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Charles Miller: The TT Interview

The former chairman of the UT System Board of Regents on why demography is destiny, why higher education isn't necessarily the key determinant of the state’s economic future, why Texas doesn't need more tier-one schools and how colleges abuse the financial aid system.

Charles Miller, chairman of the University of Texas Board of Regents, conducts a regular meeting on August 6, 2003 in San Antonio.

Charles Miller, the force behind some of the most influential — and controversial — education initiatives in Texas, is enjoying what he calls his “godfather years.” People come to him seeking his counsel and connection, he says. He advises and assists where he sees fit. He’s still busy: A given day might include meetings with foundation heads, education consulting firms and Bill Powers, the president of the University of Texas.

Miller took a circuitous route to higher education. He earned a national profile (he’s been on the cover of Barrons three times) by building a successful investment company and was increasingly drawn into state matters — first in finance, then public education and later higher education.

He served on the University of Texas System Board of Regents from 1999 to 2005 and was its chairman from 2001 to 2004. Miller says he wasn’t looking to become a regent. He had turned down the opportunity twice before finally accepting an appointment from then-Gov. George W. Bush. Even after his term as a regent expired, his ties to Bush kept him involved in higher ed. In 2006, he chaired the federal Commission on the Future of Higher Education, assembled by Education Secretary Margaret Spellings.

Miller’s influence can be felt in both public and higher education in charged topics like tuition deregulation, the rise of charter schools and standardized testing. He famously served on the policy committee that established the Texas Assessment of Academic Skills, or TAAS, which later became the Texas Assessment of Knowledge and Skills, otherwise known as TAKS. “I didn’t so much create the TAAS test,” he explains. “I helped develop a system of accountability where we had a whole range of things happening. We had a curriculum designed with standards at the state level, and we tied the test to those standards, which had never been done before.” Though he says he wasn’t involved, his efforts in Texas are clearly visible in the DNA of the federal No Child Left Behind Act.

Miller habitually challenges conventional wisdom in higher education — notably casting doubt on the College Board claim in 2008 that college graduates make $1 million more than non-graduates over their lifetimes. Other notions he doesn’t much care for: that demography is destiny, that higher education determines the state’s economic future, that standardized testing binds teachers’ hands, or that being appointed to the board of regents comes only as a quid pro quo for campaign donations.

A Republican, he freely admits contributing to Bush and his successor, Gov. Rick Perry, but denies any “pay-to-play” exchange and says he never felt pressured politically by either man while serving on the board. “It’s clear to me that people who are successful have the capacity to donate, and they tend to know people like the governor,“ he says. “And you want smart, capable, successful people to be on the board. So it’s not surprising.” 

Miller talked to the Tribune recently about these and other topics. An edited transcript follows.

Audio highlights: Charles Miller

TT: Your thinking on some higher ed matters differs from others — on demography, for example. We often hear that demography is the destiny of higher education.

Miller: Yeah. “Demography is destiny” has some merit as a broad statement about the fate of an economy. It’s not unimportant. But the saying “demography is destiny” implies some things that I think are negative and not necessarily accurate. It implies that if we keep having a large immigrant population or Latin American or Hispanic population that, over time, because they are on average low-income producers, that will pull down the income of the state and make us poorer — if everything stays the same. There’s always the qualifier, but almost nobody stops there.

In actual fact, there’s a good case history. Texas, in the last dozen years, has had an increase in that population of people. You would ordinarily say that demography should imply lower everything and poor growth, and so far in this dozen years, Texas has had an extraordinarily favorable growth rate. Its income relative to the country has grown — we’re gaining on them. We have a large number of our population who are high-income producers and highly educated who tend to pull up the whole economy and make opportunities available for everybody, including the people who come from lower-educated places. What that does is, it allows a lot of people … to grow and have opportunities, and that’s a very positive economic environment.

And besides the demography itself, there are other factors that are at least as important and maybe more important over time.

Let's take geography. A state like Texas has huge natural resources, a moderate climate, the Gulf of Mexico, great river system, it’s a central location relative to emerging and developed markets, centrally located to the Americas. It's right in the middle of a huge population center. It’s got large and productive land areas for agriculture, for development. It’s got large quantities of minerals and other natural resources. It has, frankly, alternative sources of energy like sun, wind and biomass. Plus, we have our own energy system within the state. So geography itself has a big advantage if we manage those resources right — that’s maybe as important as anything we do.

Public policies make a huge difference. You can see that in comparison to us and California and other big states, especially on taxes, public spending and regulation. They‘re always determinants of economic prosperity. We have ample evidence and wide agreement that Texas has been a national leader in adopting those policies in the areas that produce economically for its citizens. 

TT: You mentioned California, which Texas likes to compare itself to. A current example is the number of tier-one universities: You often hear that Texas has three and California has nine. Is that a worthwhile effort for our state to be engaged in?

Miller: The argument for doing it that somebody has nine and we have three — it’s just not a good argument for all sorts of reasons. On the one hand, it’s not even a correct ratio. Rice may be a top-tier university as a liberal arts college in U.S. News & World Report, but it’s not a great research university in any normal sense of the word. We have a number of institutions in Texas besides A&M and UT-Austin that are huge, world-famous research organizations, and we should count them: medical schools like UT Health Science Center in Houston or in San Antonio or MD Anderson, the No. 1 cancer center in the world, or Southwestern. Each one of those brings in hundreds of millions of dollars, and a total of over a billion dollars — maybe two billion in research dollars. If you count A&M and UT-Austin in the combination, I’m sure it adds up to over $3 billion. It makes us No. 3 in the country in academic research.

Most universities that are considered top research universities have a medical school. In fact, California probably has only four top academic schools in the top 50 research category when you look at research dollars and not some U.S. News & World Report ranking. So we have two big ones and they have four. Our two big ones make up almost four California ones because our student population is 45,000 and 50,000, where their population is 30,000. Relative to the size of our state, their population is roughly 50 percent bigger and their economy is 50 percent bigger. So, Texas having two very large academic institutions that are top tier in research? That’s pretty good compared to California already.

Compared to the public universities in California, Texas has a very strong position. It probably needs more, but it doesn’t mean it's weak. If we imply that we’re weak because somebody else is strong, when in actual fact it’s just the opposite, that’s a really bad strategic position, and it sends a signal to other people that we’re beggars or something. Think of us as Texans. We should be pounding on our chests and saying, “We’re great. We’re a research powerhouse.”

And, while we’re talking about it, California seems to be falling off into the Pacific while Texas is thriving. If it's true that they have nine verses three, you might say, “So what?”

TT: People criticize standardized testing because teachers have to teach to the test. What do you say to that?

Miller: Well, I say that it’s just wonderful, when you’re a teacher, not to have to teach to anything — if you say, “Whatever I do is going to be okay. It’s up to me to decide.” When they were doing that, they were turning out kids without any education. 

Higher ed uses tests all the time, so why wouldn’t it be correct to use them in K-through-12 settings? The answer is, you do want teachers to teach to the test if those tests are properly designed and you have the right information on those tests. Why wouldn’t you want students to learn what’s on those tests? And it’s pretty clear that there’s plenty of room in the curriculum for teachers that are good to teach what’s required on the state standards and have more room to teach other things. “Teach to the test” sounds like the poor teachers don’t have any freedom, and to some extent some freedom is removed, but the really good teachers will tell you, “I want to do that, and I can do more.” So I think that’s more of a lame excuse not to do what is needed than a valid argument against testing.

TT: You had a large role in tuition deregulation. What has that done for the state? Has it made tuition go up to an excessive degree?

Miller: Our average tuition in Texas for a four-year college is about the same as the national average. The rest of the country is probably going up faster. We did a catchup, going back five or six years ago, from a very, very low base. 

Having a very rigid set of tuition requirements for all kinds of schools all over the state, all kinds of programs of any kind, was actually really inefficient. What we were doing was adding fees to those tuitions quietly and silently without disclosing that to the students. So we were actually raising rates pretty rapidly. You couldn’t tell in dollar terms — there were still big increases for many years. And every once in a while, the Legislature would pop another increase in there without knowing what was needed or talking about it in the context of all the things.

Having tuition flexibility allows different universities to charge different amounts for different programs, and you can give incentives to kids to finish sooner by letting them earn 18 hours for the same price they’d earn 12 hours. That kind of incentive gets them out sooner, and it’s cheaper for everybody: the state, the student and the family. So [there are] a lot of benefits to tuition deregulation. It makes some people unhappy, because it looks like everybody has to pay more, when in actual fact, at UT, we didn’t ask families or students of below-average income to pay more at all. We put a lid on it. We asked students in the next quartile up to the 75th percentile only to pay part of the increase. Then we asked kids from high-income families only to pay the full increase.

It’s been a savior for the universities. If the state had the money to support more kids with lower tuition or financial aid based on need, that would be okay, but they don’t and haven’t. Period.

TT: I imagine you wouldn’t say that [financial deregulation] is the only solution to the higher education financing problems.

Miller: That’s an important point, and we don’t discuss it enough strategically. The whole system really is flawed, and that’s part of the complaint that people have. Because it’s subsidized a lot and the financial aid system is very complicated and confusing, people from poor families who need [aid] worst have to go through very, very complex applications and forms. It’s really a very bad system. It needs to be nuked and reorganized in a much more simple way.

We could have national financial aid, where somebody fills out a postcard with family income in the ninth grade and has some commitment about what they’re going to have when they graduate high school. We could actually do that. But most of the complexities are helpful to the institutions, because it's confusing and they’re able to game the system and use that for their own purposes.  Most of the money for financial aid over the last 20 to 25 years hasn’t gone to need-based students. It’s gone to merit-based students, which is a great name, but it’s basically just students that the schools want, not the ones who can’t afford it.

The institutions want a lot more information, and there are all kinds of reasons for that. But the biggest reason is they want to know everything about a family’s finances before they decide whether they let a student in. It’s the only part of our society where you have to disclose virtually everything about yourself privately, including your whole family finances, before they even tell you if you can buy the product or what you have to pay for it. Once they see all that information, they can rig the game to get as much out of you as they can or slice a little of the financial aid off the top coming from the federal government. Or, if they don’t want you, or you’re not likely to pay as much in the future or your family can’t donate as much, they can find ways to keep you out. They call that managed admissions. They do it openly and overtly.

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