The real reason for skyrocketing cost of higher education?

[Ser Scot A Ellison]

Administration, administration, administration. Is that the real reason for the stagnant salaries of college professors and the skyrocketing cost of higher education? That's what this op-ed posits.

http://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html?WT.mc_id=2015-MAY-WCASeq-OPINION&WT.mc_ev=click&ad-keywords=WCARETARG&_r=0

From the op-ed:

State appropriations reached a record inflation-adjusted high of $86.6 billion in 2009. They declined as a consequence of the Great Recession, but have since risen to $81 billion. And these totals do not include the enormous expansion of the federal Pell Grant program, which has grown, in todays dollars, to $34.3 billion per year from $10.3 billion in 2000.

It is disingenuous to call a large increase in public spending a cut, as some university administrators do, because a huge programmatic expansion features somewhat lower per capita subsidies. Suppose that since 1990 the government had doubled the number of military bases, while spending slightly less per base. A claim that funding for military bases was down, even though in fact such funding had nearly doubled, would properly be met with derision.

Interestingly, increased spending has not been going into the pockets of the typical professor. Salaries of full-time faculty members are, on average, barely higher than they were in 1970. Moreover, while 45 years ago 78 percent of college and university professors were full time, today half of postsecondary faculty members are lower-paid part-time employees, meaning that the average salaries of the people who do the teaching in American higher education are actually quite a bit lower than they were in 1970.

By contrast, a major factor driving increasing costs is the constant expansion of university administration. According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.

Even more strikingly, an analysis by a professor at California Polytechnic University, Pomona, found that, while the total number of full-time faculty members in the C.S.U. system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183 a 221 percent increase.

How can this be corrected?

[Solmyr]

Administration, administration, administration. Is that the real reason for the stagnant salaries of college professors and the skyrocketing cost of higher education?

How can this be corrected?

By firing their asses?

P.S. I work in administration myself :dunno:

[Hayyoth]

Offering government backed debt to kids to pay for schooling is a fuckin terrible idea. It encourages shit like this as Universities know damn well they can charge as much as they want sure in the knowledge that teenage kids don't possess the maturity to know they're being royally screwed. Leverage increases demand which feeds through to higher prices, is not hard to work out. All the extra money coming in has to go somewhere, mostly to admin, stupid ass athletics departments and swish college dorms and common faclities.

[aceluby]

Offering government backed debt to kids to pay for schooling is a fuckin terrible idea. It encourages shit like this as Universities know damn well they can charge as much as they want sure in the knowledge that teenage kids don't possess the maturity to know they're being royally screwed. Leverage increases demand which feeds through to higher prices, is not hard to work out. All the extra money coming in has to go somewhere, mostly to admin, stupid ass athletics departments and swish college dorms and common faclities.

Bolded for emphasis. Yes, administration is a HUGE problem, but they are also spending money on things that have nothing to do with education in order to convince students to borrow enough to buy a house and spend it at their institution.

There is no single silver bullet, it's all shit at this point. Demand for education is huge, the price tag is enormous, the money is really easy to get, and universities will do whatever they can to get their piece of the pie and then distribute it like a business; where admin get the most (my alma mater president gets 7 figures a year), and the ones doing the actual work get the leftovers (my alma mater adjunct professorship has increased 1000% over the last 10 years).

I'm not sure what the answer is because I wouldn't have been able to go to college w/out loans like these, and many, many people are in that same boat. Yet, if the money is this easy to get and is so easily available, with no checks or balances as to what that money can be used for, these types of activities will keep going on.

[Seli]

Offering government backed debt to kids to pay for schooling is a fuckin terrible idea. It encourages shit like this as Universities know damn well they can charge as much as they want sure in the knowledge that teenage kids don't possess the maturity to know they're being royally screwed. Leverage increases demand which feeds through to higher prices, is not hard to work out. All the extra money coming in has to go somewhere, mostly to admin, stupid ass athletics departments and swish college dorms and common faclities.

It is a great idea, as long as you limit the freedom of the Universities to charge what they want.

[DreamSongs]

I think part of the problem is research or perish. The various professional fields are pushing out research which the profession in the greater community uses to 'encourage' established workers to pursue advanced degrees in order to remain relevant. I feel that this is turning higher education into degree mills.

I carry a BA and an ADN and am eligible to retire in 16 years, yet I feel pressured to take out new loans to get a BSN or MSN if I want to move from where I'm at. 'You can do it online at your own pace'. Sure I can. It still costs money. Big business is all it is.

[White Walker Texas Ranger]

It is a great idea, as long as you limit the freedom of the Universities to charge what they want.

That sounds like great, as long as they're receiving government money or accept government backed loans.

[Altherion]

There are a few different causes for the dramatic increase in the number of administrators. The ones that I've heard mentioned are:

1) Government regulations. In order not to get sued or lose federal funding, colleges must satisfy many different laws on matters as varied as the proper administration of financial aid (probably inevitable) and the creation of parallel justice systems (probably unnecessary). As new laws are introduced and colleges get sued based on new applications of old ones, this results in administrators being hired specifically to prevent such situations. This undoubtedly results in some extra administrators, but how much of the overall increase is due to it is rather vigorously debated.

2) Administrators that bring in money. The larger universities have substantial endowments (from tens of millions to tens of billions of dollars) and these require financial managers. The pay of the latter is necessarily comparable to what they would get in the for-profit sector. Despite their salaries being incredibly large by college standards, they bring in more money than they consume. The same is true for various athletic positions (mos obviously head coaches) at colleges which are famous for a certain sport. In addition to these, there are also administrators dedicated to fund raising.

3) Services demanded by students and alumni. Even when not legally required, it is generally accepted that colleges will have counselling for various matters ranging from psychological counselling to career counselling. Sports also require significant oversight due to the fact that there are inter-college bodies with their own regulations.

4) Technical services. Two decades ago, wireless internet was an obscure oddity whereas today it would be very strange to encounter a college without campus-wide WiFi.

5) Good old fashioned corruption and accumulation of power. This article has several examples.

[zelticgar]

I'm looking at 3 kids in college over an 8 year period so this is interesting to me. I'm inclined to push the girls towards state schools unless they can get grants for private schools that effectively make it cheaper than state Universities. I figure if they perform well and want to go to a more prestigious school for their Masters then we can figure it out. No sense in spending 60k a year going to Boston College or Boston University when they can get a really good education at a quality state school for half the price. I just dont see the extra value in an undergrad degree anymore.

Regarding costs, i get the research aspects and they bloated admins but it seems like there are quite a few schools carrying part time professors who are making huge money. I remember when Elizabeth Warren was running for senate i was blown away that she was making north of 350k for teaching one class at Harvard. I wonder how common it is to keep faculty on the books even if they only teach one or two classes a year?

[Altherion]

Regarding costs, i get the research aspects and they bloated admins but it seems like there are quite a few schools carrying part time professors who are making huge money. I remember when Elizabeth Warren was running for senate i was blown away that she was making north of 350k for teaching one class at Harvard. I wonder how common it is to keep faculty on the books even if they only teach one or two classes a year?

Harvard (and Yale and a few others) are very different from the typical American university in terms of the finances. Keep in mind that Harvard's endowment is currently around $36B and it routinely gets donations of order $10M ($100M is less common, but hardly unheard of). Thus, it is profitable for them to have celebrities like Warren teach even if they are not teaching very much and even if they get paid a substantial amount of money (though still orders of magnitudes less than Harvard's financial managers).

EDIT: The flip side of that coin though is that they're also highly atypical when it comes to financial aid. Harvard will fully pay for all students whose families make less than $60K per year, those that make $60-120K pay very little and even up to $180K the payment is no more than 10% of income. Financially, it's actually a very good place to go... assuming one can get in.

[Iskaral Pust]

Some growth of admin adds value, as Altherion noted, because they either raise funds or else help manage large endowments. Those are very well paid people but still net positive. And in an ideal world of public funded universities they wouldn't be needed at all.

But other admin and services and amenities grow because competition flows in one direction only, creating a spiral: there is a huge demand for university and no real alternative available and, so far at least, huge scope for increasing tuition. So universities are competing with each for market share in a growing industry with almost no price resistance. Of course they are going to lard on whatever frivolous extras that students appear to want, and inflate grades, and play all the games to boost their rankings and prestige. To quote Chuck Prince: "while the music is playing ..."

There is a huge waste in here. It's the opposite of a public good: no individual would invest in a public good (military, environmental protection, etc) unless there was a government to enforce it and remove free-riders. No individual will reduce their investment in education (until their finances are tapped out) unless government enforces a ceiling on the cost/amenity spiral because everyone is too afraid to opt-out or aim low.

There is very little tangible or empirical basis to evaluate universities (because graduates do not have to meet an independent standard to justify their grade) so the relative value is all about the intangibles: quality of the student body (peer discussions, competition, networking), sports, recognition among employers, shiny amenities, nice climate, etc. Those are still available with a cap on spending. It's like a payroll cap in professional sports.

Also, universities still try to straddle two worlds: research and teaching. Most professors want to do research but the students and govt and mostly paying them to teach. Personally I think it's time for a clean separation between the two.

[DreamSongs]

Also, universities still try to straddle two worlds: research and teaching. Most professors want to do research but the students and govt and mostly paying them to teach. Personally I think it's time for a clean separation between the two.

Universities have always straddled between the two...hence the publish or perish. My issue is not peer-reviewed research. My concern is that administrators in some fields (notably healthcare) take research and essentially spread the message that if you do not have X degree by 2020 or 2025, then you become a liability to the profession.

In my field, the difference is a few management classes and an extra pharmacology course which will obtain you a 'BSN'. The online diploma mills add in a more in-depth 'Nursing through the Lifespan' (over a 3-4 class span) which contains information that most experienced nurses would know about providing care. These classes are primarily geared toward new, young nurses that lack life experience.

Makes me wish that I had stayed in psych research.

[Shryke]

Offering government backed debt to kids to pay for schooling is a fuckin terrible idea. It encourages shit like this as Universities know damn well they can charge as much as they want sure in the knowledge that teenage kids don't possess the maturity to know they're being royally screwed. Leverage increases demand which feeds through to higher prices, is not hard to work out. All the extra money coming in has to go somewhere, mostly to admin, stupid ass athletics departments and swish college dorms and common faclities.

Are universities in Canada or europe seeing the same price inflation?

Cause if not, then this ain't the big problem.

[Errant Bard]

Are universities in Canada or europe seeing the same price inflation?

Cause if not, then this ain't the big problem.

Europe is not a country.

But for what it's worth, university is mostly public and free in France, except for a nominal administrative fee. That fee has been rising, but something like three hundred euros a year on average is still hardly going to make students get a loan, especially as financial help is provided for the poorest of them.

I don't think a comparison of US with Europe on that point is all that meaningful, since the model is not the same to start with.

[Shryke]

Europe is not a country.

.... yes, I know. I never implied it was. I don't know wtf you are on about here.

But for what it's worth, university is mostly public and free in France, except for a nominal administrative fee. That fee has been rising, but something like three hundred euros a year on average is still hardly going to make students get a loan, especially as financial help is provided for the poorest of them.

I don't think a comparison of US with Europe on that point is all that meaningful, since the model is not the same to start with.

It's definitely comparable for the purpose of this argument. Because the contention was essentially that easy money leads to rising costs. Someone else is footing the bill so anyone thinks they can go to university and the universities know this and so raise fees to milk the students for all they are worth.

But there's a bunch of other countries of a similar setup in Europe that do a much more robust job of funding post-secondary education then the US does and afaik they don't have these same issues or not to the same extent. I know Canada doesn't have near the same issues as the US despite much lower costs for the student directly. There does not seem to be any evidence to support this commonly voiced theory.

AFAIK in reality alot of rising costs to the student in the US seem to be based on lowered government funding by the states.

[Eyron]

Are universities in Canada or europe seeing the same price inflation?

Cause if not, then this ain't the big problem.

Where I am (Sweden) university is free.

We can apply for national student loans to pay for the most basic living costs (a small sum monthly during the semesters, not during summer holiday). To keep getting payouts one has to complete a certain amount of the studies within the semester or risk not getting a loan for the next semester. The repayment plan is fair, and long term with low interest rate. It's very common that parents can't pay for their childrens living costs through uni, so most students apply for the loans to have enough time to study properly, and keep a part time job to manage.

All phd students, teachers and most of professors do research and teach. Everyone doing research chase funding for their projects themselves mostly. The pay for a permanent position at a uni is low compared to most of the western world at least.

[Ormond]

It always bothers me when the discussion of this issue turns to focusing on "publish or perish". That's only a very small part of the problem, because the great majority of college students do NOT attend selective research institutions where that's an issue.

The increase in administrators is an issue for all types of colleges and universities, not just the Harvards and University of Michigans of the world. One of the fastest growing parts of administrations in many places are in the admissions and marketing departments. Student recruitment is a big part of the rising costs at those universities which do NOT get many more applications than they have spaces for.

This discussion should also not be just about traditional age students. A big percentage of the debt is being carried by people who get college degrees beyond age 25. In fact, I would bet that most of the people who get degrees from for-profit institutions which tend to have students with the hardest time paying back their loans are older. It's one thing to have a lot of debt to pay back when you leave college at age 22 with forty to fifty years of working life to pay it back -- it's another thing to leave college at age 45 with a lot of debt. Being "naive" about taking out loans is not a problem of 18 year olds -- it's a problem for anyone who is a first generation college student no matter what their age. Heck, the 18 year old fresh out of high school is much more likely to have parents who can advise them on that issue that the 30 year old single mother who's trying to get a degree is.

[Larry of the Lawn]

Best way to solve problem is probably in solo's member title. Summary executions.

[Ser Scot A Ellison]

A very interesting response to the original op-ed I linked to. From Slate:

http://www.slate.com/blogs/moneybox/2015/04/06/why_is_college_so_expensive_the_new_york_times_offers_an_awful_explanation.html

From the article:

The military base comparison is weak for a couple of reasons. First, it obscures more than it reveals. We worry about per-student funding in higher ed because students pay tuition. Service members, of course, do not pay tuition, though they do draw a salary and would probably be quite unhappy were their paychecks slashed. If that happened, some might reasonably be tempted to accuse the Pentagon of cutting service member compensation, even while defense spending rose overall. Likewise, it's fair to worry about declining student subsidies, even while total education spending heads higher. But Campos' point fails on a more basic level, too. If the U.S. government wanted to run its military bases using slightly fewer personnel to save money, it might be able to do so. Sadly, nobody has yet figured out a way to run a university using drastically fewer professors without sacrificing some educational quality (and no, the Internet has not changed that). While schools have managed to restrain their spending by paying masses of part-time adjunct faculty a pittance, the cost of instruction is still going up. Until someone comes up with a brilliant strategy for making teaching a more efficient endeavor, the fact that states provide colleges with a smaller sum of cash per student than they did 25 years ago will mean that, for all intents and purposes, education subsidies have been cut. Academia is simply not prepared to do more with less.*

To his credit, Campos is at least gesturing towards an important point. Even in years when states increased their per-student education spending, public colleges still raised their prices faster than inflation. And while schools tend to up tuition when legislators cut their budgets, they don't usually lower it when the subsidies get restored (see the graph below1). Instead, they lock in the extra revenue so that they can spend more per undergrad. Where has that money gone? Here, Campos is more on point. As he writes, universities are spending an increasing share of their budgets on administration. In other words, the bloat really has grown in higher ed, and it's costing students.

But that doesn't change the fact that government cutbacks have contributed to the problem. There have been moments when university profligacy has been the major driver of tuition increases. At others, contracting state support has played a critical role. This has especially been the case in these days of post-recession budget austerity. Depending on who's calculating, states are giving schools somewhere around 25 to 30 percent fewer dollars per student than they were 15 years ago. And someone has had to make up the difference. Namely, college kids.

That really slaps the original op-ed pretty hard. Sounds like Campos has a point regarding administrative blot but is attempting to ignore funding issues in favor of his pet issue.

[Altherion]

But other admin and services and amenities grow because competition flows in one direction only, creating a spiral: there is a huge demand for university and no real alternative available and, so far at least, huge scope for increasing tuition. So universities are competing with each for market share in a growing industry with almost no price resistance. Of course they are going to lard on whatever frivolous extras that students appear to want, and inflate grades, and play all the games to boost their rankings and prestige. To quote Chuck Prince: "while the music is playing ..."

There is a huge waste in here. It's the opposite of a public good: no individual would invest in a public good (military, environmental protection, etc) unless there was a government to enforce it and remove free-riders. No individual will reduce their investment in education (until their finances are tapped out) unless government enforces a ceiling on the cost/amenity spiral because everyone is too afraid to opt-out or aim low.

While this is true and the government does have a carrot (federal funding) which can be taken away to force universities to comply, I don't see it happening. It would have to be done by the federal government because the states suffer from exactly the same competition spiral and this would be micro-management on a scale that our government usually doesn't do. It would also be rather unpopular since all of the money being spent on amenities is going to other businesses.

Also, universities still try to straddle two worlds: research and teaching. Most professors want to do research but the students and govt and mostly paying them to teach. Personally I think it's time for a clean separation between the two.

You have a point and I would actually prefer such a separation, but there are several problems with it. First, there are few places other than universities where research is done. There do exist some national labs, hospitals, etc. which do research, but universities employ the bulk of researchers (including practically everyone whose field is not in STEM or medicine). Second, the professors still need to teach graduate students and the latter typically pay their way by teaching undergrads. You would need to significantly restructure the whole enterprise. Also, universities will strongly oppose any restructuring that moves research money away from them. In the current setup, they take a huge cut of all research funds coming from the government for "administrative overhead".