By: Justin Henry, Editor in chief
Editor’s note: Budget information is made public through the library archives.
“People Over Profits!”
This chant from faculty unions and traditional scholars symbolizes a concerted effort against the “corporate model” brought to higher education. In this new model, a college’s mission to educate its students is compromised. Supposedly, students are reduced to customers purchasing a commodified college experience provided by administrative executives. These executives then profit from climbing tuition, and their professors are relegated to mid and low-level employee status.
The majority of private colleges in the U.S. are nonprofit institutions, meaning they are driven by a mission statement and produce no earnings for stockholders or owners. However, as administrators adapt their colleges to meet the demands of market forces, traditional scholars grieve over the gradual sacrifice of liberal arts.
Although Ithaca College, like most private colleges across the country, is registered with federal and state governments as a tax-exempt nonprofit, critics point to an uncanny resemblance the modern institution of higher learning bears to a business: broadening administrative control, high administrative salary, reducing expenses and devoting large sums of the budget to features that make the college more marketable to prospective students.
The budget narrative for the college’s 2007-08 fiscal year reflects the inevitable struggle of the nonprofit world, where there are no final solutions, only temporary trade-offs.
“No matter the ultimate outcomes, there will be those who feel we raised tuition too much, financial aid not enough, that our employees are being asked to sacrifice too much by our not providing for a salary increment.”
Funding Higher Education
Small, independent colleges like Ithaca College maintain a delicate balance between three main sources of revenue — student fees, donations and endowment income — each of which are subjected to their own capricious market forces. It is student fees that have provided the college with 90-95 percent of its operational budget in the past several years.
With almost 100 percent dependency on student fees, the college must allocate money to academic programs as students enroll in them. For example, part-time faculty are often referred to as “contingent” because their position is dependent upon student demand.
“Our hiring of part-time faculty depends on enrollment needs,” interim Provost Linda Petrosino said. “We are an enrollment-driven institution.”
The college’s discount rate, the percent of tuition revenue the college returns to students as financial aid, was 45.2 percent for the 2016-17 academic year. This means that although tuition price appears excessive at $41,776, a 45.2 percent discount rate means the college only keeps 55.8 percent of the tuition revenue from students. The rest is transferred back to students in the form of financial aid.
The college’s trend of unprecedented discounts on tuition follows suit with institutions across the country after the 2008 financial crisis, according to a report by Cornell University labor economist Ronald Ehrenberg.
“At all but a handful of the very wealthiest private institutions, the majority of undergraduate aid financial aid dollars come from tuition money,” Ehrenberg reported.
The average discount rate climbed from 26.7 percent in 1990 to 42 percent in 2008 for full-time, first-year college students, according to a study by the National Association of Colleges and University Businesses (NACUBO).
Older and more prestigious institutions have endowments that dwarf Ithaca College’s as well as deeply rooted donation networks that account for a larger portion of the operating budget. Cornell University, for example, has an endowment worth $6.03 billion. Ithaca College’s endowment is only $269 million, according to the online endowment report.
This sets the stage for Ithaca College to compete with other small, independent colleges in the Northeast for students who can afford climbing tuition rates with little to no financial aid. Consequently, rankings in U.S. News and World Report and “re-envisioning” the student experience are critical for the college in order to secure its largest source of revenue.
Once the markets crashed, the impact devastated the college in ways that continue to affect it today. The endowment decreased by over one-third, from $237.2 million to $150.8 million. The college lost much of its expected revenue from students as many middle-income families couldn’t afford college tuition, even with the college’s unprecedented discount rate.
“Fundamentally, organizations will face significant choices about capital investment, appropriate staffing levels, and prudent endowment spending policies in an environment where little about the future can be predicted with confidence,” the budget for the following year cites from an article by Moody’s Investor Service.
During the years following the financial crash, the college faced declining rates of qualified students in the Northeast region applying to college. This posed a challenge for the college’s budget team to keep tuition at a level that could sustain the college while offering low prices to keep it affordable.
Enter Tom Rochon in the spring of 2008, who was tasked by the college’s board of trustees to “strategically re-envision” the college’s future. This began as an integrative program for general education studies but grew into 15 initiatives known as IC 20/20.
“We expect that with the accomplishment of this vision, Ithaca College will augment its reputation, increase its organizational alignment, sustain operational excellence, and be widely known as the home of a distinctive and valuable model of education,” the preamble to “IC 20/20: Focusing our Vision on Student Learning” stated.
The supposed re-imagination of the student experience sought to provide an original framework for the college experience while simultaneously settling all of the college’s financial woes. With its new vision, the administration aimed to cultivate a loyal student body that would serve as a reliable source of donations after graduation.
A New Vision
Chris Biehn, vice president of institutional advancement, said a nonprofit institution like the college has its obligation to a student-centered mission, which means everything in the budget must be evaluated based on its contribution to a better student experience. These decisions are made at interdisciplinary meetings with the Institutional Effectiveness and Budget Committee (IEBC).
“We are all looking at all the resources and looking for ways to strategically allocate them to student experience,” Biehn said. “And we’re always making tradeoffs.”
President Rochon’s administration is marked by a re-evaluation of values, quality and cost that was described in the budget for the 2013-14 academic year in the equation Value=Quality/Cost. Carl Sgrecci, former Ithaca College vice president of business and finance, said this philosophy must be integrated into the entire college.
Thomas Pfaff, an Ithaca College professor in the department of mathematics, said this line of thinking treats quality and cost as though they don’t affect each other. For example, when the college cuts costs by hiring more non-tenure-track faculty members, they shortchange the quality of education by hiring faculty members with less years of experience.
“If you lower cost, it’s likely going to impact quality,” Pfaff said.
Throughout the country, much of the funding that would have gone toward opening tenure tracks for new faculty have been redirected to projects intended to make the college more attractive to tuition-paying students, according to “Trends in College Spending: 1998-2008.”
IC 20/20 first manifested as the Integrative Core Curriculum (ICC) and the Freshman First Year Experience (FYE). Future projects included building a China center, creating an Office of Civic Engagement and increasing diversity and inclusion at the college, all by the year 2020. By the end of the 2011-12 academic year, the budgets reported that the college spent a total of $171 thousand on these initiatives, calling the ICC by its previous name, “IC Squared”.
Although projects like these are criticized as “frills”, Ehrenberg reported statistics indicating that colleges who invest in these projects see higher rates of graduation and lower rates of first-year dropout at four-year institutions. These statistics are critical to the college’s competition to receive donations, grants and tuition revenue.
By the end of the 2014-2015 academic year, IC 20/20 was central to the college’s operational functions. Rather than listing the initiatives separately, the budget divided the expenses among several categories such as “salaries and benefits” and “employee recruiting.”
“Initiatives that have already been funded are now a part of respective departments across the campus; therefore, managing the overall effort will become much easier as they are analyzed with other strategic priorities,” the budget for the 2014-15 academic year reported.
Despite the optimism expressed by early projections for IC 20/20, its implementation came to a halt in 2016. President Rochon announced the college’s future was in the hands of the new president and the vision he or she brings comes in with. With many of IC 20/20’s efforts unresolved — the China enter, the Office of Civic Engagement — and with no clear vision for the future, many faculty members are left demoralized, insecure about their roles at the college.
Funding for these monumental changes had to come from somewhere inside the school. Even fundraising for IC 20/20’s programs initially required expenditures, which put a financial strain on other aspects of the college’s budget. Gerald Hector, former vice president of institutional advancement at Ithaca College, cited college affordability as the primary reason for reducing the college’s expenses in the budget narrative for the 2014-15 fiscal year.
“We are lowering our rate of increase in tuition and increasing the discount rate, which both affect the net tuition negatively,” Hector reported. “The consequence of these actions puts a new emphasis on reducing operating expenses since there will be less net tuition revenue to pay for them.”
Financial practices by Rochon and Hector, which were criticized as “corporate,” would eventually lead to record-breaking rates of tuition increase for the 2014-15, 2015-16 and 2016-17 academic years.
For the 2014-2015 fiscal year, Ithaca College implemented college-wide cost cutting practices, such as “strategic sourcing” and “zero based budgeting.” The goal of “zero based budgeting” was to distinguish between the college’s “needs” and “wants”.
As a result, Hector reported in the budget narrative for the 2015-16 academic year that $1 million had been reclaimed from “vacant or redundant” positions and would continue to look to cut $2 million more in the year.
“Zero based budgeting” caused anxiety among the faculty, because it required each department to defend the allocations it received from the budget as a “need” rather than just a “want” in annual meetings with the Institutional Effectiveness and Budgeting Committee (IEBC).
David Turkon, chair of the department of anthropology at Ithaca College, said competition for financial resources from the administration, such as filling a vacated faculty position, has increased between the various departments as the IEBC has moved toward requiring departments to make a case for their portion of funds.
“If [the anthropology department] loses a faculty member, that faculty member is not replaced, unless we can show that we have the numbers among our students to justify replacement of that line,” Turkon said. “It puts us in competition with other programs to attract the most number of students that we can.”
Departments dedicated to humanities, like anthropology, politics, history and English, lose out in this new system, since they offer less opportunities in the job market. They are therefore undesirable by students focused on using their degree to get a job and pay off student debt.
For those reminiscent of a “Golden Age” in higher education with its dependence on life-long careers of humanistic scholars, the decrease in full-time tenured and tenure-track faculty in institutions in the second half of the 20th century threaten to make obsolete careers devoted to liberal arts academia.
For tenured professors and department chairs, increasing reliance on part-time faculty threatens to have a negative impact on the quality of education, especially in humanities fields. John Rosenthal, professor in the department of mathematics, said he and other full-time faculty would be delighted to see the administration meet the demands of Ithaca College’s contingent faculty union, because this would mean the college had enough funds to support more tenure-track positions.
Professors in the School of Humanities and Sciences also took issue with the commodification of the college experience and a culture of anti-intellectualism at the college. Turkon said he is urged by administrators to sell Ithaca College as an experience rather than anthropology.
“The idea is you’re selling a college experience and trying to attract people into a college environment or community,” Turkon said. “An awful lot of faculty have felt that academics are devalued on this campus.”
The “Blue Sky Reimagining” during the Fall 2015 semester demonstrated the new anti-intellectual culture at the college, which devalued in-class scholarship in exchange for experiential learning. During the event, one of the panelists, Chris Burch ‘79, referred to the native population where he built his hotel as backwards because they sold women in exchange for livestock.
“That struck me as evidence of why Burch needed book learning,” Turkon said. “That’s something you could overcome in an anthropology class. It’s not the buying and selling of women. It’s the forging of community relations.”
Chris Biehn from the Office of Institutional Advancement said the college’s emphasis on experiential learning was not meant to replace classroom learning, but to complement it.
“You can’t have experiential learning without classroom-based learning, ” Biehn said. “You need to understand concepts learned in the classroom in order to go out into the world and apply them.”
Conclusion: A Split in Vision
The story of Ithaca College’s split community is a story of dispute in vision between the ideals of faculty and the response from administration to capricious market forces. With the latter of these two groups holding final executive power, response from the college communities has manifested in grassroots activism, protests, open letters and unionization.
With so many projects of IC 20/20 left unresolved, even after Rochon announced that it would be wrapped up with his presidency at the end of the Spring 2017 semester, many faculty members are left demoralized and insecure about the future vision of the college and whose hands it will fall into.
Although IC 20/20 has formally come to a halt, Biehn said the Office of Institutional Advancement would continue to raise money for its existing programs’ continuance by providing new endowment funds into the college’s portfolio.
With declining enrollments in upper level classes in humanities, writing Professor Anthony DiRenzo said colleges are less likely to support liberal arts academia so that students will be drawn toward more profitable fields. He expressed fear that Ithaca College would follow the trend of other independent colleges to use introductory level liberal arts courses to supplement the technical training curriculums.
“What they do, essentially, is they gut those departments and combine them,” DiRenzo said. “They take anything that isn’t an automatic degree … bunch them all together and call them ‘ The Department of Humanities’.”
DiRenzo expressed concern for the future of the college, especially after the administration closed the search for a new president from the public eye. Although there are practical reasons to protect the identities of qualified candidates, DiRenzo said the decision ignored why there has to be a search in the first place.
“This means in the spring, they’re just going to surprise us as to who the new president is going to be,” DiRenzo said.
There was a time, DiRenzo said, when the entire college was united behind IC 20/20 and the ICC because it promised more respect for the School of Humanities and Sciences. In fact, it was Rochon, whose administration would soon be characterized as aloof and uncaring, who galvanized the faculty to support the ICC because it promised the fruits of a liberal arts education.
“One of the reasons so many people got involved in IC 20/20 was because Tom had built up so much goodwill by having those meeting groups, by dropping in and saying ‘hello,’ by calling you,” DiRenzo said. “Even Peggy did not do that.”
In the end, sociological forces have proven stronger than the goodwill of individual people, DiRenzo said. While professors may yearn for a previous era of higher education with heavy reliance on tenured and tenure-track faculty, colleges and universities must respond to the demands of the market, Ehrenberg wrote.
“The pressures that public and private colleges and universities face to expand enrollment, to increase graduation rates and to limit future cost increases will likely only exacerbate the decline in full-time tenured and tenure-track faculty,” Ehrenberg said.