How the Push for Online Degrees Hides the Cause of the UC's Financial Probelms

Inside Higher Ed has a new article on Dean Edley and his promotion of online education as the solution to all of the University of California’s problems. It is clear from this piece, and Edley’s constant efforts at promoting a UC version of digital education, that the push for an online solution serves two important functions for the university’s administration: it hides the true causes for the UC’s fiscal problems, and it offers an avenue for more centralized control.

I have been writing for a year that the university has been blaming Sacramento for all of its problems because it does not want to look at its own issues. As I have shown, the central driving force behind the UC budget crisis is the loss of $23 billion of investments during the period of 2008-09. This huge loss dwarfs the state reduction of $600 million, and yet the university has never had to explain why and how it lost so much money and what it plans to do to prevent this from happening in the future.

Another major issues that is starting to get some attention is the idea that the university is losing money on its externally funded research grants. Even the Commission on the Future of the University has argued that the UC system is losing at least $300 million a year because its grants do not pay for the full cost of research. It is clear that a turn to online undergraduate education will not solve the research funding problem and will only function to obscure the investment losses.
However, one thing that the push for online education will do is to help the administration develop and control the undergraduate curriculum. As the Inside Higher Ed article states, the Berkeley Faculty Association “was particularly unnerved by the idea of graduate student-instructors being the “frontline of contact” with online students, as Edley put it. For some, that sort of talk evokes a model many for-profit institutions have used to keep payroll expenses low and administrative control high: have full-time faculty put together the syllabus, then hire less-expensive adjuncts to deliver it.” The idea here is that once the online courses are developed, the central administration can decide who teaches the courses, and the faculty senate will lose their current control over curricular decisions.

Edley’s response to the fear that the administration will take over and replace tenured faculty with adjuncts and graduate students is to argue that the online programs will generate huge profits that can be used to hire more tenured faculty, and this project offers the only hope for the economically challenged system. However, when Inside Higher Ed asked Edley and others to provide details on how the online courses would make money, they received the following response,” The university could not immediately provide the details of its financial modeling, but other documents suggest that the money would come from tuition, fees, and perhaps licenses for "premium access" to course content.” In other words, the UC has no idea how much money it will lose or gain, and it plans to use student fees and tuition to pay for the online courses.

It is interesting that the first comment on the Inside Higher Ed article comes from “Dean Dad,” an administrator who writes regularly for Inside Higher Ed: “It's increasingly clear that public higher ed won't be able to rely on the state to the extent it has in the past; that's especially true in California. As awkward as it can be to grow revenues, it beats cutting costs. The details matter, and I assume they'll evolve, but Edley is broadly right to look at ways to make the core educational mission self-sustaining.” The administrative logic here is that since states are cutting their support for higher education and because undergraduate instruction loses money, the only way to make education sustainable it to let it turn to online education as a mode of making money off of undergraduate students. Yet, as I have continued to show, undergraduate education already turns a huge profit, and these profits are used to sustain the unprofitable sectors like administration and external research.