As an education technology company that provides online bookstore services to schools and their students, Akademos has always had anecdotal information from clients and students regarding the changing landscape for textbook services. We sought to validate the concerns that college chief financial officers (CFOs) had expressed to us about the future of their textbook services given the challenges presented by a vast marketplace of external competition, and the requirements of meeting new digital delivery needs presented by growing online curriculum.

Thus, we commissioned the first comprehensive survey of college CFOs regarding the future of bookstore services, with the results published in March 2013 here in a white paper. Here is a snapshot of some key findings:

• 89% of respondents confirmed that students are increasingly turning away from campus-based bookstores in favor of third-party providers, citing, on average, 28% of students are shopping elsewhere.
• Respondents pointed to price as the primary reason students bypass the college bookstore (78%), with students’ inclination to purchase online a distant second (12%).
• Survey respondents indicated that on average, 56% of textbook sales are transacted with financial aid.
• Respondents ranked giving students access to high-quality, low-cost textbooks as the most important service institutions can provide regarding the sale of textbooks.
• 88% believe textbook costs impact student retention and persistence.
• 82% indicated that textbook sales have been flat or down over the past three years.
• 18% stated they believe textbooks will be sold exclusively in a school online bookstore, while 80% are of the opinion that their school will utilize both an online and brick-and-mortar store.

Overall, textbook delivery and bookstore services are only now becoming a prominent issue for CFOs (the topic doesn’t even come up on previous surveys about CFOs’ general responsibilities). This rise in priority is likely due in part to increasing attention to the costs vs. outcomes of higher education from students and their families, accreditation committees, and the government (e.g., HEOA). The question becomes whether the competitive and technical challenges of serving student-needs in an increasingly online world can be met by the current model, particularly by college bookstores that sell textbooks in a brick-and-mortar environment.

Competition from online, third-party providers is of major concern for the viability of the textbook business at campus bookstores. Students are leaving the school-sanctioned bookstore because of better pricing elsewhere, and this loss of customers is driving schools to more closely examine their textbook affordability, both for business reasons—revenue from textbooks appears to be in decline—and for educational reasons—charging students exorbitant mark-ups on course materials to help fund school initiatives is becoming an increasingly questionable practice in higher education.

Below is a summary of top outcomes and analysis from our survey on textbook delivery and bookstore services.

Textbook costs impact retention and persistence

The impact of college affordability on student outcomes such as retention, persistence and completion is becoming more evident, particularly in those programs where the cost of textbooks could exceed the cost of the course.

The majority of CFOs (89%) indicated textbooks costs do have some impact on retention and persistence. Given students are reporting that they do not buy all of their required books for a course, and graduation rates are tied to accreditation and other funding, textbook costs are joining tuition and fees as a potential cause of attrition.

Students are shopping outside the school-sanctioned bookstore for textbooks—predominantly choosing third-party, online retailers

Whether you are a college CFO, a faculty member, a student or parent, or just a member of the general public, you likely recognize that students are shopping online in order to find lower cost textbook prices.

Most CFOs (89%) confirmed that students are indeed shopping for textbooks outside of the school bookstore. What percentage of students shopping outside the school bookstore is too much? We think that is, and will continue to be, a central question in bookstore services. If you are a CFO reading this, do you know how many student customers are buying their books at your bookstore and how many are leaving?

CFOs in our survey reported that on average, 28% of their students are shopping elsewhere. Yet in the recent National Survey of Student Engagement (NSSE), between 25% and 33% of students reported not even buying required textbooks. So who is shopping at the school bookstore for their texts (see Financial Aid point below in this post)? In our experience, the portion of students perceived as shopping outside the bookstore is under-reported. The majority of schools are either not tracking this data, or not analyzing this data in an actionable way. Additionally, one-on-one feedback from school administrators across the country in the last year actually points to the contrary—that less than 30% of students are shopping in the school-sanctioned bookstore for textbooks. This discrepancy is surely a challenge to be reconciled by schools and their bookstore providers.

Further, a follow-up focus group indicated an interest in understanding how many of those students are purchasing the majority of their books at the school bookstore.

Cost is the biggest issue chasing students away

It is likely no surprise that respondents pointed to price as the dominant reason (79%) for students shopping elsewhere, with the belief that students are more inclined to purchase online as a distant second (12%). When you put these together, it confirms an overall trend we have heard from administrators and students alike: Students are increasingly buying textbooks on third-party websites because they can find better deals there than at the school bookstore. And, again, it is no surprise that school bookstores are experiencing challenges competing when you consider the costs of running a brick-and-mortar with limited or local inventory vs. an online operation with national inventory.

Access to high-quality, low-cost textbooks is the most important service schools can provide

The “most important service schools can provide students regarding the sale of textbooks,” as ranked by 53.5% of respondents, is to provide “access to high-quality, low-cost textbooks.”

Additionally, in the open-ended answers, textbook affordability was listed as the second most-cited concern about bookstore services (after staying competitive).

Used books are the most important resource to the future of schools’ bookstores

When asked to rank resources such as new, used, digital, rental, and OER (Open Educational Resources) in order of importance to the future of the school’s bookstore, nearly 80% of respondents ranked used books as number one. It is interesting to note that a majority of CFOs rated both supplying used books and supplying rentals as very important, yet revenue from new books is still outpacing that from both of these categories combined.

Financial aid, designed to assist financially-challenged students, is actually leading them to the most expensive options for textbooks

On average, new books make up approximately half of all textbook sales at respondents’ school bookstores. New books are also the students’ most expensive option. If our neediest students buy elsewhere, they are forgoing their aid. But, if they buy at the school bookstore, they are likely spending more than they need to on textbooks. This Catch-22 is contributing to both the rising student debt burden and mounting budgetary pressures on financial aid.

In the face of competition, schools still believe they will be in the business of selling textbooks out of a brick-and-mortar in the coming years

This might be the most surprising outcome of the survey. A majority of CFOs believe that their school will continue to sell books at their brick-and-mortar bookstore. Only 18% of college CFOs believe textbooks will be sold solely online. It is particularly surprising given CFOs recognize that cost is the biggest issue chasing students away, and that financial aid is binding students to shop at stores where costs are less competitive than online alternatives.

How feasible is it for schools to balance textbook pricing for their online bookstore and their brick-and-mortar store, particularly without unnecessarily inflating prices for students?

When the responses were posed to a focus group following the survey, some cited long-term contracts for brick-and-mortar services and the inability to consider alternative options until those contracts expire. The question then becomes, if the bookstore is not competitive in current times, how will long-term contracts affect schools’ ability to keep up with changing trends and technologies five or ten years into the future?

Staying competitive is a top business concern

What are CFOs’ top concerns in their own words? The open-ended answers revealed a consistent set of issues relating to textbook delivery/college bookstores, but staying competitive was the top cited issue.

What Can You Do? Best Practices Bookstore Services Audit

If you wish to further examine the issue of textbook affordability at your school, what can you do? We recommend starting with an audit of your bookstore practices, taking into consideration how the economic model is changing as well as how student preparedness affects overall student academic performance. We have put together the Akademos Textbook Affordability Best Practices Audit to assist you with evaluating both the health and the mission of your textbook practices. As always, you can also reach out to us directly to have a conversation about your textbook delivery mission and practices.

What do CFOs think about the future of textbooks sold in college bookstores? Our 2013 College CFO Survey on Textbook Delivery and Bookstore Services has been completed and posted to our resources webpage. Check out the summary in our Textbook Delivery infographic below. Or download the full report.

Hello all! Just a quick post to summarize some students trends and accomplishments lately here at Akademos / TextbookX.

Students are Increasingly Buying eBooks, But Trend Has Yet to Reach Critical Numbers - We analyzed some students buying trends for course materials and noted that eBooks are steadily climbing as a portion of overall revenue year over year, but have yet to reach critical mass. It appears eBooks are seeing an increase later in the Spring term. My hypothesis is that students are buying the digital version of their required textbooks to help them study for final exams. Read more here…

Akademos-TextbookX Saves Students over $46 Million and an Average of 54% on Textbooks in its TextbookX Marketplace – We stand strong behind our bookstore services model. Moving textbook operations completely online helps reduce the cost of textbooks for students and improves efficiencies for administrators. Read more here…

Three College Students Win Akademos-TextbookX Intern Awards for Most Effective On-Campus Marketing – The inaugural year of our bookstore services internship was a success. Students at schools with virtual bookstores got the word out, telling students via social media, print, in-person, email and more, how they could save big money at the school’s own bookstore. Three interns stood out for their on-campus marketing efforts. Read more here…

The Chronicle of Higher Education this week released a four part series on textbooks:

-Students Get Savvier About Textbook Buying, When They Buy at All
-Don’t Call Them Textbooks
-For Many Students, Print Is Still King
-Can Textbooks Ever Really Be Free?

It is February, after all–the season of textbook adoption! Faculty across the US are rushing to their computers as we speak to search, discover, compare and adopt their course materials for the Fall 2013 term. So it truly is a good time to spotlight textbook affordability.

Back to The Chronicle. While all of the articles they published relate to our business here at Akademos and TextbookX.com, student-buying habits are especially of interest. In Students Get Savvier About Textbook Buying, When They Buy at All, The Chronicle “talked with students and found that having more choices in how to get books hasn’t solved the main problem: cost.” Among the workarounds–not buying texts at all (as 1/3 of seniors and 1/4 of freshmen reported not having done), and stealing in the form of pirating texts.

I’m not the first to say we are in a sad state of affairs when students are not buying textbooks at all, or stealing them; or when the cost of textbooks is more than the cost of a course. While I think students need to better educate themselves about the total cost of an education, there must be more we can do, especially to help our under-represented students, our financially-challenged students, and our community college students.

I think what is most frustrating, and comments posted on The Chronicle webpage underneath the article allude to this, is that the conversation keeps going round and round, with little appearance of reaching a solution. Now, I know this is not so–I have personally seen actions on the part of many schools, CFO’s, Provosts, faculty, and both not-for-profit and for-profit companies–to help bring visibility and action to this problem. But, we all need to do more.

What if every key stakeholder did one thing, right now, to help make textbooks more affordable for our students? Can’t we gather for a call to action? A call to service? Do we need to name a month, a day, in order to remind us? Then let’s do it. I hereby declare February “National Textbook Affordability Month”. Should we pick a day too–like the don’t buy gas days? National Textbook Affordability Day is…OK, I might need some support on this one people.

So to throw my 10 cents into the ring, here are my top recommendations to help fix the ‘cost’ problem of textbooks:

1. Schools need more used book inventory – Contrary to a point made in the article, an increase in the supply of used books helps decrease costs for students. Especially if the used books are available from national sources, not just local ones.
2. Students and their families should comparison shop – Students should always check prices as they would for other items they buy. A good comparison widget is www.campusbooks.com and, of course, a quick plug for our own TextbookX.com.
3. Administrators – Can consider new business models aimed at lowering the cost of textbooks for students (and forgo margins on course materials).
4. Governments – Should follow California’s example of developing Open Educational Resource materials for top core courses. Florida has done some important work on this too.
5. Last but by no means least, faculty can do some comparisons of their own–they can consider the cost of textbooks and other course materials very seriously in their textbook adoptions. One tool we developed to help faculty do this is our textbook adoption tool (yes, it is a plug, but it is a free website open to any faculty).

So what did I do today to help textbook affordability (besides huffing and puffing through this blog)? I finished a white paper summarizing what college CFO’s think about textbooks, especially their costs; and, I tested a new feature of our Akademos Textbook Adoption Tool due to launch any day now, which will rank schools by the affordability of their textbooks. I know it is not much, but it is something. Stay tuned.

What did you do today to help textbook affordability?

We have collected some links to information that can help colleges and universities review information on how the fiscal cliff will affect them and their students. 

NACUBO

Liz Clark, the Director of Congressional Relations at NACUBO, does an excellent job of summarize the potential changes, especially for College CFO’s and other higher education finance administrators.

• FIVE QUESTIONS ABOUT THE FISCAL CLIFF
• WHITE HOUSE REPORTS SEQUESTER CUTS WILL BE BLUNT AND INDISCRIMINATE

The White House

• http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/stareport.pdf

Inside Higher Ed

IHE has been covering the fiscal cliff story and how it relates to colleges and universities well for quite a while now. Below you can preview some of their latest stories with links to read more. 

The Fund-Raising Cliff? - For more than a year, higher education organizations have urged Congress to somehow avoid the “fiscal cliff” — the dramatically named combination of spending cuts and tax hikes that will take effect Jan. 2 if lawmakers cannot agree on a plan to reduce the deficit and extend expiring tax cuts and benefits. Read more: http://www.insidehighered.com/news/2012/12/06/colleges-worry-over-proposed-changes-charitable-deduction#ixzz2El2lIR1u

Fiscal Cliff Diving - I have to admit finding the “fiscal cliff” debate a little bit silly, given that the “cliff” in question is entirely artificial. But if you start pulling that thread, it’s not clear where it ends. And even if the cliff is a figment of the collective political imagination, the harm that cliff-driven decisions could do is very real. If you swerve your car to avoid the unicorn you’re hallucinating, the tree you crash into isn’t a hallucination, and the damage done is real and potentially terrible. Read more: http://www.insidehighered.com/blogs/confessions-community-college-dean/fiscal-cliff-diving#ixzz2El4dIIIs

Research Spending, Before the Cliff - Research university administrators are understandably jittery about the fiscal cliff facing policy makers in Washington, given the prospect that federal budget cutbacks would shave — if not savage — government funds for academic research and development. Read more: http://www.insidehighered.com/news/2012/11/29/spending-academic-research-rose-69-2011#ixzz2El55Zr00

Cliff time - Notwithstanding the impact of Sandy, I have much to be thankful for, including this year’s very welcome Thanksgiving Day break. But what I am most thankful for is not yet a done deal but rather a new feeling that suggests we will avoid the fiscal cliff. The meeting a week before Thanksgiving between the Congressional leadership and President Obama seemed to end with a sense on all sides that fiscal disaster could be avoided. In my opinion, there is no choice but to do so, but I am a spectator and Congress and the President are the ones who need to make it happen. Read more: http://www.insidehighered.com/blogs/provost-prose/cliff-time#ixzz2El5NQsar

What’s Next for the Pell Grant? - It’s been a nail-biting few years for Pell Grant advocates, as Congressional budget crisis after Congressional budget crisis raised the specter of deep cuts to the major federal financial aid program for low-income students. Read more: http://www.insidehighered.com/news/2012/11/16/how-congress-might-deal-pell-grant-shortfall#ixzz2El5Zcdlm 

The Chronicle of Higher Education

Americans Prefer to Cut Spending on Defense Over Education, Poll Finds - If negotiations in Washington to avoid a “fiscal cliff” come down to a choice between cutting spending on defense or education, a majority of Americans would spare the education programs, accord…Read more: http://chronicle.com/blogs/bottomline/americans-prefer-to-cut-spending-on-defense-over-education-poll-finds/

Colleges Worry That Tax Incentives for Donations Are Again on the Chopping Block - Higher-education advocates are closely watching how the current fiscal negotiations in Washington will affect federal support of colleges and universities. But many are also concerned that a chan…Read more: http://chronicle.com/blogs/bottomline/colleges-worry-that-tax-incentives-for-donations-are-again-on-the-chopping-block/

Amid Federal Budget Battle, Report Cites Centrality of Scientific Research - As negotiations over the federal budget reach a climax, a new report urges the government to spend more money on scientific research and do it more wisely. Read more: http://chronicle.com/article/Amid-Federal-Budget-Battle/136089/

Lessons From America’s First Fiscal Cliff - America faced its first fiscal cliff in 1893. The date should be familiar. It was the start of the Panic of 1893, and it led to the biggest shift ever in the composition of the U.S. Congress. Conte…Read more: http://chronicle.com/blogs/conversation/2012/11/28/lessons-from-americas-first-fiscal-cliff/

Colleges React to Potential Research Cuts

I gathered a few links from universities concerned with cuts to research and development. 

MIT – Webinar Recording: THE FISCAL CLIFF: HOW IT AFFECTS MIT - Will R&D fall off the fiscal cliff? Policymakers still haven’t taken action to avoid sequestration. The sequester was a huge set of budget cuts put in place by Congress as a carrot to make sure the Joint Select Committee on Deficit Reduction (known as the “Super Committee”) acted to develop a balanced deficit reduction strategy. As a result of the Super Committee’s failure to come up with a balanced strategy, the discretionary budget — which includes the funding budget for all the major science research agencies — will see a huge across-the-board cut of about 8.7% take effect on January 2, 2013. View the recording: http://alumic.mit.edu/s/1314/03-alumni/wide.aspx?sid=1314&pgid=11547&gid=13&cid=20917&ecid=20917&post_id=0

Princeton - Looming fiscal cliff threatens Princeton research - The University could face severe cuts in research funding and a shrinking endowment in the near future if Congress fails to reach a deal on the so-called fiscal cliff, which will trigger an array of automatic tax increases and budget cuts on Jan. 1. Read more here - http://www.dailyprincetonian.com/2012/12/09/32119/

Washington Post

Family Income and Tax Cuts Calculator - Use this tool, based on data from the Tax Policy Center, to estimate how your family would be affected by the Democratic and Republican plans for dealing with scheduled tax hikes — and what would happen if no deal is reached. The math is complicated: The expiration of all or part of the Bush-era tax cuts could have the biggest impact on most families, but the end of the temporary payroll tax and new taxes related to the health-care overhaul mean that most families would see their tax burden increase under any scenario. Use the tool here: http://www.washingtonpost.com/wp-srv/special/business/tax-cut-scenarios/

Fed is expected to launch new bond buying program to aid economy as ‘fiscal cliff’ looms - Fed is expected to launch new bond buying program to aid economy as ‘fiscal cliff’ loomsWith a nervous eye on the “fiscal cliff,” the Federal Reserve is expected this week to announce a new bond-buying plan to support the U.S. economy. Read more: http://www.washingtonpost.com/business/fed-is-expected-to-launch-new-bond-buying-program-to-aid-economy-as-fiscal-cliff-looms/2012/12/11/1f5db4e8-4350-11e2-8c8f-fbebf7ccab4e_story.html

K-12 – Fiscal cliff: Schools would be affected inequitably - It is not certain that President Obama and Congress will come to a budget deal before the end of the year to avert automatic budget cuts, including in education. Here Anne O’Brien, deputy director of the Learning First Alliance, explains what would happen to school districts if the country goes over what is being called “the fiscal cliff.” The Learning First Alliance is a partnership of 16 education associations with more than 10 million members dedicated to improving student learning in America’s public schools. Read more: http://www.washingtonpost.com/blogs/answer-sheet/wp/2012/12/11/fiscal-cliff-schools-would-be-affected-inequitably/

Let us know if you have any additions to this list as I am sure there is tons of material about how the fiscal cliff might affect schools, from community colleges to state schools, from not-for-profit to for-profit institutions. 

Just a quick roundup of some education news focused on digital textbooks and eBooks, open educational resources, education policy, and textbook publisher trends.

• Free digital textbooks offered as Gov. Jerry Brown signs bills - http://20mm.org/LA-Times-Free-digital-textbooks-offered-as-Gov.-Jerry-Brown-signs-bills/News-49.html
• McGraw-Hill Education Launches E-Book Program for Higher Ed - http://digital-textbooks.blogspot.com/
• How ‘Big Three’ Publishers Are Approaching iPad Textbooks - http://thejournal.com/articles/2012/11/08/how-big-three-publishers-are-approaching-their-ipad-textbooks.aspx
• Duncan: Make textbooks ‘obsolete’ - http://www.eschoolnews.com/2012/11/19/top-ed-tech-news-novemberdecember-2012/
• Chief Academic Officers and Faculty Survey Finds Use of Open Educational Resources Remains Consistent but Low - http://www.sacbee.com/2012/11/07/4967562/chief-academic-officers-and-faculty.html

The CAO survey mentioned in the last bullet above advised that “Chief Academic Officers and faculty report that key barriers to adopting OER are the lack of a single, comprehensive catalog of content, difficulty finding content, and concerns about time and energy spent selecting and evaluating the material.” Remember folks, the Akademos Textbook Adoption Tool is open to all faculty from any college or university. It is the only textbook comparison tool that includes OERs and commercial textbook publisher offerings.

Check out this new infographic from Inside Higher Ed summarizing an EDUCAUSE student survey study about technology in coursework. Take aways for us here at Akademos and TextbookX? Students want more technology in their coursework, including Open Educational Resources and eBooks.

Torn down the middle. That’s how the NY Times Magazine’s September Education Issue portrayed UVA’s campus on its cover page, along with a dramatic title: Anatomy of a Campus Coup: The inside story of the failed ouster of the University of Virginia’s president–and what it means for the future of higher education.

By now, many of us know the story of UVA president Teresa Sullivan’s forced resignation and subsequent reinstatement. In fact, it took me a few days to read the Times Magazine cover story because, well, I thought I already knew what had happened. It turns out there was still more to the soap opera, and a little bit of journalistic digging has helped uncover some lessons learned and a conspiracy theory or two. Allow me to summarize the article for you…

At the heart of the drama seemed to be philosophical differences in how to run an elite institution between those that have more of a not-for-profit/higher ed/government background and those that have more of a business/corporate/Wall Street resume. Where these two groups see the future of education heading caused a rift at UVA’s campus that likely revealed schisms happening at institutions all across the country and the world. To the UVA Board of Visitors, an appointed body that oversees the university, Ms. Sullivan was not “CEO” enough in her actions or her image. The drama played out in the media as potential sexism, political jockeying, and fiscal philosophical differences.

But put succinctly, UVA’s board did not think Ms. Sullivan was building enough long term fiscal bets into the strategic plan, such as online programming, and was most certainly not acting fast enough in experimenting with trends like MOOCs (Massive Online Open Courses) along with the MITs of the world. The board had been influenced, in addition to their MBA-ness, by Clayton M. Christensen’s book “The Innovative University,” which focuses on “disruptive innovation” in higher education. Talk to any private equity wonk and he or she will animatedly tell you how education is poised for disruption–the kind of disruption that could make someone a lot money. So why wasn’t UVA taking advantage of its brand name and keeping up with the times?

Well, let’s set the scene. UVA is considered a top ranked university, right up there with the Ivy Leagues. What sets it apart from these schools though is that UVA is a public school. So already we are not comparing apples to apples. UVA also has a smaller enrollment than many of its peer institutions. And finally, UVA is committed to keeping a higher mix of in-state students than, say, a University of Michigan (state schools typically charge out-of-state students a much higher tuition, thus those schools that have a higher percentage of in-state students cannot depend on out-of-state students to line the coffers). UVA’s president, Teresa Sullivan, has been called a technocrat, an incrementalist, a consensus builder…all those terms that read slow-moving. Some questioned whether she had the inspired spirit needed to run an institution at the presidential level (president’s are well known for helping to raise funds/endowments and acting as the face of the university).

So what does a not-for-profit-type administrator with a background in sociology bring to the table at a place like UVA? Well, we know Ms. Sullivan previously worked as the University of Michigan’s provost, and before that, conducted sociology research at the University of Texas. Her post at Michigan is supposedly one of the reasons she was hired at UVA–she knew how to work in an environment where the state budget was consistently being cut; she knew how to do more with less. While at Texas, where she was “a demographer” and a “numbers cruncher,” she worked on middle class-debt research with Elizabeth Warren, a bankruptcy law  professor who has taught at several institutions, including Harvard, has been a Special Advisor for the Consumer Financial Protection Bureau under President Obama, and overall, is considered an expert on middle-class finance policy. Ms. Warren is something of a Wall Street-watchdog, advocating for the middle class in a system she feels is “rigged,” (according to her 2012 Democratic National Convention speech delivered just before former President Bill Clinton’s). Warren is also currently running for US Senate in Massachusetts against incumbent Senator Scott Brown. I mention all this because the NY Times article referred to Warren as a “liberal icon” and touches on conspiracy theories that Teresa Sullivan was singled out because of her associations with anti-Wall Street and/or pro-middle-class fiscal policies. The Times points out that, in hindsight, this seems unlikely, though at the time, it may have fueled some of the flames. But because the Governor of Virginia is responsible for appointing the board, and he happened to be Republican, and because members of the board also happened to be some of UVA’s biggest donors, political suspicions abounded.

Many people believe the UVA board used a faculty letter as a proxy to oust Sullivan. Faculty, tired of flat salaries they considered uncompetitive, wrote a letter asking for “urgent and immediate action.” Helen Dragas, rector/leader of the board, began lobbying for support to remove Sullivan. She wrote the following to a fellow board member: “I am growing increasingly nervous that others are thinking about big trends and long term prospects for higher education delivery and funding.” She reached out to board members one-by-one, some say to avoid attracting attention (in Virginia, university board member meetings of more than two persons are public record). She then advised Virginia’s Governor McDonnell of her plans. All systems seemed to be on go for Dragas. What is ultimately interesting about this faculty letter is that the faculty of UVA joined the reinstate-Sullivan-camp after the ouster. The Times summed it up by suggesting that faculty may voice gripes, but when it comes down to it, they prefer an academic in charge over a business person.

The faculty, the students, and a former (and influential) board member, all mounted a counterattack. The Times reported that vandals had spray-painted the six front columns of the school’s neoclassical Rotunda with the letters “G-R-E-E-E-D.” And the more the board tried to tell faculty this change was a good thing, the more faculty became “paranoid” that big money donors were controlling the strings at UVA. When Sullivan gave her goodbye speech to the board, people gathered on the lawn to protest her departure. The public relations mess that followed only further riled Sullivan’s supporters. “The national news media seized onto the story, which seemed to dramatize a broader conflict between big money and public education,” according to the Times; and further, “the conservative editorial page of The Wall Street Journal accused the protesting faculty of trying to create ‘an academic Green Zone separated from economic reality,’ while liberal publications held up Sullivan as a symbol of a beleaguered egalitarian ideal.” Ms. Dragas, the leader of the board, lost many of her backers after the decision to remove Sullivan, and Governor McDonnell called on the board to figure this mess out or resign. Sullivan was reinstated as UVA’s president on June 26, 2012. And ironically, on July 17th, it was reported that UVA would participate in a MOOC initiative with Coursera via Stanford University.

So what really happened at UVA? Was it sexism in reaction to UVA’s first female president, was it a Republican conspiracy fueled by big donors and a Republican governor, was it MBA/Wall Street bravado? We may never really know. But I think it is an important lesson in public administration. As the public sector adopts the more useful fiscal practices of the private sector, we must remember that feeding the needs of a public entity is a balancing act, even more so than sustaining a corporation. While business courses try and teach leaders how to run a company that treats its employees as more than just human resources, as a part of the company as a whole, in the public sector,  the people are our shareholders. And in education, which is a Public Good, whether the school be private or public, we have an obligation to run institutions in a manner that helps our investments–the students who are our future and the faculty who are showing them the way–best flourish.

I will end on a final note that I think captures a major schism between public and private business management as related to the UVA story. A UVA board member who considers himself more an entrepreneur than a Wall Streeter provided this analysis: “This board comes predominantly from the corporate sector, and they were not used to dealing with people who have academic tenure and can say whatever they want. They are used to being able to fire people who do that.”

Our friends at 20 Million Minds released a compelling new infographic today summarizing the benefits of California’s potential new law (needs to be signed by their governor) creating an open educational resource library of free e-textbooks. Who doesn’t love a good infographic?

This September, the NY Times ran a front page article in their Sunday paper on college student loan defaults and the organizations that attempt to collect on defaulted loans. Look, if you take out a loan, my expectation is that it gets paid back. But what to do in the case of exigent circumstances? (And what exactly qualifies as exigent–that’s a whole other blog post.) My focal point today–how hard is it becoming to watch students fall deeper under water?

When credit card debt becomes beyond-overwhelming, bankruptcy offers a solution. But the majority of student loans cannot be erased by bankruptcy. And it has become increasingly difficult to watch our college educated fall behind in repayment of loan debt, plus interest. The college-bound go to school to help improve their lot in life, and watching them try and climb out of a sink hole of college debt doesn’t strike me as the best way to build our economy. Though for some companies, the more students that default, the better for that company’s bottom line. (Sound familiar mortgage lenders?)

The Times article shines a spotlight on those companies who are profiting from student loan default. With 5.9 million people in default, someone has to service the lenders. The Department of Education paid $1.4 billion to collection agencies last fiscal year alone. According to one founder of a debt collection agency, the DOE contract has become “THE most sought after contract” within the industry.

The same Times article notes the monetary amount of defaulted loans is believed to be “greater than the yearly tuition bill for all students at public two-year and four-year colleges and universities.”  This strikes me as obscene! (Though I would like to see some more data supporting the claim). But the idea that the amount of money in student loan defaults could pay for every student attending community college and state school is crazy. The for-profit institutions (who tend to serve an under-represented student population), seem over-represented in the list of schools with the highest default numbers. Granted they often have higher enrollment rates and more challenging struggles with retention and persistence (in part due to their online programs), but when our under-represented college population– who is already most at-risk–is in such high default, it does not bode well for our economic future.

The US government has noted that student borrowers need to be made more aware of their college loan options. The article notes that “the companies hired to administer federal student loans are not paid enough for lengthy conversations to walk borrowers through payment options,” according to critics. In fact, one program, called “income-based repayment,” where students pay a percentage of their income toward loan debt, seems underutilized. Further, because letting students go into default brings in so much revenue, third party collectors have little incentive to help the government with their programs to educate borrowers in this regard.

What can we do to help solve these problems? To start we can make a college education more affordable in this country. Additionally, we should do a better job at matching students to the right education for them. This also means keeping the standards high at our public institutions. We all know you get what you pay for, but in the case of higher education, much more is at stake. We can’t treat college as we would a flat screen TV. By keeping tuition at an affordable rate, one that does not egregiously outpace inflation, and by reducing the cost of course materials, such as textbooks, we can improve persistence rates and contribute to a better opportunity for students to graduate, find a good job and pay back their student loans.