Business thinking gutted my university — is your education in danger?


This week’s Occupy Math is venturing again into the sociology and politics of education in the service of addressing a pressing problem. There are places where Occupy Math managed to wedge in a little math — and there are tips on self-defense for those of you who might pay for educational opportunities. The basic thesis of this post is that trying to run education like a business degrades education and also fails at the normal goals of business. The basis of the problem is that education is critical, people really want it, which means the demand for it is inelastic (doesn’t change much with price), which in turn means price can get totally out of control. This also makes education a fertile ground for con-artists, who are always willing to exploit people who really want something.

Let’s start at the top with the President of the United States and his Secretary of Education. Trump University sold courses in how to become fabulously wealthy in real estate. The only training it gave was to its sales force on how to get poor people, looking for a way out of their troubles, to cough up their life savings to pay for Trump University. Their “professors” included everything from a fast food restaurant manager to a convicted felon. There was one thing that helps a little. Trump University was not accredited and so the students could not take out federally guaranteed student loans.

The issue of student loans has recently become a hot topic. A federally guaranteed loan is like free candy to a bank. They cannot lose because the government pays the loan if the student can’t. These loans are critically important because they open up advanced education to people that cannot afford it. Education really is the silver bullet against poverty, crime, and other societal ills. The problem is that, when you make money available to help people, the con-artists are going to show up at the party.

Fake schools — like Trump University but with better cover and accreditation — sprouted like weeds.

The Obama administration went to work trying to make things better:

“Last summer, the Department of Education, in consultation with the Consumer Financial Protection Bureau, released enhanced guidelines aimed at crafting the way in which the federal government contracts with outside companies to service federal student loans in order to ensure that borrowers get the service and protection they deserve.”

The quote is from an article on how US Secretary of Education Betsy DeVos removed the protection. Why would the Secretary of Education try to make it easier to rip off students? The answer is a classical exercise in follow the money. Betsy DeVos directly profits from the student loan industry. Beyond her counter-factual beliefs about education Ms. DeVos has a direct, corrupt conflict of interest. She has partially divested — but between her family and business associates, this is not a stain that can ever be removed.


Beware of Fake Education! Be Prepared!

Following Occupy Math’s tradition of not just being Gloomy Gus, and given that the federal government is going into the business of helping the con artists, here are some tips.

  • If you are thinking of signing up for some education, talk to former students. The testimonials the program offers are a start, but an honest program will let you talk directly to graduates.
  • Do not accept an educational programs claims at face value. Check your internet resources and check with your friends and relations to get some perspective. Use multiple metrics that interact with one another. A huge problem with the PPP (much more on the PPP below under “disembowled”) at the University of Guelph was the use of a single metric that ignored most of the useful information.
  • Accreditation is a thing. See if there is an accreditation authority like
    ABET for engineering, CACMS for (Canadian) medical schools, or even a general list of professional programs.
  • If it sounds too good to be true, it probably is. Anyone that says they will make you millions is trying to pick your pocket. Independently compiled employment statistics are an excellent resource if you can find them. This is called the “placement record” of the program.
  • Don’t focus on one skill; it may become obsolete. An education program that gives you not only an employable skill but tools for learning broadly is just plain safer.

But is education a business?

Alert readers may have noticed that Occupy Math has only demonstrated that the business of education attracts corrupt people. Including high government officials. This does not make the case that education is not a business, just that it needs better oversight. The meat of this matter lies in the time scale, the difference between public and private, and goals. A business focuses on making a profit and so must follow money and pick its customers wisely. Education is a civil right that must be available to all. This right is enshrined in a majority of state constitutions in the United States. Kansas courts recently ordered the governor of the state, on constitutional grounds, to adequately fund the state’s schools. See the difference?

Even if you accept that the only reasonable goal is to pile up money, making education available to all is the correct decision. This moves us to the issue of time scales. Except during start-up, a business needs to make money every year or the investors may go elsewhere. The government needs to make money on a time scale of decades or centuries. Business gets its money directly from its customers. Governments get their money from taxes, levied across society. Viewed as mathematical systems, business and government are not even in the same category. A key factor in the financial success of a government is the way it pursues education — because educated people pay more taxes on average and economies made up of educated people have higher output.

We’ve demonstrated that a university and a business are trying to accomplish different things. That doesn’t mean that business thinking cannot help a university. The thing is that we know it can hurt a university — if applied blindly.

How Business Planning Disemboweled my University

Recently at the University of Guelph we had a university-wide planning exercise called the Program Prioritization Process (PPP). This is supposed to be a review, using business principles, to locate and remove inefficient programs from the university. There were a few issues with the process. The PPP considered everything from parking to central administration a program. The PPP did not look at which employees were in each program — and behaved as if the staff of each program was separate — making its conclusions financial nonsense. The PPP had no process to correct inaccurate information. The only metric for an academic program was its number of majors.

Occupy Math’s own department had 50 majors (which is near the national average) and 12,000 students in courses we do for other majors like Engineering, Business, Biology, and, well, everyone. Our undergraduate majors in Mathematics and Statistics were shut down (we have a new combined major after a too-long hiatus). Three professors — with millions in grants and large numbers of funded graduate students — left in protest. Even weirder, one of the three most successful graduate program at the University, the Masters of Statistics (metrics: enrollment, employment within a year of graduation) was judged as “Worthless, close immediately”. In the end the blow-back from this and other insanity led the administration to repudiate the PPP. Conservatively, this exercise in “business management” cost the University fifty million dollars, many talented people, and an irreplaceable store of good will.

How did we fall into this trap?

For the University of Guelph, we adopted the PPP because a con-artist who wanted to sell his consulting services to the university got to our former provost. This provost was denied promotion and left under a cloud — partly because of her adoption and management of the PPP. More generally, the problem is this: university administrators are former professors. They have little or no training in management and, on average, sub-par management skills. In short, they are amateurs. The same dark forces that sell fake education to vulnerable citizens sell university administrators fake management advice. This, combined with administrative bloat, means that more and more, universities are run by unqualified people living in an echo chamber. This drives up tuition and disconnects university policy from students, faculty, staff, and the general public.

Is business thinking in fact worthless in education?

At this point Occupy Math will go out on a limb and disagree with people that say business thinking has no place in education. Much as the Soviet Union has little to say about the worth of communism (in either direction), current attempts to apply business techniques to education are not informative about the potential worth of such thinking. The insanity is in trying to run an educational program as if it were a business.

There are serious problems with the way education is financed and managed. The truism that a college education pays for itself is being correctly questioned. Occupy Math’s editor is taking her own swing at this with a new job that involves retro-fitting people’s education. This doesn’t mean education’s worth must fade: we need a course correction in cost and content. Occupy Math is upset about the degradation of teaching math skills — but his editor observes “Here’s what drives me: 90% of what I learned in school was totally irrelevant to the workplace. Academic institutions are completely failing to prepare young graduates for a modern world.”

Using quantitative metrics, figuring out what your customers need, having a process for self-correction, and getting information from all stakeholders are all ideas from current business practice. Current university practice includes using bogus metrics appropriated from other domains, figures out what will make their customers keep paying tuition, rejects correction as interference, and only makes pro-forma consultations with stakeholders. Guelph recently adopted Office 365 — currently burying Occupy Math’s e-mail every day — without asking one professor or dean if it was a good idea. The point? You don’t need to adopt the goals of business to swipe some of their better ideas.

This brings us back to the problem that university administrators are often lambs waiting to be fleeced instead of hardened professionals. They have to do something impressive to get their next promotion or their next job. “Bringing Business Principles to the University” has the right ring to it — and it might be a good idea if it was done sensibly. Occupy Math hopes this editorial helps someone — especially the parts on how to protect yourself. Remember that “Math is the Right of all Free People” — partly because it helps you protect yourself. Know about an outrageous scam or good protective technique? Comment or tweet!

I hope to see you here again,
Daniel Ashlock,
University of Guelph,
Department of Mathematics and Statistics


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