The First-Year Experience

H E 5840 College Finance Wednesday 6-9 p.m. Spring 2008

Instructor: Dr. Dan Friedman Office: Edwin-Duncan Hall, Room 223D Email: [email protected] Phone: 262-8083 Office hours: By appointment. Also, I am generally available before class on Wednesdays from 1-6pm. Feel free to call or email with any questions, concerns, etc.

Course Description & Purpose: College finance is a cornerstone of American higher education. Almost every concept studied in this field can be viewed through the lens of finance. The purpose of this course is to introduce students to general financial concepts as they relate to colleges and universities. This course is not so much about the “How” of finance, but rather the “Why” and “So What.” Topics will include: Revenue sources and expenditures, the reasons for rising college prices, the challenge of accessibility and affordability, the role of states, federal government, and institutions in financing higher education, ways to increase cost effectiveness, and institutional and departmental budgeting. These topics will be explored relative to all institutional types.

Course Objectives: As a result of this course, students will be able to:  Identify sources of revenue for colleges and universities along with general trends and limitations associated with each source  Determine how colleges spend money  Reason and articulate the cause of rising college prices  Comprehend the state, institutional, and unit-level budget processes  Understand the role and challenges of financial aid policies at the national, state, and institutional level

Required Text:

All assigned readings are available on ASULearn. Assignments & Grading:

10% Class Participation Class participation includes attending each class session and being engaged in and actively contributing to our discussions.

25% Paper on Rising Prices Please write a paper discussing the reasons for rising college tuition. Be sure to explain the national and state context for rising prices, as well as issues of affordability and access. This paper should be approximately 4-5 pages. Please use APA style to document your sources. Due March 5.

10% Interview with Budget Manager Please interview someone who manages a college or university budget (unit, departmental, division, or institutional level). This can be done via phone, email, or in- person meeting. We will develop of list of questions in class. The results from these interviews should be shared in class when we discuss institutional budgeting.

25% Finance Presentation Groups of 2-3 students will be formed to present on a special topic related to college finance. Groups will be asked to educate the class on their topic in a 20-30 minute presentation. Topics may include the finance of intercollegiate athletics, for-profit higher education, a critique of tax credits and policy, the role of finance in college rankings/prestige, auxiliary enterprises, finance of community colleges, and the Higher Education Act.

30% Final Exam (take home) A take home exam will be distributed in early April and will be due at our last class meeting. This exam will be open-book/notes and will draw upon all the themes of the course. Course Meeting & Assignment Schedule Date Topic Readings Assignment Due/Notes Jan 16 Welcome & Introductions; Overview of course & field; Economic concepts

Jan 23 Revenues & Subsidies 1. Baum – “Concepts in College Finance” 2. Toutkoushian – “Trends in Revenues & Expenditures…” 3. Carnesale –“Private-Public Gap”

Jan 30 Expenditures & Rising 1. Johnstone – “Those out of Form presentation Costs control costs” groups 2. Baumal & Blackman – “How to think about rising costs” 3. Dickinson – “FAQ about College Costs”

Feb 6 Access and Affordability 1. McPherson & Schapiro – chapters 3-5 of The Student Aid Game 2. Baum – “College education: Who can afford it” 3. Baum – “Student aid policies…” 4. Fischer – “Elite colleges lag in access” 5. Fischer – “UVA tries to balance access with prestige”

Feb 13 State Role in Financing 1. Mumper – “State’s efforts to Brainstorm keep college affordable” questions for 2. Jones – “State’s fiscal future” budget manager interview

Feb 20 Federal Role 1. Wolanin “Federal role in higher (student grants & loans; education” research spending) 2. Burgdorf & Kostka – “Eliminating complexity…..” 3. Longanecker – “Tale of Two Pities”

Feb 27 Institutional Issues- use 1. Finder - “Aid lets smaller of merit aid as a strategic colleges….” weapon 2. Ehrenberg - “Admissions and Financial Aid – chapter 5 of Tuition Rising March 5 Endowments, 1. Gibbs – “Role of Environmental Rising Prices paper fundraising & Scanning in Effective due philanthropy Fundraising” 2. Ehrenberg - “Endowments” from Tuition Rising 3. Strout - "Community Colleges Struggle in Soliciting Private Donations” 4. Strout – “In the same state, yet worlds apart” 5. Mead & Jacobs – “Don’t require colleges to spend more of their endowments” 6. Blumenstyk – “Pressure builds on wealthy colleges to spend more of their assets” 7. Congressional testimony on endowments March 12 Spring Break

March 19 State Budget Process 1. Lasher & Greene “College & University Budgeting” 2. UNC Budget Process

March 26 Institutional & 1. “Private colleges remain…….” Budget manager Departmental budget 2. Lasher & Greene “College & interview due process – budget University Budgeting” allocations, budget pools; and state regulations; budget pitfalls April 2 TBD Hand out final exam

April 9 Presentations

April 30 TBD Final exam due College Finance Bibliography

Barbett, S. & Korb, R.A. (1997). Current funds revenues and expenditures of institutions of higher education: Fiscal years 1987 through 1995. (National Center for Education Statistics Publication NCES 97-441). Washington, D.C.: U.S. Department of Education.

Barr, M.J. (2002). Academic administrator’s guide to budgets and financial management. San Francisco: Jossey-Bass Publishers.

Baum, S. (2004). Student financial aid policies: Do they promote universal education? Ford Policy Forum, 7-14. Forum for the Future of Higher Education.

Baum, S. (2001). Higher education dollars and sense: A framework for campus discussions. New York: College Entrance Examination Board.

Baum, S. (2001). College education: Who can afford it? In Paulsen & Smart (Eds.), The finance of higher education (pp. 39-52). New York: Agathon Press.

Baumol, W. & Blackman, S. (1995). How to think about rising college costs. Planning for Higher Education 23, 1-7.

Bowen, W.G. & Breneman, D.W. (1993). Student aid: Price discount or educational investment? The College Board Review 167, 2-6 & 35-36.

Burgdorf, B.D. & Kostka, K. (2006). Eliminating complexity and inconsistency in Federal financial aid programs for higher education students: Towards a more strategic approach. Issue paper for the Secretary of Education’s Commission on the Future of Higher Education.

Burke, J. (2002). Funding public colleges and universities for performance. Albany, NY: The Rockefeller Institute Press.

Callan, P. (2002). Coping with recession: Public policy, economic downturns, and higher education. National Center for Public Policy and Higher Education.

Conklin, K.D. (1998). Federal tuition tax credits and state higher education policy: A guide for state policy makers. National Center for Public Policy and Higher Education.

Dynarski, S. (2000). Hope for whom: Financial aid for the middle class and its impact on college attendance. Working paper for the National Bureau of Economic Research, 1-21.

Ehrenberg, R. (2002). Tuition rising: Why college costs so much. Cambridge: Harvard University Press.

Gibbs, A. (1996). The role of environmental scanning in effective fundraising. In Taylor and Breneman (Eds.) New Directions for Higher Education, 94, pp. 57-67. Jossey-Bass Publishers.

Heller, D. E. (2001). Trends in the affordability of public colleges and universities: The contradiction of increasing prices and increasing enrollment. In D. E. Heller (Ed.) The states and public higher education policy: Affordability, access, and accountability (pp. 11-38). Baltimore, MD: The Johns Hopkins University Press.

Johnstone, D.B. (2001). Higher education and those ‘out of control’ costs. In Albach, Gumport, & Johnstone (Eds.) In defense of American higher education (pp. 144- 180). Baltimore: Johns Hopkins University Press.

Jones, D. (2006). State shortfalls projected to continue despite economic gains; long-term prospects for higher education no brighter. Issue paper for the Secretary of Education’s Commission on the Future of Higher Education.

Kane, T. & Orszag, P. (2004). Financing public higher education: Short-term and long- term challenges. Ford Policy Forum, 33-39. Forum for the Future of Higher Education.

Kane, T.J. (1999). The price of admission: Rethinking how Americans pay for college. Washington, D.C.: Brookings Institution Press.

Kubatzky, T. (2000). Did you say a billion? Case currents (March) 21-24.

Lasher, W.F. & Greene, D.L. (2001). College and university budgeting: What do we know? What do we need to know? In J.L. Yeager, G. Nelson, E. Potter, J. Weidman, and T. Zullo (Eds.) ASHE Reader on Finance in Higher Education, 2nd Ed. (pp.475-502). Boston, MA: Pearson Custom Publishing.

Longanecker, D. (2006). A tale of two pities: The story of public higher education finance in American. Change (January/February), 1-9.

Longanecker, D. (2002). Is merit-based student aid really trumping need-based aid? Change (March/April), 31-37.

McPherson, M., Schapiro, M, & Editors (2006). College access: Opportunity or privilege? New York: The College Board.

McPherson, M., Schapiro, M., & Winston, G. (1993). Paying the piper: Productivity, incentives, and financing in U.S. higher education. Ann Arbor: The University of Michigan Press. McPherson, M. & Schapiro, M. (1998). The student aid game. (Chapters 4, 5, & 8) Princeton: Princeton University Press.

Mumper, M. (2001). State efforts to keep public colleges affordable in the face of fiscal stress. In Paulsen & Smart (Eds.), The finance of higher education (pp. 321-354). New York: Agathon Press.

Paulsen, M. (2001). The economics of the public sector: The nature and role of public policy in the finance of higher education. In M.B. Paulsen & J.C. Smart (Eds). The finance of higher education: Theory, research, policy, and practice (pp. 95- 13). New York: Agathon Press.

St. John, E. & Parsons, M.D. (2004). Public funding of higher education. Baltimore: The Johns Hopkins University Press.

Toutkoushian, R. (2001). Trends in revenue and expenditures for public and private higher education. In Paulsen & Smart (Eds.), The finance of higher education (pp. 11-38) New York: Agathon Press.

“Trends in College Pricing.” (2005). College Board: Trends in higher education series.

Winston, G.C. (1997). College costs: Subsidies, intuition, and policy. The National Commission of the Cost of Higher Education: Straight Talk about College Costs and Prices, 117-127.

Winston, G.C. (1999). Subsidies, hierarchy and peers: The awkward economics of higher education. Journal of Economic Perspectives 13 (1), 13-36.

Winston, G.C. (1999). For-profit higher education: Godzilla or chicken little? Change (Jan/Feb) 13-19.

Wolanin, T. (2005). The higher education act reauthorization: Issues and prospects. NEA Almanac of Higher Education, 39-51. National Education Association.

Wolanin, T. (2003). The federal role in higher education. NEA Almanac of Higher Education, 39-51. National Education Association.

Zumeta, W. (2006). The new finance of public higher education. NEA Almanac of Higher Education, 37-48. National Education Association.

Zumeta, W. (2005). Higher education’s fiscal fortunes: Some light in the tunnel at last. NEA Almanac of Higher Education, 27-38. National Education Association. Important Resources in College Finance

Chronicle of Higher Education (money & management section; almanac) www.chronicle.com

College Board www.collegeboard.com

National Center for Educational Statistics: http://nces.ed.gov/ Integrated Postsecondary Education Data System (IPEDS) http://nces.ed.gov/ipeds/ National Postsecondary Student Aid Study (NPSAS) http://nces.ed.gov/surveys/npsas/ State Education Profiles http://nces.ed.gov/programs/stateprofiles/

Lumina Foundation http://www.luminafoundation.org/ www.collegecosts.info

National Association of State Student Grant & Aid Programs (NASSGAP) www.nassgap.org

National Center for Higher Education Management Systems (NCHEMS) higheredinfo.org

National Center for Public Policy and Higher Education http://www.highereducation.org/

NEA Almanac of Higher Education http://www2.nea.org/he/almanac.html

Southern Regional Education Board (SREB) www.sreb.org

State Higher Education Executive Officers (SHEEO) www.sheeo.org

Western Interstate Commission on Higher Education (WICHE) www.wiche.edu