Monday Matters
Last week in this column I discussed the new budgeting system that we've developed to address the University shift to value-centered management (VCM). Today we will look at one very specific example of how VCM changes the way we make decisions about finances. I have chosen the topic of how we hire graduate assistants because this is the topic I receive the most questions about. Also, the changes in graduate assistant hires very nicely exemplify the shift in thinking that one must assume when moving from central-based decision making to local decision making.
First, for those of you who may not work with graduate assistant hires, I will present a brief description of the old system. Next, I will present the new system in a way that highlights the changes and the relation of these changes to VCM. Finally I'll share just a few of the details about the new GA hiring system that we've implemented for the College of Education. As you'll see, this system makes it very easy for departments to process electronic "no-paper work" to hire a GA.
Those Were the Days
Last year when a student was awarded a graduate assistantship this student was provided the lowest tuition rate for all graduate students. All students paid one of three tuition rates. These were (from highest to lowest) an out-of state student rate, an in-state (or resident) student rate, and a graduate assistant rate. On the surface this may look like an attractive proposition for graduate students, but such is not always the case. Top research universities around the country compete for the brightest and the best students. As in any market-driven economy, the competition varies from program to program so that the packages put together for students may range from a tuition discount for students in one discipline to a full-tuition waiver for those in another discipline.
Programs in our College had no choice in the matter. Our tuition discount was fixed by the University and was based totally on the current GA tuition rate. The only way we could compete was to increase the stipend (salary) that we would pay a student, but as many of you are aware, even these stipends are restricted in tough budget times. I have personally been involved in recruiting wars and have been in competition with universities that used incentives like full-tuition waivers, paying expenses for prospective students to visit the campus, and even offering sign-on bonuses. (I bet you thought this only happened in football!)
Why do universities invest such resources to recruit top students? My guess is that these universities recognize that the quality and reputation of a university is largely determined by the students at the university. Top graduate students turn into top competitors in the job market and land positions that boost the reputation of the graduates and their alma maters. (A corollary to this might be that graduates in top positions also boost the flow of contributions into university endowments.) For whatever the reason, our hands have been tied when we go toe-to-toe against some of the top schools in the land.
The Future is Now
With VCM comes the freedom to use our GA dollars in more creative ways that will allow us to be competitive when we choose to be. To begin with, the GA tuition rate is gone. Now all students will pay either in-state or out-of-state tuition. Many of the calls to my office and some of the general hysteria that the Dean of the Graduate School has had to fend off with his memos is the result of this new two-tiered (rather than three-tiered) tuition structure. Graduate assistants have heard that there will no longer be a GA tuition rate. This is true, but it is only part of the story. If you stop reading now you'll be prone to add to the panic. Keep reading. The news is good.
In the past graduate assistants only received a stipend. Now each graduate assistant is eligible to receive both a stipend and a tuition credit. A tuition credit is literally a credit that is applied to the student's bill and works as payment toward the bill just as if the student had sent in a check. Many of the departments in the College will be giving tuition credits of about $1800 per semester. The reason they have chosen this amount is because it is the equivalent of what the student was getting under the old GA tuition rate this past academic year. That is, if VCM had been in effect last year and the student had been charged the in-state tuition rate, but received a tuition credit of $1800 per semester, the amount the student would have had to pay out-of-pocket would be just about identical to what they actually paid using the GA tuition rate.
You may wonder what benefit VCM brings for hiring a GA if the end result is the same as it was under the old system. The answer is that the end result does not have to be the same. The choice to give a student $1800 per semester may be a good choice in a transition period, but departments can make other choices. Each department has been given a budget allocation for GA tuition credits. A department may choose to give smaller credits to most students and larger credits to top recruits. A department may also choose (and I would encourage them to seriously consider this) to give only half of the tuition credit to 10-hour graduate assistants that they would normally give to 20-hour graduate assistants. The basic idea here is that departments now have the flexibility to put together packages that reflect internal values or market forces, or a combination of these.
The funding for GA tuition credits was made possible by resources allocated at the University level. The College received GA money based upon our GA hiring patterns for the past three years. We received $4300 per GA ($3600 for the academic year and $700 for the summer). Approximately half of this money has been allocated to academic departments based on the number of faculty members in the department (5 GA hours per faculty member) and to supporting offices based on GA needs (partly reflected by past GA hires).
The other half of our tuition credit allocation will be used to support graduate assistants that work on externally-funded projects. Note that this half of the College tuition allocation is given to us for one-year only. These are non-recurring dollars. That is why I now insist that every funding proposal that comes across my desk includes a proposal for tuition money if graduate assistant support is included in the proposal. I have already seen proposals for several externally-funded projects in the College that are seeking full-tuition funding for graduate assistants. This is taking advantage of the new system to provide good stipends and full tuition payment for the best and brightest of our graduate students. That is how VCM is supposed to work!
Our First Electronic Form
You may have noticed that the new College web page has a blank "forms" page at:
http://www.ed.sc.edu/forms.asp
The Graduate Assistant Hiring Form will be the first new electronic form to appear on this page. This particular form can only be accessed by those who have the authorization to hire graduate assistants. I will be holding a training session for these individuals (and others who are interested) at 3 p.m. on the day this column is released (July 14) in the Instructional Services training area (ETC classroom). At that time I will demonstrate how to use the form. What all members of the faculty and staff should be aware of is that soon this forms page will be populated with a variety of electronic forms. Some of these will be standard forms that everyone uses, so these will be publicly available. Others will be restricted to those who have the authority to use that particular form. This is consistent with the development of our College web as a way to obtain information and do everyday business.
Those who use the new GA Hiring Form should find it very simple to use. You will enter some basic information about the student and then enter the finance information, consisting of both a stipend amount and tuition credit and an account number and expense category for each. To hire the students you will simply provide the student an offer letter (an example will be given to you at the workshop), fill out the electronic form and click on the "submit" button. That's it!
Of course this all seems way too simple. It is. The method of letting the University know about this hire involves separate forms for stipends and tuition credits, and even separate places to send the forms. It also involves entering information on the VIP hiring system. The reason that department and office hiring procedures became simpler, even as the University system became more complex, is because the Business Office staff is doing the work behind the scenes. We have attempted to create a system that provides local decision making that can be conveyed to us with simple forms. We take care of the rest. Just as I asked you to do last week, make sure to thank Steve Mattison and his staff for taking on the extra tasks so that we can keep the internal process simple.
Of course VCM will only translate into meaningful change if we take advantage of our power to make decisions and influence policy. I encourage individual units to discuss graduate assistant support options, develop a policy, and then implement a long-term plan to gradually shift towards a support policy that is consistent with the mission and goals of the unit. As always, let me know if I can help.
Until next week,
Mike