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Director, Minnesota Office of Higher Education
Caucus, 8301 Creekside Circle #920, Bloomington, MN 55437
Friday, July 9, 2010
Verne Johnson (Chair); David Broden, Janis Clay, Marianne Curry, Diane
Flynn, Paul Gilje, Joe Graba, Jim Hetland (phone), Sallie Kemper, Dan
Loritz, Tim McDonald, Jim Olson (phone)
It is increasingly apparent that the financial distress presently
experienced by the higher education systems in Minnesota will not be
alleviated in the foreseeable future, but will in fact get worse.
Metzen, Director of the Minnesota Office of Higher Education (OHE), argues
that much change awaits post-secondary education in the state. If leaders
do not anticipate the challenges of costs and productivity, the state will
be controlled by problems instead of shaping them. There needs to be more
discussion about the nature of the challenges, and what can be done about
them. The OHE will research these questions before the end of Governor
Pawlenty’s term in 2011.
Context of the meeting—Minnesota’s
post-secondary educational institutions are on the front lines of some of
the greatest changes affecting the state: economic constraints,, problems
managing change and innovation,, and the disruptive power of new
technologies. From his position in the OHE David Metzen interacts with all
post-secondary systems in the state, and the Civic Caucus sought him out
for ideas about the nature of the challenges, and possible responses.
Welcome and introductions—
Metzen opened with a story. Many years ago, while superintendent in South
Saint Paul, he had to manage a budget downsizing that required the layoff
of teachers. “A letter was sent to the local paper, with my salary down to
the penny.” It listed the six most popular teachers that were losing their
jobs. “The letter was signed by Tim Pawlenty, junior in high school.”
Metzen would be appointed by Pawlenty to be Director of the Office of
Higher Education, an office that gathers and distributes information on
post-secondary education options in Minnesota, and administers the $150
million state grant program.
He is a
past two-term member of the University of Minnesota Board of Regents and
was Chair of the Board of Regents from 2003-2005. He served the South
Saint Paul School District as superintendent from 1982-2000 and was
previously an elementary school teacher, principal, and assistant
superintendent specializing in curriculum in the district.
Comments and discussion—
During Metzen’s visit with the Civic Caucus, the following points were
largest program of the Office of Higher Education is the Minnesota State
office’s activities, 80-90 percent are devoted to administering state
financial aid programs. State grants totaling $150 million are awarded by
need, and distributed to accredited institutions across all sectors of the
higher education system—including two and four-year, public, private, and
for-profit institutions. “Not all states do that. I believe in choice,”
Metzen said, “including for-profit.”
time the Higher Education Coordinating Board (HECB) performed this
function, reaching across all systems. After a merger of the state
technical and two-year colleges and the state universities, HECB was
re-positioned as the Higher Education Services Offices (HESO), and
maintained the same board. Then under the Pawlenty administration the
board was removed, and the director was made a direct appointment by the
governor and given the task of policy review and advisement.
can also play an important role in surfacing information---The
agency lacks power, Metzen said. The best you can do is jawbone, do things
like this (speak to the Civic Caucus) to get the message out. Information
is its advantage: “This is one of a few agencies in the state that has an
education research function. It is doing great higher education research,
unbiased and student-centered,” he said. “We don’t have a parochial
Traditional institutions can learn from for-profit schools--Frontline
did a story, Metzen said, about how for-profit colleges are “ripping off”
students. But most of the for-profits in Minnesota are doing good work,
and are clean operations. Competition from for-profits is good.
commented that he used to go out to the best schools—“some call it best
practices, I call it cherry picking”—and see what they are doing right.
had told me two years ago that the for-profits were doing a great job, it
would have surprised me.” The question is not how many students start, but
how many finish. Just having students go (to college) isn’t the only goal.
For-profits take non-traditional students, so it is challenging to assess
their effectiveness here—but they have an incentive to keep students
“Something the for-profits do effectively is to put the best teachers in
the beginning courses to hook you, then work hard to keep you in.” And he
believes they have incentive for quality control in their teaching: You
don’t keep your job there if students do not give you good reviews.
Change needs to come—will come—to higher education--There
will be winners and losers over the coming years. With the governor
leaving there is an opportunity to point out some issues that are facing
higher education that ought to be identified as priorities to be worked on
likened it to a bubble: Costs, spending, tuition have been rising at
unsustainable levels. If resources were not a constraint this trend could
continue, but they are. More students are now going back to school,
reacting predictably to a down economy. This puts strain on aid programs,
and results in more borrowing.
potential for technology is dramatic, and its capacity for personalizing
learning is starting to manifest. Visiting a vocational school recently
Metzen observed a welding program—something that requires intensive
personalized instruction—now performed 90 percent by computer with
enormous savings in labor cost, and improved productivity.
demographics are changing. The old model is not going to work with the new
populations. Online learning and hybrid models will enable greater
flexibility. The state needs to continue rethinking what higher education
should be: There is a myth out there that it’s a four-year college. We
should be saying you need at least two years beyond high school. The
definition of a student today is different. More than 25 percent are 25 or
older. The market right now for those that need to be retrained is 25-40
5. Cash shortages will drive change in higher education--It’s
very difficult to drive change when you have money, Metzen said. When you
have money its hard not to have all programs, not to keep all the same
the state $6 billion in debt even the most aggressive tax-raising scheme
cannot close the deficit. Higher education is not part of anyone’s stump
speech, and we should expect continued cuts to state aid.
basic premise is that people don’t change unless they see a need for it.
It is like a drinking problem: you first need to see the problem. As long
as you’re flush with money you don’t see the problem.”
6. Post-secondary schooling must become more productive--For
the cost of K-12, Metzen figured, for 10 hours a day and at $12k a year
students are being supervised the whole time. Look at higher education—how
many hours a week is there a paid instructor in front of students? 10-12
hours per week. Yet overall higher education costs are high.
inflationary pressures are enormous. “I don’t have the solution, he said,
“but there’s no turning back now. There’s no making this up.” He told the
group that he went on the University of Minnesota’s Board of Regents in
1997 to hold down tuition. Yet while he was there tuition went up 81
percent, and in his first seven years he voted for the increases. There
was no stopping it. “The bubble, if it hasn’t burst, will. This can’t
continue. This is unsustainable.” Old ways of doing business are over.
Note the recent history of the postal service, newspaper industry, etc.
the participants said many people do not understand the “disconnect”
between the inflating cost of the system, and the ability of people to
pay. Parents used home equity loans in the recent past, but those are gone
now too. There is a third party, the financial lenders, that has enabled
this growth. As that funding source diminishes, the situation will change.
attempt to understand the nature of the problem, a member asked Metzen
what accounts for the increased cost of the system? He replied that he
does not know—but education is a labor-intensive industry. Labor is
expensive, and labor costs have risen faster than economic growth.
colleges, even without salary increases, are seeing costs increase five to
seven percent per year.
of resolving the problem of cost is improving productivity. This does not
simply mean adding students to classrooms, he said—the state needs to look
at who is doing what, and how they’re doing it.
participant asked whether anyone is looking for examples of productivity
from private industry. She shared a story of a university hospital that
realized it had to resolve costs that were rising too rapidly. They set up
committees to pick apart the hospital’s business model and found ways to
improve it, ultimately adopting some of Toyota’s lean manufacturing
principles. Their cost curve flattened. For-profits are doing that in
higher education, Metzen said.
There is no strategy presently to manage the changes that need to occur--A
participant noted that there is much talk about the ‘need for change,’ yet
we do not all have answers, now. That implies the need for a change
strategy—a way to get the new ideas that are needed. Is anyone doing that
particularly, Metzen said, but people are innovating. He went up to
Superior and was surprised with how they’re incorporating online learning.
There are many small schools and districts in northeastern Minnesota using
online learning facilitated by the university. And they are doing really
well with the unions there—though you can’t blame the unions for being
scared, he observed. This is untried territory.
question of managing change, he said administrators are in a delicate
position. “One of the things I’ve learned being a superintendent,” he
said, “is that some of the best administrators are pains in the butt. The
question is will they fight for kids or fight for new office desks for
themselves.” We need to support administrators who are leading change.
from faculty is essential for a post-secondary administrator. “Once the
faculty gives you a vote of no-confidence, you’re in trouble—if you push
too hard you’ll lose their confidence.”
presidents need to balance the pressure.
participant wondered if the governor were to ask Metzen if he could depend
on the existing systems to handle the changes that need to occur, would he
agree or is this something that needs a new approach?
be tough. Institutions are geared to look after existing systems. The new
leaders of the two main systems will inherit terrible budgets. You’ve got
many presidents. The labor contracts are like Christmas trees—you add a
new ornament each year and eventually it falls over.”
participant mentioned a comment made by a senior professor at the U of M
about the financial position of the University: “We’re going over the
cliff.” So there is an awareness of the situation there. The one thing
that absolutely exasperates this professor is the law school. Law school
buildings are used only part time, but “you can never shut off the lights,
can never turn off the heat or air conditioning, yet you cannot cut back
the university law school building hours.” Incentives do matter.
need solutions, a member asked, or mechanisms that produce solutions? “We
have got to understand the problem first,” Metzen said.
More good people must begin talking about this problem--"I
have proposed to the governor that we need really good people thinking
about this. I think we’re at such a tipping point in higher education (in
Minnesota and the US generally); the challenges are so great—the only way
this state survives is by turning out intelligent, hard-working people.
That’s why Minnesota has been a leader for so many years.
a partnership with K-12, higher education, and the business community.
There is a window of opportunity with the governor going out, and the
heads of the two systems (MNSCU and U of M) coming in. I’ve talked to the
candidates for governor about that.
“Information is important,” Metzen said “because there is a myth that you
get what you pay for. We need better data so that people can make
informed decisions.” People in the agency told Metzen coming in: “We’ve
been told not to think, just to hand out the money.” Metzen asserted,
“That’s changed with us. First we’re going to develop a thoughtful
9. The new leaders of MNSCU and the U of M will confront the
need for major change--
“Change is coming, whether they like it or not, because of the lack of
money. Private schools are going to change because they need to change
just to be competitive. These two new leaders are going to need to trust
participant asked Metzen: Do you sense an obligation to leave at the end
of the year some kind of analysis and recommendation to the incoming
governor, about the challenges facing higher education in the state and
recommendations for action? Answer: “To lack power is not to lack
10. It is not sufficient to wait until change is forced—we
could still slide a long way--A
participant with experience in different areas of higher education had
some thoughts on the dilemma facing all of higher education, except
perhaps the for-profits. “I think we’re facing two major earth-shaking
events in higher education. One is the funding; the other one is the need
for model change—and fundamentally different arrangements for delivery.
concerned that the public, the policy makers, and the higher education
systems will in fact tolerate a significant decrease in the quality of the
system in order to maintain the current form of the system. This
reluctance will cause us to tolerate an eating-away of the system year
after year after year.
so wedded to the current model of post-high-school learning. Those inside
higher education cannot look at the world and see themselves being shaped
by the world—they think entirely within their own model. This enterprise
defines quality as the inverse of productivity. We define productivity as
small classes. And so every discussion about productivity immediately
translates in the heads of faculty as more students sitting in front of
them, while all these systems sell themselves on their small class sizes.
groups like this talking about the issues, Metzen reiterated. We need
people saying what is best for students—not for institutions.