by Jeff Baldani
Professor of Economics
Professor of Economics
The faculty will soon be asked to vote on a resolution of support for the strategic planning (SP) framework. That framework includes a long list of new initiatives, most of which are clearly desirable in principle. How can anyone be opposed to providing equal access through need-blind admissions, fostering increased globalization of the curriculum, or enhancing integration of living and learning? Well, I’m an economist. My field focuses on scarcity, opportunity costs, and understanding the marginal impact of choices. I look at the strategic plan and quickly come to the conclusion that the faculty should be asking for much more information before being asked for an endorsement.
The SP website has a spreadsheet (or more accurately, a PDF of a spreadsheet) with more than 150 initiatives. Some of these have monetary costs, while some merely place demands on faculty or administrative time. Many of the costs aren’t yet filled in. There is no bottom line total for the SP. The planning framework starts with an admonition that future revenue increases (both tuition and endowment) will be constrained and then lays out a relentlessly expansive vision for spending on new initiatives, programs, and positions. How does this fit with funding the ongoing business of departments and programs? There don’t seem to be any strategic deletions here, so how is this picture consistent with future budget projections? Are there priorities in the SP, i.e., what will or won’t get funded if money is not available for the entire wishlist? Part of the problem here is that last year’s working groups were charged with coming up with good ideas without regard to budget realities and did that job well. We have a Budget Committee as part of our governance system and they should be the group evaluating the budget implications. Before endorsing the SP framework, faculty should ask our elected colleagues on the budget committee report on budgeting for the plan. Some possible topics:
- How the SP initiatives fit with future budget projections, including an assessment of whether the overall level of spending is consistent with balanced budgets and adequate support for ongoing programs.
- How initiatives in the strategic plan we are already committed to will be financed (for example, the new athletics facility is listed as a $500K hit to the annual budget and the Center for Art and Culture, with property taxes, added staffing and other costs, will not be cheap either), and the same question for other items that are APC identifies as high priority and/or cost.
- How new initiatives may increase risks in future budgets, including, in particular, an analysis of the risks of added debt costs, operating costs, and uncontrollable costs if tuition revenues and endowment returns grow slowly. (A prime example of uncontrollable costs would be need-blind where the financial aid budget is no longer under Colgate’s control.)
- Whether (as seemed to be the case with the last strategic plan) the plan’s financial realities will exhaust all possible new initiatives, i.e., whether the plan leaves any room for other new initiatives that might be proposed by departments and programs.
Beyond the big picture that the Budget Committee might provide, faculty should also be asking pointed questions about the effectiveness and costs of individual initiatives. We are not going to be asked to vote on individual initiatives, but that makes it all the more imperative that we feel comfortable enough with the particulars to be willing to endorse the plan as a whole. As a cautionary example in this vein, the faculty should be demanding a careful analysis of need-blind admissions. As compelling as the principle of equal access might be, need-blind has been examined in strategic planning before and rejected on the basis of cost effectiveness, i.e., despite the enormous price tag, need-blind was projected to have only a minimal impact on the academic quality of an entering class.
Understanding how this conclusion about need-blind was reached is straightforward once one focuses on facts rather than anecdotes. The admissions landscape I recall is from decade-old data, but I would be very surprised if the general outlines have changed. There are three key facts:
- The bottom 25% of an entering class (as defined by admissions office overall academic ratings) consists primarily of students admitted for special reasons, including student athletes, OUS and LPRs (legacies, politicals, and relations). Need-blind does not alter the composition of this group.
- The top 25% of the class includes AMS students, aided international students, and both aided and non-aided “regular” admits. Colgate was (and likely still is) already need-blind for regular aid applicants in the top 25%.
- The impact of being need-aware thus falls (or did fall a decade ago) squarely in the middle 50% of the class. The only real question is a matter of where in the middle 50%. Answering that requires actual data on the cutting-room floor and statistical analysis. In particular, there are diminishing returns and anecdotes can be highly misleading because the main impact stems primarily from initial aid dollars: swapped students display increasingly similar academic profiles as aid is expanded toward the need-blind goal.
The takeaway from past analysis was that need-blind would spend many millions of dollars to swap ~60 full-pay students somewhat below the median (B-/B students) of the entering class for ~60 aid applicants somewhat above the median (B/B+ students). Publicly reported admissions statistics on an entering class either wouldn’t have changed at all (such as the 25%-75% percentile of SATs for admitted students) or would have changed only marginally (an increase in average SATs in the single digits). Almost no one involved in past strategic planning viewed this as a good - never mind transformative - investment of scarce resources when evaluated on the metric of academic quality. The one-year experiment with need-blind, the class admitted in 2002, was almost exactly what the data analysis predicted.
I don’t know for sure whether analyzing current admissions data necessarily yields the same conclusions as a decade ago, nor am I considering other arguments in the need-blind debate and saying the initiative should be rejected. (I am, however, skeptical of the other arguments for need-blind whenever those arguments seem to be based on vague hopes rather than evidence.) My point here is simply that the APC should be insisting on careful modeling of data and be sharing the results with the faculty before asking for an endorsement of the initiative.
Need-blind is an example that I know well from involvement with previous strategic planning exercises, but it is certainly not the only place where questions are appropriate. A strategic plan is a complex document, much too complex to fully consider every opportunity cost or tradeoff. Nevertheless, asking about cost, projected impact, and the metric for judging success of individual initiatives is a starting point. Getting answers that indicate that issues have been carefully thought through - answers that indicate APC has done its homework and that there is substance behind rhetoric – would be reassuring when the faculty is asked to cast a blanket yes vote on the SP as a whole.