Universities track the number of years it takes for students to graduate. However, the pursuit of this goal causes problems, especially at state universities where incentives to focus on the quality of education are poor. As pressuring professors to pass students regardless of their performance in class does not work all the time, some university administrators adopt a complementary strategy: eliminating prerequisites for more advanced classes.
In the Finance, Insurance, and Law Department of Illinois State University (ISU), where I work, we keep dropping prerequisites for more advanced finance classes, giving students more flexibility to choose which classes they take first. A student who fails a class that used to be a prerequisite for a more advanced finance class but is not a prerequisite anymore, can now take the more advanced class without a delay. When prerequisites are eliminated, even students who do not fail any classes can and often do take more advanced classes at the same time or before the class that used to be a prerequisite. The current and previous chairs of our department argue that this helps students graduate faster.
Unfortunately, eliminating prerequisites means that professors cannot build on knowledge acquired in earlier classes and have to keep covering the same material in many classes. When some students do not know the material studied in prerequisite classes, professors can ask these students to review this material themselves, spending little or no time on it in class. However, that is not a reasonable request when the material is not covered in prerequisite classes. Professors have to lower their expectations about what they can expect students to learn in their class as they need to cover the material that students should have learned before the class.
Dropping prerequisites is not limited to those cases where just a few simple concepts needed in more advanced classes are covered in the dropped prerequisites. Some of those concepts are complex and hard to understand. A good example is inflation. We cannot estimate inflation precisely, and it does not affect all prices at the same time and in the same way. Moreover, there are strong political incentives to create and misreport inflation. At the same time, inflation has an enormous impact on financial decisions and cannot be ignored without leading to many false conclusions. Inflation is typically covered in Financial Markets (or a similarly named) class. However, at ISU, Financial Markets is not a prerequisite for some finance classes where it used to be a prerequisite.
Some professors agree with dropping prerequisites as they feel that too many students remember very little or nothing from previous finance classes. However, that needs to be addressed by making sure that students are not passing classes without learning anything. Unfortunately, this solution is not popular with many administrators who are happy with more students passing classes. Other professors agree with dropping prerequisites because they want to avoid the retaliation from the chair or want to gain favors from the chair—department chairs control many issues that affect the faculty.
In our department, even a student complaining that there is too much repetition in finance classes did not trigger the evaluation of dropping prerequisites for finance classes. During a faculty meeting, the chair mentioned that students complain about repetition; however, he did not mention that his policies of continuing our department traditions in eliminating prerequisites might be causing this.
In the long run, these policies are not likely to work even to achieve the goal of faster graduation. By reducing the costs of failing classes to our students, we are encouraging more irresponsible behavior by students. We are also making the school less attractive to students who are serious about learning. Changing the student population from more responsible to less responsible students is likely to lengthen the time to graduation.
In many cases, it seems impossible to solve such problems inside of the university. Complaining about department problems to the higher university administration often produces no positive results. State universities compete for students and resources in an environment that does not even resemble free markets. State bureaucrats often practice distribution to universities based on needs and let universities choose how they measure their own performance, further encouraging irresponsible behavior by university administrators. Moreover, ambitious and overly optimistic university administrators hope to move up before the problems they cause become obvious.
These problems will not disappear until the incentives for state universities change.
Dalia Marciukaityte
Dr. Marciukaityte previously she served as Humana/Mike McAlister Endowed Professor at Louisiana Tech University. Her business experience is with Strategic Management Group and Merrill Lynch.
She was born and raised in Lithuania, when it was still part of the Soviet Union. Her B.S. and M.S. degrees in management are from Kaunas University of Technology, Lithuania. She moved to the United States to study at Drexel University and the University of Pennsylvania. Her Ph.D. in finance with a minor in economics is from Drexel University.
Dr. Marciukaityte has published articles in Financial Management, the Journal of Corporate Finance, the Journal of Financial Research, the Financial Analysts Journal, the Financial Review, the Journal of Business Research, the Journal of Behavioral Finance, and other journals. Her research interests are in government regulations, market competition, corporate finance, and behavioral finance. She has taught Financial Management, Financial Markets, International Finance, and Financial Econometrics, working with undergraduate, masters, and doctoral students.
