If the University of Alaska is ‘on fire,’ a merger might not be the best bet

The University of Alaska is in trouble. That much was made clear at the Board of Regents meeting July 30. What’s not clear is how a total system merger will help.

The Board of Regents directed President Jim Johnsen to put together a plan for consolidating all three UA universities into one. University of Alaska Fairbanks Chancellor Dan White, University of Alaska Anchorage Chancellor Cathy Sandeen, and University of Alaska Southeast Chancellor Rick Caulfield argued for a less cataclysmic approach to handling the $135 million funding cut, detailing where they could find savings without massive restructuring. But a majority of regents opted for the dramatic solution.

The problem is that a merger may not be an effective solution. Mergers rarely save money short-term; in fact, they incur extra costs. The list is extensive: rebranding, communications, university relations, infrastructure, redeploying staff, managing facilities, signage, travel, transition management personnel. “Cost savings take time to realize and are generally dwarfed in the face of the many expenses that a merging institution needs to incur,” a TIAA Institute report advises. Yet leaders tend “to exaggerate the potential for financial savings and underestimate the associated costs.”

Savings typically only show up long-term, if at all. A Pew Charitable Trusts report notes there is “no good data on whether the mergers actually save money,” and there “are plenty of examples around the country since the 1980s that have increased tuition, failed to reduce the costs of running colleges and universities, and created tense standoffs.” Researcher Lauren Russell found that the average merger between 2000-2015 increased tuition and fees by 5% and did not generate cost savings. Dennis Jones, president emeritus of the National Center for Higher Education Management Systems (and recent consultant for UA), has repeatedly noted that mergers save little money.

Add to this the risk of a change to single accreditation. Those who have done it warn of serious challenges; meeting the standards of more than 30 agencies may be required. This claims attention and resources from other projects, incurring significant opportunity cost. Recently, a Connecticut merger of all state community colleges failed to receive approval from accreditors, was told to reduce disruption for students, and will reapply in 2023. In Alaska, the accreditation of our entire university system will be on the line if a merger occurs.

In addition, mergers are difficult to reverse, sometimes increase administration and overhead, put more distance between students and management, and can reduce choices and access for students. When the merger process is more top-down than bottom-up, drop-out rates increase.

In theory, mergers offer many benefits: increased efficiency, economies of scale, expanded offerings, lower administrative cost, enhanced research productivity. But many fail to achieve these results. Corporate mergers have a 20-50% success rate; university mergers may do slightly better but are still risky. Georgia’s consolidations are a poster child for mergers, but even their savings have been small: 1% of state university funding. In Alaska, similar success would save only $3.3 million, a far cry from the $135 million needed.

In 2016, Johnsen asked Dana Thomas, a former UA vice president, to assess whether single accreditation was right for UA. Thomas listed no fewer than 13 negative outcomes that were likely, concluding, “Single accreditation is neither necessary nor sufficient to achieve cost savings, enhance the student experience, or improve state higher education performance measures … the process to merge UA’s institutions would be disruptive, take at least two years, and might not be approved by the Commission. Therefore, undertaking an accreditation merger at this time is not recommended.” In today’s crisis, it is even less advisable; experts caution against attempting a merger out of desperation.

It’s understandable that the regents feel they must take extreme action. But they are attempting something that may well have never been done before in our nation: cataclysmically consolidating an entire state education system into one institution, against advice and evidence, in a place where there are few alternatives. Gov. Mike Dunleavy has created an unprecedented problem. President Johnsen is pursuing an unproven and problematic solution. Both of them need to explain to Alaskans how they plan to get a better outcome than anyone has reason to expect.

Rebekah Radcliffe Potter, M.A., is a former reporter and content editor, UAA faculty spouse, and home educator. She lives in Anchorage.

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