Perry issues executive order creating WGU Texas, promising cheap, online degrees

Posted on: August 3rd, 2011 by Patrick Michels 1 Comment

Gov. Rick Perry issued an executive order today announcing the creation of Western Governors University Texas, a local partnership between WGU, a nonprofit online university, and the State of Texas.

Perry’s calls for market-minded reforms toward a $10,000 college degree in Texas have settled into a sort of cold war at premiere schools in the University of Texas and Texas A&M systems, but the governor sidestepped that controversy with today’s announcement:

“By offering online, competency-based courses in key workforce areas, WGU Texas provides another flexible, affordable way for Texans to fulfill their potential and contribute their talents for years and decades to come, without any need for state funding. Our strengthened collaboration with WGU plays an important role in the effort to ensure Texas has an equipped workforce to meet the needs of job creators.”

Perry’s announcement said more than 25,000 students are enrolled in the university, including 1,600 from Texas, in fields like “business, information technology, education and health professions, including nursing.”

The Utah-based school has also been “the nation’s largest supplier of math and science teachers in urban school districts,” according to a November 2008 Time magazine story calling WGU “The best relatively cheap university you’ve never heard of.”

The deal is actually a reworking of a 1997 agreement, when Texas helped create WGU along with 18 other states, each of which chipped in $100,000 for the cause. The school is both regionally and nationally accredited.

WGU Texas is the school’s third such beefed-up state program in the last 16 months, WGU spokeswoman Joan Mitchell told the Texas Independent today.

Gov. Mitch Daniels created WGU Indiana by a similar executive order last year, Mitchell said, and WGU Washington was created by lawmakers in that state in the spring.

WGU is self-sustaining, Mitchell said, based on tuition that runs at a flat rate of $2,890 for a six-month term. The program is self-paced, so students can take as many courses as they can manage in one term, and advance as soon as they pass end-of-course exams.

“All of our coursework is online. that model, coupled with being a nonprofit is really unique,” Mitchell said. Four-year tuition at the school runs a little more than $23,000, but Mitchell says most of WGU’s students are adults who already have some college credit. Thanks to that head start many students have, Mitchell says the average time to graduate with a WGU degree is 30 months.

Grants to the school cover new program outside WGU’s operating budget, like special initiatives to boost graduation rates. The Bill and Melinda Gates Foundation — a major backer of market-based public education reforms and charter schools — gave WGU $1.2 million in 2009, and re-upped in June with a 3-year, $4.5 million grant.

Steps toward no-frills higher education
The Texas Public Policy Foundation, backed by Perry, and other conservative higher education reform groups, have focused on faculty salaries and research costs as prime examples of inefficiency at Texas’ public universities.

TPPF’s “seven breakthrough solutions” proposals to tighten spending by splitting up teaching and research budgets, and give teachers performance-baseed bonuses.

At WGU, research costs are already zero, and the school’s faculty includes more than 700 full-time “academic experts,” and 100 part-timers, who serve as advisers but don’t actually teach.

Mitchell said WGU buys its curriculum materials “from all kinds of different third-party sources,” and reviews them regularly to keep them current. WGU spent $9 million on “learning resources” in 2009, according to tax records — about one tenth of its total expenses for the year.

The organization’s lean, no-frills approach to degrees falls right in line with Perry’s higher ed reform strategy, which has, in turn, been getting attention from conservatives around the country.

But the Texas Coalition for Excellence in Higher Education, a group that has opposed most reform efforts backed by Perry, particularly the TPPF’s seven solutions, said today’s announcement was good news:

“We applaud Governor Perry, Senator Zaffirini and Representative Branch for adding to the diversity of higher education opportunities in Texas with the announcement of the Western Governors University Texas. This low cost alternative will expand access to more Texans, engaging our diverse student population and upholding our statewide commitment to help more students reach their academic and lifelong goals.”

Top pay outpaces Texas’ public universities
The school does not skimp on salaries for its top officials, though.

WGU President Richard Mendenhall made $732,000 in 2009, tax records show, more than all but three presidents at Texas’ public universities, including UT-Austin President William Powers Jr.

A November story in Salt Lake City’s Deseret News examined Mendenhall’s salary, which in 2008 was about $40,000 less than he makes now and placed him 72nd among private university presidents.

More than half of his salary that year was based on performance incentives, though, to help tuition flat, for instance, while enrollment WGU’s enrollment grew from 1,000 to 20,000 students. Trustee David Simmons told the paper Mendenhall had earned so much because he continued to deliver on those challenges:

“Virtually every year the targets that have been set have been met or excelled,” Simmons said. “Each year as we have reviewed compensation we set higher bars for the next year, thinking that this is going to be almost impossible to achieve. And yet year after year this senior management group has been able to do it.”

In 2009, though, none of his reported salary came from bonuses. “A lot of that is how we pay into his pension for his retirement,” said WGU’s spokeswoman Mitchell. “That’s probably one of the reasons people look at it and say wow that’s high.” According to tax records, Mendenhall’s retirement pay accounted for less than $20,000.

It’s also in line with base salaries for presidents at major for-profit online schools like DeVry and the University of Phoenix, though U.S. Securities and Exchange Commission filings show many of them enjoyed “other compensation” far beyond their base pay.

Four other top officials made around $200,000 or more in 2009.

Agencies encouraged to work with WGU
In making WGU the “newest addition to our state’s higher education family,” as the governor says in a video accompanying the announcement, Perry instructed a few state agencies — the Texas Higher Education Coordinating Board (THECB), Texas Education Agency and Texas Workforce Commission — to work with WGU and “create appropriate data sharing processes.”

While encouraging state agencies to work with WGU, Perry’s order also calls for “the creation of an advisory board whose members will be appointed in consultation with the governor.”

“WGU Texas will significantly expand access to affordable, high quality education and training,” higher ed commissioner Raymund Paredes said in the statement. “This initiative is yet another innovation that is making Texas a national role model for reinventing higher education.”

That “reinvention” is a top priority for the board, Paredes said last month, as he works to increase graduation rates and access to scholarships in the midst of severe budget cuts.

The partnership with WGU is the first of its kind in Texas, said higher ed board spokesman Dominic Chavez, and anyway, with its self-pacing programs and nonprofit structure, “WGU is a really unique institution.”

Chavez said a report from the THECB’s Advisory Committee on Higher Education Cost Efficiencies had listed a partnership with WGU as one of its prime strategies last year, and on the march to lower tuitions in the state, WGU Texas was one step Perry was able to take directly.

“A lot of the things that the commissioner and the board are talking about, some of those are gonna require legislative changes, some are going to be the board changing its rules, getting institutions to take action themselves,” Chavez said. “This was one initiative that he governor was able to execute and move on.”

This story has been corrected to reflect that 30 months is WGU’s average time to graduation, not the amount of time “most students” take to earn a degree.

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