at the federal or state level, the idea of raising it further didn't make a lot of sense.  You do realize that the reason public universities keep their tuition low is because they get money to subsidize their operations right?  It isn't the other way around.

This is what people mean when they say you can't always compare the business world to government.  When you have a legislature that mandates a great deal of how you operate, you can only do so much. 

Don't be so obtuse. This is a question of competitiveness. You are confusing the issue with red herrings. If an enterprise requires subsidies to compete then it is not competitive. Think Airbus vs Boeing. In the case you mention, the tax payers of Indiana have a decision. If they choose to continue to subsidize an enterprise that is not competitive they are making a strategic decision. But the enterprise remains non-competitive. In the private sector management answers to shareholders who expect a return. Subsidies are rarely given. In the case of Airbus it is a matter of prestige. There are few other similar examples.

[GGGG]

Don't be so obtuse. This is a question of competitiveness. You are confusing the issue with red herrings. If an enterprise requires subsidies to compete then it is not competitive. Think Airbus vs Boeing. In the case you mention, the tax payers of Indiana have a decision. If they choose to continue to subsidize an enterprise that is not competitive they are making a strategic decision. But the enterprise remains non-competitive. In the private sector management answers to shareholders who expect a return. Subsidies are rarely given. In the case of Airbus it is a matter of prestige. There are few other similar examples.

Really?  I'm the one being obtuse?

You simply have no comprehension for how public universities work, are governed and what their missions are.  They aren't private companies that receive subsidies....they are state agencies owned by the people of that state and therefore access to their product at a reasonable price is part of what they (rightly) expect.

[keefe]

The flagship university of my state has basically adopted some sort of business model.  We have lots of vice presidents running around and lots of other people with corporate sounding titles.  They all make significantly more than the most important people to the university's function, the professors not to mention the grad students who work as slaves.  They outsourced the dormitories and are massively expanding the number of students admitted.  They do not care about the fact that their graduation rate is horrible.  They have it all figured out.  Just put as many warm bodies into outsized classes and take their tuition which of course mostly comes from student loans.  The fat cats continue to make out like bandits.  I really am concerned for the students and the state.  I hope you can understand why.

I won't bother to comment on whatever university you reference as you gave zero detail. But I will offer up Marquette as an example of an educational enterprise that cannot rely on tax payer subsidies to the degree that public schools do. Marquette operates within financial parameters that dictate revenues = costs. If this were not the case then Marquette would cease to exist. It is that simple.

State universities have offered lower tuition due to tax payer subsidies. As a parent I was willing to pay private school tuition for 2 of my 3 kids. We assessed the quality of the product to be consistent with market dictates and gladly wrote the checks. As a tax payer, I own homes in WA and WI. I am very unwilling to pay more in taxes to subsidize tuition at UW-Madison, UDub, or Wazzou.  

[keefe]

Really?  I'm the one being obtuse?

You simply have no comprehension for how public universities work, are governed and what their missions are.  They aren't private companies that receive subsidies....they are state agencies owned by the people of that state and therefore access to their product at a reasonable price is part of what they (rightly) expect.

I absolutely understand the mandate of public universities. But as a tax payer I also do not wish to continue to pour my money into enterprises that do not deliver the return I expect for society.

I do not think that many of the colleges out there are worth the cost. Not everyone is entitled to own a home. And not everyone should be given a subsidized college education. You may disagree but that is a matter of perspective. Frankly, I do not wish to pay for subsidized degrees that really aren't worth that much. As I mentioned earlier, I would take the lit major from Amherst over the finance major from Ball State every time.   

[GGGG]

These are examples of the traditional notion of a classical liberal arts education. You likely have little experience with Wall Street but most houses will hire a lit major from Middlebury or Bowdoin before they hire the finance major from Ball State. It is far from atypical. It is just not typical of your experience.

It is absolutely atypical of most of those who receive liberal arts degrees.

[Newsdreams]

Quick comments and a question about scholarships...

As a high school senior, I applied to Marquette where I was accepted and granted an Ignatius scholarship of $6,000 per year and entered into the honors program, despite a mediocre high school GPA. My GPA was somewhat offset by an ACT score in the 95th percentile. I chose to attend UW-Whitewater over Marquette simply because I didn't have the money to pay for Marquette and was intent on graduating college loan-free.

My question is: Does everyone who is accepted into Marquette receive a scholarship of some sort? I've wondered for the past four years what I did to warrant that scholarship.

Not necessarily everyone gets a scholarship. You can get scholarships in form of merit aid and or need based aid. The Ignatius scholarship (and Magis) is merit aid and it is available to everyone that submits an application. Essentally it depends on the credentials of the pool of applicants. Consideration includes GPA, SAT or ACT scores, community service, and leadership. You probably got the $6,000.00 due to the high ACT and maybe you had good community service and leadership positions in highschool. The Ignatius scholarship is guaranteed for 4 years as long as the student remains in good standing in their college.

[jsglow]

Not necessarily everyone gets a scholarship. You can get scholarships in form of merit aid and or need based aid. The Ignatius scholarship (and Magis) is merit aid and it is available to everyone that submits an application. Essentally it depends on the credentials of the pool of applicants. Consideration includes GPA, SAT or ACT scores, community service, and leadership. You probably got the $6,000.00 due to the high ACT and maybe you had good community service and leadership positions in highschool. The Ignatius scholarship is guaranteed for 4 years as long as the student remains in good standing in their college.

To follow-up.  Merit based schollys are the tool of competition for private universities today.  Such was seemingly not the case 30 years ago when I attended.  What this really means is that places like Marquette have students paying over a fairly wide spectrum from the full 'rack rate' to a scholly that approaches about 30-40% of tuition except for those very small handful of full ride opportunities.  I don't have the statistics to directly support this but I do believe that a decent plurality get some amount of merit based aid. (My guess is the median Ignatius scholly is around $3,000 per year.)  But to be near the top of the curve (like $12,000-$14,000 per year) one needs to be a borderline elite student with a 4.0+ GPA built on AP courses and an ACT well into the 30s.

One other note.  Other comparable universities routinely offered modestly more to my kids than MU was able to muster in its offer.  It's not that they saw either prospective candidate differently.  MU's endowment is simply a limiting factor in my view.   

[ChicosBailBonds]

You know who makes a terrible politician.  A businessman.  Government isn't a business.

Which is a big reason why it is so incredibly f'd up.

Don't get me wrong, there are things that gov't has to do that isn't going to correlate to a business, but much of that is because we have allowed gov't to get involved in things they never used to be involved in.

Very little accountability, costs be damned, and promises to certain groups to keep the gravy train chugging along means we get what we get

[Newsdreams]

To follow-up.  Merit based schollys are the tool of competition for private universities today.  Such was seemingly not the case 30 years ago when I attended.  What this really means is that places like Marquette have students paying over a fairly wide spectrum from the full 'rack rate' to a scholly that approaches about 30-40% of tuition except for those very small handful of full ride opportunities.  I don't have the statistics to directly support this but I do believe that a decent plurality get some amount of merit based aid. (My guess is the median Ignatius scholly is around $3,000 per year.)  But to be near the top of the curve (like $12,000-$14,000 per year) one needs to be a borderline elite student with a 4.0+ GPA built on AP courses and an ACT well into the 30s.

One other note.  Other comparable universities routinely offered modestly more to my kids than MU was able to muster in its offer.  It's not that they saw either prospective candidate differently.  MU's endowment is simply a limiting factor in my view.   

You are basically spot on on merit competition amongst private universities except the top 25 to 30 do not give merit aid only need based aid. Although some will consider families that earn up to like 125K for need aid if they really want the students. Regarding MU's Ignatius S got 12K with GPA of 3.90. D got 13k with GPA of 3.97. S went to MU D got accepted and chose a top school in the field she was interested in. the school is notoriously stingy with merit aid but they offered her 1/2 tuition based on merit aid so I guess they really wanted her.

[keefe]

It is absolutely atypical of most of those who receive liberal arts degrees.

It is atypical in your world.

[keefe]

Which is a big reason why it is so incredibly f'd up.

Don't get me wrong, there are things that gov't has to do that isn't going to correlate to a business, but much of that is because we have allowed gov't to get involved in things they never used to be involved in.

Very little accountability, costs be damned, and promises to certain groups to keep the gravy train chugging along means we get what we get

Why govt is involved in so many activities is beyond me. Thomas Jefferson is spinning in his grave.

"A wise and frugal Government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circlue of our felicities."

[ChicosBailBonds]

It is atypical in your world.

I think it depends on a lot of things.  I'm a perfect example of what you stated earlier.   Liberal arts degree with political science and history and currently responsible for about $3 billion in business per year.  Only one person on my team has a MBA, though several of us have masters degrees in other areas.  All went to solid schools.  I would say that it took a lot of years and proven track record to get there where in other departments a certain degree will get you into the door quicker.  Some departments pretty much 100% of the folks have an MBA or some type skilled degree (finance, accounting, etc) that is more in demand.  I have definitely noticed in the last few years some departments won't consider anyone without a certain degree and that didn't used to be the case.

Our department is a bit different.  My philosophy has been to hire good people, critical thinkers, people that make smart and common sense decisions.  If they were an English major, so be it as long as they are capable people.  Sometimes certain folks are a bit too myopic based on their core competencies and that isn't always what you need, at least in my field.  If I need high powered analytics or financial gurus, then I'll call on those other departments that specialize in those areas to get involved.  We may be the exception, but we certainly have a number of liberal arts folks in our department with a more "generalist" approach and we have done well in the businesses we run.  Stock all-time high today.  Been a crazy run....won't last forever but we'll make a go of it.