Sunday, May 20, 2012

Administrative Bloat and Higher Education Bubble

The post below originally appeared in January, and I feature it again today because it highlights one of the reasons that the higher education bubble might be unsustainable:  Much of the increased cost of college tuition has gone to fuel an expansion in college administrators, what some have called "administrative bloat" or even "administrative blight." 


From an open letter to President Obama on December 16, 2011 from University of Michigan President Mary Sue Coleman:

"Higher education is a public good currently lacking public support. There is no stronger trigger for rising costs at public universities and colleges than declining state support."

According to the Washington Post, "President Barack Obama will announce a plan to shift some federal dollars away from colleges and universities that don’t control tuition costs and new competitions in higher education to encourage efficiency as part of an effort to contain soaring college costs. Obama will spell out his plans Friday at the University of Michigan in Ann Arbor."

One issue that will probably not receive a lot of attention today from either President Obama or President Coleman is the contribution of rising administrative positions and salaries to the rising cost of college tuition.  For example:

1. According to data from the Chronicle of Higher Education (also available from IPEDS), the University of Michigan-Ann Arbor has 53% more full-time "administrators and professionals" (9,652) than full-time faculty (6,305), or a ratio of 1.53 administrative and professional positions for every full-time faculty member.  Couldn't those administrative/professional expenses have something to do with rising tuition?

2. In a front page article on March 27, 2011, the Detroit Free Press reported that:

"Michigan public universities increased their spending on administrative positions by nearly 30% on average in the last five years, even as university leaders say they've slashed expenses to keep college affordable for families. The number of administrative jobs grew 19% over that period at the state's public universities, according to data submitted by the schools to the state budget office.

The increases took place from the 2005-06 school year through 2009-10 -- a period in which both student enrollment and state funding of universities remained about the same, state data show. The higher administrative costs were slightly exceeded by tuition hikes over this period."

3. From this Detroit Free Press database that accompanied the article above, administrative salaries at the University of Michigan-Ann Arbor increased by almost 27% in the five-year period between 2005-2006 and  2009-2010, compared to an 18.2% increase in faculty pay during the same period.   

4. From a related March 13, 2011 story in the Flint Journal:

"The University of Michigan-Flint’s administrative ranks has grown the fastest among the 15 public universities in the state, according to figures from the Michigan Higher Education Institutional Data Inventory released earlier this year. The data showed that the percentage growth in full time administrative and professional staff positions swelled 74 percent between 2005 and 2009, although the percent of administrative positions on campus remains average compared to other universities.

As the number of deans, associate deans and program directors grew at the Flint campus over the last five years, so have administrative paychecks. Six-figure salaries more than doubled on campus since 2006, according to the newest faculty and staff salary information recently released by UM. Nearly 50 of the roughly 1,000 employees made $100,000 or more at UM-Flint, compared to about 20 four years earlier."

5. It's not just Michigan universities that have added administrators, it's a national phenomenon, here's a story from a few years ago about the growth in administrative positions in the University of North Carolina system.

Update 1: According to IPEDS data from the U.S. Department of Education, here are the headcounts for the Univeristy of Michigan-Ann Arbor in 2010 (most recent year available):

Full Time Faculty: 5,693
Full Time Executive/Managerial: 1,711
Full Time Professionals: 6,772
Total Executive/Managerial/Professional: 8,483

Therefore, in 2010, there were 49% more full-time administrative/professional staff than full-time faculty.

Update 2: Examples of positions in the Executive/Managerial category include: Deans (including Associates and Assistants), Program Directors, Office Managers, Supervisors, Registrar, Provost, President, Chancellor, Vice-Chancellors, etc.

Positions in the Professional category include Coordinators, Trainers, Graphic Artist, Program Manager, Analyst, Benefits Representative, Accountant, Associate Librarian, Financial Aid Administrator, Major Gifts Officer, Counselor, etc.  

13 Comments:

At 5/20/2012 11:52 AM, Blogger Buddy R Pacifico said...

Universities would probably implement adminstrative and professional improvements, but it probably has to to be done with:

"Transformative leadership" that enables "strategic visioning" done through "the power of collaboration" that results in an "engaged and sustained community" for those that are "academically-at-risk".

 
At 5/20/2012 1:50 PM, Blogger Pulverized Concepts said...

Institutions of higher learning are bureaucracies in capital letters. The preservation and expansion of their administrations is their goal above all others, certainly more important than stuffing adolescent minds full of facts and concepts. This is because the higher level bureaucrats determine hiring and budgets. As long as there are more applications for admission than there are openings, the situation will continue on its present trajectory.

 
At 5/20/2012 1:58 PM, Blogger bart said...

As far as I'm concerned, anytime the admin ratio gets above 1:2 (1 admin max for every 2 teachers [or other profession/business]) and stays there for a while, the area will get very badly hurt by competition... at best.

 
At 5/20/2012 2:05 PM, Blogger NormanB said...

MP: can you tell us how many credits per year the full-time faculty averages?

 
At 5/20/2012 2:38 PM, Blogger arbitrage789 said...

"Much of the increased cost of college tuition has gone to fuel an expansion in college administrators, what some have called administrative bloat or even administrative blight."
______________

I agree with this completely.

But if I were a professor at a university, I'd be afraid to say this publicly (tenure or not).

 
At 5/20/2012 3:22 PM, Blogger AIG said...

Dr. Perry, we've had this discussion before.

Ann Arbor is a research institution. All one has to do is go visit the campus of the school (or look at a map), to realize that of course this particular school is going to have a lot more "professionals" than academic staff. it's focus is not on academics.

This is indeed a reason for rising tuition costs in some schools and some fields; ie the fields require a lot more focus on research these days then before, because that is what the market demands. Whereas 30 years ago a BS may have been sufficient in some of these fields, today it no longer is. Because as we become more competitive on the higher end of the knowledge scale, the market demands people on the higher end.

This isn't a negative thing, because anyone can compete on a BS degree level. Not anyone can compete when it comes to the higher levels (which are research based)

 
At 5/20/2012 3:37 PM, Blogger AIG said...

By that same data that you provide here, my conclusion was that a large number of the "professional" category included researchers, since that number is not captured in the faculty category.

And in our last discussion I also pointed out that this patter of high level of "professionals" was common in research and medical universities, but not so in institutions focused on academics.

But this, again, falls back to the argument that in order to compete and develop and generate the innovation and growth in high tech industries that you yourself are so proud of in this blog...universities are becoming more and more focused on research. When you become more focused on research, you have to develop a different administrative mix than an academic institution.

Where are those 3D printers you post on your blog, developed? I myself worked for nearly 2 years in a print systems laboratory at my university where they worked on 3D printers.

But that is why universities aren't just about "knowledge". They are much more. And this is why US universities are world beaters and remain so...because they don't compete on knowledge in a book.

Is this going to cost more? Of course, and why shouldn't it?

 
At 5/20/2012 4:37 PM, Blogger Aiken_Bob said...

As usual AIG comments leave me scratching my head. The massive rise in administrate positions is found in all colleges and universities.
The key they add very little, if any value to product, in this case education. If some of these folks are tied to research - great -- but generally research grants are structured to paid for the research folks and hence shouldn't be part of the tuition hikes.

 
At 5/20/2012 4:52 PM, Blogger Mark J. Perry said...

See the full post, I used several other examples besides Ann Arbor, including UM-Flint (not a research institution), see the front page Flint Journal article. The Detroit Free Press article shows that the trend is happening across all 15 Michigan public universities. And there is a link to article about administrative bloat at all of the NC system universities. It's truly a systematic problem at almost all universities, it's not isolated to research institutions.

 
At 5/20/2012 6:01 PM, Blogger AIG said...

As usual AIG comments leave me scratching my head. The massive rise in administrate positions is found in all colleges and universities.
The key they add very little, if any value to product, in this case education.


This is the key point; the product of a university is NOT "education", not the way you're thinking of it. Ann Arbor is a research heavy institution. Since more and more universities are focusing on research, it is expected that this trend WOULD be happening almost everywhere.

Why shouldn't it?

If some of these folks are tied to research - great -- but generally research grants are structured to paid for the research folks and hence shouldn't be part of the tuition hikes.
Research grants don't pay for buildings, administration of all those research folks etc.

 
At 5/20/2012 6:10 PM, Blogger AIG said...

See the full post, I used several other examples besides Ann Arbor, including UM-Flint (not a research institution), see the front page Flint Journal article. The Detroit Free Press article shows that the trend is happening across all 15 Michigan public universities. And there is a link to article about administrative bloat at all of the NC system universities. It's truly a systematic problem at almost all universities, it's not isolated to research institutions.

You don't have to be a research institution to have research occurring in your university. Flint is also the fastest growing of the universities in the University of Michigan system.

But, you're asking me to defend a "trend" without explicitly saying why this trend is negative, or what is causing this trend, or how this trend contributes, or not, to the competitiveness of the final product of these schools.

My argument is that universities today are becoming more and more focused on research, and on higher levels of education (beyond bachelors). This is what the market wants, since it is paying considerable premiums for such students. This is what has created the high-tech competitiveness of the US...the move beyond basic college education.

If this move requires a higher number of administrative staff, and a higher number of support staff, then why is this a negative thing? The benefit generated is considerably greater. The cost should be greater as well.

It seems to me that on one hand people here want the added benefit that is generated from the high-tech economy, which comes about from an higher education system becoming more research intensive and more focused on higher degrees.

But on the other hand, people here seem to complain when the composition or cost structure of higher ed. changes to accommodate this greater return.

I mean, what do people here think all those analysts and "professionals" at Ann Arbor do?

 
At 5/20/2012 6:18 PM, Blogger AIG said...

So let me give you an example. I worked at a print systems laboratory in my previous institution as a research assistant. I was one of those "professionals" that was hired by the institution (since I was no longer a student at that point, nor faculty). Along with me there were also about 5 others in the same boat. Also a few post-grads. There were probably 3 administrative staff taking care of our paperwork and paychecks etc. Probably half a dozen other staff that worked on various things related to our research, publications etc etc. There were only about 4-5 faculty that were directly working there, only 2-3 regularly.

And this was a comparatively small research group.

Now, why is this a "negative"? Companies had created this and invested heavily in it. They hired the students who came out of it. It provided research and theses material for lots of Master students. And it created new technologies for those companies.

Why is this negative? This is what "education in the 21-st century has become. And the rewards of this are increasingly larger.

the fact that government subsidizes public institutions to keep their prices artificially low, is a separate issue. But that supports what I have been saying for a long time...prices need to go up much higher and much faster.

 
At 5/21/2012 4:50 PM, Blogger Mark said...

You seem to have hit a nerve with AIG. It is delusional to expect that there can be a 7 percent increase in the costs of education forever. In the business world, the use of computers and competition forced evaluation and choosing of less expensive alternatives. I have 2 children in college now, and there is a tremendous amount of waste in the system. Colleges compete on features as much as academics. The excess administrators plan and execute these frivolous ventures and activities. Meanwhile, the availability of courses needed to graduate goes dowwn.

This trend is also present at lower levels of education. Where a Principal used to run a school before, now there is a financial manager and an assistant principal and additional staff. Because there are more of these people, there is more support staff to support them and the cost of educating goes up.

 

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