Colleges Should Go Beyond the Rhetoric of Accountability

Visiting Scholar
Richard Vedder
A growing chorus of critics--legislators, governors, alumni, students, parents, trustees, and others--is pressuring colleges to increase "accountability" and "transparency." The critics want colleges to measure whether they are actually achieving their core missions, especially educating undergraduates, and to give people the facts about what they find.

As a member of the Commission on the Future of Higher Education, known as the Spellings Commission, which highlighted the need for more transparency and accountability in its 2007 report, I have supported efforts to respond to such public concerns. For example, both the National Association of State Universities and Land-Grant Colleges and the National Association of Independent Colleges and Universities have developed voluntary systems of accountability, with common sets of measures to help people compare aspects of similar institutions, like cost and graduation rates.

While I am pleased by the new rhetoric supporting openness about internal operations and accomplishments, I remain skeptical of colleges' willingness to deliver truly useful information. Although they seldom directly attack transparency, institutions often object to specific ideas designed to open them to more public scrutiny. They insist that they don't have the information outsiders are demanding or that getting it would be costly or invade peoples' privacy. They complain that their institutional independence is being violated.

If colleges resist calls for accountability and transparency too much, they may pay a high price: the loss of institutional autonomy.

Behind such quasi-valid objections are less legitimate concerns. Colleges are afraid that establishing measures of what their students learn, and sharing the results, might reveal that they are, in fact, doing little, or that college A is doing less well than college B. Or that they are doing things they don't want the public to know--for instance, that administrators are getting large salary increases but professors aren't. Moreover, being accountable takes work and money, and some institutions don't want to make the investment.

Yet if colleges resist calls for accountability and transparency too much, they may pay a high price: the loss of institutional autonomy. The public and its political representatives are getting fed up. When that anger passes some threshold, the politicians will probably act, and colleges won't like the imposed solutions--and for good reason, because those solutions may meddle too much in institutions' affairs. Indeed, if you thought the Spellings Commission was rough on colleges, you haven't seen anything yet.

Right now, colleges are given considerable protection from political interference and operate autonomously. Professors can utter unpopular thoughts and explore zany ideas because it's generally accepted that deviations from conformity often propel scholars, institutions, and society to higher levels of intellectual achievement and prosperity. Indeed, a compelling case can be made for isolating colleges somewhat from the political pressures for conformity and uniformity.

But higher education depends largely on resources from the public. Great universities like Harvard and Yale receive more than one-third of their incomes from endowments, and perhaps an additional one-fourth or one-fifth through government research grants or other forms of federal support. Governments at both the state and federal levels provide appropriations, subsidies, and tax exemptions. They, along with taxpayers and private donors, need an accounting of how their money is being spent.

Meanwhile, rising tuition costs have increased public scrutiny of colleges and further undermined the arguments for institutional autonomy. Scandals around inappropriate spending--for instance, multimillion-dollar packages for departing presidents--have erupted with increasing frequency. Soaring compensation of top administrators has caused political leaders to believe that greater oversight is needed--and that everything important happening on campuses should be fully disclosed.

How can we as a nation protect colleges from undue political interference but also give supporters evidence that their money is being used prudently and consumers the information they need to make admission decisions? One solution would be for colleges to adhere to the spirit of the recommendations in the Spellings Commission report. They could start by providing:

  • Data on sources of funds and expenditures, assets and liabilities, and other financial matters. Accounting techniques and procedures should be described, and accounts should be independently audited.
  • The number of applicants and student acceptances; the quantity and distribution of student aid; the quality of incoming students; the attrition rate of students; graduation rates; the number of transfer students; and the breakdown of students by academic major, ethnicity, gender, and national origin.
  • Measures of learning, including improvements on standardized tests like the Collegiate Learning Assessment, the percentage of students accepted for graduate or professional training, and student involvement in both classes and extracurricular activities as measured by such instruments as the National Survey of Student Engagement.
  • Information on the careers of students who are out at least five years. What are alumni doing? What types of jobs do they have? Roughly, how successful are they? What is the estimated median work-related income of those who graduated five or 10 years ago?
  • Analyses of faculty teaching loads and employment on campuses, including details on how employees are allotted to faculty, academic support, student services, research activities, and various auxiliary enterprises like housing and hospitals.
  • Responses to the specific questions of interested parties, like the news media. How many shares of XYZ Company stock does the college own? How much money is a certain professor getting paid?

Is there some information colleges should not provide, even if it is specifically requested? Yes. They should be able to have confidential discussions about personnel matters--whether to give tenure to a professor, how a supervisor evaluated a staff member's annual performance. Generally speaking, donors should be able to give anonymously. Medical records should be confidential, as should discussions with lawyers about legal issues and options.

In deciding what is off limits for disclosure, however, colleges should err on the side of openness, unless it's clear that disclosure would be materially harmful. Even if a disclosure may be financially damaging, reporting it can sometimes be desirable. The public should know, for example, if trustees have given a president a $1-million golden parachute, even if it causes embarrassment leading to a decline in donations.

Indeed, regarding finances, colleges should be subjected to the same kind of accountability as businesses and other organizations. Corporations face scrutiny from stockholders, auditors, the Securities and Exchange Commission, and others. Under the Sarbanes-Oxley Act, corporate CEO's must certify the accuracy of the company's financial data, follow exacting accounting standards, and withstand external audit. To avoid facing similar mandates, more higher-education institutions should make more information publicly available on their Web sites, such as the data contained in the Form 990s they file with the Internal Revenue Service--as some colleges already do.

Colleges particularly resist calls to measure the value they add to student learning. They argue that institutions have different missions, and a one-size-fits-all formula for assessing learning won't work. But while no single test is perfect, virtually all colleges can agree that certain tests can measure knowledge in subject areas as well as critical-thinking skills. Colleges require admissions tests like the SAT and ACT because such exams measure students' potential. Surely they could administer a similar test at the end of a student's college career--maybe even the SAT or ACT again. At a minimum, colleges could require students to complete one from a menu of different tests. If needed, the College Board, ACT, and others could create new exams.

In addition, colleges could make public more information about their alumni beyond the highly successful ones whom they track for fund-raising purposes. They could require students who received financial aid to report their earnings for five or 10 years after graduation, with the stipulation that the information will be used only to evaluate aggregate postgraduate performance and will not be shared.

Another approach would be to obtain aggregate work-history data from the Social Security Administration. With a modest change in federal law, colleges could simply provide the administration with a list of Social Security numbers, and the administration would then give the colleges the median reported earnings of all graduates of a given class, which could then be made public. (To avoid privacy concerns, no individual's earnings history would be made available.) Why don't we require any college that receives federal funds to request and publish such earnings data?

Unlike the business world, there is no clear bottom line in higher education, so poor performance often goes undetected. But transparency is vital in evaluating what colleges accomplish. In fact, transparency confers immense benefits. Armed with more information, students who view education strictly as a financial investment may aim for low-priced colleges with good track records in producing graduates who go on to successful careers. Cost-conscious parents may seek out institutions with good four-year (versus six-year) graduation rates. Research sponsors and philanthropists may prefer to give money to colleges with low overhead costs. In short, providing more information would subject colleges to competitive pressures and lead to better allocations of resources. Transparency can help colleges, too, by raising public confidence and dissipating unfounded rumors about financial or other improprieties.

To be sure, transparency involves trade-offs--sacrificing a little institutional autonomy to meet the public's legitimate need for information. But colleges must move aggressively to meet this imperative--or face the consequences of increased, and perhaps costly and inefficient, regulatory mandates.

Richard Vedder is a visiting scholar at AEI.

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