By the Numbers - Key Data for the PSA Model

I have been updating some of the numbers that support the PSA model. I decided to post my calculation document in raw form. The numbers speak for themselves, but I’ll provide a little elaboration.

 All calculations are based on 2015 data for the public sector of US higher education (HE) and are given in averages and full time equivalent (FTE) measures, unless otherwise stated. The data sources are the National Center for Education Statistics (NCES) and the College Board (CB). Calculations do not include weighting for 2-year vs. 4-year institutions or undergraduate vs. graduate level of study.

Two notable calculations:

a)    Tuition-free HE is possible across 2 and 4-year HEIs for 61-77% less than the $31,806 expenditure per student of the current model.

b)    Expense-free HE is possible across 2 and 4-year HEIs for 18-33% less than the current model expenditure per student (Note: expenses include: tuition, fees, room, board, books, supplies, transportation, and other).

These claims are true even if: 1) student enrollment increases by 28% (2026 projection); 2) graduate assistant numbers increase by 929%; 3) faculty average income increases by 11-43%; and 4) faculty numbers increase by 28-48%. It is important to make clear that these claims refer to the teaching, research and community services provided by academics.

As always, I invite feedback and collaboration.

PSA practice scenario expenses:

Scenario 1: $200,000 annual practice expenses

1)     Income - $11,466/month ($137,600/annum)

2)     Facilities - $2000/month ($24,000/annum)

3)     Support Staff - $3,200/month ($38,400/annum)

4)     Total: $16,666/month ($200,000/annum)

Scenario 2: $160,000 annual practice expenses

1)     Income - $8,138/month ($97,600/annum)

2)     Facilities - $2000/month ($24,000/annum)

3)     Support Staff - $3,200/month ($38,400/annum)

4)     Total: $13,338/month ($160,000/annum)

Scenario 3: $120,000 annual practice expenses

1)     Income - $7,400/month ($88,800/annum)

2)     Facilities - $1000/month ($12,000/annum)

3)     Support Staff - $1,600/month ($19,200/annum)

4)     Total: $10,000/month ($120,000/annum)

[NOTE: Practice expenses are based on professional prerogative and so in reality will display considerable variety. These numbers are for a solo practice with office assistance and facilities, face-to-face teaching facilities, and a teaching/graduate assistant. It is also important to note that under these calculations the mean, median and mode of income distribution are the same, with a range of zero – so, every academic earns the identified practice scenario income.]

PSA practice scenario revenue:

Scenario 1:

1)     $12,500 per student

2)     1:16 faculty to student ratio

3)     16 students per practice (faculty)

4)     80 full year or 160 half year course enrollments per annum = 16 students x 5 full year or 10 half year courses

Scenario 2:

1)     $10,000 per student

2)     1:16 faculty to student ratio

3)     16 students per practice (faculty)

4)     80 full year or 160 half year course enrollments per annum = 16 students x 5 full year or 10 half year courses

Scenario 3:

1)     $7,500 per student

2)     1:16 faculty to student ratio

3)     16 students per practice (faculty)

4)     80 full year or 160 half year course enrollments per annum = 16 students x 5 full year or 10 half year courses

PSA practice scenarios funded by select current model sources:

Scenario Source 1: education and related expenditure 

1)     $13,715 education and related expenditure per student (current model)

2)     $31,806 expenditure total per student (current model)

3)     $144.769 b total education and related expenditure (current model) (10.5 m students)

4)     $132 b total education and related expenditure (PSA) (10.5 m students x $12,500 per student)

5)     $12.768 b reduction in total education and related expenditure (PSA)

6)     57% less than the current expenditure total per student (PSA)

Scenario Source 2: federal, state, and local grants

1)     $8,440 federal/state/local grants per student (current model, 2107 College Board)

2)     $31,806 expenditure total per student (current model)

3)     $88.62 b total federal/state/local grants (current model, 2107 College Board) (10.5 m students)

4)     $105 b total federal/state/local grants (PSA) (10.5 m students x $10,000 per student)

5)     $16.38 b additional federal/state/local grants required (PSA)

6)     73% less than the current expenditure total per student (PSA)

Scenario Source 3: nonoperating revenue – appropriations 

1)     $7,409 nonoperating revenue – appropriations per student (current model)

2)     $31,806 expenditure total per student (current model)

3)     $78.187 b total nonoperating revenue - appropriations (current model) (10.5 m students)

4)     $79.93 b total nonoperating revenue – appropriations (PSA) (10.5 m students x $7,500 per student)

5)     $1.743 b additional nonoperating revenue – appropriations required (PSA)

6)     77% less than the current expenditure total per student (PSA)

PSA faculty increase:

1)     673,241 faculty (current model)

2)     Scenario 1: 1 million faculty = $200 b/annum ($200,000 practice revenue)

3)     Scenario 2: 1 million faculty = $160 b/annum ($160,000 practice revenue)

4)     Scenario 3: 1 million faculty = $120 b/annum ($120,000 practice revenue)

5)     1 million faculty is a 48% increase

6)     48% increase in service = 5,040,000 students (1:15.7 faculty to student ratio)

7)     1:9 faculty to student ratio (down from 1:15.7, enrollment of 10.5 million)

PSA graduate assistant increase:

1)     97,208 graduate assistants (current model)

2)     1 graduate assistant x 673,241 faculty = 673,241 graduate assistants (PSA)

3)     592%increase in graduate assistants

4)     1:16 graduate assistant to student ratio (down from 108.7, enrollment of 10.5 million)

5)     1 graduate assistant x 1 million faculty = 1 million graduate assistants (PSA)

6)     929% increase in graduate assistants

7)     1:9 graduate assistant to student ratio (down from 108.7, enrollment of 10.5 million)

PSA offers free higher education:

Tuition-free higher education

Assuming the government provides the per student funding identified in the scenarios – which is a 57-77% reduction in the current expenditure total per student – the PSA model would not need to charge tuition. This reduces the full cost of 2-year and 4-year attendance by 20% and 39%, respectively. The remaining student expenses include: books and supplies, room and board, transportation and other expenses.

Expense-free higher education

Present (2018)

1)     $14,665 average books and supplies, room and board, transportation and other expenses (2017-18 College Board)

2)     $153.982 b = $14,665 x 10.5 million students

3)     Scenario/Source 1: $285.982 b = $132 b + $153.982 b

4)     Scenario/Source 2: $258.982 b = $105 b + $153.982 b

5)     Scenario/Source 3: $233.912 b = $79.93 b + $ 153.982 b

6)     $335.661 b total expenditure by HEIs (current model)

7)     15-31% reduction in the total expenditure by HEIs (PSA)

Future (2026)

1)     7% increase in enrollment by 2026 (4-year)

2)     21% increase in enrollment by 2026 (2-year)

3)     28% total increase in enrollment by 2026 (2&4-year)

4)     13.440 million students by 2026 (2&4-year)

5)     $196.097 b = $14,665 x 13.440 million students (2018 dollars)

6)     188,507 faculty increase to service 28% enrollment increase (1:15.7 faculty to student ratio)

7)     Scenario/Source 1: $370.446 b = $174.349 b ($200,000 annual practice revenue x 861,748 faculty) + $196.097 b

8)     Scenario/Source 2: $333.976 b = $137.879 b ($160,000 annual practice revenue x 861,748 faculty) + $196.097 b

9)     Scenario/Source 3: $299.506 b = $103.409 b ($120,000 annual practice revenue x 861,748 faculty) + $196.097 b

The PSA model entails benefits beyond those made explicit in these calculations. Once you understand the full PSA model, you can begin to identify other entailed benefits on your own. To get you started, here is one in outline form.

Improved Completion Rates: Increasing the number of teaching/graduate assistants reduces the student to assistant ratio (e.g., from 1:108 to 1:16 or 1:9). Combined with proper assistant compensation of $40/hr working 20hrs/week and publication of professional academic practice performance (e.g., student pass/fail statistics, student comments, etc.), this makes for an environment highly incentivized to help students complete quality course credits and degrees with high standing and in a timely fashion. It also converts TA/GA assistant work to a proper occupation - not a cheap source for labour for HEIs or a way for students to finance their education. $38,400/annum is a pretty good part time job. And by reducing the completion rates, the overall cost of higher education is reduced. With more TA/GA assistants and graduates entering the workforce more quickly, there will be improved tax revenue.