The rise and retrenchment of IUP (II)

 

Editor’s note: In a December article in The HawkEye, Dr. Radell documented why Indiana University of Pennsylvania’s gradual cutbacks during the 2010s should have made unnecessary the radical retrenchment announced on Oct. 30. In this article Radell offers more evidence that IUP’s avowed “financial instability” cannot be traced fairly to excessive faculty salaries and benefits, to excessive numbers of faculty or to inadequate faculty “productivity.”

 

‘Fire more faculty’ illogic

By Willard Radell Jr.

INDIANA — On Monday, the American Association of University Professors released its annual faculty-compensation survey with data on faculty at IUP. From 2001 to 2020, IUP’s “full-time continuing faculty” decreased to 462 from 684. During the same period, full-time equivalent students dropped to 9,421 from 13,155, according to the IUP Midyear Budget Report, FY 2020-21

In other words, from 2001 to 2020, IUP student enrollment dropped by 28.4% while at the same time IUP full-time continuing faculty decreased by 32.5%. It is important to note that this decline in faculty positions occurred before the official retrenchment set to begin in June 2021.

The latest AAUP data have a history.

 

When PASSHE Chancellor Frank Brogan said at a media briefing on Oct. 10, 2013, “Make no doubt about it, retrenchment is here,” his statement was more prescriptive than diagnostic. The next day at his strictly controlled first public meeting at IUP, Mr. Brogan added, “There are too many universities in Pennsylvania.”

The handwriting was on the wall. Having power and believing that the “hardness” of “hard decisions” meant they were “good decisions,” Brogan, et al., set out to fulfill their own prophecy.  The three consecutive Florida-launched chancellors who headed the Pennsylvania State System of Higher Education from 2001-2017 left as their legacies contentious labor relations, diminished student choice of curriculum, privatization of student housing and university services (e.g., auto fleet), and fiscal austerity for the instructional departments. 

Meanwhile, funds were diverted to pricey, peripheral, non-academic projects (convention center, athletic complex, suite-style student housing subsidized by university-financed “amenity spaces” and offices, hotel). The projects contributed to IUP’s image and ambience but at best had little to do with generating credit hours for students, which is the primary, measurable “product” of a university.

The 800-pound canary in the coal mine (pardon the mixed metaphor) is IUP’s decrease in student credit hours produced, to 302,000 from 434,000 – a decline of 30% — in less than a decade. (One student taking a full academic load of two semesters of 15 weekly class hours accounts for 30 credit hours produced in a year; see Table 1).

The decrease was anticipated and planned for by IUP managers, faculty and staff over several decades.  Anticipating a predicted decline in the 18-24-year-old population, IUP managers constrained growth in faculty positions early in the 2010s when enrollments were high, radically increased the sticker price (tuition, fees, room and board), and then cut faculty positions to shadow the predictable enrollment drops that came as price increased.

This pre-retrenchment retrenchment can be seen in Table 1, below, as a drop of full-time equivalent (or FTE) instructional faculty positions to 624 from 733 (a 14.9% decrease) between 2010-11 and 2018-19. (FTE adjusts for part-time faculty. Two faculty members, each teaching 50% of full load, count as one FTE faculty member. For managerial purposes, FTE is more meaningful than “faculty head count.”) Table 1 also shows the cut in instructional faculty salary cost to $48.1 million from $54.7 million (a 12% decrease).

These pre-retrenchment cuts, all of which preceded the official retrenchment announcement of Oct. 30, were substantial and showed that IUP managers did not ignore the faculty personnel angle of the expected demographic slump as it played out. But the enrollment decrease was amplified and exacerbated by Harrisburg politicians, by PASSHE managers, by the state-system Board of Governors, and by the most compliant of the councils of trustees and university presidents and provosts, including those of IUP.

IUP and PASSHE spokespersons and leaders have stated or implied the following reasons for faculty retrenchment:  

— Population in Pennsylvania is down, causing enrollment decreases;

— Personnel salaries are a large portion of the operating budget;

— Faculty salaries are a large portion of salaries;

— Tuition is high because of faculty salaries;

— Faculty must be fired to pay for lost revenue from enrollment decline. 

Although, on the surface, the rationale for retrenchment seems reasonable, it breaks down on closer examination of the data.

 

IUP faculty salary costs

Consider the argument that faculty salary costs are the reason for the magnitude of the 2021 IUP faculty retrenchment. Table 1, below, shows how faculty salary costs changed from 2010-11 to 2018-19 (the eve of official retrenchment).

 

*An FTE student is an undergraduate student taking 30 credit hours in an academic year. The number of FTE students is officially calculated by dividing total undergraduate credit hours by 30 (a full annual undergraduate class load] and dividing all graduate credit hours by 24 [a full annual graduate student class load).

Source: PennsylvaniaJoint State Government Commission, “Instructional Output and Faculty Salary Costs of the State-related and State-owned Universities,” February 2012 and February 2020, Historical Tables 2, 5, 6, 7, and 13. Note: Total Faculty Salary Cost has been computed from data in Historical Tables 2 and 7. The increase in IUP Average Instructional Faculty Salary Cost Per FTES and IUP Instructional Appropriation Per FTES stemmed primarily from enrollment decreases and not from the modest faculty salary increases. Most of the numbers presented in Table 1 cannot be updated because Act 50 of 2020exempted PASSHE from annual public data disclosure to the Joint State Government Commission.

 

Close examination of Table 1 calls into question the presumption that faculty salaries are at the root of IUP’s financial woes:

IUP Tuition & Required Fee Revenue Per Student was 2.4 times instructional faculty salary cost in 2010 ($8,080 versus $3,338) and by 2019 it was 3.2 times greater ($13,356 versus $4,151).  Shockingly, just the increase in per-student tuition and fees ($5,276) from 2010-11 to 2018-19 was greater than the full undergraduate instructional faculty salary cost per student ($4,648) in 2018-19. So, the extra tuition and fees each IUP student paid ($5,276) in 2018-19, was more than the full faculty salary cost per student ($4,648) in 2018-19.

IUP Instructional Appropriation Per Student increased by $1,493, while IUP instructional faculty salary cost per student increased by only $955. PASSHE allocations of appropriations lag behind enrollment drops, causing an increase in instructional appropriations per student when enrollments decline. But since faculty salary costs per student increased by less than appropriations per student it is clear that, on the eve of retrenchment, faculty salary costs were not a valid justification for radical retrenchment. 

— Total Instructional Revenues Per Student sums what commonwealth taxpayers pay (Instructional Appropriations) and what the students pay (Tuition and Required Fees).  Per student, that sum was $11,889 in 2010 and $18,658 in 2019, an increase of $6,769. That $6,769 increase in instructional revenue per student greatly exceeds the $955 increase in faculty salary cost per student by more than a factor of seven. That implies that in 2018-19 IUP got $6,769 more instructional revenue per student than in 2010-11. But of that only $955 per student went to faculty salaries; $5,814 per student went somewhere else in the 2018-19 university budget.

 

The big-picture takeaway from Table 1 is that prior to the announced retrenchment of instructional faculty, enough faculty reductions had been made already by attrition that instructional-salary cost numbers looked good compared to IUP’s revenue streams from students and taxpayers. The numbers show that instructional and fee revenue per student grew dramatically from 2010-11 to 2018-19 (up 56.9%) while faculty salary costs per student (up 25.9%) did not share proportionately in the new revenue.  That calls into question the official narrative coming from IUP and PASSHE officials that faculty salaries and lack of faculty productivity (inadequate class sizes) under a regime of declining enrollment justifies the radical retrenchment.

 

‘It’s the demographics, stupid’

James Carville would understand the issue: Is it true that the sharp drop in college-age population has caused a sharp drop in IUP’s enrollment?  From a policy perspective better questions are, “Has IUP gotten its share of recent high school graduates, or has its share decreased, and, if so, what could account for that?”

One answer is that IUP has not gotten its share. In other words, although enrollment would have likely decreased anyway in the past decade, IUP’s market share of the college-age population in Pennsylvania has declined.

The primary reasons have little to do with anything the faculty have, or have not, done. Moreover, the radical restructuring of the PASSHE and IUP (think System Redesign and IUP NextGen) coupled with radical retrenchment of the faculty do not seem likely to do anything to boost IUP’s future market share.

IUP management’s increases in tuition, fees, and room-and-board prices raised the sticker price of IUP attendance in a way that almost guaranteed a drop in market share. The National Center for Education Statistics reported that from 2011 to 2020, the rolling four-year sum of Pennsylvania high school graduates decreased to 476,510 from 522,422, a decrease of 8.79%. At the same time, the Joint State Government Commission reported that IUP’s enrollment dropped to 10,344 from 14,218, a drop of 27.2%.  Clearly, the decreases in IUP’s enrollment exceeded the commonwealth’s demographic decline by a lot.

The influence of the drop of IUP’s enrollment relative to the key college-age demographic on IUP market share can be seen in Table 2 and Figure 1, below. They show an increase in the IUP market share of Pennsylvania high school graduates in 2011 and 2012, with respectable market shares in 2013 and 2014, followed by significant and sustained market share decreases from 2017 to 2020.  Table 2 also shows that had IUP’s 2011 market share of 2.7% been maintained, its enrollment would have been 12,971 in 2020 instead of 10,344, or 2,627 more students (25.4% more).

Table 2

      Year IUP’s Pennsylvania Market Share (Percent)   IUP FTE Enrollment IUP Enrollment, Had 2011 Market Share Been Maintained
2011 2.722 14,218 14,220
2012 2.829 14,820 14,259
2013 2.789 14,587 14,235
2014 2.793 14,493 14,127
2015 2.717 13,917 13,944
2016 2.692 13,554 13,705
2017 2.631 12,990 13,440
2018 2.456 11,969 13,265
2019 2.356 11,379 13,145
2020 2.171 10,344 12,971

Figure 1

IUP’s Pennsylvania Market Share (percent)

 

 

Figure 2, below, superimposes actual IUP enrollment and what enrollment would have been if the 2011 market share of 2.7% had been maintained. It shows a spread that appears as scissors blades (or maybe more appropriately crocodile jaws) on the right side of the graph.  The spread represents enrollment that IUP should have had, but didn’t get.

Note that the crux of the scissors coincides with the institution of large tuition increases and the new per-credit tuition pricing model. The negative spread between hypothetical and actual enrollment in 2020 represents lost revenue on the order of (conservatively estimated) $30 million over the nine-year period.

 

Figure 2

IUP Actual Enrollment and Hypothetical
Enrollment If 2011 Market Share Had
Been Maintained

 

It is often said by IUP and PASSHE spokespeople that IUP’s enrollment has decreased because the population of Pennsylvania high school graduates has decreased.  While that is statistically true as a tendency, it doesn’t explain why IUP’s 2019 enrollment was 10,344 instead of the 12,971 students that would be predicted if IUP’s market share had held at the 2011 level.  

 

WHY DOES THIS MATTER?  Students and the public are being told that the demographic decline is driving the faculty retrenchment. The faculty, who are in the most direct contact with the customers (students) and who are producing all the credit hours that are the raison d’etre for billing the commonwealth for appropriations and billing the students for tuition and most fees, have been targeted for retrenchment.

But the precipitous decline in market share from 2017 to 2020 was not done by the faculty. The faculty and students are being forced to pay a heavy price for a severe problem that did not originate with them while being told that radical restructuring of PASSHE and IUP and retrenchment of faculty and staff will solve the problem.

 

Productivity

Just as the demographic argument is not as strong as it is touted, the productivity data also tell a story that puts the justification for the severe IUP retrenchment in doubt.

One way to gauge faculty productivity is to examine average class size.  Although IUP’s average undergraduate class size has been decreasing over the past seven years, it has been above or equal to the PASSHE average for the entire period.  IUP’s comparatively larger class sizes (25.66 students per undergraduate section; PASSHE average, 24.5) generated more revenue per faculty member and have been more “profitable” than the PASSHE average. 

Going back to 1992-93 through 1996-97, IUP and the state system had the same average undergraduate class size of 22.2. There was no retrenchment at IUP in 1999-2000 when IUP’s undergraduate class size (21) was two students belowthe IUP average on retrenchment eve in 2020.  And there was no talk of retrenchment at West Chester University when in every year from 1981-82 to 2017-18 their undergraduate class size was significantly below IUP’s (five students per class lower than IUP as late as 2012-13).

Figure 3, below, shows IUP’s historic advantage in class size over PASSHE from 1981-82 to 2018-19. In that 38-year span there were only five years when IUP had a lower undergraduate class size than the PASSHE average — 1996-97 through 1999-00 and 2005-06. In other words, in 35 of the previous 38 academic years and in 13 of the last 14 years, IUP faculty were more productive than the PASSHE average.

‘In other words, in 35 of the previous 38 academic years, IUP faculty were more productive than the PASSHE average.’

 

It seems oddly unjust that for the 13 years leading up to the only official IUP retrenchment, IUP’s undergraduate class size was at or above PASSHE average every year.  In 2018-19 when IUP fell to the PASSHE average, suddenly the sky was falling and Chicken Little (PASSHE and IUP) gave its chicks retrenchment letters sending them to the chopping block.  On the eve of the great retrenchment, when the sky fell, IUP’s average undergraduate class size was equal to the PASSHE average.

Figure 3: Average Undergraduate Class Size

(x, PASSHE; o, IUP)

1981-82 – 2018-19

Source for Figures 3 and 4: Joint State Government Commission, Instructional Output and Faculty Salary Costs of the State-Related and State-Owned Universities, February 2020, Historical Table 8.

 

Figure 4, below, compares IUP and West Chester – the largest university in the PASSHE system –and reveals that IUP’s undergraduate class sizes exceeded West Chester’s in 37 of the 38 years.  In the runup to the Great IUP Retrenchment of 2020-21, there was no talk in the state system of clamping down on West Chester because of their significantly smaller class sizes (compared to IUP).

West Chester’s administration used their smaller class sizes strategically to become the largest state-owned university in the system. College Bound Mentor noted that “Westchester’s (sic) … student to faculty ratio is 18:1.”  And West Chester’s own publicity touted the small class sizes. “We offer academic programs that feature small classes.”

In 2020-21, part of the rationale for retrenchment at IUP is that its class sizes, which have exceeded those at West Chester for most of its recent history, are now deemed too low.

 

Figure 4: Average Undergraduate Class Size

1981-82 – 2018-19

(o, IUP; x, WCU)

 

Source for Figures 4 & 5 is Joint State Government Commission, Instructional Output and Faculty Salary Costs of the State-Related and State-Owned Universities, February 2020, Historical Tables 6, 7, 8.

 

Figure 5, below. shows comparative undergraduate faculty salary costs for the six-year runup to the “Great Retrenchment” for IUP, PASSHE and Penn State. IUP, the university marked for the greatest retrenchment of faculty and staff, had faculty salary costs per credit hour below Penn State and below the PASSHE average.  It seems unjust that the IUP faculty, with undergraduate salary cost per credit hour below the PASSHE average, would be the faculty hit with retrenchment.

 

Figure 5: Faculty Salary Cost ($)

Per Undergraduate Credit Hour

(o, Penn State); (x, PASSHE); (+, IUP)

 

 

Recap

For at least 15 years before the demographic crash at IUP began in 2015, IUP managers and knowledgeable faculty and staff spoke of “The Cliff,” which stood for the demographic predictions for the last half of the 2010s (an echo of the earlier demographic drop-off in the 1990s). In response to the prophesy, IUP managers did not allow faculty positions to expand with growing enrollment in the first decade of the 2000s, and they cut faculty positions by attrition in the late 2010s. The AAUP data released Monday underscore how far faculty positions have fallen.

IUP management also thought they were preparing for The Cliff by scrapping the state-owned dorms and replacing them all with modern suite-style dorms that would be so attractive that they would stabilize IUP’s enrollment despite demographic challenges. Unfortunately, the requisite increase in sticker price nullified that hope, and the attendant debt and interest rate swaps on that debt added to the university’s financial difficulties. But The Cliff was anticipated, planned for and addressed by administrative academic personnel policy from 2005 to 2020.

Having prepared, IUP was on a glide path to a difficult but soft landing, ending the flight with enough of the core university preserved to provide a base for future growth and development.  There were crosswinds – like the current IUP administrator who was heard several years ago railing against “the academic mentality.” But most administrators, faculty and staff were on board for an orderly retreat to weather the demographic crisis.

Then came the Covid-19 crisis. On May 19, PASSHE Board of Governors Chair Cynthia D. Shapira praised the “State System family” for the successful response to the Covid crisis [emphasis added]:

“To our other students, our faculty, and our staff, allow me to express our most sincere gratitude for the patience, perseverance, and determination that all of you embodied this past semester in the face of an extraordinary situation due to Covid-19. You have come together to stand against the odds and to demonstrate what it means to be part of the State System family. It means that even when the obstacles are high and the road is long, you find a way and move forward.  We are right here with you and always will be.”

There was no hint that, in less than six months, scores of faculty and staff “family” members were about to pushed out of the IUP plane.

Faculty salaries are neither the reason that tuition and fees are so much higher, nor are they responsible for the current fiscal plight of IUP. Careful analysis reveals that the announced faculty and staff retrenchments have been excessive and the administrative rhetoric used to support radical retrenchment and restructuring has been exaggerated.

Faculty are more productive and less costly than has been asserted, and revenues associated with faculty and frontline staff have been underestimated by PASSHE and IUP managers, the Board of Governors, trustees, and retrenchment-supportive politicians.  IUP faculty salary costs per student and per credit hour are reasonable when compared to Penn State and the rest of PASSHE despite significant drops in enrollment.  Adjustment by attrition for a soft landing should have been sufficient.

The magnitude of the radical retrenchment and reorganization is simply not justified by the numbers and threatens to impair the future credibility of IUP as a university.

———————

Dr. Willard Radell Jr. is an Indiana University of Pennsylvania emeritus professor of economics. He served on various budget advisory committees during many of his 38 years at IUP. He is member of the American Economic Association, the American Statistical Association, The Association for the Study of the Cuban Economy, and the American Association of University Professors. He lives in White Township.

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