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The Wilson
Quarterly, Summer 2004 v28 i3 p46(14)
Higher Ed, Inc. James B. Twitchell. Full Text: COPYRIGHT 2004 Woodrow Wilson International Center for Scholars
In the early afternoon of December 2, 1964, Mario Savio took off his shoes and climbed onto the hood of a car. Savio was a junior majoring in philosophy at the University of California, Berkeley, and he was upset that the administration of the university had arrested a handful of students and forbidden student groups to set up tables promoting various political and social causes. So he put himself "upon the gears" of the machine: If this is a firm, and if the Board of Regents are the board of directors, and if President Kerr in fact is the manager, then I'll tell you something: The faculty are a bunch of employees, and we're the raw material! But we're a bunch of raw material[s] that don't mean to have any process upon us, don't mean to be made into any product, don't mean to end up being bought by some clients of the university, be they the government, be they industry, be they organized labor, be they anyone! We're human beings!
In the four decades since Savio's expression of defiance, Higher Ed, Inc., has become a huge business indeed. And as is typical of absorbent capitalism, it does not deny its struggles so much as market them. Mario Savio died in 1996. To honor his activism and insight, the academic senate at Berkeley agreed to name a set of steps in Sproul Plaza, the site of many political speeches, the Savio Steps. In an interesting bit of corporate assimilation, Savio became a lasting part of his own observations: He himself got branded.
Although Mario Savio didn't mention it, the success story of Higher Ed, Inc., is based foursquare on the very transformation that allowed him access to Berkeley. For each generation since World War II, the doors to higher education have opened wider. Unquestionably, university education is the key component in a meritocracy, the sine qua non of an open market. A university degree is the stamp that says--whether it's true or not--this kid is educated, qualified, smart. The more prestigious the university, in theory, the smarter the kid. And increased access to university life has succeeded beyond anyone's wildest expectation. In fact, the current dilemma is the price of success. There are too many seats, too much supply, and not enough Marios. The boom is over. Now the marketing begins.
Counting everything but its huge endowment holdings, Higher Ed, Inc., is a $250 to $270 billion business--bigger than religion, much bigger than art. And though no one in the business will openly admit it, getting into college is a cinch. The problem, of course, is that too many students want to get into the same handful of nameplate colleges, making it seem that the entire market is tight. It most certainly is not. Here's the crucial statistic: There are about 2,500 four-year colleges in this country, and only about 100 of them refuse more applicants than they accept. Most schools accept 80 percent or more of those who apply. It's the rare student who can't get in somewhere.
The explosive growth of Higher Ed, Inc., is evident in increasing enrollments, new construction, expanding statewide university systems, more federal monies, and changes in the professoriate. In the 1950 census, for example, there were 190,000 faculty members. A decade later, shortly before Savio took to the hood of the car, there were 281,000. In 1970, when I entered the ranks, there were 532,000, and in 1998, the latest year for which figures are available from the U.S. Department of Education, some 1,074,000. And remember, what distinguishes the academic world is a lifetime hold on employment. About 70 percent of today's faculty have tenured or tenure-track jobs. Even ministers get furloughed. Museum directors get canned. But make it through the tenure process, and you're set forever.
If real estate's motto is "location, location, location," higher education's is "enrollment, enrollment, enrollment." College enrollment hit a record level of 14.5 million in fall 1998, fell off slightly, and then reached a new high of 15.3 million in 2000. How did this happen, when the qualified applicant pool remained relatively stable? Despite decreases in the traditional college-age population during the 1980s and early 1990s, total enrollment increased because of the high enrollment rate of students who previously had been excluded. What has really helped Higher Ed, Inc., is its ability to open up new markets. Although affirmative action was certainly part of court-mandated fair play, it was also a god-send. It insulated higher education from the market shocks suffered by other cultural institutions. In addition, universities have been able to extend their product line upward, into graduate and professional schools. Another growth market? Foreign students. No one talks about it much, but this market has been profoundly affected by 9/11. Foreign students have stopped coming. There are enough rabbits still in the python that universities haven't been affected yet. But they will Be.
What makes this enrollment explosion interesting from a marketing point of view is that Savio's observations ("the faculty are a bunch of employees, and we're the raw material") have been confirmed. What he didn't appreciate is that instead of eating up raw material and spitting it out, Higher Ed, Inc., has done something far more interesting. As it has grown, its content has been profoundly changed--dumbed down, some would say. There's a reason for that. At the undergraduate level, it's now in the business of delivering consumer satisfaction.
I teach at a large public university, the University of Florida. As I leave the campus to go home, I bike past massive new construction. Here's what's being built. On my distant left, the student union is doubling in size: food court, ballrooms, cineplex, bowling alley, three-story hotel, student legal services and bicycle repair (both free), career counseling, and all manner of stuff that used to belong in the mall, including a store half the size of a football field with a floor devoted to selling what is called spiritware (everything you can imagine with the school logo and mascot), an art gallery, video games, an optical store, a travel agency, a flame store, an outdoor outfitter, and a huge aquarium filled with only orange and blue (the school colors) fish. On a normal day some 20,000 patrons pass through the building. The student union is looking eerily like a department store. So is the university.
On my immediate left, I pass the football stadium. One side of it is being torn apart to add a cluster of skyboxes. Skyboxes are a valuable resource, as they are almost pure profit. The state is not paying for them. The athletic department is. They will be rented mainly to corporations to allow their VIPs air-conditioned splendor high above the hoi polloi. The sky-boxes have granite countertops, curved ceilings, and express elevators. In a skybox, you watch the football game on television. Better yet, the sky-boxes allow what's forbidden to the groundlings: alcohol. How expensive are these splendid aeries? There are 347 padded 21-inch seats in the Bull Gator Deck. They'll run you $14,000 a person, and you get only four games in the box. For the other four, you're in the stands. Don't worry about doing the math. The boxes are already sold out. I teach in a huge building that looks like the starship Enterprise. It houses classrooms and faculty offices and cost $10 million when it was built a few years ago. These skyboxes and some club seats are coming in at $50 million. Everyone agrees, the skyboxes are a good idea. They'll make money. Better yet, they'll build the brand.
Across from the football stadium, at the edge of the campus on my right, is the future of my institution. I pass an enormous new building with a vast atrium of aggressively wasted space. This building houses the headquarters of the University of Florida Foundation. The foundation funnels millions of dollars of private money the state will never know about into and through various parts of the university. I don't complain. No one does. Two decades ago, the foundation gave nothing to the English department; now, about a hundred grand a year comes our way. In front of the foundation, where a statue of some illustrious donor or beloved professor would stand at an elite school, is a bronze statue of the athletic department's trademarked mascots, Albert and Alberta Alligator.
On this side of campus, enrollment, enrollment, enrollment is becoming endowment, endowment, endowment. Americans donate more money to higher education than to any other cause except religion. And Florida, with its millions of retirees looking for "memorial opportunities," is a cash cow just waiting for the farmer's gentle hands. The residents of Florida have almost no interest in funding education, especially not K-12 education, which really is in dire shape. But there are wads of money to fund bits and pieces of the campus in exchange for good feelings and occasional naming rights.
American colleges and universities raise about $25 billion a year from private sources. Public universities are new to this game, but they've learned that it's where the action is. Private dollars now account for about 30 percent of the University of Illinois' annual budget, about 20 percent of Berkeley's, and about 10 percent of Florida's. In a sense, tuition-paying undergrads are now the loss leaders in the enterprise. What used to be the knowledge business has become the business of selling an experience, an affiliation, a commodity that can be manufactured, packaged, bought, and sold. Don't misunderstand. The intellectual work of universities is still going on and has never been stronger. Great creative acts still occur, and discoveries are made. But the experience of higher education, all the accessories, the amenities, the aura, has been commercialized, outsourced, franchised, branded. The professional manager has replaced the professor as the central figure in delivering the goods.
From a branding point of view, what happens in the classroom is beside the point. I mean that literally. The old image of the classroom as fulfillment of the Socratic ideal is no longer even invoked. Higher Ed, Inc., is more like a sawmill. A few years ago, Harvard University started a small department called the Instructional Computing Group, which employs several people to videotape about 30 courses a semester. Although it was intended for students who unavoidably missed class, it soon became a way not to attend class. Any enrolled student could attend on the Web, fast-forwarding through all the dull parts. This is "distance education" from a dorm room, at an advertised $37,928 a year.
Elite schools are no longer in the traditional education business. They are in the sponsored research and edutainment business. What they offer is just one more thing that you shop for, one more thing you consume, one more story you tell and are told. It's no accident that you hear students talking about how much the degree costs and how much it's worth. That's very much how the schools themselves talk as they look for new sources of research or developmental funding. In many schools there's even a period called shopping around, in which the student attends as many classes as possible looking for a "fit," almost like channel surfing.
So we do college as we do lunch or do shopping or do church. That's because for most students in the upper-tier schools the real activity is getting in and then continuing on into the professional schools. No one cares what's taught in grades 13-16. How many times have I heard my nonacademic friends complain that there's no coherence in the courses their kids are exposed to? Back in the 1950s, introductory courses used the same textbooks, not just intramurally but extramurally. So Introduction to Writing (freshman English) used the same half-dozen handbooks all across the country. No longer. The writing courses are a free-for-all. Ditto the upper-level courses. Here are some subjects my department covers in what used to be English 101, the vanilla composition course: attitudes toward marriage, business, bestsellers, carnivals, computer games, fashion, horror films, The Simpsons, homophobia, living arrangements, rap music, soap operas, Elvis, sports, theme parks, AIDS, play, and the ever-popular marginalization of this or that group.
But cries that the classroom is being dumbed down or politicized miss the point. Hardly anyone in Higher Ed, Inc., cares about what is taught, because that is not our charge. We are not in the business of transmitting what E. D. Hirsch would call cultural literacy; nor are we in the business of teaching the difference between the right word and the almost right word, as Mark Twain might have thought important. We're in the business of creating a total environment, delivering an experience, gaining satisfied customers, and applying the "smart" stamp when they head for the exits. The classroom reflects this. Our real business is being transacted elsewhere on campus.
Development is both PR and fundraising, the intersection of getting the brand out and the contributions in, and daily it becomes more crucial. That's because schools like mine have four basic revenue streams: student tuition, research funding, public (state) support, and private giving. The least important is tuition; the most prestigious is external research dollars; the most fickle is state support; and the most remunerative is what passes through the development office. Leaf through The Chronicle of Higher Education, the weekly journal of the industry, and you'll see how much newsprint is devoted to the comings and goings of development. Consider where the development office is housed on most campuses, often right beside the president's office, and note how many people it employs.
At many schools, there's also a buried pipeline that connects the development office with the admissions office. Most academic administrators prefer that it be buried deep, but from time to time someone digs it up. In The Wall Street Journal for February 3, 2003, Daniel Golden reported on how the formal practice of giving preference to students whose parents are wealthy--called "development admits"--has profound implications not just for affirmative action but for the vaunted academic ideal of fair play.
Remember the scene in the third season of The Sopranos when Carmella has a lunch meeting with the dean of Columibia University's undergraduate school? She thinks the lunch is about her daughter Meadow, but the dean wants a little development money. Carmella listens to his charming patter before being hit with the magic number of $50,000. She goes to Tony, who protests that the Ivy League is extorting them and says he won't give more than five g's. But the dean eventually gets his 50 g's; Tony, the consummate shakedown artist, has met his match.
When enrollments began to escalate ill the 1960s, what used to be a pyramid system--with rich, selective schools at the top (read Ivy League and a handful of other elites) and then a gradation downward through increasing supply and deceasing rigor to junior and community college systems at the base--became an hourglass lying on its side. There's now a small bubble of excellent small schools on one side (Ivy League schools qualify as small) that are really indistinguishable, and, on the other, a big bubble of huge schools of varying quality. The most interesting branding is occurring on the small-bubble side, as premier schools vie for dominance, but the process is almost exactly the same, although less intense, for the big suppliers.
Good schools have little interest in the bachelor's degree. In fact, the better the school, the less important the terminal undergraduate degree. The job of the student is to get in, and the job of the elite school is to get the student out into graduate school. The schools certify students as worthy of further education, in law, medicine, the arts, or business.
Premier schools have to separate their students from the rest of the pack by generating a story about how special they are. We have the smart ones, they say. That's why they care little about such hot-button issues as grade inflation, teaching quality, student recommendations, or even the curriculum. It's not in their interest to tarnish the brand by drawing distinctions among their students. These schools essentially let the various tests--LSAT, MCAT, GRE--make the distinctions for them. And, if you notice, they never divulge how well their students do on those tests to the outside world. They have this information, but they keep it to themselves. They're not stupid; they have to protect the brand for incoming consumers because that's where they really compete.
In one of the few candid assessments of the branding of Higher Ed, Inc., Robert L. Woodbury, former chancellor of the University of Maine system, noted the folly of the current institutional U.S. News and World Report rankings: When Consumer Reports rates and compares cars, it measures them on the basis of categories such as performance, safety, reliability, and value. It tries to measure "outputs"--in short, what the car does. U.S. News mostly looks at "inputs" (money spent, class size, test scores of students, degrees held by faculty), rather than assessing what the college or university actually accomplishes for students over the lives of their enrollment. If Consumer Reports functioned like U.S. News, it would rank cars on the amount of steel and plastic used in their construction, the opinions of competing car dealers, the driving skills of customers, the percentage of managers and sales people with MBAs, and the sticker price on the vehicle (the higher, the better).
The emphasis on "inputs" explains why the elite schools aren't threatened by what others fear: the much-ballyhooed "click" universities, such as the University of Phoenix and Sylvan Learning Systems, Inc., because those schools generate no peer effects. So, too, there's no threat from corporate universities, such as those put together by Microsoft, Motorola, and Ford, or even from the Open University of England and The Learning Annex. The industrial schools have not yet made their presence felt, though they will. The upper tier on the small side of the hourglass is not threatened by "learning at a distance" or "drive-through schools," because the elites are not as concerned with learning as they are with maintaining selectivity at the front door and safe passage to still-higher education at the back door.
So what's it like at the upper end among the deluxe brand-name schools, where Harry Winston competes with Tiffany, where Louis Vuitton elbows Prada, where Lexus dukes it out with Mercedes? In a word, it's brutal, an academic arms race.
How did the competition become so intense? Until 1991, the Ivy League schools and the Massachusetts Institute of Tecnology met around a conference table each April to fix financial aid packages for students who had been admitted to more than one school. That year, after the Justice Department sued the schools, accusing them of antitrust violations, the universities agreed to stop the practice. As happened with Major League Baseball after television contracts made the teams rich, bidding pandemonium broke out. Finite number of players + almost infinite cash = market bubble. Here's the staggering result. Over the past three decades, tuition at the most select schools has increased fivefold, nearly double the rate of inflation. Yet precious few students pay the full fare. The war is fought over who gets in and how much they're going to have to be paid to attend.
The fact of the matter is that the cost of tuition has become unimportant in the Ivy League. Like grade inflation, it's uncontrollable--and hardly anyone in Higher Ed, Inc., really cares. As with other luxury providers, the higher the advertised price, the longer the line. The other nifty irony is that, among elite schools, the more the consumer pays for formal education (or at least is charged), the less of it he or she gets. The mandated class time necessary to qualify for a degree is often less at Stanford than at State U. As a general rule, the better the school, the shorter the week. At many good schools, the weekend starts on Thursday.
Ask almost anyone in the education industry what's the most overrated brand and they'll tell you "Harvard." It's one of the most timid and derivative schools in the country, yet it has been able to maintain a reputation as the uber-brand. Think of any important change in higher education, and you can bet (1) that it didn't originate at Harvard, and (2) that if it's central to popular recognition, Harvard now owns it. Why is Harvard synonymous with the ne plus ultra? Not because of what comes out of the place but because of what goes in: namely, the best students, the most contributed money, and, especially, the deepest faith in the brand. Everyone knows that Harvard is the most selective university, with a refusal rate of almost 90 percent. But more important, the school is obscenely rich, with an endowment of almost $20 billion. Remember that number. It's key to the brand. The endowment is greater than the assets of the Dell computer company, the gross domestic product of Libya, the net worth of all but five of the Forbes 400, or the holdings of every nonprofit in the world except the Roman Catholic Church.
In a marketing sense, the value of the endowment is not monetary but psychological: Any place with that many zeros after the dollar sign has got to be good. The huge endowments of the nameplate schools force other schools, the second-tier schools, to spend themselves into penury. So your gift to Harvard does more harm than good to the general weal of Higher Ed, Inc. It does, however, maintain the Harvard brand.
With the possible exception of Harvard, the best schools are about as interchangeable as the second-tier ones. All premier schools have essentially the same teaching staff, the same student amenities, the same library books, the same wondrous athletic facilities, the same carefully trimmed lawns, the same broadband connection lines in the dorms. Look at the websites for the most selective schools, and you'll see almost exactly the same images irrespective of place, supposed mission, etc. True, they may attempt to slide in some attention-getting fact ("If you use our library, you may notice our Gutenberg Bible," or "The nuclear accelerator is buried beneath the butterfly collection"), but by and large the websites are like the soap aisle at Safeway.
If you really want evidence of the indistinguishability of the elites, consider the so-called viewbook, the newest marketing tool sent to prospective applicants. The viewbook is a glossy come-on, bigger than a prospectus and smaller than a catalog, that sets the brand. As with the websites, what you see in almost every view is a never-ending loop of smiling laces of diverse backgrounds, classrooms filled with eager beavers, endless falling leaves in a blue-sky autumn, lush pictures of lacrosse, squash, and rugby (because football, basketball, and baseball are part of the mass-supplier brands), and a collection of students whose interests are just like yours. From a branding point of view, the viewbook is additionally interesting because it illustrates how repeating a claim is the hallmark of undifferentiated producers. Here's what Nicolaus Mills, an American studies professor at Sarah Lawrence College, found a decade ago, just as the viewbook was starting to become standardized. Every school had the same sort of glossy photographs proving the same claim of diversity:
In this kind of marketing, Higher Ed, Inc., is like the crowd in Monty Python's Life of Brian. Graham Chapman as Brian, the man mistaken for the Messiah, exhorts a crowd of devotees: "Don't follow me! Don't follow anyone! Think for yourselves! You are all individuals!" To which the crowd replies in perfect unison, "Yes, Master, we are all individuals. We are all individuals. We are all individuals."
The elite schools have to produce an entering class that's not just the best and brightest they can gather, but one that will demonstrate an unbridgeable quality gap between themselves and other schools. They need this entering class because it's precisely what they will sell to the next crop of consumers. It's the annuity that gives them financial security. In other words, what makes Higher Ed, Inc., unlike other American industries is that its consumer value is based almost entirely on who is consuming the product. At the point of admissions, the goal is not money. The goal is to publicize who's getting in. That's the product. Who sits next to you in class generates value.
So it's to the advantage of a good school to exploit the appearance of customer merit, not customer need. But how to pay for this competitive largesse if tuition is not the income spigot? At four-year private colleges and universities, fully three-quarters of all undergraduates get aid of some sort. In fact, 44 percent of all "dependent" students, a technical term that refers to young, single undergraduates with annual family incomes of $100,000 or less, get aid. What elite schools lose on tuition they recover elsewhere. Take Williams College, for example. The average school spends about $11,000 a student and takes in $3,500 in tuition and fees; Williams, a superbrand, spends about $75,000 per student and charges, after accounting for scholarships and other items, a net of $22,000. Why? Because Williams figures that to maintain its brand value, to protect its franchise, it can superdiscount fees and make up the difference with the cash that's to come in the future. In theory, if an elite school could get the right student body, it would be in its best interest to give the product away: no tuition in exchange for the very best students. (That's a policy not without risk, as Williams found last year when Moody's lowered its credit rating because the college had dipped too deeply into endowment to fund its extraordinary incoming class.)
How does the brand sensitivity of the elite institutions affect the quality of the educational experience for the rest of us? How dangerous is it that schools follow the corporate model of marketing? The prestige school has other money pots than tuition. Every two weeks, for example, Harvard's endowment throws off enough cash to cover all undergraduate tuition. But what happens to schools below the privileged top tier? They, too, have to discount their sticker prices to maintain perceived value. So competition at the top essentially raises costs everywhere, though only some schools have pockets deep enough to afford the increase. The escalation in competitive amenities is especially acute in venues where a wannabe school is next to an elite one.
Things get worse the further you move from the top. To get the students it needs to achieve a higher ranking in annual surveys--and thereby draw better students, who boost external giving, which finances new projects, raises salaries, and increases the endowment needed for getting better students, who'll win the institution a higher national ranking, which ... etc.--the second-tier school must perpetually treat students as transient consumers.
Really good schools have all those so-called competitive amenities, all those things that attract students but have nothing to do ,with their oft-stated lofty mission and often get little use--Olympic-quality gyms, Broadway-style theaters, personal trainers, glitzy student unions with movie theaters, and endless playing fields, mostly covered with grass, not athletes. This marketing madness is now occurring among the mass-suppher institutions. So the University of Houston has a $53 million wellness center with a five-story climbing wall; Washington State University has the largest Jacuzzi on the West Goast (it holds 53 students); Ohio State University is building a $140 million complex featuring batting cages, ropes courses, and the now-essential climbing wall; and the University of Southern Mississippi is planning a full-fledged water park. These schools, according to Moody's, are selling billions of dollars of bonds for construction that has nothing whatsoever to do with education. It's all about branding.
The commercialization of higher education has had many salutary effects: wider access, the dismantling of discriminatory practices, increased breadth and sophistication in many fields of research, and an intense, often refreshing, concern about customer relations. But consider other consequences for a place such as the University of Florida, which is a typical mass-provider campus. To get the student body we need for a respectable spot in the national rankings, we essentially give the product away. We have no choice. Other states will take our best students if we don't. Ivy League monies come from endowment and have the promise of being replenished if the school retains its reputation. But state universities are heavily dependent on the largesse of state legislatures, and to keep the money coming they need to be able to boast about their ability to attract the state's best and brightest. So about half of them have been sucked into simple-minded plans that are essentially a subvention of education for middle-class kids. Everyone admits that most of these kids would go to college anyway. But would they go to the state system? Who wants to find out the hard way?
Mario Savio was right. Before all else, the modern university is a business selling a branded product. "The Age of Money has reshaped the terrain of higher education," writes David Kirp, of the Goldman School of Public Policy at the University of California, Berkeley. "Gone, except in the rosy reminiscences of retired university presidents, is any commitment to maintaining a community of scholars, an intellectual city on a hill free to engage critically with the conventional wisdom of the day. The hoary call for a 'marketplace of ideas' has turned into a double-entendre."
Administrators and the professoriate have not just allowed this transformation of the academy, they've willingly, often gleefully, collaborated in it. The results have not been all bad. But the fact is that we've gone from artisanal guild to department store, from gatekeeper to ticket taker, from page turner to video clicker. This commodification, selling out, commercialization, corporatization--whatever you want to call it--is what happens when marketing becomes an end, not a means.
Universities are making money by lending their names to credit card companies, selling their alumni lists, offering their buildings for "naming rights," and extending their campuses to include retirement communities and graveyards. It's past time for the participants in Higher Ed, Inc., to recall what Savio said years ago: The university is being industrialized not by outside forces but by internal ones. Rather like the child who, after murdering his parents, asks for leniency because he's an orphan, universities grown plump feeding at the commercial trough now complain that they've been victimized by the market. This contention of victimization is, of course, a central part of the modern Higher Ed, Inc., brand. The next words you'll hear will be "Please give. We desperately need your support!"
JAMES B. TWITCHELL is a professor of English and advertising at the University of Florida, Gainesville. He is the author of many books, including most recently Living It Up: America's Love Affair with Luxury (2002). This essay is drawn from his forthcoming book Branded Nation, to be published by Simon Schuster. Printed by permission. | |||
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