Sunday, August 30, 2015

For the Record: U of M President Kaler chides Strib's DJ Tice

President Kaler complains about the Strib:

it’s bad when comments I’ve made are taken woefully out of context "

From the Strib Letters to the Editor Section:


We are an enduring institution, but also one of useful change

It is good when the Star Tribune drives the community discussion around issues in higher education, but it’s bad when comments I’ve made are taken woefully out of context. In his Aug. 23 column (“The ungrounding of the institution of higher ed”), D.J. Tice chided me for my “medieval attitude” as he cited a recent Minnesota Monthly magazine article in which I said that, unlike many thriving modern institutions, world universities have been in existence since the 1500s, and “I just don’t think the business is going to change very much.”

That historical fact — and I’ve said it many times — comes in the context of that same article’s mention of the many changes underway at the U as we need to “retool in the face of international competition.”

While I do disagree with some prognosticators who are predicting the end of place-based education, a much more accurate description of what I think comes from my State of the University address last spring: “Yes, universities are remarkable for their historic continuity, but they and we do change. We change because of the needs and demands of technology. We change because our faculty uncovers and gives birth to new ideas and new discoveries. We change because students lift their voices.”

I’m proud that we are one of Minnesota’s oldest and most enduring institutions. I’m also proud that through distance and active learning, flipped classrooms, electronic textbooks, interdisciplinary courses and a commitment to diversity, the University of Minnesota is always in the process of changing for the benefit of our students and the prosperity of our state. Medieval? Not so much.

Eric W. Kaler, president, University of Minnesota

Out of context?  Let me explain what I really meant when I said ...
Measure twice, cut once? 

Monday, August 24, 2015

For the Record: Letter from Robbins lawyer on behalf of Parker Search to U of M President Kaler

The buck stops where?

To download the original document in pdf format, click the download symbol above.

For background and information about the letter please see: Search firm: Teague properly vetted for U athletics job.

Tuesday, August 18, 2015

University of Minnesota Athletic Debt on Steroids

 Athletic Accounting Part II

From the 2014 U of M annual report to the NCAA:

The "athletically related facilities annual debt service" for fiscal year 2014 was $17,663,000.

The "athletically related outstanding debt balance" for fiscal year 2014 was $201,395,000.  See p. 2 of the 2014 annual report. 

Part of that debt is for the $137 million in special purpose bonds issued by the University in 2006 to pay a portion of the cost of construction of TCF Bank Stadium.  The principal and interest on those bonds will be paid by the citizens of Minnesota to the tune of $10,250,00 per year for more than 20 years.

It appears that the Regents are poised to approve the plans to construct a $150 million "athletic village." (The scope of the project has been temporarily reduced from the original plan at a cost of $190 million.)  The cost of financing the project will increase the already staggering amount of athletic department debt.

The policy of the University is that 80% of the cost of a project must be raised before starting construction.  See the statement of policy by U of M CFO Richard Pfutzenreuter in the February 8, 2015 Star Tribune report on U's Athletics Project. So the Regents will have to disregard the policy of the University to approve the start of construction as the athletic department is far short of raising 80% ($120 million) of the current cost of the project.

Why should the athletic department get a pass on compliance with University policy?  Especially when it already has athletic debt on steroids?

There is a solution that would enable the University to disentangle itself from the big business of the major revenue sports while allowing the games to continue.  The football and basketball teams should be organized as separate corporations.  The University would grant a license to those corporations to use the University name for the teams.  The license fee would be a percentage of the revenues generated from ticket sales, broadcasting rights, advertising, etc.  The license fee would be used to support the non-revenue sports the University decides to retain, such as track and swimming.

This is a solution that would enable the sports fans (including the U of M president and the Regents) to continue to enjoy the games.  Of much greater significance, it would enable the University to focus on education, research, and public service--the reasons for its existence.

Michael W. McNabb

University of Minnesota B.A. 1971; J.D. 1974

University of Minnesota Alumni Association life member

Friday, August 7, 2015

Student Debt: Fiction v. Fact Part II

Student Debt: Fiction v. Fact Part II

In response to Part I, a U of M professor sent a link to the June 24, 2014 New York Times report on The Reality of Student Debt
. The Brookings Institution analysis of student debt nationwide described in the report shows that in 2010 58% of young adult households in the United States with student debt had outstanding student loans of less than $10,000. The Brookings Institution analysis is based on 2010 data. So the analysis does not include the hundreds of millions of dollars in student loan debt incurred over the past five years.

A more recent analysis shows that the financial reality for college graduates in Minnesota is much bleaker. Minnesota ranks 5th in the nation in student loan debt. In 2013 66% of U of M graduates had student debt. The median debt was $25,080, and the average debt was $27,599. See p. 17 of the June 2014 Minnesota Office of Higher Education report on Cumulative Student Loan Debt in Minnesota. See also the November 13, 2014 Star Tribune report on Minnesota Ranks High in Student Debt  and the June 1, 2013 Star Tribune report on Minnesota Grads Carry Heavy Student Debt Burden.

Then there is the unconscionable economic burden placed on students in the professional schools. In 2013 91% of the graduates from the U of M professional schools had student loan debt. The median debt was $157,671. See p. 23 of the June 2014 Minnesota Office of Higher Education report .

The high tuition high financial aid experiment has failed a vast majority of students and their parents. It has vaulted many U of M students into the top tier for student loan debt notwithstanding the ballyhoo by the U of M administration about the Promise Scholarship program. (This was a predictable result of the experiment as college administrators classify student loans as "financial aid." )

Tone deaf remarks about student loan debt ("less than a new car") by the U of M president and the 2014 chair of the Board of Regents demonstrate a failure to acknowledge the overall cost of a college education and a remarkable lack of empathy for the students and parents struggling to pay that cost. The senior administrators and the Regents responsible for a decade of skyrocketing tuition in 2002--2012 never had to deal with that financial burden when they were starting their careers and their families after graduation. How much different would their lives have been if they had been shackled by student debt?

Rather than attempting to minimize the effect of such debt the U of M president could begin an effort to find a better way to operate and to finance higher education. He could establish a task force with members of the administration, legislators from the higher education committees, staff from the Minnesota Office on Higher Education, and informed students and parents. Someone like Jay Kiedrowski of the Humphrey Institute (a former state commissioner of finance) could serve as the chair.

The work of the task force should include an analysis of the rise in the costs of administration over the past 40 years. If there has been a increase in the number of administrators that is disproportionate to any increase in the number of students or the level of research, we should ask why. If there has been a substantial increase (in constant dollars) in the compensation of any administrator, we should ask why.

Each biennium the citizens of our state now invest more than $1 billion in the U of M in general appropriations. With that much at stake the legislature should appoint a qualified person to monitor on a continuing basis the operations of the University and the use of state appropriations. This legislative liaison (or watchdog) should have the responsibility to review the information produced by senior administrators, to collect additional information through his or her independent research, and to meet with all groups at the University so that the perspectives of other well-informed and thoughtful members of the University community are presented to the legislature.

Michael W. McNabb

University of Minnesota B.A. 1971; J.D. 1974

University of Minnesota Alumni Association life member