Thursday, May 10, 2001

A New Report Details Options for Paying Colleges' Technology Expenses By FLORENCE OLSEN Colleges must find new ways to pay for information technology, says a new report from the Institute for Higher Education Policy in Washington. The report, "Funding the 'Infostructure,'" was commissioned by the Lumina Foundation for Education, formerly the USA Group Foundation. The foundation supports higher-education research and programs for improving access to higher education. The report says that traditional institutions need to be more flexible about financing the information systems, personnel, and wiring infrastructure required for the effective use of information technology. Most colleges pay for information technology with year-end savings and other forms of "budget dust" that do not produce sufficient financing to meet technology needs, according to the report. Higher-education associations are concerned about this patchwork financing of information technology and plan to do something about it, says Richard L. Harpel, director of federal relations for higher education at the National Association of State Universities and Land-Grant Colleges. "It's going to take a significant investment from the federal government, in partnership with the states and private sector," says Mr. Harpel, whose association has proposed a program of federal investments in technology infrastructure comparable to the G.I. Bill of Rights or the program that created the interstate-highway system. Higher education, he says, suffers from the lack of an "overall coordinated effort to see that the physical infrastructure holes are being plugged." The Lumina report notes that some states have developed unusual ways to pay for information technology. Missouri's Video Development and Educational Opportunity Fund for elementary and secondary schools, for example, is financed by a tax on videotape rentals. The report says colleges should consider a variety of options that include debt financing, revolving funds, and internal charge-back systems. The report also suggests revenue-generating activities such as the sale of advertising space on college Web sites. The Lumina report is different from others in the detailed suggestions it gives for financing colleges' information-technology needs: Revenue bonds are usually appropriate only for financing the information-technology structure in buildings, such as wiring conduits, that would be replaced infrequently. For short-term borrowing, public institutions can turn to forms of lease financing, or to other financial instruments. Revolving funds can be used to pay for data, voice, and video information-technology systems. Such funds, financed by foundation grants or institutional money, make loans that are repaid by savings or revenue from investments in new information technology. Continuing-education programs are probably best suited for revolving-fund financing, according to Ronald A. Phipps and Jane V. Wellman, the report's authors. Student-technology fees and user fees charged to departments for information-technology services provide a stable and renewable source of financing for information technology. But many public institutions, especially community colleges, have state-imposed policies that prohibit supplemental student fees. Group-purchasing arrangements can sometimes produce savings of 20 percent or more on information-technology systems or personnel for large institutions, state systems, and regional consortia, according to the report. Profit-making subsidiaries are another option that some institutions are considering to pay for information technology. Noncredit, certificate, and some graduate programs are good candidates for such for-profit subsidiaries, the report says. Regional and national networks represent an important aspect of technology infrastructure for higher education. "Even if new revenue sources are not available," the report concludes, "expertise is a precious form of technology capital that can and should be shared." Easy-to-print version E-mail this article

Book on America's gun culture has its author watching his back Graduates of Mount Holyoke scrap with college for control of alumnae fund Niger blocks protests calling for reopening of country's only university Irish students criticize low pay in summer work program Spring commencement speakers are announced by 20 colleges A new report details options for paying colleges' technology expenses Digital-library company lays off half its staff and slows conversion effort Author says libraries shouldn't abandon paper Brenau U. offers automatic scholarships to some of its online students