PASCU President Claims “Government” Higher Education Benefits from “Status Quo Bias”

Angelo Armenti, Jr., president of the Pennsylvania Association of State Colleges and Universities (PASCU) asserts that every status quo—including “Government” higher education—has its winners and losers, i.e., those who benefit and those who don’t, and that even those who don’t benefit but might benefit from an alternative, may be reluctant to support that alternative due to the “status quo bias.”

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Privatization Without a Plan

A good definition of insanity is doing the same thing and expecting a different result.

Chesterbrook, Pennsylvania (PRWEB) April 23, 2014

According to Angelo Armenti, Jr., president of the Pennsylvania Association of State Colleges and Universities (PASCU), the term “status quo bias” in decision-making was coined by Samuelson and Zeckhauser in the Journal of Risk and Uncertainty in 1988. The very human tendency to “stay with the current situation” may be attributed to a fear of possible negative consequences associated with an alternative, even when serious negative consequences from the status quo have become quite obvious.

“To do nothing is within the power of all men.” Samuel Johnson

“Government” higher education has been defined as what students get when the State controls more than 50% of the governance seats, while providing less than 50% of the annual funding; Armenti cites Pennsylvania as an extreme example for clinging to 100% control but providing only 25% of the funding.

But Pennsylvania is hardly alone, observes Armenti. American public higher education has been rapidly privatized in just one generation. In FY 2012, the mean net tuition share of funding for public higher education across the 50 states was 47.0%, up from 23.3% just 25 years earlier in 1987.¹

The mean net tuition contribution to public higher education funding across America—the share paid by students and parents, less financial aid—has been increasing inexorably at about one percent per year for the past 25 years! Should that rate continue traditional, highly state-subsidized public higher education could vanish entirely in America in just one more generation.

“Organizations are perfectly aligned to produce the results that they get.” Stephen R. Covey

In his recent book² Privatization Without a Plan, Armenti identifies the “winners” and “losers” under Pennsylvania’s current “government” higher education status quo. The winners—i.e., those who benefit the most from the current status quo—are the elected and appointed state officials for whom PASSHE is currently aligned to produce maximum benefits, despite their being the minority (25%) stakeholder.

The losers—i.e., those who benefit the least from the current Pennsylvania status quo—are the students, parents and donors, primarily alumni for whom PASSHE is currently aligned to provide minimum benefits, despite their being the majority (75%) stakeholders.    

The Funding/Governance Disparity is the Source of PASSHE’s Current Misalignment

According to Armenti, the source of the current “upside-down” situation just described—where maximum benefits go to the minority financial stakeholder and minimum benefits go to the majority financial stakeholders—is the great funding/governance disparity that exists in Pennsylvania.

That the State, the minority (25%) stakeholder controls 100% of the governance seats, while the students, parents and alumni donors, the majority (75%) stakeholders control 0% of the governance seats, is tantamount to privatization without representation—which is just another name for tyranny.

“A good definition of insanity is doing the same thing and expecting a different result.” Anon.

This definition of insanity is an perfect corollary to Covey’s organizational principle cited previously. The “upside-down” situation described earlier will continue to be produced indefinitely by PASSHE unless and until its internal alignment is changed to a very different one—e.g., one that is aligned to produce maximum benefits to the majority financial stakeholders—the students, parents and alumni donors.

The current misalignment in PASSHE’s organizational structure originates from the funding/governance disparity that currently gives 100% of the decision-making authority to the minority (25%) financial stakeholder, and 0% of the decision-making authority to the majority (75%) financial stakeholders.

As shown in Privatization Without a Plan, additional future State funding to PASSHE is precluded due to powerful demographic and economic forces. And for that reason, the only variable available to remedy the huge funding/governance disparity is an adjustment to the governance shares of the majority and minority financial stakeholders.

Amending Act 188 to change the PASSHE governance shares to more closely match the respective funding shares of the two current stakeholder groups will clearly be challenging. But, according to Armenti, PASCU intends to educate some 700,000 members of PASSHE’s majority stakeholder group—the students, parents and donors, primarily alumni—to actively support the PASCU alternative to the current PASSHE alignment and, in so doing, to help preserve and deliver the statutory purpose of public higher education in Act 188: “High quality education at the lowest possible cost to the students.”

While the status quo bias is a potent obstacle to achieving PASCU’s primary goal, the opportunity to indefinitely preserve and faithfully deliver Act 188’s statutory purpose is also a powerful motivating factor, especially since PASSHE’s current alignment hasn’t succeeded in achieving either one since 2002.

¹ http://www.sheeo.org/sites/default/files/publications/SHEF-FY12.pdf. p 32, Figure 7
² http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=angelo%20armenti.

The Role of PASCU
PASCU’s mission is “To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: ‘High quality education at the lowest possible cost to the students,’ is indefinitely preserved and faithfully delivered.” To advance that mission, PASCU seeks to reform the governance of PASSHE so as to enable it achieve its statutory purpose as mandated by Act 188.

ABOUT THE AUTHOR
Dr. Angelo Armenti, Jr. served as President of California University of Pennsylvania (Cal U) from 1992 to 2012. Before that, he was a Dean at Villanova University, a professor of physics, and author of The Physics of Sports (American Institute of Physics, 1992). During his career at Cal U, Armenti is credited with establishing numerous funding sources for student scholarships and for campus revitalization projects, efforts made in part to address the problems that he describes in Privatization Without a Plan. In June of 2012, Armenti founded a non-profit corporation entitled The Pennsylvania Association of State Colleges and Universities (PASCU) whose mission it is to preserve the statutory purpose of public higher education in Pennsylvania. He also writes for his blog at http://angeloarmenti.blogspot.com/.


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