Rhetorical allocations in higher education

Sara Goldrick-Rab’s discussion in early August of higher education, health care, and costs argues that there needs to be more nuts-and-bolts scrutiny of costs in colleges. I agree, and yet I also think it is difficult to do so cleanly. If you think hospitals are good at obscuring what is spent where (and they are very good at that legerdemain), the practice of budgeting in public higher education makes hospitals seem positively transparent.

Here’s the reason why, or rather the confusing reasons why:

• Some revenue sources are highly restrictive — we may call these pots of money “strictly allocable” because there are harsh penalties for an institution’s ignoring the boundaries. For example, when Goldrick-Rab wins a grant to research the consequences of financial aid policies, those funds go into a segregated account, and she has to use those funds for the activities and the budget approved for the project. Where projects are funded by federal agencies, there are some amazing rules that go with allocability, but the general principle is that restricted accounts generally are segregated and have to be spent for a defined set of purposes.
• Some revenue sources are much less restricted — we may call these pots of money “generally fungible.” There are usually restrictions on this type of funding, but it is as likely to be an effective political restriction as much as legally binding restrictions. So when the Florida state legislature appropriates money for “educational and general” (or E&G) expenses in public universities, the money can be used for a broad range of activities, though there are a few obvious no-nos (no spending on food, to pick one noncontroversial item). When I think about the restrictions on spending “educational and general” funding in my department, I ask whether I could explain my decision to our students and to my neighbors — because student tuition and Floridians’ taxes are paying my colleagues, our graduate assistants, and our staff, there are a lot of ways I could spend money legally but don’t because it doesn’t pass the smell test on public accountability; stewardship is the highfalutin’ language for that.

And now here’s the complexity of higher ed: certain types of restricted accounts may be strictly allocable in theory but fungible in fact, and other spending from less-restricted accounts are mentally and politically tagged as restricted and allocable though the claims are entirely rhetorical. The first is a matter of choices if the same person has spending authority over a range of accounts that include both highly-restricted and less-restricted rules. If the same spending category can be covered by different accounts, you effectively have a logistical choice, so that when funds are low in one account, you can draw from another. Over the past 17 years my department has hired graduate research assistants in some cases from grant funds (for those projects), in other cases from so-called indirect funds (federal funds related to grants but not restricted in exactly the same way), or on occasion on educational and general (E&G) funds.

Thus far, we’re mostly in the domain of practical decision-making. The messiness of revenue restrictions gives us two political complications, assertions by the institution or others about what money is being used for. In these cases, the asserted connection between a revenue source and an expense is not required by law but is allocated entirely by rhetorical construction. It is that rhetorical allocation that makes discussion of higher-education expenses complicated. Let’s handle them separately:

Institutional (internal) claims of allocation. Many institutions will assert that a certain pot of money is allocated for a category of spending in a way that implies that choice cannot be done otherwise. Sometimes that claim is correct–for example, with externally-funded projects such as research grants where the direct funding is tied to project objectives. But sometimes that claim is fictional. For example, my institution claims that the only subsidies to the Athletic Department are in the form of educational and general (E&G) funding going to support women’s athletic scholarships required by Title IX. On its face, that sounds like a valuable use of funding, to ensure both moral equity and compliance with the law. But while there is an institutional requirement to fund women’s athletic scholarships, there is nothing in federal law that requires that those funds be taken out of a specific account. There is nothing in federal law that prohibits my institution’s president from telling the athletic director to pay for women’s athletic scholarships out of non-E&G sources and economize on other expenses such as outrageous coach and assistant-coach salaries. As you might guess, I think she should; for a variety of reasons, subsidizing athletics at the cost of core academics is the wrong set of institutional priorities.

External claims of allocation. But we can’t blame just administrators for making rhetorical allocations that are mentally convenient choices. The same is true of students and faculty and the general public. As students pay an increasing proportion of the costs of undergraduate education, claims magnify about what students are paying for. Are they paying for administrator salaries? Amenities? Faculty research time at those institutions with significant research time (unfunded by grants)? Where there is a clear fee structure — such as athletic fees that pay for a stadium or other athletic facilities — you can identify at least a plausible connection. In other cases, it is more difficult. Is student tuition paying for assigned research time, or is that being paid by the state legislature? How you answer that question probably depends on what you see as the public good coming from public higher education.

The framing of allocation questions is a matter of moral and political judgment, not clear accounting rules. Instead of trying to make arguments from essentially arbitrary allocation questions, the better way to analyze public higher education is to ask about broader institutional priorities:

• What is the public good one can identify in this institution? For community colleges and mostly-bachelor colleges and universities, teaching should be at the core. At research universities, it should be both teaching and research. 
• Is that public good at the center of budgeting and tuition decisions at the college/university?
• In which cases do subsidiary business/quasi-businesses draw either resources or political commitment that detracts from the core public good of the institution? What are the institutional alternatives to expanding/maintaining those subsidiary activities?

There are going to be arguments about the centrality/marginality of large enterprises such as health centers and athletic departments, especially in the ways that the political work on behalf of those enterprises may detract from time spent by upper administrators on core academics. I am not persuaded that the costs of having a Division I-A football team is primarily in terms of the subsidies involved; there are plenty of other indirect costs on both student life and the attention upper administrators pay, often distorting the central mission of the university. Doubt me? Ask those at Penn State or at many other institutions where the university looks remarkably like a football team with a few classes as an appendage.

But the larger point is that the primary issue should be whether the institution’s decisions as a whole serve the public good. Instead of worrying about rhetorical allocation claims, we should be worrying about the bigger institutional priorities. Yes, the rhetorical allocation claims can reveal a great deal about institutional priorities, but that should be secondary to the facts at issue.