Explaining Cost Increases at University of New Mexico

University of New Mexico’s president David Schmidly responded to my comment in the Albuquerque Journal, in which I pointed out that while Central New Mexico Community College has found cost-savings per student, University of New Mexico has increased costs per student. While the response is appreciated, UNM’s president has not responded to the substance of my complaint. I dissect his response below.

Efficiency is the key to the future of higher education. Our institutions must work diligently to make their operations more efficient, thereby bolstering the resources dedicated to student success.

Schmidly sounds like an economist here. But, “efficiency” is a toothless concept if we do not define it in terms of inputs and outputs. Efficiency has a both a numerator and a denominator. My op-ed talks about dollars per student. We could talk more specifically about dollars per English major, or even more specifically about dollars per C-average student in freshman English. We could further control for the quality of incoming students: How much does it cost UNM to train a C-average student with a middling SAT score into an average university writer? We don’t have data to make such detailed comparisons, but this is the direction we should proceed in. Alternative metrics are also welcome, so long as they can actually measure something.

The need for additional efficiencies does not increase or diminish in times of economic boom or bust. Rather it should always be the guiding motivation for all of our public institutions.

In fact, the need for additional efficiencies is greater than ever. The university is part of an economic system in which a decreasing amount of economic output means, ceteris paribus, less revenue for the state government. The state is the majority funder of higher education, thus its economic problems also belong to the state universities. Since post-secondary institutions purport to be generators of economic growth, economic trouble forces the question: Does higher ed generate returns sufficient to justify its costs?

The University of New Mexico has identified $6 million in cost-containment measures in developing its fiscal 2011 budget. The Strategic Advisory Team that I charged with finding efficient and cost-effective ways to conduct university operations will continue its work, as additional and more creative efficiencies must be found to help balance future budgets.

This is wonderful news. I would welcome a discussion with UNM (and other state universities) about the particulars of the cost savings they have found. It is worth asking what these areas of savings are and if we can generalize any conclusions from UNM’s experience.  It is helpful to know how to evaluate which programs are worthwhile, and which are not. This goes back to the question of metrics which is rooted in a theory of what education is attempting to accomplish, and what role it plays in the state’s economy.

Though the premise of targeting inefficiency found in a recent opinion piece from the Rio Grande Foundation showed promise, we find the content disturbing in its oversimplification. Building an argument based on the comparison of a community college and a flagship research university makes no sense, as the operations in mission and scope are too different to even allow comparison.

In fact, my argument is not based on a comparison of a community college and a research university. My Albuquerque Journal op-ed is a derivative product of a larger policy study that asks why some NM schools’ costs have gone up while others have gone down. To say that there is no possible comparison is to completely avoid the challenge.  Asking why the costs are different is an invitation to explain why this difference exists, which should lead to a discourse about what higher education is (and ought to be) pursuing.

Yet we find media stories seeking to do this as though the two were interchangeable. Outstanding community colleges like Central New Mexico prepare their students with skills to enter the workforce or to continue their education at a four-year institution. They offer affordability, accessibility and flexibility.
Research universities like UNM go beyond preparation to provide opportunities to pursue advanced degrees in specialized fields with faculty recognized nationally and internationally in their fields. They provide professional degrees in areas like architecture, law, pharmacy and medicine. They offer research libraries, Division I athletics, housing, museums, a comprehensive health sciences center and a teaching hospital. With all that, UNM remains affordable and accessible when compared to its peers.

So, this brings us closer to a fair comparison. But, what of those services that are comparable? Will UNM’s president join me in a call for complete transparency? I would propose a department-by-department comparison between state universities and with national peers.  How does UNM compare to CNM in subjects they both teach? Further, what does it actually cost UNM to produce architects, lawyers, pharmacists, and medical doctors?

CNM and UNM have different missions but we share the same goal — preparing our students to be contributing citizens, providers for themselves and their families, and the scholars who will lead us further into the 21st century.
We must never forget the true costs of failing to invest in the education of our children, failing to give them the opportunity to reach their highest potential, failing to search for the cures and solutions to our most pressing challenges.
It is through partnerships such as the one modeled by CNM and UNM that the real efficiencies and success of higher education will be realized.

All of this is lovely, positive talk. In order to translate good thoughts into reality requires seriously talking about how the cost structure of higher ed works and what is driving some schools to increase costs while others appear to be saving money.

Someone once said, “A goal without a plan is just a dream.” Similarly, rhetoric without accountability is just cheap talk.

Higher ed in New Mexico can be more cost effective. UNM’s efforts towards dialogue and reform efforts are appreciated and admirable. But, we have much work to do.