Demise of Pac-12, Campus Spending, and DeSantis at Yale

I'm feeling it. You're feeling it, Jeff. And I suspect I know what way too many students are probably feeling right now as well, that our summer breaks went by way too fast.

Oh, yes, it did, Michael. But maybe there'll come a day when we don't take that break because it seems Higher Ed didn't take one, given the deluge of headlines from around Higher Ed that greeted us when we started planning this episode, the kickoff of our seventh season of Future youe. This episode of Future youe is sponsored by Ascendium Education Group, a non profit organization committed to helping learners from low income backgrounds reach their education and career goals. For more information, visit ascendiumphilanthropy.org this episode is brought to you by the Bill and Melinda Gates foundation, working to eliminate race, ethnicity and income as predictors of student success through innovation, data and information policy, and institutional transformation. I'm Jeff Salingo.

And I'm Michael Horn.

It's so good to be back with all of you on Future UN with you, Michael.

Likewise, Jeff. I'm thrilled to be doing a seventh season.

Yeah, I know. It's incredible how fast that has come. And you know that I ended my work travel in late June, and it was on that trip to the west coast that I met a provost who told me that he downloaded a bunch of episodes to take on his summer vacation, which was about to start. Now, I didn't want to tell him how to spend his vacation. And we really do appreciate all of our listeners out there, trust me, but I'm not sure I would have spent my summer vacation listening to us. So, Michael, I assume you didn't go back listening to the archives of Future youe for your summer vacation. So. So how was your summer?

Oh, but I was so tempted, Jeff. But it, it flew by as I think everyone I've talked to, their summer seemed to have not nearly the number of cookouts and times in the tennis court that I had perhaps expected. Primarily, I think that was because our home renovation that we started back at the end of January, so during season six is still ongoing, Jeff. But we did get in some nice travel in all but one of the states that comprise New England. And of course there was some work sprinkled in, but fewer trips outside of1 to DC to testify in Congress actually on higher education.

So what was one of those states? That one state?

Yeah, the one state we didn't get to was Vermont on this particular summer. You know, we get there for skiing, though.

Well, you also spend time finishing the edits on your next book. So how did that go? And any quick update there for our listeners?

Yeah, that's absolutely true. It's been all consuming in some ways and in others, I'll say it's sort of like the furthest ahead I think I've ever been on a book, given that it doesn't come out until November 2024. So after the presidential election. But literally, as we're recording this, I just put the final edits on what we're going to submit as the first draft to our publisher, Harper Collins, and my co authors and I, Ethan Bernstein at hbs, and Bob Mesta. We still don't have a title, Jeff, but all I'll say for now is that all of our listeners who are perhaps thinking about a job change or, you know, someone who needs to change jobs, this will be the book for you. How about you, Jeff, though? How did you feel your summer?

Well, Michael, personally, there were lots of time spent at swim meets as both of our girls are on a summer swim team and they also went to camp up there in New England. And I was going to say our

neck of the woods.

Yeah, your neck of the woods. So it was good to they really enjoyed it up there. A little cooler than D.C. that's for sure. So that meant that really the second half of our summer was spent on family vacation. But the first half, in many ways was really productive with work. For one, I was finishing up a new book proposal, which I'll talk about in a future episode. We also completed the recruitment of this is really unbelievable to me, our 10th cohort of the Academy for Innovative Higher Education Leadership, which is a partnership between Arizona State and Georgetown. We have 30 individuals in this new cohort that will start this fall. And if I can just take a minute talking about the alums of this program because, Michael, we're now coming up in our 10th year, and I'm just incredibly impressed with the people who have come through this program. We have Charles Isbell, who is very familiar to the listeners of Future you, who this summer became the provost at the University of Wisconsin at Madison. When we had him on last season, he was still at Georgia Tech. We have Lynn Wooten Perry, who's formerly of Cornell's business school, who's now the president at Simmons University, who we're going to actually have on the podcast this season, Brian Brayboy, who became dean of the School of Education and Social Policy at Northwestern University Adrian Kluger, who was named the US executive director of World Bank. We have more than 250 alums at that program now. And while I highlighted some of the promotions, you know, what's most important is that the majority of the people who come through this program remain at their institutions, many in their same jobs, but with kind of a new mindset and a set of tools to carry out new and major innovations on their campuses. And so, you know, we'll put a link to the program in the show notes, should any of our listeners be interested in applying for next year. But, you know, Michael, when this new cohort meets in Washington this fall, you know, I really do think the discussion will be very different than the one that I heard in recent years. You know, last year was about getting back to normal, and in this year I think it's going to be about a new normal.

Well, you know, I'm going to ask what do you mean by that? Because that's a curious phrasing.

Yeah, you know. Well, you know, the new normal is obviously being talked about a lot post pandemic. And, you know, we've been warning since the last group of money from the federal government and Covid aid ran out that there would be a reckoning in higher ed, and that the normal is not one we're returning to from 2019, but rather it's a normal that I think probably would have come in 2023 anyway without the pandemic, but one that was really accelerated by the trends of the pandemic, namely things that we talked about on this podcast. Enrollment losses, increasing skepticism of institutions overall, whether that's Congress or colleges or universities. And Michael, I quickly want to tie together three higher ed headlines in recent weeks because I think really explain this new normal that we're going to be living through, probably likely for the rest of this decade, if not longer. And so the first is the big athletic conference realignment. And if you don't follow sports, essentially what happened this summer is the PAC 12 collapsed overnight. The PAC 12 was trying to get a new television deal. And that's really where the money is in college athletics to run these massive departments where the strength and conditioning coach of the football team often makes more than the college president. Well, it turns out that the best the Pac12 could do with their, you know, Pacific time zone football games that us, those on the east coast don't love to watch and stay up till late to watch because, you know, we know it's football and basketball that really drive these television contracts. Well, what they ended up with was really kind of sounded like an innovative streaming deal with Apple. Now, it was reported And I must admit, I really devoured the news on this in the Athletic, which is one of my favorite reads every day, that some presidents didn't want to be streaming on Apple. They wanted traditional linear television. And others were worried that part of the deal with Apple was that universities had to essentially sell subscriptions, which the president of the University of Arizona likened to selling candy bars for the Little League to go out and raise money for sports. So what happened in the end, for those of you who don't follow, this is the University of Washington and the University of Oregon. They bolted to the Big Ten. The University of Arizona, Arizona State in Utah left for the Big 12. And it was a pure money grab by the universities that needed the dollars to really sustain spending on coaches and facilities. And so whether it was the $32 million annual payout per school that schools are going to get in the Big 12 or it's 60 million in the Big 10, and those are amazing numbers to me. It's important to remember, I think, that those dollars are furnished by this traditional linear television, which is quickly dying. I wonder, really, how many university presidents really think those dollars will be there the next time these contracts come up, especially if Disney sells off ESPN or partners with somebody or cable subscribers continue to cut out sports. So when the University of Arizona president pooh poohed the media deal that the PAC12 had negotiated with Apple to stream games, I think really that Apple and other streaming services will probably be a lifeline for universities by the end of this decade when the networks can't pay top dollar anymore. It's going to really be difficult for these universities beyond the very top ones in sports or with endowments like Texas or California, to sustain athletics in the face of other pressures that we saw in the second headline, I wanted to tie to this new normal, and that is the news out of West Virginia University. As many of our listeners might know, the state's flagship is planning to cut more than two dozen programs in a proposal that goes to the university's Board of Governors next week. And at first, the proposal was that all of its languages were going to go, but now it seems like they're going to save Spanish and Chinese. But grad programs and math are on the chopping block. And the, the cuts there are needed to close a projected $75 million deficit by 2028 that was really widened by, you know, way too optimistic enrollment goals over the last decade that weren't met at West Virginia.

Yeah. So, Jeff, I'm. I'd love to know in your view. Is this the case just, you know, demographics catching up with West Virginia, because we know the demographics of college aid students are going in the wrong direction, particularly in the Northeast and Midwest. Or do you think something else is going on here?

MICHAEL I think that demographics play a part, surely. But there is a great separation happening among colleges and universities, and that's even in the case of state flagships, which I think many people thought were kind of immune to the demographics which would largely hit the regional publics or smaller privates. And at West Virginia, they had the playbook of many other big public universities, and for that matter, many other universities large and small over the last decade, and spending on programs and amenities meant to attract students. And they tried really hard to attract students from other states, of course, who pay more at public universities. But the problem is that it's hard to get students, to be honest with you, to go to Morgantown, West Virginia, especially when Pitt and Ohio State and Indiana and others are doing the same thing. And at some point, you know, enrollment is a zero sum game. And I think that West Virginia just lost out way too often. And there's really this growing divide in higher education among winners and losers, and it's often, I think, driven by the wealth of students going to these institutions.

I'll just jump in, Jeff, for a moment to say this is a huge point, and I think what it shows is that you cannot outspend reality, and if you do well, there are big ramifications to trying to be all things to all people. Morgantown just doesn't have the appeal of, say, a Miami or an Austin, Texas. But if I take what you're throwing down, Jeff, then am I right to assume that this third headline that you want to tie in is another one from economists, and this time at Harvard's Opportunity Insights Project, perhaps?

Yes, that is the third headline which got a huge headline in the New York Times when it came out in July, and that's the continuation of work done by Raj Chetty, whose name has really now become synonymous with this data that they use from tax records about the wealth of students who go to certain colleges. Now, the headline of that story, and we'll add it to the show notes, found that at a group of 12 institutions, essentially the entire Ivy League plus Stanford, Duke, MIT and the University of Chicago, applicants from families in the top 1% were 34% more likely to be admitted than applicants with the same SAT and ACT scores, and those from the top 0.1% were more than twice as likely to get in. Now, we're probably going to talk about this study more at some point, Michael. But what's interesting to me is that while those numbers kind of got the headlines, the researchers didn't just study elite universities because their sample included 139 institutions in all. And when you look at those places, you see the ultra rich are not just enrolling at the Ivies as the study found, but also at a slate of other institutions further down the ranking. So let me explain quickly using a few specific institutions from an interactive with the data that Open Campus put together and again, we'll also link to that in the show notes first to just give some context to this study. The 99th percentile in the study is families with incomes at 660,000 a year and above. And then the 0.1% are good put bit higher. And what you'll find is that colleges like Elon or Wake Forest or Bowdoin where there's this huge spike at the very top among those 0.1%. And those places seem to be, as Open Campus said, a real magnet for the uber wealthy. And then in contrast, you have a university like Case Western that doesn't really have that wild swing at the very top and really seems to struggle to get the very rich to go there at the same rates as merely the well off. Right. And I think American University also sees the drop off once you move from families led by those making in the hundreds of thousands of dollars to families making millions of dollars a year. And the publics follow similar patterns. The University of Michigan at Ann Arbor, where we're going to be for the next stop of our campus tour next month. They attract a lot of students from out of state who are at the very, very top of the income scale. The University of Kentucky, not so much. And that over time will have, I think, long term implications for institutions that are able to attract the very wealthy and those that aren't, given the demographics, athletics, spending and all of these issues.

Super interesting, Jeff. And I do like how you wove the University of Kentucky in there as an example because it was the lead in a powerful Wall Street Journal piece that I want to discuss when we come back on this episode of Future you.

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So welcome back on Future youe and Michael, you mentioned right before the break that great piece in the Wall Street Journal last month that we'll also link to in the show Notes and it it outlined in detail the spending habits of public flagships over the last 20 years. And I think in many ways, to be honest with you, you know, backed up your argument that we can't just blame state disinvestment for rising tuition at public universities over that time.

Yep, yep, yep. That article, which was by Melissa Korn, of course, a Future YOU veteran, as well as Andrea Fuller and Jennifer Forsyth, and the opening line made that argument that I've been making. And it's quote, you know, the nation's best known public universities have been on an unfettered spending spree. That's their words, not mine. And you mentioned the University of Kentucky, and the article says, quote, it upgraded its campus to the tune of $805,000 a day for more than a decade. And then the article has this graphic that shows the percent change in spending versus enrollment between 2002 and 2022 that essentially showed spending is rising much, much faster. So that means that spending in absolute terms is rising, but it also means that spending per student is also increasing. And just to quote from the article again, because why quote for myself when they make the argument at the median flagship University, spending rose 38% between 2002 and 2022. Only one school in the journal's analysis, the University of Idaho, spent less. And I'll just note that enrollment fell there, although spending did fall faster. Now, from my perspective, Jeff, here's the thing. I've made the argument that over a much longer period and on an absolute basis, state spending in higher education has actually gone up, by and large. But it's true that if you look at it from 2002 to 2022, the Journal found that it's gone down writ large. Yet what's interesting, I think, is that the reporters also found that, quote, for every $1 lost in state support at those universities over the two decades, the median school increased tuition and fee revenue by nearly $2.40 more than covering the cuts the journal found. So I just want to make sure that this is clear. Spending by colleges has gone up faster than inflation at the same time that state spending went down. Take that and you put them together and that means that tuition has risen by a lot even more. So it could cover those cuts. Now, I will say that, look, these schools don't have economies of scale. That's a point that Rick Levin made to us on the podcast. They have balmos cost disease. They have, you know, they're all about prestige. It's about growth and revenue over cutting costs, said the article. And they had this great quote from another past guest on Future you, Holden Thorpe, who of course was chancellor at UNC Chapel Hill and is now editor in chief of Science. And he told the journal, quote, these places are just devouring money. Offering everything to everyone all at once is unsustainable, he said, and universities need to focus on what their true priorities are and what they were created to do. So yes, Jeff, safe to say I felt seen by this article. And the spending argument is one that Western Governors Universities President Scott Pulsifer and I have subsequently made in a few more articles at Forbes and at the Deseret News, which we'll link to as well.

Well, and Michael, you also brought this argument to Capitol Hill as well this past summer when you were asked to testify before the subcommittee on Higher Education and Workforce Development. And we'll link to a video of the subcommittee notes, but quite an honor to have the co host of Future you in front of Congress. And at least it was for something good and you weren't being hauled up there like all the tech CEOs. And in short, what did you tell them?

Well, I'll say it felt mostly good, Jeff, mostly. But I, I essentially advanced the argument that students aren't the only customer of higher education, but taxpayers are, of course, a major one as well, and that taxpayers are paying for what they get, in essence, which is enrollment of students, not employment, not learning, not life outcomes. And the sum of this is that there are far too few incentives in my mind for institutions to focus on student outcomes in terms of financial returns, employment and learning. And the result, of course, is what we just talked about. You know, higher ed has long been on this unsustainable spending trajectory. And since 1970, spending by public colleges and universities rose from nearly $104 billion in today's dollars to 420 billion by 2020. Now, the historical answer for Congress has really been accreditation, which again we discussed at length last year on future you and a future you one on one with Barbara Brittingham. But my observation in the testimony is that as we learned on that show, accreditors were not built originally to focus on outcomes. And I'll add that they don't really think of value in the same way that students and families and taxpayers do. And you know, for listeners of future you, I would say a lot of the themes then that you've heard me talk about in shows came up in some quick sound bites. You know, regulating inputs doesn't make sense. The regulations on third party servicers that were advanced and then at least somewhat rolled back, it seems won't help anyone. And I advance the argument that policy should be focusing on student outcomes and empowering, you know, freeing up schools to figure out the best ways to deliver value for students and taxpayers. And just two points in particular there, which again, drew on some past guests that we've had here. First, something we talked about with Ron Lieber, which was that there should be upfront price transparency so students know what they're going to pay on the front end and not have any surprises. And then second, I talked about how Congress could pass policy to require that colleges share in the risk when student borrowers don't repay what they take out in loans. And that having skin in the game, if you will, I think would make them more mindful of making sure that the programs they offer will mean that there's really a return on investment, you know.

So, Michael, for our listeners, you know, some of whom as academics might have had the opportunity to testify on the Hill, what's it really like? Are there any, any stories you can tell us?

Well, I don't know how juicy. It's the second time I've gotten to do it. I will say, Jeff, the the staff is really good and they are listeners of Future youe. They, as a result, not just of listening, but in general, they really know the issues. And this time around, I was incredibly well prepared and ready for the questions that I'd likely get. And then the staff also tells you and perhaps warns you that you're going to get some questions out of left field, or perhaps it's right field, depending on where they come from, I guess from folks that have their pet issues, whether that's, you know, around the whole De and I conversation, for example, or maybe the most memorable exchange was with Representative Manning from North Carolina, where she basically went to me and each of the panelists and basically said, Mr. Horn, you know, you have a liberal arts history degree from Yale University, correct? Source? Yes. Right. And you sort of go down and the stated implication was, look, you know, you're talking about aligning value with labor market returns, but the degrees you have, they do have labor market value. And I think the implication was somehow that risk sharing or putting the focus on outcomes would cut those things out. But I guess where you. You can't really get in there, Jeff. Right. When they're on a roll and say, your view. Because I would have loved to say, look, yeah, my history major paid off. But here's the thing. Under a proposal where there's risk sharing, Yale University, you know, they could still offer the history major because it'll be just fine. I think the real concern would be if the government started micromanaging. Right. Which degrees universities could or couldn't offer, perhaps based on what it thinks, you know, will be the hot fields or skills or majors in the years to come, all that, say, a metric that ensures that taxpayers and students are protected from programs that deliver poor value and a poor return on investment. I don't think they're going to negatively impact those liberal arts programs that, in my view, offer very valuable skills and credentials in the labor market, and I think, frankly, skills that are going to increase in value in an age of artificial intelligence.

Yeah. So sticking with politics, Michael, I want to get your read on two things. One that is, in my mind, in the realm of the ridiculousness, I think, but let's stick with the first one. First, the New York Times did this big piece on Ron DeSantis and how he leaned heavily on his Ivy League schooling as an undergrad at Yale and law school at Harvard, but then turned on that Ivy League education and used it as fodder in the culture wars in Florida and now running for president. Now, I'm not going to go into every detail of the piece. We're going to link to it in the show notes, but given you overlapped with DeSantis at Yale for a few years, I was kind of curious about the depiction of campus life there in the piece that, for example, the student body didn't take the baseball team seriously, of which DeSantis was a member, the working class fraternity, the secret society that they talked about in the piece of, you know, just wondering how the description of Yale struck you, especially how DeSantis talks about it as a place where he encountered fervent anti Americanism that he. He know, he now rails against. Yeah.

So obviously I read the story, thanks to you sending it to me the morning it came out, and I. Look, I. I kind of know what DeSantis means and was saying. But. But let me. Let me go through the points while I got to cover the baseball team as, you know, as an announcer for the radio station. I get why he'd say that. The student body writ large. Now, these are all generalizations, of course, but, you know, it's true. Like, there was a bit of a bias against the merits of the baseball team being members of the Yale community. And then Deke, which was the fraternity where he was a member. I don't know that I would call it a working class fraternity. It was the athletes fraternity. But it certainly had a reputation as of, you know, as being the wilder bunch of the frats on Yale. I think that was all fair, and I actually was shocked. I thought the article did a really good job of depicting the purpose of secret societies in my mind, which is really to broaden your social experience. You know, sort of freshman year, you're trying to meet everyone. Sophomore year, you kind of start to figure out who your crew is. Junior year, you solidify it. And then senior year was a way of opening you back up and introducing you to 14, 15 people that you didn't really know before and really get to know their stories in just a very deep, intimate way. That really broadened my horizon. And, yes, I was in a secret society. And those folks, you know, they weren't my friends beforehand, but they are. Many of them are very, very close friends. Still, I can't speak to Ron's DeSantis's experience. Governor DeSantis, excuse me, but I. Look, I. I thought the article actually did a good job of capturing it. With regards to the last point you brought up of Yale being a place that was anti American, I think it's fair to say that I had a different experience from Governor DeSantis. Look, Yale certainly was a place that's more liberal than conservative. There were, when we were there, plenty of conservative enclaves, shall we say? You look at the History Department, for example, at that time. John Gaddis, Donald Kagan, Mary Hayback, Michael Oslin, grand strategy as a whole course, which is sort of famous. There were some real leading lights who were conservatives or conservative leaning, I think it's fair to say. Now, look, the Economics department was maybe significantly less conservative. I was always stunned at how uniform the people at Yale who majored in economics thought of what the purpose of economic policy is, for example, they had a very left wing view and it was striking how similar it was for all of them. But I'll say that from my perspective, Jeff, it wasn't hard to express one's opinion per se, even if it wasn't the majority view in a room at all. And, and you have to remember, while Governor DeSantis was there and for my first two and a half years at Yale, Bill Clinton was the president. And so in some ways, if the quote unquote in party is sort of always on the defensive, you know, coming out of the Monica Lewinsky and the impeachment stuff and Clinton's big wins, frankly, having come through compromise with Republicans and Newt Gingrich, it was just a very different atmosphere from what it is today. I mean, just two quick stories, like graduate students trying to organize as employees was one of the big stories while I was there. It still is a big story, but then it was like a very unpopular sort of thing among a lot of students, just to show you how different I think it is. And then the big sort of activist movement at the time was the fact that a lot of clothing that Yale had ties to was, was made in sweatshops. And like those movements were not the movements of the 1960s and 70s, Jeff. Like, you know, and I, I just, I had plenty of friends on both sides of the aisle, to be sure. Now, my sense is that some degree this has changed and some of what Governor DeSantis alleges, you know, maybe that's more how things are now. And so the points sort of, they ring, maybe they have a certain ring on the, on the campaign trail, shall we say. Right. Because of that. But I'll also tell you, I remember what Rick Levin told me when I covered him for the Yale Daily News. You know, he used to always like to say, look, the Wall Street Journal is going to print what it prints about Yale, and they have this view that is so out of touch with the majority, you know, sort of experience on campus that you just can't read too much into it. And while I do have a sense that the campus culture has changed, I do think you have to be careful to extrapolate too much from these articles, which are all generalizing to some degree, and create some different kinds of caricatures. One last point on this, Jeff, for what it's worth, which is after Governor DeSantis left, is when 911 hit. That was my senior year. And let's just say the campus took a very different turn when that happened. One that doesn't reconcile at all with what he wrote in the article. I mean, it was a very patriotic, pro American, deeply affected campus that doesn't accord at all with some of the allegations that were printed in the article. I don't know if that answers all your questions, but hopefully helpful.

Well, I really appreciate you giving us kind of an insider's perspective on that. And I think this is really important to think about because, you know, whether DeSantis is the Republican nominee or not, it's clear that kind of culture, the culture wars seem to be back in education, definitely at the K through 12 level and even so at in higher ed. And so I think that the perspectives of how the candidates were formed, and it's interesting, right, we have a, we have a presidential candidate who, you know, overlapped in a generation that we're familiar with, unlike, you know, the nominee who's going to be in the Democratic Party. Right. Who's of a very different generation. So I think it's just really interesting, that backstory and really appreciate that, Michael. Now. So before we leave, though, you know, speaking of generations, I know I'm a little bit older than you are, but, but do you remember the Presidential Fitness Test from elementary school? Because I remember doing pull ups and running and sit ups and trust me, as somebody who wasn't very sporty, it wasn't much fun.

Oh, do I remember it, Jeff? That darn stretching test. I. How I wish I could go back now and do it because I'm a lot more flexible. Except that I've learned subsequently, Jeff, it's kind of a biased test against people with shorter wingspans, which is me. And it's why I know now that I could never have been an NBA player. But, you know, advanced stats showing that wingspans are predictive. Right. Of success in the league. But I, I'm guessing you're not bringing this up to comment on my sports prowess or lack thereof, but instead because of some. Yeah, because of some other political news which we're told is serious, which is that GOP presidential candidate Vivek Ramaswamy suggested on Twitter or, or X as it's now called, that in the wake of the Supreme Court decision on affirmative action, where colleges will quote deprioritized applicants standardized test scores that in his suggestion, not ours, the College Board should perhaps add a physical fitness section to the SAT that possibly resembles the former Presidential Fitness Test.

Yes. And we are told this is a serious recommendation and that Presidential Fitness Test was disbanded about a decade ago. I actually looked up the history on this. It dates back to the Eisenhower administration who worried that kids were becoming couch potatoes. That sounds familiar. And the original test when I took a deep dive one night on the Internet about this was consisted of six parts. Pull ups for boys, modified pull ups or arm hangs for girls at the time, sit ups, a shuttle run, a standing broad jump, a 50 yard dash, a softball throw for distance and a 600 yard walk run was added at a later stage. Now Michael, I'm all for more physical activity for students but as a way into college, I'm sorry, I think this is one proposal that we probably shouldn't give any more airtime to.

Well, look, I'm all for being for fit and for well students, but I am with you. Let's leave that clown show behind and move on. And we'll wrap it there on our welcome back episode of Future youe as we kick off this our seventh season and we look forward to a lot of headlines, a lot of conversations and a lot of of great guests and a lot of dialogue with all of you. Thanks for joining us.