Yesterday, I wrote about a financial transparency bill that is making its way through the Ohio State Legislature. The bill, if adopted, will require higher education institutions to provide a statement to students regarding the actual costs they can expect to pay and the income that the school’s graduates in the 25%th to 75th percentiles earn immediately after graduation and five years after graduation.
This is a “McDonald’s move” applied to higher education. In 2017, the Food and Drug Administration started requiring certain restaurants (including McDonald’s) to post calorie counts on their menus. The company’s revenue dropped by more than 20% in the three years following the ruling’s implementation.
If the same strategy becomes common in higher education (and I think it will), how long will it take for legislatures to require institutions to report on their instructional and non-instructional expenses? The compensation costs for the institution’s five or ten highest compensated employees? As I mentioned yesterday, the size of the institution’s maintenance liability?
Requiring true financial transparency would raise more questions than it would answer. When this happens – and it will – higher education institutions will have no one to blame but their trustees, regents, governors, or whatever else they call themselves. If the elected or appointed officials who are supposed to be asking questions actually did their jobs, the state legislatures would not be questioning things that institutions that would prefer no one asked.
And how long will it be before the state takes over the oversight responsibilities that the trustees should be performing? It really isn’t the trustees’ job to give advice; it is really their job to provide oversight – actual, honest-to-God oversight.
Trustees must provide responsible oversight for higher education institutions
When trustees refuse to ask questions, financial mismanagement occurs. No one asks why it is necessary for a medium sized certificate school to have 12 (now 11) Vice Presidents. Nobody questions whether it is a good idea to build a new building when enrollment is lagging. It is seemingly acceptable to allow a publicly funded, privately operated fitness center that offers no draw to students to lose millions of dollars on operations. But it is absolutely impossible to allow the campus daycare, which could attract and support single and working parents, to remain open. Trustees who allow the administration to devote a negligible amount of money to maintain publicly funded facilities invite additional regulation by the state.
When trustees routinely and willingly abdicate their oversight responsibilities, at some point, the state will come knocking. Someone has to watch the money, and if the elected or appointed officials refuse to do that (or don’t know how to), legislators – many of whom are now openly hostile to higher education spending – will be more than happy to start sifting through the books.
Photo Credit: Hideya Hamano , via Flickr