With responsive, militarily relevant curricula and a focus on meeting the specific needs of the Navy Department, the Naval Postgraduate School is an invaluable asset. Captain Winston Scott—one of the 34 NPS graduates who have gone on to become astronauts—was able to transition from an undergraduate music degree to a master's in aeronautical engineering to join NASA's space shuttle program.
The Department of the Navy has been under severe budget pressure for most of the past decade. Shortages in people, parts, maintenance funding, and training opportunities have combined with a multitude of commitments and a high operating tempo to strain our forces. There has been insufficient investment in ships and airplanes, and a tremendous bow wave of requirements looms on the horizon even to maintain the size of today's too-small fleet. It is not surprising that naval leaders are looking for ways to cut costs in all "support" areas, including graduate education.
Graduate education in the Department of the Navy is provided mainly by the Naval Postgraduate School (NPS). The cost of sending students to NPS has been under close scrutiny for some years, to see if funds could be squeezed out for other purposes, and the department has commissioned several studies to look for alternative ways to provide graduate education at less cost. For the most part, however, these studies have been flawed by imbalanced analysis, inadequate research, and preordained outcomes.
In her July Proceedings article, "Rethinking the Naval Postgraduate School" (July 2000, pp. 46-49), retired Navy Lieutenant Commander Janice Graham offers yet another view. Driven largely by her interpretation of the Department of the Navy's values and objectives for graduate education and a superficial analysis of relative education costs, Commander Graham offers education vouchers, privatization, and outsourcing as alternatives to NPS graduate education.1 These recommendations seem to reflect the notion that one graduate degree will serve the department just about as well as any other. Nothing could be further from the truth.
The Value of Relevant Graduate Education
For the Navy, the longstanding "P-Code" system identifies the billets requiring graduate education in specific academic areas, but those billets are almost entirely ashore and mainly in Washington.2 There is a much larger requirement for graduate education than that dictated by the narrow confines of the P-Code system. It seems reasonable, for example, for a few officers serving on board, say, an aircraft carrier or an Aegis cruiser to have had graduate education in an area of practical value to the fleet. Department heads certainly would benefit from graduate work in virtually any curricula offered by NPS. More important, their ships or squadrons would benefit, too.
The Fleets are trying to be more involved in the requirements process, and NPS graduates will be increasingly important to fleet understanding of how systems work and how they are integrated into a larger whole. Upgrades and new systems are being introduced continuously, but few of our end users have the background to understand them fully and use them effectively. We can't offer everyone a graduate education, but our fleet officers ought to be more than just a cadre of "button pushers."
In spite of Commander Graham's assertion to the contrary,3 there is evidence that most senior leaders in the Department of the Navy place great value on graduate education. Facing rapidly changing technology, new missions, and evolving military strategy, they recognize that education is a key to preserving maritime dominance. In fact, the Marine Corps has almost doubled the number of Marine students at NPS in the past several years.
What NPS Graduate Education Provides
The mission and objectives of a Department of the Navy-funded graduate school are clearly specified. With guidance from Title 10 U.S.C., Section 7041-7047, and SecNav Instruction 1524.2A (4 April 1989), the Chief of Naval Operations' "Vision Statement for Graduate Education" (5 May 1999), and its own vision statement (www.nps.navy.mil), the Naval Postgraduate School for more than 90 years has provided graduates able to serve well in a wide variety of coded billets. These graduates have brought their education to the fleet as well, which probably is of even greater value to the services. Besides honing graduates to fill specific jobs, there are other critical characteristics that distinguish NPS from civilian universities:
- NPS provides curricula that are militarily relevant, meeting Navy and Marine Corps subspecialty and general education requirements. Degree programs serendipitously chosen by the officer corps would not match service needs.
- NPS curricula are subject to biennial Navy flag-level sponsor review for military relevancy, with the ability to implement desired course and program changes swiftly.
- Entrance to NPS is controlled by military performance and demonstrated aptitude rather than undergraduate grade-point average and standardized testing.
- NPS provides able and motivated officers the opportunity to transition from one undergraduate area to a different graduate major (unlike industry, the military cannot hire mid-career talent with the desired skill sets; it must educate from within). Astronaut Winston Scott, for example, transitioned from an undergraduate music major to a master's in aeronautical engineering at NPS.
- NPS provides refresher courses to allow students to renew academic skills after several years of on-the-job performance.
- Faculty and students participate in more than 500 research projects per year on issues of interest to sponsoring (funding) agencies from the Department of the Navy and throughout the U.S. government.4
- The NPS student body combines junior officers from the Navy, Marine Corps, Army, Air Force, National Guard, defense agencies, and more than 60 foreign countries to explore technical, operational and strategic problems.
This partnership among students, faculty, sponsors, and foreign militaries produces an unparalleled educational opportunity. There also are important linkages between the Naval Postgraduate School, the geographic commanders-in-chief, and the Fleets. If the Department of the Navy sought to replicate these attributes in civilian universities, it would have to establish Navy and Marine Corps programs under civilian control (with significant augmentation). Naval leaders control these attributes at NPS; they would have to be contractually specified in civilian universities, with questionable results.5
Many of the Postgraduate School's technical and nontechnical fields appear to have civilian counterparts, but NPS curricula have the advantage of being uniquely tailored to satisfy Department of the Navy subspecialty requirements as well as civilian-sector degree requirements and accreditation standards. For example, both NPS and civilian universities offer master's degrees in management, but the NPS programs add defense-specific issues to the general material. Contract management at NPS includes Defense and Navy Department contracting policies, requirements, and case studies. Manpower Systems Analysis addresses the software, data bases, and analytical techniques peculiar to military manpower analysis. There are other examples of synergy, too, such as the National Security Affairs Department being able to draw on the presence of 250 foreign officer students from 60 countries.
NPS is responsive to Department of the Navy and curriculum sponsor direction in ways that may be transparent to the outside observer. For example, at the behest of Vice Admiral Arthur Cebrowski when he was Director, Space, Information Warfare, Command and Control, NPS changed the electronic/information warfare curricula significantly. The school also developed two new 18-month master's programs—Information, Systems, and Operations and Systems Engineering and Integration—specifically designed to meet the needs of unrestricted line officers. Both include joint professional military education. A relatively new 18-month interservice, interdisciplinary curriculum for special warfare officers, sponsored by U.S. Southern Command and initiated under the close scrutiny of its Commander-in-Chief, is very popular with that community. Students also have increasing opportunities to complete phase one of professional military education during their standard NPS tours, taking classes from on-site Naval War College instructors. Finally, NPS is working with Navy sponsors and operational forces to provide distance learning, including both traditional NPS degree courses and graduate-level short courses.6
Any analysis of cost effectiveness must first consider educational objectives. If the Department of the Navy validates subspecialty-based curricula, which it has, then the alternatives include maintaining the Naval Postgraduate School, outsourcing, and privatization. If the department were to adopt a general education model, the alternatives would include a restructured NPS and tuition payment to civilian institutions.7
Subspeciality-based Graduate Education. For the government to consider outsourcing or privatization, private-sector graduate education must offer better performance or lower costs, resulting in better value. Office of Management and Budget Circular A-76 emphasizes the need to normalize for differences in outputs when comparing costs between government and commercial producers.
If we attempt to analyze the cost to provide subspecialty-based graduate education, comparing NPS's costs to the existing tuition rates at civilian universities will not provide meaningful data. Endowments and state and local taxes subsidize civilian tuition. Civilian universities likely would view an outsourcing or privatization proposal as a business opportunity that they would enter if profitable; it is unreasonable to think that they have excess endowment funds or tax financing to subsidize Department of the Navy graduate education.8 Thus, an appropriate comparison involves total education costs, given a standardized educational offering.
Unfortunately for purposes of comparison, there are important differences between the Naval Postgraduate School and civilian universities. Unique attributes that increase NPS's average education cost per student per year relative to the standard civilian-sector model include:
- Military-relevant graduate education that satisfies both general education and subspecialty requirements
- Dedication to graduate education (instruction by regular faculty; no teaching assistants)
- Academic scheduling with heavy class loads
- Quarterly admissions with demand-driven course scheduling (courses scheduled to guarantee on-time graduation)
- Required theses in all degree programs
- A military infrastructure superimposed on a traditional academic infrastructure to maintain professional and military aspects of officer-student careers
- Infrastructure to support classified courses, laboratories, and student/faculty research
In addition, the Department of the Navy also pays students' full salaries and benefits while they attend in-residence graduate programs. These costs can be significant, and they are important considerations if graduate programs differ in duration. The most critical adjustments to be made in this area when comparing costs include:9
- Academic Calendar and Course Scheduling. The Navy and Marine Corps want every day of graduate education to count because an officer's time away from the fleet is precious. Thus, the typical NPS student receives 16 hours of instruction per week and attends class 48 weeks per year. This totals 768 hours of instruction per year. In contrast, civilian-sector graduate students typically receive 486 hours of instruction per year, including summer classes, when course selection typically is limited.10
- Dual General Academic and Subspecialty Educational Requirements. The average NPS graduate degree program requires 18 months and involves 1,152 hours of class instruction; civilian universities would require 28 months to deliver an equivalent course content.11
- Focus on Graduate Education. Graduate education is more expensive than undergraduate education. Graduate class sizes are smaller, professors are not supplemented by teaching assistants, and instruction and research require more expensive equipment and specialized laboratories, especially if students must complete master's theses. This is particularly significant for technical graduate programs. One analysis found that graduate education in Washington, Florida, and Illinois was two to three times as expensive as undergraduate education.12
- Student Salaries and Benefits. If NPS and civilian programs are of different duration (e.g., 18 versus 28 months), any cost comparison must include the students' salaries and benefits. The Department of the Navy's Director, Assessment Division, estimated that the annual cost of salary, benefits, and housing per NPS-resident officer totaled $63,300, compared to $72,300 per officer-student at civilian institutions.13 The higher civilian cost reflects the fact that most NPS officers live in base housing.
A 1998 study by Linda Cavalluzzo and Donald Cymrot compared cost data for postsecondary education in 28 civilian universities and NPS. We normalized that data for the effects of NPS's unique academic calendar and course scheduling, dual general education and subspecialty academic requirements, focus on graduate education, and student salary and benefit considerations.14 With these adjustments, the current graduate education costs per master's degree student range from $570,500 (California Institute of Technology) to $208,400 (University of Texas at Austin). The average for the 28 civilian universities considered is $268,300. NPS's graduate education costs are $207,200—lower than all the civilian institutions considered. Student salaries and benefits are included in these figures and account for anywhere between 25% and 70% of the totals, with an average of 53%.
As these results show, when data are normalized for the school's unique aspects, the Naval Postgraduate School is cost competitive with civilian universities. It is unlikely, therefore, that the total costs of in-residence subspecialty-based graduate education for the Department of the Navy would be reduced by outsourcing or privatization. In fact, NPS would look even more cost effective after adjusting for other cost-related unique attributes.15
This result is counter to the conventional view that annual costs per student are greater at NPS than at civilian institutions. The primary explanation for this difference is workload. Because annual student workloads are approximately 60% higher at NPS than at civilian graduate programs, and because higher student workloads use faculty more intensively, the average annual cost per student is increased. But the length—and thus ultimate cost—of a standardized degree program is reduced considerably.
General Graduate Education. If the Department of the Navy were to adopt a general education objective, comparing current costs at the Naval Postgraduate School to tuition rates at civilian institutions still would be meaningless. NPS's costs reflect subspecialty-based graduate education; to compare NPS costs with civilian institutions would require first defining a general education curriculum structure at NPS. This is beyond this article's scope, but we offer some observations.
On the surface, cost effectiveness of general graduate education at NPS is unlikely to compare favorably with tuition costs at civilian institutions. This is because tuition covers only a portion of educational costs at civilian universities—endowments and tax financing fund the balance.16 The Navy Department, on the other hand, must pay all educational costs at NPS. This disadvantage would be offset to some extent by NPS providing more class hours per year and by flexible admissions timing. Returning students to the fleet more quickly reduces the associated student salary and benefit costs by up to 40%.
In addition, NPS admits students based on militarily relevant requirements. Civilian universities consider undergraduate academic records, standardized test scores, and, in some cases, relevant professional experience. Civilian admissions committees also balance the demographic characteristics of their incoming classes. The prestigious programs often suggested as alternatives to NPS are not undersubscribed by civilian students. Thus, they likely would limit admission to a very few of the most qualified Navy and Marine Corps students. This would create problems for the Department of the Navy as it seeks quality civilian education for large numbers of service members. Of course, marginal schools that struggle to maintain enrollment would welcome large groups of Navy Department students willing to pay full tuition, but we should carefully consider the resulting tradeoff between cost and educational quality. Civilian universities are ranked on excellence of education, not on costs. Why should the Navy Department's university be ranked otherwise?
A Good Return on Investment
The Department of the Navy's objective for the Naval Postgraduate School is to provide technical, analytical graduate education in a variety of subspecialty areas not available in civilian universities. General graduate education emphasizing entrepreneurial skills, public speaking, debate, and better business practices simply does not meet the naval services' need. NPS includes this material in its curricula, but it specializes in developing and applying technology, knowledge, and intelligence to managing future security crises and wars, serving all military services and more than 60 foreign countries. NPS quickly adapts curricula to the sponsor's changing needs, and its programs are well regarded by the nation's higher educational community and highly valued by their curriculum sponsors, by commands receiving its graduates, and by foreign governments. Although many civilian institutions offer graduate education, none provide it with the unique naval and defense characteristics that the Naval Postgraduate School offers.
Commander Graham's article does highlight the importance of providing more visibility to the great national resource that is the Naval Postgraduate School. If the school were better understood by some of the budget-cutters in Washington, there would be greater recognition that it produces the essential seed corn of tomorrow's educated officer corps and is cost effective in the process.
To put this debate in perspective, consider that the annual budget of the Naval Postgraduate School is less than one tenth of one percent of the Department of the Navy's budget. It produces an overwhelmingly good return on that investment. Even so, the school is not about costs; it is about value. NPS graduates will have a significant positive impact on the future of the Navy and Marine Corps. In fact, both services would be well served to examine more closely their requirements for graduates to serve afloat and ashore, and increase the number of students at NPS accordingly. All the studies in recent years, and the related discussion of realignment, relocation, outsourcing, privatization, and so on, have had a corrosive effect on the school, its faculty, and even the students. Let's hope those studies have run their course. It's time to get on with graduate education at the Naval Postgraduate School.
Admiral Mauz is president of the Naval Postgraduate School Foundation. Before retiring from active duty in 1994, he was Commander-in-Chief, U.S. Atlantic Fleet. Dr. Gates is an associate professor at the Naval Postgraduate School. He received his Ph.D. in economics from Yale University. Prior to joining NPS, he worked as an economist at NASA's Jet Propulsion Laboratory and as a consultant to the Rand Corporation.
1. Commander Graham states, "Initial forays to several top-tier private universities for the purpose of determining their interest in some type of partnership with NPS were most promising." She does not provide any reference for this assertion, list the universities contacted, or describe the ground rules specified (student/faculty workloads; admissions timing, curriculum content and review; etc.). As such, it is difficult to determine the actual interest level in such partnerships. back to article
2. Commander Graham reports that only 20-25% of NPS graduates filled matching P-coded billets in the six years following graduation. The primary reference is Linda C. Cavalluzzo and Donald J. Cymrot, "A Bottom-Up Assessment of Navy Flagship Schools," CRM 97-24, Center for Naval Analyses, January 1998, p. 111. More detailed data in this report (pp. 61-62) indicate that "exact matches" within six years equaled 54% and 30% in the restricted line and unrestricted line communities, respectively. Utilization rates after six years for a qualifying payback tour (exact, closely related, or other qualifying match) were 91% and 67%, respectively. back to article
3. See also Cavalluzzo and Cymrot, "A Bottom-Up Assessment." back to article
4. This reflects fiscal year 2000 reimbursable research program as of 1 June 2000. back to article
5. Civilian universities are unlikely to develop/deliver military-unique material, or the other attributes NPS offers, if DoN students simply pay civilian tuition rates. back to article
6. This is consistent with SecNav Instruction 1524.2A, which states: "The objectives of graduate education at the NPS are to prepare officers to fill subspecialty positions. . . . Graduate degree and nondegree (short courses) programs in technical and nontechnical fields shall be established by the Superintendent of the NPS in response to Navy and Marine Corps requirements." back to article
7. Restructuring NPS into fewer, broader curricula would increase the emphasis on general education while retaining some focus on DoN- and DoD-specific issues. Sending students to existing civilian programs would mean losing all focus on DoN/DoD issues unless the programs were augmented by Navy-funded material. back to article
8. Civilian universities would share their endowments only if they enter outsourcing or privatization agreements out of a sense of public service, not as business opportunities. back to article
9. For a more complete discussion see William R. Gates, Xavier K. Maruyama, John P. Powers, Richard E. Rosenthal, and Alfred W. M. Cooper, "A Bottom-Up Assessment of Navy Flagship Schools: The NPS Faculty Critique of CAN's Report," NPS Technical Report NPS-FC-98-001, November 1998, pp. 11-22. back to article
10. NPS's heavier academic load makes sense because the Navy and Marine Corps pay these students full salary and benefits; graduate students at civilian universities may need a lighter load to allow time for employment or other pursuits. back to article
11. Cavalluzzo and Cymrot, "A Bottom-Up Assessment." Alternatively, NPS and civilian university costs could be scaled to a 972-class-hour civilian graduate program. Relative costs are the same in either case; only the scale differs. Commander Graham asserts that NPS's dual educational requirements increase degree program length; however, its more intensive academic calendar allows NPS to satisfy dual education requirements without extending the graduate program length. Transitional and refresher courses have a greater impact on program length. These classes reflect Navy policy allowing students to enter NPS in fields outside their undergraduate majors. This flexibility is essential considering the Navy's closed-pipe personnel system that precludes mid-career accessions in areas of Navy need. back to article
12. Peter D. Syverson and Moira J. Maguire, "Estimating Institutional Costs of Graduate Education: Reports from Three States Demonstrate Promise, Pitfalls of Cost Studies," Council of Graduate Schools, 1997. back to article
13. "Memorandum for the Deputy Chief of Naval Operations (Resources, Warfare Requirements and Assessments)," Ser N81/3U639949, 29 March 1993. back to article
14. Detailed calculations are described in Gates et al., "A Bottom-Up Assessment." back to article
15. For example, quarterly inputs and class scheduling to ensure on-time graduation reduce class size; maintaining military infrastructure increases administrative costs; and the thesis requirement increases faculty costs. back to article
16. Tuition covers 13%-73% of educational expenditures in the civilian sample described above (Cavalluzzo and Cymrot, "A Bottom-Up Assessment," p. 69). back to article