PSA Promotes Too Much Free Education

Imagine a society that felt: Because of how expensive it is to provide, there is no substantial benefit to publicly fund primary and secondary education, so anyone who wants such education must privately pay for it through personal savings or loans. Further, because of the expense, this education is not equally accessible to members of society and susceptible to wide variation in quality.

What is your reaction? I expect most feel that this view undermines dignity and aspiration to the point of being cruel to individuals and counterproductive to societies.

We think formal education is valuable to individual and collective well-being – up to a point. So much so that nations make it a legal requirement for citizens to attend formal education – up to a point. While effort is made to increase access and quality – up to a point.

That point is defined by cost-benefit analysis that incorporates the subtext of all discourse on education - money. The cost of providing education determines who pays for it, who has access to it, what quality is achieved, what content is covered, what level is required, how it is provided, how sector labour is treated, and much more.

Now, imagine that same society applied their views not to primary and secondary, but to higher education (HE). What is your reaction?

I expect reactions tend to be mixed. Societies such as Germany, Sweden, and Finland maintain that HE is a substantial value with individual and societal benefits on par to those of primary and secondary education. Accordingly, these HE systems are publicly funded to the point that it is (virtually) free to attend – in the same sense that it is free to attend primary and secondary schools. Other countries such as Canada, the US and the UK offer partial state funding for HE that requires significant private financing, often in the form of personal savings or loans.

While we tend to exercise a firm collective grip on the fiducial, functional, and financial expectations of primary and secondary education, our grip becomes more flexible when the cost-benefit analysis moves to HE, as evinced by the vicissitudes of countries like the US, UK, and Germany.

This post is directed at those societies with and without some form of free HE, as it defends the claim: PSA is a viable means of providing free HE that can help maximize education levels.

 

No Such Thing As A Free Lunch

HE is not free. But for present purposes, “free HE” can be defined as public education beyond secondary that is for students free of tuition or expense, where the latter entails the former, but includes other costs such as textbooks, school supplies, room and board, entertainment, and the like. This is “free” in the sense that students do not have to use personal loans and savings to fund their HE. Instead, like public primary and secondary education, public HE is fully funded by tax dollars.

Within those societies that have a variety of free HE, the subtext of money continues to have impact on HE discourse. For instance, in Germany, because of the public cost to provide free HE, national placement exams are used to determine who can study what. Since there is no such thing as a free lunch, disagreement over free HE policies persist among taxpaying Germans, as it does among Americans and in other counties.

But no matter your view on the subject of free HE, the only way to effectively immunize discourse against the subtext of money is to reduce the financial burden in the first place. In such a circumstance, cash-weighted cost-benefit analysis is eased, if not eliminated.

For some time now in the United States, including in the most recent Presidential election, there has been buzz about making at least some HE free. Various plans have been floated. For instance, Bernie Sanders wants to commit a further $48 billion a year to eliminate tuition and fees at four-year public colleges and universities, while he advocates cancellation of some $1.6 trillion in student loan debt through increased taxes. On both counts, the government has thus far failed to deliver.

Back in 2014, when President Obama was making similar promises, I posted a response to one such plan that made its way to the White House from the Lumina Foundation, dubbed the F2CO – the free 2-year college option. This option aims at not just tuition-free but expense-free HE. Though the goal is commendable, the F2CO plan is condemnable.

The response showed how PSA either corrects or avoids 14 shortcomings of the F2CO plan. For my efforts, after publicly calling me a “laughable, unstable, goofy guy,” I was Twitter-blocked by one of the F2CO authors, Professor Sara Goldrick-Rab, of Temple University. So much for open, respectful intellectual engagement with an employee of a publicly funded HEI.

Like every other free HE initiative, the F2CO plan offers no reduction in system-wide costs, while it asks for additional public funding to, in this case, make a mere 2-years of college free. PSA offers exactly the opposite with a reduction in funding requirements, though it provides free public HE for undergraduate and graduate studies in college and university – among other numerous benefits unimaginable under the F2CO or any other plan.

If the aim is tuition or expense-free HE in a system that is less susceptible to the machinations, moods and markets that can loosen our grip on the value of this pillar of society, then asking for more funding is an irresponsible strategy. PSA asks for less, while it offers so much more. Though this blog recently provided financial analyses of PSA for the Canadian and Australian HE systems, the present discussion returns to an American financial analysis from a previous post.

Relying on data that includes full time equivalent (FTE) measures of student enrolment and academic staff, along with revenues and expenditures of public higher education institutions (HEIs), analysis reveals how the PSA model can be financed for far less than the HEI model of universities and colleges. Sourced from the National Center for Education Statistics and the College Board, all data is for the 2016-17 academic year and in constant 2017-18 USD. The data is averaged across and not weighted for 2-year vs. 4-year institutions or undergraduate vs. graduate level of study.

Full Time Equivalent Measures
FTEs		Student Ratio
Faculty (FTEF)	680,510	15.5
Graduate Assistants (FTEGA)	98,599	107.2
Other Staff (FTEOS)	1,162,004	9.1
Students (FTES)	10,565,751	N/A

[Table 1: FTEF includes instruction, research and public service. All graduate assistants are considered part time. Figures are for 2 and 4-year public HEIs combined. Source: Snyder, et al., 2019, pg. 262 and 283.]

 

Practice Revenue Per FTEF
Source	Per FTES	Per FTEF
Revenue
Total Revenue	37,797	586,853
Appropriations & Non-operating Grants	10,523	163,106
Tuition & Other Fees	7,666	119,823
Expense
Instructional	10,832	167,896
Instructional, Research, Public Service, and Academic Support	18,959	293,864
Instructional, Research, Public Service, Academic and Student Support	21,036	326,058

[Table 2: Formula used in calculations: (Source per FTES) x (Ratio of FTES to FTEF (15.5)) = Per FTEF (Practice Revenue). Source: Snyder, et al., 2019, pg.386, 387, 394.]

Because of the considerable liberty that a professional service model like PSA offers academics, there is no single formula that describes practice expenses. For instance, where teaching assistants are concerned, I don’t assign them work because, while I am happy to see students collect much needed money, I prefer to do the work myself. Nevertheless, to make the case that PSA is financially viable, the following describes expenses for a solo practice situated in New York City, with office assistance and facilities, face-to-face teaching facilities, and a teaching/graduate assistant working 20 hours per week.

Professional Academic Practice Expenses
Amount	Item
$10,000	Salary of academic practitioner (gross)
$3200	Salary of teaching assistant (gross)
$2000	Rent (office and instruction services, facilities, and equipment)
$200	Advertising, web hosting, internet and phone fees
$200	Office supplies and equipment (computer, phone, printer, etc.)
$50	General professional liability insurance
$300	Health insurance
$350	Retirement
$500	Other fees (society memberships, PD, conferences, etc.)
$16,800	Total

 [Table 3]

Along with the qualifier regarding the effects of professional liberty on practice expenses, it should be said that within an established PSA HE system, there might well be policies that encourage opening and offer support for operating a professional academic practice. For instance, business incentives, tax breaks, group insurance rates, savings and investment perks, facility leasing discounts, among other possibilities.

For these reasons, it is inappropriate to assess the financial viability of the PSA proposal based solely on this sample practice profile. Instead, the sample is used to signal financial liberty that the current HEI model of universities and colleges cannot hope to match.

Consider that under PSA the operation of a private academic practice for around $200,000 is 43% lower than the 2016-17 combined HEI expense of instruction, research, public service, and academic support. Or consider that based solely on HEI instructional expenses, every single FTEF in both the university and college systems earns an annual gross income of $120,000 after practice expenses, which is 36% higher than the 2020-21 systems-wide average of $88,277 for full time faculty (i.e., those faculty with 9-month employment contracts, which does not include sessional faculty). Or finally, consider that the average stipend of $18,616 paid to HEI graduate employee types – teaching assistant, research assistant and graduate assistant – is less than half that offered by PSA, which also manages to adjustment the FTEGA-to-student ratio from 107.2 to 15.5, on par with the FTEF ratio.[see Table 1]

No matter how it’s sliced, even if PSA can only reduce the total cost of HE by 30 or 40 percent, this is a significant financial improvement, with numerous benefits to individuals and societies.

[NOTE: I am working on a post that presents the real total cost of HE. That is, not only the expenses typically reported by HEIs, but also those associated with: the operation of accreditation boards, the bureaucracies of the federal and state Departments of Finance and Education, federal student aid and debt management, tax breaks, education savings incentives, HEI investment losses, interest paid on general bonds, union representation, and more. Most of these real costs are eliminated or reduced by the PSA model.]

While it reduces costs, PSA continues to facilitate traditional face-to-face education, but in a model where both students and teachers (academics) are personally invested in the satisfactory completion of courses and credentials. This is so thanks to model features such as anonymous, crowd-source evaluation of students and public service performance data of academics. With such quality assurance mechanisms in place, a professional academic has far less room (and HEIs have none) to manufacture learning outcomes and so must provide effective quality education, a record of which is available to all who seek their services. A reliable Yelp for HE.

None of the proposals for free HE can hope to accomplish what PSA does, because without exception these proposals assume the HEI model. This means there will be no reduction in costs, but rather an increase. With uncertain success, cost-benefit campaigns might be launched in the hope of persuading taxpayers to give new money or to channel existing money away from other social goods such as healthcare, welfare, or primary and secondary education. For instance, HEIs can cite how their contributions to the economy offset costs and offer a wide range of benefits.

But here it is important to restate a fundamental distinction between HEIs and HE. Universities and colleges are not HE. The oft cited contributions come from HE, not these institutional middlemen which are merely one means of facilitation. PSA also facilitates the full spectrum of activity referred to as HE, though with far less cost and greater benefit.

However, if wholesale adoption of PSA seems unreasonable, then consider a more modest proposal. In a model with widespread financial strain, Liberal Arts and Humanities programmes are routinely obliged to justify their value to students and societies, as they face declines in funding and enrolment.

Recognizing that there is no such thing as a free lunch, PSA at least offers a very inexpensive one that frees Liberal Arts and Humanities from the financially strained cost-benefit analysis discourse of the HEI model, allowing their contributions to HE to be more readily received by students and societies. Consider how in fields of study (FOS) like those found in Liberal Arts and Humanities, using only select expenses or the tuition and fees of HEIs, it is possible to operate a private professional academic practice not only in America but also Canada and Australia.

Country	Source	Amount (CND and AUD)	Practice Income (gross)
Canada	Tuition & Fees (average domestic (under)graduate per FTES)	$11,420	$199,850
	Tuition & Fees (average domestic undergraduate per FTES in PSA amenable FOS)	$8,071	$141,242
Australia	Tuition & Fees (total for international students only)	$9,222,983,000	$185,007
	Average Unit Teaching Expense per FTES (10 classroom-based undergraduate FOS)	$16,000	$363,200

[Table 4: FTES stands for “full time equivalent student.” FOS stands for “fields of study.” FOS readily amenable to PSA conversion include classroom-based: Executive MBA; Regular MBA; Business, management and public administration; Mathematics, computer and information sciences; Education; Architecture; Law; Social and behavioural sciences, and legal studies; Visual and performing arts, and communications technology; and Humanities.]

Whether it’s wholesale or partial substitution, these financial analyses substantiate the claim that PSA is a viable means of providing free HE. To emphasize just one substantiation, consider that in Australia, even if the teaching expense per FTES is cut in half, this provides each and every full-time equivalent faculty (academic) with $181,600 in practice revenue per year.

The effects of such cost reduction on HE discourse are profound and discussed throughout this blog. But to close this section, one effect of note is on the quarrel over student loan debt forgiveness. Reducing the total cost of HE by 40, 50, or even 70 percent can not only make free public HE a reality but eliminate the need for future student loans, giving those in opposition to debt forgiveness reason to reconsider.

 

No Such Thing As Too Much Education

As finances of the HEI model sculpt HE discourse, we find notions like degree inflation, overeducation, oversupply, labour demands, and return on investment shape cost-benefit analysis claims such as: i) There are more PhDs than we need to achieve the economic goals of society; or ii) Based on expected lifetime earnings, some fields of study are a risky investment.

Take as an example, my field of philosophy. The predictable question arises: “What are you gonna do with a philosophy degree?” HEI websites provide answers that reassure few who ask this question. The mindset is that a PhD in philosophy meets neither the public economic expectations of a society nor the private investment expectations of an individual. Along with virtually any degree outside of science and business, it is a field of study discouraged by parents who fear their darling doctor of philosophy will end up an overeducated, underpaid barista.

Fair enough within the expensive HEI model, where American student debt has now reached $1.7 trillion. But under the PSA model the response is, “So what? Certainly, being a CEO or a surgeon is not for everyone, but we should welcome a world where it is possible to have highly educated citizens in all walks of life.”

These polar responses are framed by the disparate financial realities of the two models. Since PSA is a viable alternative that dramatically reduces HE costs, “overeducated” and “oversupply” are not pressed into the PSA discourse. There is no financially fueled concern with “too much education” or “useless education.” Without regret we can have a world filled with highly educated baristas.

Thanks to the long and expensive tenure of the HEI model, this might be hard to imagine – perhaps as hard as it is to imagine HE without university and college institutions, though historically this was in fact the case.

At the same time, think of people like Elon Musk working on ways to make seamless interfaces between man and machine, where knowledge is internally democratized: I know what you know and we both know everything. Supposing this access was available to all at low to no cost, would any of us have a serious challenge to such a world? What objections could be launched against a barista with knowledge beyond the current aspirations of any PhD in philosophy or biology or law or….? Beyond personal preferences, would any of us think such access “too much” or “useless”?

Elsewhere this blog has addressed possible technological trumps of traditional modes of knowledge transfer – which notably is not the same as education. But no matter the means – be it new technology or new model – the end of increased access to knowledge and education is unassailable. A little knowledge is indeed a dangerous thing.

Of course, the need to generate new knowledge continues and HE is a key player in this valuable social good. Recognizing that universities and colleges are not HE and reducing the total cost of HE facilitation, the PSA model liberates substantial public funds that can be channelled to increase research production on a scale and scope not possible in the HEI model – not to mention the increase in human capital that PSA makes possible.

In closing, lest it be thought there is no need for everyone to have access to HE or that entrance exams can successfully select those individuals for whom HE will provide the most personal and public benefit, consider these observations:

First, as the 2022 Pritzker Prize winner, Diébédo Francis Kéré, clearly demonstrates there is no obvious means of predicting from where valuable human capital might emerge. Kéré is from “one of the world’s least educated and most impoverished nations [Burkina Faso], a land void of clean drinking water, electricity and infrastructure.” As The African Report says, “His art is revealed in his desire to link ecological issues and access to comfort, even for the poorest.”

Nor is there much confidence in processes that supposedly select for valuable human capital. A study of one of the more demanding national college entrance exams in the world, China’s gaokao, reveals that its top scorers have not made more significant contributions to society than have those without top scores [note link is in Chinese]. Another study found that those with higher gaokao scores are less likely to be entrepreneurs that open innovative businesses. The authors hypothesize that this is because preparation for the gaokao produces students that are less socially adept, more risk aversive, and lack jack-of-all-trades skills.

In the final analysis, casting a wide net to capture and cultivate human capital is the best practice – up to a point. Compared to the expensive HEI model, PSA can afford to move this point much farther.

Second, it might also be argued that in the United States and elsewhere there are too many HEIs servicing declining enrolments. Ignoring that some 32 million Americans have yet to finish the degrees they started, this is a risky response to fluctuations in college-age enrolment trends.

It suggests education is for the young and not something to be valued throughout life. It requires the complex, fixed education infrastructure of the HEI model to expand and contract in response to demographics, rather than market demand, which are not the same thing. But perhaps more importantly, there is no guarantee that after the dust settles the best teachers and researchers will be the ones left employed by the remaining institutions. Thanks to the poor working conditions and compensation of the HEI model, this isn’t even true now when there are perhaps too many HEIs, because a lot of talent leaves academia to pursue careers that are more satisfactory on many measures.

The private practice, entrepreneurial nature of PSA means it can more easily expand and contract according to demands associated not only with demographics, but also industry, interest, and location. At the same time, the oversight provided by professional licensure and the aforementioned Yelp-style evaluation mechanisms, means that academics who provide poor service will either need to seek professional development or fail to make a living in the profession. As for making a living, as indicated, the PSA model offers working conditions and compensation that can serve to attract rather than alienate would-be academics in large numbers.

Third, recall the imagined views on primary and secondary education that opened this post and how most people would find them unacceptable. In fact, most societies consider access to education a human right, as evinced by international and national rights documents that call for equal, free access to primary and secondary education. What many people do not realize is that access to HE is also a human right. The International Covenant on Economic, Social and Cultural Rights is ratified by 171 members of the United Nations ranging from the United States to China.

Article 13, sections 2 (c) and (e) state:

Higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education; and [the] development of a system of schools at all levels shall be actively pursued, an adequate fellowship system shall be established, and the material conditions of teaching staff shall be continuously improved.

As such, access to (higher) education is not about what individuals or societies expect as a return on investment, it is not about finance-based cost-benefit analysis. The extravagant cost of the HEI model has twisted discourse in this direction and the lack of an alternative service model has made it seem unavoidable.

But it is avoidable. Along with earlier ones, this post has argued that PSA is an appropriate means of HE provision that offers real progress toward free HE as it stands to maximize the education levels across society.

Please feel free to join the discourse that PSA makes possible.