Scholar Dollars Update

In September of 2010, Dr. Tim O’Neill presented his well researched and thoughtful report on the university system in Nova Scotia. It clearly identifies the major challenges faced by the sector. The current financial model and recent growth rate in government support are unsustainable. So tuitions are going to go up—the only questions are, how much and for whom?

His first recommendation is that tuition fees should be deregulated, and that a percentage of the tuition increases should be earmarked for increases in student assistance. This approach is entirely appropriate. In the present environment, reductions in tuitions enabled by government grants to universities represent a subsidy. Those most likely to benefit are affluent families whose children represent a disproportionately large share of student populations. Why should average taxpayers subsidize the well off?

But there is a more important reason to support the recommendation to deregulate tuitions. Students usually blame governments for the level of tuition rates. This must be perplexing and disappointing for government, which annually subsidizes universities to the tune of $9,500 per full time student (much more for professional and graduate students, less for most undergraduates), about one and a half times what students themselves pay. Universities receive additional funding for research and infrastructure renewal. It is usually government that announces the outcome of its negotiations with the universities on tuition costs. In so doing government accepts the blame for the cost of running universities. Yet it does not exercise any control over those costs.

Those costs need more scrutiny both by university stakeholders and taxpayers in general. Dr. O’Neill makes a compelling case that universities will need to deal with a rapidly changing environment. The dominant cost factor is salaries, of which the biggest component is for faculty. Universities will need to respond quickly but are hamstrung by collective agreements with faculties that make it extraordinarily difficult for them to adapt.

All full-time faculty members have access to good insurance, health, and dental benefits as well as pension plans. Paid leaves are often available for maternity, illness, bereavement, periodic sabbaticals, or retraining. Vacation allowance is five weeks. Tenured full professors can expect to earn base salary in the low one hundred thousands.

Faculty members teach and do research; usually the two are given equal weight. Full-time faculty members are expected to teach during two of the three semesters in a year. Typically they will teach 2.5 full year courses, although excellent researchers and those with administrative roles may teach less. Others may teach more because their research output is weak or as a matter of personal preference. At St. Mary’s, faculty can spend up to a day a week earning other income so long as it does not interfere with their university responsibilities.

These arrangements are workable in a stable environment. But problems arise when the environment is volatile or a faculty member no longer has the skills needed by the university. godaddy domain buy service . Problems such as:

1. If the university concludes that a program is no longer viable, usually due to plummeting enrollment, it must engage in an arduous process before actually closing the unit. Generous transition measures are provided to affected faculty. Acadia’s agreement prohibits layoffs for financial reasons and insists that tenure-stream complement remain at or above 182 (although vacancies can remain unfilled) again regardless of financial considerations. At Dalhousie a faculty member who does not agree to any of these can stay on with no teaching duties at half salary. The consequence is that many programs are retained long after their financial viability has ceased, draining resources from new opportunities.
2. Likewise, if two universities were to merge programs, or amalgamate, there are numerous contractual obstacles to achieving the resulting opportunities for cost saving.
3. One or more universities may reach a financial crisis, the possibility of which will grow as financial pressures increase, especially if enrollments sag. But in the event of a crisis, the institution will be unable to take decisive action until a joint board-union committee has evaluated the board’s thinking and proposed its own alternatives—a process that could easily take years.
4. Agreements typically state that even tenured faculty can be terminated for “just cause” but “just cause” does not appear to include persistently dreadful teaching or lacklustre research output. As a result poor performers remain long after they should, damaging students, their faculties, and the institution’s reputation. Universities used to wait (too) patiently for mandatory retirement to deal with problems but that is no longer possible. It is interesting that universities asked for and received from the government “compensation” for the elimination of mandatory retirement, an explicit admission that their practices were keeping some faculty long after they ceased earning their keep.

What is to be done?

Students, and particularly student leaders, need to engage. When money is spent unproductively it comes out of their pockets. Although the bargaining agreements have a common pattern, they often differ in the details, and the universities have differing circumstances. (The summary above is approximate and incomplete. The typical faculty bargaining agreement is 200 pages long.) Students should examine each aspect of their university’s agreement and identify clauses that inhibit flexibility and sustainable excellence. Then put pressure on both administration and faculty associations to do better next time.

Faculty members need to think about what is needed to make their institution durable in the face of change. Many are only vaguely familiar with the terms of their bargaining agreements. The good ones (and that is the vast majority) are not happy about retaining obsolete programs or chronically unproductive colleagues who diminish their institution’s reputation and effectiveness. In fact, the institution’s inability to respond promptly to circumstances is a threat to their own financial prospects. Ten years from now there will be 4,000 fewer students from Nova Scotia—about today’s total enrollment at St. Francis Xavier and far more than Cape Breton University, Acadia, or Mt. Saint Vincent. Faculty members will be the biggest losers if cost levels prevent universities for competing effectively for out-of-province students.

Government needs to use its spending power to be more demanding. Those universities and faculty associations that reach agreement to enable greater flexibility and focus on excellence should be rewarded at the expense of those who do not. If government fails to respond it will put a very important part of our economy at risk.

Summary

Universities will need to attract growing numbers of out-of-province students if they are to survive. The cost of providing a university education has been growing at 2% above inflation. In a context where government subsidies will grow much more slowly, tuitions will have to rise. The need to compete in a global marketplace will exert considerable downward pressure on tuitions. Government should follow Dr. O’Neill’s recommendations to deregulate tuitions (together with improved student assistance).

This is good social policy. It will also bring much needed focus on the cost effectiveness of University operations.

In the “More information” sidebar, readers can find copies of the faculty collective agreements for Dalhousie, St. Mary’s, Acadia, and St. Francis Xavier, as well as the O’Neill report.