Monday, June 24, 2013

Figuring the Real Cost of a Cancelled Section

Imagine for a moment that you were in charge of an affair for hundreds of
people. You made arrangements with the caterers months ago. They had given you a list of food you could choose from. You chose it. Put down a deposit. Sent out invitations so people could attend. Chose all the necessary accouterments and all the arrangements. Took off a few days from work to be able to attend. Bought the guest books. Prepared fully. Then a few days before the affair, the caterer called and said that it was canceled because there were not enough guests to make it worthwhile. Sorry! Would you be upset? Likely so. Mad enough to spit and quit! Never use that caterer again.

Your school is that caterer most every semester, quarter and/or term when we cancel classes after registering students into them.

One of the greatest dis-services we provide students is during the scheduling of classes. Well, actually the non or re-scheduling of classes. Even more accurately, the canceling of classes during the last week or two prior to the start of classes. 

Higher education quite often shows absolutely no real concern for the students and the serfs it employs as adjuncts when deciding to cancel a section late in the game. And this is done so very often. Colleges have a very bad habit of waiting until the last week or two then determining that there are not enough students in section 8 so cancel it. This throws the lives and schedules of the students’ who registered for section 8 into confusion and disarray. So what if they registered months ago and planned their lives and schedules (academic and personal) around the promised section. So what if they planned their work around the sections they chose and we let them believe they would have right up until now. If they have to choose between work and non-intellectual stuff like food and paying for tuition, they should realize what comes first! Our convenience and poor planning!! And if they don’t like it they should just quit their job and……. What’s that? They did quit. Not the job. School. Well, we were right to cancel their section. They really aren’t dedicated to learning enough to change their entire schedule, their life, job, arrangements with others, and all the things we were equally pissed about when we were students.”

Just because the college made an offer to them which they accepted and put down money for, it is believed that doesn’t mean there is a real contract because this academia is a different place than the world outside it. In the world outside of the university when an offer is accepted and money passes hands, paperwork is filed that forms an actionable contract. The one who breaks the contract is liable often for real money, or at least for some penalty. But in the academic world, it is the client who feels the pain and colleges wonder why they are angry and dropping out to go to another school.

Most of the time, colleges and universities decide to cut a section for “fiscal reasons.” They believe there aren’t enough students in the section to make it fiscally reasonable. Colleges and universities just cut back on the number of course sections offered and then cull out sections with small numbers to save on the budget. They think that if they do not teach a low enrollment section, they will save money. Not really so. Not simply because the calculations are wrong but because losing a student because of a cut section can be just poor money management. 

For some reason, perhaps academic tradition, colleges and universities often use the number 10 as the required number of students enrolled in a section by a certain date to let a class go forward. That in itself befuddles fiscal and staffing realities.

Consider that the average number of adjuncts (i.e. part time indentured servants who get very low pay and no benefits. At least Wal-Mart gives its serfs a staff discount and $4 generic drugs and you don’t need advanced degrees to work there…) teaching course sections in the average college or university has risen to somewhere between 50% to 64% and could be more if figured by individual departments. That’s the number of adjuncts by the way, not the percentage of courses taught by them. That number is not available but could run as high as 75% considering some will teach as many sections as one section below full-time teaching loads, reductions in loads and such. It seems most of the introductory courses and required courses not taught by the newly hired junior, non-tenured, full-time faculty are taught either by adjuncts or T.A’s, i.e. part-time grad students who get tuition reduction and sometimes some pay too. So the odds are quite good that a course section especially required or introductory courses will be taught by a low-paid adjunct or T.A. How low paid? As low as possible. When $3,400 a section is like a princely sum. At $3,400 a section, an adjunct teaching 3 sections can make as much as $10,200 a semester!! Times two semesters that’s as much as $20,400 a year. There are hotel maids that don’t make that much though they do get tips which adjuncts don’t.

These facts are brought forward as part of a larger customer service point about the fiscal truths about canceling sections and pushing students to think very negatively about your college or actually quit. 

The Real Cost of Sections
All the above is to also question whether or not students are receiving the most important customer service of good teachers who are dedicated to their learning and available to assist them when they need help. Maybe not. But what the numbers show is that most courses in colleges and universities are being taught by underpaid, non-benefit receiving part-timers. Yes, some schools do provide some benefits and some adjuncts have unions to try to gain them better pay and benefits but to this point, it’s still serfdom for most. According to the College Board's article on its website What It Costs to Go to College the average tuition costs were as follows:
Four-year private $27,293
Four-year public $7,605
Two-year public $2,713

Now let’s assume that the average student takes 4 courses. So the four-year private student pays $6,823 per course; four-year public $1901 per course and two-year public $678 per course in tuition and fees. For public schools which do get some public financial support, tuition is not the only revenue source so the cost per course is actually lower for the student but to keep the playing field even, we’ll just figure tuition and fees. 

Now, consider that the best paid adjuncts seem to get around an average $3,400 a course, no benefits. Most get less and some quite a bit less but for this discussion let’s use the high priced serf cost. That way we won’t be understating costs. So to equal pay for an adjunct at a two-year school would need just about 5 students in the section to break even; a four-year public college or university would call for 1.2 students and a four-year private would need just a torso, not even a full student. Granted there are associated costs but this should provide a general notion that the number of 10 in a section for fiscal responsibility is just wrong. Schools  can of course really figure the particular break-even at your institution as follows:
          RPC = Tuition per student (revenue per student per course)            
           Cost of instructor per section        
= number of students to break even

If a school can break even in the teaching of a course, it should always offer the section. Granted there are some systems such as in California that do not provide additional revenue by offering additional sections. The universities get an apportionment from the state to run the school for the year and will receive no additional dollars. This situation is different but does not alter the actual cost of the class or the result of cancelled sections. In such situations the proviso above if the school can break even still applies.

As a customer service to students and as a retention service to itself. A canceled section loses students due their accurate perception of customer non-service and indifference to their needs by the school. The student realizes he or she is not really important to the school. The college loses because students will drop out when courses are not available. Though universities may think they save money when they cancel an under subscribed section, when one looks at the formulas above that belief is often proven untrue. The institution may very well either break even or make some money. Yes, we all know that most colleges are not into it to make money but a fund balance never hurts. And those that are for-profit, why lose revenue and EBITA? 

Why cancel sections students need to progress to graduation and lose students colleges need to make revenue to run the college? Especially when there is nothing lost? Except when sections are cancelled due to bad math.

This is chapter 5 of the new book Collegiate Customer Service from A to G: Admissions to Graduation to be published in September 2013. It will all be posted chapter by chapter on this blog between then and now.

If this article has value for you, you'll want to get a copy of the best-selling book The Power of Retention by clicking here.

N.Raisman & Associates has been providing customer service, retention, enrollment and research training and solutions to colleges, universities and career colleges in the US, Canada, and Europe as well as to businesses that seek to work with them since 1999. Clients range from small rural schools to major urban universities and corporations. Its services range from campus customer service audits, workshops, training, presentations, institutional studies and surveys to research on customer service and retention. N.Raisman & Associates prides itself on its record of success for its clients and students who are aided through the firm’s services. 

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