Mitch Daniels: Higher Education’s Reformer in Chief
Many expected Governor Mitch Daniels to run for President in 2012. Instead, he became president of Purdue University. Now in his 6th year, his leadership has been marked by innovation and results.
For starters, he asked for a much lower base salary than the last president. He also requested that 30 percent of his pay be tied to key goals such as increased graduation rates and affordability. What if Daniels earned a perfect score? He’d still earn less than the last president.
Daniels the President
Within one year, he announced a two-year tuition freeze, a 5 percent reduction in meal plan prices, and a 56 percent cut in the cost of co-op internship fees. For year 2? An increase in scholarship assistance, more targeting of these scholarships to low-income applicants, another 5 percent cut in meal plan prices, and the extension of the tuition freeze into a 3rd year.
Fast forward to 2018. Purdue still hasn’t raised tuition. Total student debt is down 37 percent. Of 2017 graduates, 56 percent left debt-free (compared to 33 percent for public universities in general). Income Share Agreements (ISAs) have been signed by 280 sophomores, juniors, and seniors for a total of $5.8 million. That’s almost $6 million that the students would otherwise have borrowed.
With the “Back a Boiler” ISA plan, the students agree to share something like 10 percent of their after-graduation income for ten years or less. It’s not a loan. No interest accrues. And there’s no possibility of default. If you earn more, you pay more — but always the percentage you initially agreed upon. If you really strike it rich, an early repayment can get you out of the deal. Purdue has an interactive web tool allowing prospective students to compare an ISA to popular loan products.
Purdue’s College of Liberal Arts has launched 3-year degrees, allowing students to get in and out with substantial savings. And this past November they unveiled the Boilermaker Affordability Grant (BAG). If you’re an Indiana family with up to $70,000 in adjusted gross income, Purdue will close whatever gap remains after the Expected Family Contribution and any grants or scholarships your student receives.
Daniels the Blade
With a six-year long tuition freeze, you’d think they’d have to outsource more of their instruction to meagerly paid adjuncts. Nope. From 2014-2016, they reduced their adjunct roster by 15 while adding 220 full-time, tenure track faculty. Their pay raises have been competitive against peer groups.
Daniels has made this work through cost cutting and improved efficiencies. It’s not the first time: Daniels was nicknamed “the Blade” for his cost-cutting zeal as director of the Office of Management and Budget in the Bush White House.
There are consultants who tell Boards to raise tuition because it will lead to more enrollment. People assume you get what you pay for. A bigger price tag? Must be a better product. This line of thinking would strongly discourage a tuition freeze. Makes you look as if you’ve “lost confidence in your product.”
But the results at Purdue have been just the opposite. Undergrad applications are up 56 percent since 2013. They’ve seen a 24 percent increase in the number of students earning STEM degrees, with big gains among women (40 percent) and underrepresented minorities (65 percent). Alumni donations, graduation rates, and the number of startups launched based on Purdue research — all up.
Purdue is seeking to be a leader in the area of accountability. Its retention numbers are up, both in the general population, and especially among underrepresented minorities. Their six-year graduation rate, already 71 percent in 2014, is now up to 76 percent (as compared to about 50 percent nationwide).
In 2014 Purdue inaugurated the Gallup-Purdue Index, “the largest data base ever assembled to evaluate the life success of American college graduates.” This Index would establish a national benchmark. That year Purdue also launched a study of its own alumni, to compare them to this benchmark. What they found was that “in every dimension Gallup measures, Purdue alumni are thriving in life compared to other college graduates.”
At a time when many education leaders are skeptical of accountability, Daniels is leaning into it. Recently Purdue’s faculty and administration have been investigating the extent to which grade inflation — a national trend — has made inroads at Purdue. Says Daniels, “I believe that, in a sea of leniency, a university that maintains tough standards of performance will set itself and its graduates apart in a highly positive way.”
Indeed. In an era where many graduates find themselves back in their parents’ basements, Purdue’s job placement rate stands at 98 percent. And Purdue passage rates beat the national average on all 11 of the nation’s most significant licensing exams.
What parent wouldn’t want their child to attend a university committed to academic rigor, strong job placement and affordability? Mitch Daniels passed on the chance to become Commander in Chief. But he has become higher education’s reformer in chief.
Alex Chediak (Ph.D., U.C. Berkeley) is a professor at California Baptist University and the author of Thriving at College (Tyndale House, 2011), a roadmap for how students can best navigate the challenges of their college years. His latest book is Beating the College Debt Trap. Learn more about him at www.alexchediak.com or follow him on Twitter (@chediak).