PASSHE Institutions Merging

[iupgroundhog]

Another odd thing I noticed - the east triad schools are fighting this. Not a peep in the west.

That's because adding Bloom into the deal was a mistake. The NE Triad has too much inequity built-in. LH ends up getting screwed. Under Pignatello, they were turning the corner on enrollment when this happened (I know Covid is the wildcard). Plus, the enrollment decline notwithstanding, they were in one of the better financial positions. Now, the fear is they get gobbled up by Bloom. The Bloom people don't seem big on it all, either, for reasons better explained by others.

The original LH/Mansfield arrangement worked. Everybody was happy..

Not to mention now that Hanna is the interim President of LHU and the LHU folks now know about his sordid history and that adds fuel to the fire.

[Fightingscot82]

Something that came up yesterday that I was unaware of is SUNY (the most comparable system to PASSHE) had some failed consolidations a few years ago. That system is vast (3 research universities, dozens of regional state universities, some specialized schools, and dozens of community colleges). They paired based on geography and it didn't go well. Within a few years the consolidations were undone. I think we're headed for that with PASSHE.

Another odd thing I noticed - the east triad schools are fighting this. Not a peep in the west.

[complaint_hopeful]

The system chancellor is testifying in front of the state legislature today. To say he's getting grilled would be an understatement.

I feel like there are A LOT of major details that haven't been worked out yet. Which is crazy, because the timeline is so tight that the implementation phase has to start soon.

[Fightingscot82]

The system chancellor is testifying in front of the state legislature today. To say he's getting grilled would be an understatement.

[complaint_hopeful]

Not to my knowledge. There's centralized bidding - maybe that's what you're thinking?

Yeah schools all had their own Purchasing Depts, then PASSHE had a Purchasing group. Some Purchases were coordinated at the state level, but not all or most. Most schools just did their own thing. Now there are some statewide contracts that are used by every school too and they do coordinate that to get a bulk discount. But, I think there's opportunity to do that more.

It's a fairly confusing process to describe.

I'll say too that sometimes state contracts actually cost more and not less to purchase items.

[iupgroundhog]

Not to my knowledge. There's centralized bidding - maybe that's what you're thinking?

I think there are a lot of different arrangements. But I think system-wide procurement is one of the things PASSHE does. Not for everything, but for some things. This System redesign doc reviews the existing contracts and history of system-wide contracts and other collaborative contracts. The way I understand that is that the campus-based rep/dept. coordinates with PASSHE, not the vendor. Could be wrong.

https://www.passhe.edu/SystemRedesig...ces8.30.18.pdf

[Fightingscot82]

How I thought this would go is say 1 Admissions group for the New U. You have an Admissions Call Center setup that handles the calls. Then each campus has a small amount of in person employees. The Call Center is made up of employees from each school and calls rotate through. Then 1 Director and 1 VP of Enrollment, so you lose 2 Directors and 2 Enrollment VP's. And maybe because of the Call Center, you lose a few employees at each location.

But, from what I'm reading in the papers, it sounds like the strategy will be all that is consolidated. And the staffs will be on each site.

Not to pick on Enrollment/Admissions. What I typed for that would apply to other areas too. Financial Aid, HR, Accounting, etc.

Then for the Academic side, with Online only classes, you eliminate some Faculty. Of course, you still need in person faculty, but maybe you just offer certain majors on certain campuses.

Then for purchasing, instead of every school doing their own thing...let's look at computers. Say every May, orders from all schools need submitted. Then instead of each school buying 500 PC's, they buy 7,000 in bulk. And instead of paying 1200 a computer, they pay 850 each. But, that will take coordination and planning from the schools. Many of these schools frequently submit emergency purchase orders.

I'd also work on process maturity. Like for Admissions, I'd make it ridiculously easy to become a student. And I'd streamline mailings and communication. Some schools pelt you with papers in the mail when you apply.

I believe that is somewhat the plan. Consolidation of senior leadership and those "behind the scenes" administrative functions. Admissions does need boots on the ground at each place but all I've seen from this plan is a common recruiting strategy. For example, the three schools have together held a couple events recruiting kids eligible for Pittsburgh Promise funding. I imagine they'll blend admission criteria and possibly a common application. Not sure how any of that saves money but the same goes for most of this plan.

[Fightingscot82]

I don't think each school has been doing their own purchasing. My understanding is that has been centralized for many years at the system level.

Not to my knowledge. There's centralized bidding - maybe that's what you're thinking?

[iupgroundhog]

How I thought this would go is say 1 Admissions group for the New U. You have an Admissions Call Center setup that handles the calls. Then each campus has a small amount of in person employees. The Call Center is made up of employees from each school and calls rotate through. Then 1 Director and 1 VP of Enrollment, so you lose 2 Directors and 2 Enrollment VP's. And maybe because of the Call Center, you lose a few employees at each location.

But, from what I'm reading in the papers, it sounds like the strategy will be all that is consolidated. And the staffs will be on each site.

Not to pick on Enrollment/Admissions. What I typed for that would apply to other areas too. Financial Aid, HR, Accounting, etc.

Then for the Academic side, with Online only classes, you eliminate some Faculty. Of course, you still need in person faculty, but maybe you just offer certain majors on certain campuses.

Then for purchasing, instead of every school doing their own thing...let's look at computers. Say every May, orders from all schools need submitted. Then instead of each school buying 500 PC's, they buy 7,000 in bulk. And instead of paying 1200 a computer, they pay 850 each. But, that will take coordination and planning from the schools. Many of these schools frequently submit emergency purchase orders.

I'd also work on process maturity. Like for Admissions, I'd make it ridiculously easy to become a student. And I'd streamline mailings and communication. Some schools pelt you with papers in the mail when you apply.

I don't think each school has been doing their own purchasing. My understanding is that has been centralized for many years at the system level.

[complaint_hopeful]

Some great points. University of Phoenix and other predominantly online schools aren't looking for physical locations. Every time they've invested in facilities they've been burned. Their game is ease of access. A lot are for-profit and operate by aggressively targeting those most likely to use somebody else's money to pay their high rates like veterans low income learners who don't do their research. They also don't compete for traditional students so they offer very little discount so you're getting private school sticker price for arbitrary quality. So the plan to aggressively go after online schools is a good one - PASSHE base rate tuition is significantly lower. The hurdle is cutting through all the online marketing those online schools use to reach their future students. Surprisingly Penn State World Campus (online) isn't a big player probably because they don't market well at all. Arizona State and Purdue have huge online presences and are using the corporate agreement route to grow.

I don't think the plan will work. Its going to be too clunky and the savings are going to be minimal. I think a financial recovery plan similar to what was done with Cheyney is needed - outside oversight and strict spending controls. The campuses need out of the system-wide labor contracts too. The automatic raises and unions are lagging behind the needs of the moment. NOBODY will like this but there should be no raises unless the budget can support it. That way everyone from President to custodian has a benefit in improving enrollment, retention, and graduation. I know it seems anti-union but it could replicate the feel of an employee-owned company.

These schools run close to margin. There isn't really much waste or moveable resources. If 75-85% of their budget is personnel and they're running at minimal staffing, the only way to save is to find ways to make it cheaper to employ the same workforce.

How I thought this would go is say 1 Admissions group for the New U. You have an Admissions Call Center setup that handles the calls. Then each campus has a small amount of in person employees. The Call Center is made up of employees from each school and calls rotate through. Then 1 Director and 1 VP of Enrollment, so you lose 2 Directors and 2 Enrollment VP's. And maybe because of the Call Center, you lose a few employees at each location.

But, from what I'm reading in the papers, it sounds like the strategy will be all that is consolidated. And the staffs will be on each site.

Not to pick on Enrollment/Admissions. What I typed for that would apply to other areas too. Financial Aid, HR, Accounting, etc.

Then for the Academic side, with Online only classes, you eliminate some Faculty. Of course, you still need in person faculty, but maybe you just offer certain majors on certain campuses.

Then for purchasing, instead of every school doing their own thing...let's look at computers. Say every May, orders from all schools need submitted. Then instead of each school buying 500 PC's, they buy 7,000 in bulk. And instead of paying 1200 a computer, they pay 850 each. But, that will take coordination and planning from the schools. Many of these schools frequently submit emergency purchase orders.

I'd also work on process maturity. Like for Admissions, I'd make it ridiculously easy to become a student. And I'd streamline mailings and communication. Some schools pelt you with papers in the mail when you apply.

[complaint_hopeful]

Some great points. University of Phoenix and other predominantly online schools aren't looking for physical locations. Every time they've invested in facilities they've been burned. Their game is ease of access. A lot are for-profit and operate by aggressively targeting those most likely to use somebody else's money to pay their high rates like veterans low income learners who don't do their research. They also don't compete for traditional students so they offer very little discount so you're getting private school sticker price for arbitrary quality. So the plan to aggressively go after online schools is a good one - PASSHE base rate tuition is significantly lower. The hurdle is cutting through all the online marketing those online schools use to reach their future students. Surprisingly Penn State World Campus (online) isn't a big player probably because they don't market well at all. Arizona State and Purdue have huge online presences and are using the corporate agreement route to grow.

I don't think the plan will work. Its going to be too clunky and the savings are going to be minimal. I think a financial recovery plan similar to what was done with Cheyney is needed - outside oversight and strict spending controls. The campuses need out of the system-wide labor contracts too. The automatic raises and unions are lagging behind the needs of the moment. NOBODY will like this but there should be no raises unless the budget can support it. That way everyone from President to custodian has a benefit in improving enrollment, retention, and graduation. I know it seems anti-union but it could replicate the feel of an employee-owned company.

These schools run close to margin. There isn't really much waste or moveable resources. If 75-85% of their budget is personnel and they're running at minimal staffing, the only way to save is to find ways to make it cheaper to employ the same workforce.

Absolutely.

I see some other weird stuff with the Unions. Like departments of professors slapping an Out-of-office on their email account that says they are on Winter break and will reply to emails on the 1st day of classes. Well, there may be students that you could have influenced enrolling.

Not saying there aren't good Union employees, but there are definately some that use every inch of the system. It tends to breed entitlement and inefficiency.

Like is checking your email for 10 minutes a day over a break bad?

To your point on the recovery plans...my understanding is that some schools have cut costs way more aggressively than others.

[Fightingscot82]

Great post and I 100% agree.

And that's what I think will happen. The Triads will eventually lose enrollment, then start gaining (because of lower pricing and more marketing.) The dangerous thing is that with a lower price point, they'll need to more than stay even on enrollment. They'll need to gain drastically to stay even. So you might get students that would have paid the full price, paying a lesser price.

I just think these schools have largely been not refilling positions for 5-7 years now. There isn't many more cuts they can make.

On the excess capacity, you have interesting points. So when you have excess capacity, you don't look to sell it to other schools with excess capacity...(although I guess in some instances it could align to create synergies.) Probably a better strategy would be to look at a U of Phoenix or someone like that and try to sell that excess capacity to them. Just brainstorming here.

The cutting colleges is probably what needs to happen. It just can't bc of the debt.

The best fix would be if Pennsylvania started to just fund these schools at the average that states fund schools at. But, I don't see that happening. The state largely created this mess. And then Pitt and Penn State expanded to where they compete with these schools a lot...and the state funds them. It's just a system that looks like it wasn't planned at all, and it gets subsidy from the state. And, the PASSHE schools don't appear to be able to survive under it.

Some great points. University of Phoenix and other predominantly online schools aren't looking for physical locations. Every time they've invested in facilities they've been burned. Their game is ease of access. A lot are for-profit and operate by aggressively targeting those most likely to use somebody else's money to pay their high rates like veterans low income learners who don't do their research. They also don't compete for traditional students so they offer very little discount so you're getting private school sticker price for arbitrary quality. So the plan to aggressively go after online schools is a good one - PASSHE base rate tuition is significantly lower. The hurdle is cutting through all the online marketing those online schools use to reach their future students. Surprisingly Penn State World Campus (online) isn't a big player probably because they don't market well at all. Arizona State and Purdue have huge online presences and are using the corporate agreement route to grow.

I don't think the plan will work. Its going to be too clunky and the savings are going to be minimal. I think a financial recovery plan similar to what was done with Cheyney is needed - outside oversight and strict spending controls. The campuses need out of the system-wide labor contracts too. The automatic raises and unions are lagging behind the needs of the moment. NOBODY will like this but there should be no raises unless the budget can support it. That way everyone from President to custodian has a benefit in improving enrollment, retention, and graduation. I know it seems anti-union but it could replicate the feel of an employee-owned company.

These schools run close to margin. There isn't really much waste or moveable resources. If 75-85% of their budget is personnel and they're running at minimal staffing, the only way to save is to find ways to make it cheaper to employ the same workforce.

[complaint_hopeful]

Yea...Academics and consulting companies are REALLY good at producing reports and power point presentations that look and sound very convincing...until you start running the numbers for yourself (if you have access to them). Often you get a sense of - "Wait a minute...THAT doesn't make sense!" - and the whole house of cards comes tumbling down. COlleges, and college systems, are great at "reality avoidance." What I mean is that they avoid the reality that is staring them in the face and pin their hopes on increased enrolement and the $'s that that brings to paper over the reality of mismanagement and failure to adjust to current realities. I mean, look what it took to trim some of the majors from some of the PASSHE colleges? It took 10+ years of sustained system enrolement decline for them to finally say, hey, maybe we need to cut some majors to save some money!

This kind of seems like an exercise in rearaning the deck chairs enrollement wise. Yea, the groupings might see some increase in enrolement, but by and large, this enrolement increase is most likely going to come from other PASSHE schools. Also in PA, you're dealing with fewer and fewer deck chairs to rearange. The fundamental problem is that the PASSHE has excess capacity...Only two ways to fix that problem, either you cut capacity at all schools and try to compete as smaller colleges OR you cut the weakest colleges and focus your resources on the most financially viable schools. Monkeying around at the margins, while giving the impression of addressing the problem, really doesn't. This nip-tuck approach might have worked 8 or 9 years ago, but it is a little late for it now.

Great post and I 100% agree.

And that's what I think will happen. The Triads will eventually lose enrollment, then start gaining (because of lower pricing and more marketing.) The dangerous thing is that with a lower price point, they'll need to more than stay even on enrollment. They'll need to gain drastically to stay even. So you might get students that would have paid the full price, paying a lesser price.

I just think these schools have largely been not refilling positions for 5-7 years now. There isn't many more cuts they can make.

On the excess capacity, you have interesting points. So when you have excess capacity, you don't look to sell it to other schools with excess capacity...(although I guess in some instances it could align to create synergies.) Probably a better strategy would be to look at a U of Phoenix or someone like that and try to sell that excess capacity to them. Just brainstorming here.

The cutting colleges is probably what needs to happen. It just can't bc of the debt.

The best fix would be if Pennsylvania started to just fund these schools at the average that states fund schools at. But, I don't see that happening. The state largely created this mess. And then Pitt and Penn State expanded to where they compete with these schools a lot...and the state funds them. It's just a system that looks like it wasn't planned at all, and it gets subsidy from the state. And, the PASSHE schools don't appear to be able to survive under it.

[Fightingscot82]

Stop gap solution. Have you seen the alumni giving rates? Single digits and that's ANY amount. Plus that money is best used for scholarships to keep student debt down.

[boatcapt]

Well said. The time frame doesn't seem realistic either. Like many many many things need done and the go live of Aug 22 is sooner because they start enrolling students before.

As far as cut, I don't know where those will be other than exec leadership. These schools have been not refilling positions for years now. They're staffed lean as is.

I think I saw a slide that the West has a projected budget shortfall of like $20 million. I don't see how shared services will save that much. Plus, Integration has costs. High costs..

Seems to be a lot of PASSHE spending on consultant's too. Not saying that's bad, but they've also brought in some high level employees.

In the BOG presentation, I saw a slide that showed some $50+ million savings from Shared services, cost avoidance, and a couple other things. Not saying they're not accurate, but I'd love to see the calculations to understand them better.

At the end of the day, you can only cut so far. Enrollment has to either stabilize or grow.

And as far as cuts...athletic not touched. Seems like schools will all have libraries and student centers and Housing and gyms...so no cuts there. The campuses exist, so you need facilities, police, and support personnel. You'll need some in person Admissions, Fin Aid, etc. The way this is being done, I just done see where they can do cuts. Maybe some professors? Maybe a few Accountants? HR?

The Integrations seem to be mainly wildly optimistic pr. I do hope it works, but I'm skeptical.

Yea...Academics and consulting companies are REALLY good at producing reports and power point presentations that look and sound very convincing...until you start running the numbers for yourself (if you have access to them). Often you get a sense of - "Wait a minute...THAT doesn't make sense!" - and the whole house of cards comes tumbling down. COlleges, and college systems, are great at "reality avoidance." What I mean is that they avoid the reality that is staring them in the face and pin their hopes on increased enrolement and the $'s that that brings to paper over the reality of mismanagement and failure to adjust to current realities. I mean, look what it took to trim some of the majors from some of the PASSHE colleges? It took 10+ years of sustained system enrolement decline for them to finally say, hey, maybe we need to cut some majors to save some money!

This kind of seems like an exercise in rearaning the deck chairs enrollement wise. Yea, the groupings might see some increase in enrolement, but by and large, this enrolement increase is most likely going to come from other PASSHE schools. Also in PA, you're dealing with fewer and fewer deck chairs to rearange. The fundamental problem is that the PASSHE has excess capacity...Only two ways to fix that problem, either you cut capacity at all schools and try to compete as smaller colleges OR you cut the weakest colleges and focus your resources on the most financially viable schools. Monkeying around at the margins, while giving the impression of addressing the problem, really doesn't. This nip-tuck approach might have worked 8 or 9 years ago, but it is a little late for it now.