Monday, January 28, 2013

The Cost of Independence in Higher Education


This is basic rationale and costing for an academic practice in philosophy.  The practitioner is not an employee of an institution such as a university or college, but rather an entrepreneur of higher education.

It is prima facie evidence that universities and colleges, substantial government funding and union representation are not required for ample access to affordable quality undergraduate humanities education.

Academic Practice Outside of Institutions
In a sense this alternative turns the current system inside out.

Historically the outward appearance of higher education is institutional.  It is a practice in mass-service that demands considerable public resources to maintain institutional solvency, quality and capacity; where only a relatively small portion of the available qualified and required academic labour is given quarter and compensated as handmaids of the manor.

The practice being costed liberates academics from the exploitive conditions of factory work to more independent and intimate relations with student and community, where institutions are mere electives of academic partnership and interested individuals the fulcrum of responsibility, authority and service in a proper public higher education.

This is a higher education system where the fundamental administration and management is of private practice, not institution.  Academics in professional association are the principals who determine and perform the core functions that constitute higher education service (see in particular the, Practice Dimensions, section of the prospectus).

Congruent with professionals, these academics not only operate a private practice in higher education but act as steward for the system.

Convergent with the functions of higher education, existing professional bodies such as the American Bar Association participate in the establishment of standards and practices for curricula, degree requirements, admissions, and evaluation.  They are also active in functions such as program and school accreditation, research on the system, and legislative change in higher education.

Consistent with the regulatory apparatus of professions, be they attorneys at law or professors of law licensure is required to practice.

In professions licensure is of individuals while in academia the term is accreditation and in essence it is a license to practice higher education, subject to suspension or revocation and issued to institutions based on the authoritative opinion of individual academics acting in association.

This suggests it is a natural step to have a professional body of academics determine qualification and issue to individuals the license to practice higher education, thereby removing exclusive reliance on the licensure of unnecessary and exploitive institutions and amending terms of service along lines of personal and professional prerogative.

Cost of a Philosophy Practice
Because this inversion in service structure entails greater freedom in the organization and application of individual expert labour there are many forms academic practice might take.

Such practices might be solo or small to large partnerships. They might operate out of a home office, a virtual office, an external physical office, or some such combination.  They might exclusively offer education and no research services, the opposite, or some balance.  Practices might offer only online courses, more traditional classroom lectures, or a combination of new and existing teaching formats and learning environments.

The exercise of this sort of prerogative is one of the main influences on the cost to operate an academic practice – and so higher education.

The following is thus only one possible cost for a philosophy practice.  It is chosen as a baseline because it most resembles the familiar institutional means of providing the service in a face-to-face format

It is a solo academic practice headquartered out of the home but with external office and lecture facilities and services located in downtown Toronto, Canada, within two city blocks of the University of Toronto.  It includes costing for education but not research, though there is overlap in areas such as journal, association and conference fees, advertising, support staff and office supplies.

One-time Start-up Costs:

1.
$1000
Home headquarters furniture and equipment (chair, desk, lamp, etc.)
2.
$5000
Computer Hardware and Software (adequate for client files, record keeping, communication, accounting, online instruction, etc.)

3.
$1000
Setup, installation and consulting fees (banking, accounting, internet, library services, etc.)

4.
$1500
Business cards, logo, stationary and other initial design work
5.
$1000
Advertising and promotion for opening (including the professional society website and others that operate as yellow pages for academic service)

6.
$5000
Legal and other professional fees (establish the practice or partnership, initial professional membership and licensing fees)

7.
$500
Business licenses and permits
8.
$1000
Miscellaneous set-up expenses
9.
$16,000
Total set-up
Ongoing Monthly Costs:

1.
$10,000
Salary of academic practitioner (gross)
2.
$3200
All other salaries wages and commissions (teaching assistant)

3.
$2000
Rent (office and lecture facilities/services)
4.
$200
Advertising
5.
$100
Postage and shipping
6.
$100
Office supplies
7.
$200
Website hosting, maintenance, internet fees
8.
$50
General business insurance
9.
$150
Health insurance
10.
$200
Retirement
11.
$500
Membership and other professional fees (professional society, accountant, professional development courses, etc.)

12.
$16,700
Total monthly
After initial set-up the total cost to operate the baseline higher education practice in philosophy is $200,400 per annum.  Assuming tuition as the only source of revenue and an in-state, public four-year institution course is priced at $750 for 15 weeks at 3 hours per week the practice would need to secure 267 course purchases.

This would provide the academic with a gross annual income of $120,000 and a teaching assistant working 20 hours per week at a respectable $40 per hour.

It includes modern physical office space, lecture facilities and equipment and reception services (among other amenities) for $2000 per month.  It covers the cost of journal subscriptions, association fees, conference expenses and professional membership dues.

It covers the incidentals of operating an academic practice such as office supplies and postage, but also advertising, health insurance and retirement.

This is naked but not naïve costing to open and operate a private practice in philosophy, assuming there was a system in place to provide it license and professional support.

Business Plan Notes
There has been no discussion of tax deductions and business incentives or other expected sources of practice revenue such as research grants, consultancy fees, interest on investments, publication royalties, course sales and endowments – each traditional revenue sources for universities and colleges, ultimately secured by the effort and quality of academic labour.

There has been only cursory discussion of the impact of professional prerogative on costs associated with practice business models, working conditions and terms of service.

For instance, an annual course enrolment of 267 might prove little challenge for some practitioners who can manage more depending on academic ability and entrepreneurial drive, the type of course, preparedness of students, instructional format, and quality of support staff.  Others might enrol fewer than the 267 and recover revenue loses through other expected revenue sources.  Or prerogative might lean academics toward a minimal expenditure practice with online courses and teaching formats, virtual office hours, and personal marking and tutoring of students; reducing or eliminating operational costs such as a teaching assistant or external office and lecture facilities. 

These are but a handful of ways in which on any measure higher education service might be provided with greater variety to better suit the unique and shared interests of academics and students.  As such each business plan for a higher education practice will be unique, except where market demand and competition are concerned.

In the tertiary market, whether local or global, demand far exceeds supply.  More academics are required and with greater access to them.  Under the current triad system we have instead received more administration, support staff, bureaucracy, and union personnel, each imposing a layer of obstruction to access by increasing costs and interference in the education service relationship.  For around $200,000 a year many more academics could independently support themselves in the market and help meet the demand through private practice.

As far as competition, it is worth noting that with only tuition revenue to operate on higher education in private practice can be offered for as little as 25% of the current total cost officially accounted for by the triad model - not including the reduction or elimination of the system costs incurred through union involvement or the bureaucracy of government.  Additionally, without the need of public operational or capital funding a professional academic practice can offer courses to all students for the same residential price and gain a competitive edge in the international market.

I ask that academics perform a similar calculation for their field of expertise and offer correction and enrichment of this attempt.

5 comments:

  1. Learn to compose complete sentences....

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  2. Hi Shawn

    Your suggested approach is interesting and sound and a very worthwhile contribution amongst all the current hand wringing in academic circles and the "slavery" model of adjunct use.

    I think the MOOC model shows that there are large numbers of people out there who are looking for a changed paradigm (many of them already university graduates) and who would probably go for utilizing professional services.

    Kind Regards

    Grant

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  3. Shawn, your example is an intriguing idea. Further parsing, however, shows that the numbers may not be as good as good as imagined for the individual practitioner -- at least for a face-to-face model.

    Three fifteen-week cycles could be scheduled in a given year (allowing for existing public holidays, etc.) That means 89 courses purchased per fifteen-week cycle to hit your number of 267. That means four sections of 22.5 students. In current academic institutional terms that is a 4/4/4 load, which is pretty heavy, if the practitioner also wants to do any research. And, in your model, the practitioner has very little administrative support, no assured access to libraries, archives, etc. The $120K gross sounds great, and is way better than adjuncting the same load, to be sure, but I'm not convinced it is a substantially better arrangement for the academic than a TT position, once the additional administrative work is added and the additional TT perks are subtracted.

    That being said, as a MOOC model, it is very attractive -- 267 students sounds like a pretty good number for a single MOOC.

    The other numbers issue is that three such courses for the student adds up to $2250 per fifteen-week period. Yes, that is cheaper than most state school tuitions now, but it isn't absurdly cheap.

    I appreciate your analysis and ideas about an academics-as-vendors/entrepreneurs, but I have concerns about whether your numbers really add up. And I fear that such a model across the board would lessen the incentive for universities to build and maintain the good research libraries, archives, etc., that Humanities researchers require.

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    Replies
    1. Thank you for your interest and thoughtful comment.

      If I may, regarding face-to-face service:

      1) 89 courses purchased per 15-week cycle does not necessarily mean a 4/4/4 load. I and many others teach single courses with 89 and more students enrolled. But of course the numbers could be parsed in nearly any combination (e.g., a 2/2/2 load with 45 students per course or 0/0/2 withl 134 students per course).

      2) This latter parsing (or any of a number of other possibilities) would leave plenty of time for research.

      3) Traditional administrative support comes from the Professional Society for things like: i) Official record-keeping; ii) Oversight of objective evaluation; iii) Disciplinary and other hearings; iv) Official calendar publication; v) Professional development; and so on. These and many other functions are carried out by national and local branches of the American Bar Association for practicing attorneys, and for other professions, at a fraction of the cost and personnel now used by universities and colleges. [Also note that the budget includes a TA/RA for 20hrs per week, which is much more than the current institutional limits placed on TA/RA hours. Under my model such positions would become more valued by academics and potential career choices for students, and not merely a way for institutions to subsidize the high cost of attendance.]

      4) The libraries and archives of at least the public institutions are just that, public. They were built with public money for the public good. If the model I suggest is adopted by the public as the or a means of providing higher education then these publicly owned assets will be put at the disposal of professional academic practitioners, as they are now at the disposal of publicly funded (paid) faculty employees of universities and colleges.

      5) $120,000 gross is about $10-15,000 more per annum than tenured full professors earn, in a position that academics have about a 15-20% of ever achieving. The independent practitioner position might not be better than the rare top-tier faculty position in some ways, but my estimation is that it is better in others - not the least of which is its wide availability - but also the control academics can have over their working/material conditions and personal lives. For instance, I would not be tethered to one institution in one location my entire life (suppose my wife needs or wants to move for her career) and I could in fact earn double or triple the $120,000 if I wish (by moving my service on line or hiring more TAs or some other adjustment in my practice).

      6) I am glad you noticed the potential for my model in online education, which would substantially lower the expenses of a private practice. Though most would not describe 267 students in one course as a MOOC, I do see that this number or some other parsing of it could make for more manageable and effective online service. I have chosen to restrict my business plan to face-to-face service because it is obviously the more expensive of the two, but certainly my model presents no bar to an academic offering only online service.

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    2. 7) As to tuition, the absurdly cheap part occurs when you factor in the absurd reduction in federal and state appropriations - namely, none are required! Literally the entire cost of providing higher education is reduced to the currently advertised price of tuition. As I indicate my model can operate on the advertised price of tuition alone. This is crucial. It means that federal and state monies now being spent on the institutional model are liberated and can be used to subsidize or eliminate tuition costs. So in point of fact higher education could be free to students - and still cost the public less overall. That's pretty absurdly cheap.

      8) With this in mind, the concern about building and maintaining good research libraries, archives, etc. is unnecessary. As I indicated these assets are in point of fact public assets and my model manages to dramatically reduce the public cost of providing higher education. So just as these public savings (in the 100s of billions) could be used to subsidize tuition costs they can also be used to further invest in the public libraries, archives, etc. But also, my model has the Professional Society invest in library and archive assets, as part of its socially contracted responsibility for higher education, funded through membership dues, fundraising and endowment (as is now done by universities and colleges).

      I hope that though my responses have been partial they are enough to allay your concerns and inspire you to further investigate the model I propose.

      Cheers,
      Shawn

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