Monday, December 21, 2009

Where Does All That Tuition Go?

Hint: Not to full-time instructional costs.

We know that the costs of attending postsecondary institutions are increasing at a rate higher than inflation. And there is evidence that institutions are using a disproportionate share of these revenues for institutional and administrative costs rather than for instructional ones. This (mis)allocation is taking place in an environment in which the federal and state governments continue to pump large amounts of money into higher education without asking institutions to meet performance standards.

~AEI report "
Where Does All That Tuition Go?" by Mark Schneider


At 12/21/2009 11:58 PM, Anonymous Benny "Tell It LIke It Is Man" Cole said...

I agree with this--I think any organization that is not subjected to market forces, or only weak market or imperfect market forces, gets incredibly top-heavy over time.

This describes every university, government entity and military organization I have ever studied or dealt with.

Guys who run small businesses are always shocked at the abundant waste and plain ol' falderal involved in dealing with large non-profits.

My guess is that the US military must be half waste and top-heaviness by now, having never been forced to compete, in dollar terms, with a rival--that is the only way the fat gets steamed out. We sure cannot hope for Congress to eliminate waste.

For large non-profits, I think the only solution to to require that no more than a fixed percent of dollars and personnel are employed on top.

Otherwise, adminstration-itis sets in.

At 12/22/2009 7:24 AM, Anonymous geoih said...

It's the way of any bureaucracy (i.e., more and more money for overhead), plus universities are notorious for paying their support staff much lower than the academics, which is probably appropriate, but I would attribute some of this to a simple leveling of the field (I'm speaking of your own institution).

Another factor would be the ever increasing complexity of the facilities. If universities are going to do cutting edge 21st century technological research, then they need 21st century technological facilities, and you don't build or maintain these facilities without a highly paid technologically proficient staff.

At 12/22/2009 7:44 AM, Anonymous Lyle said...

There are two elements additional, 1 taxing students for financial aide to other students, just like health care, and second all the in loco parentus stuff that has come up.
Counseling centers, alcohol education, suicide prevention, finals stress reduction, ... all of these sound good, but cost money. Most of these result from parents not treating their students as adults and suing when the student screws up, (such as killing themselves drinking)
Then there are the fees to support extra-curricular activities, IMHO there should be none of these, no student government tax etc. If a student government want to raise money let them do it directly.

At 12/22/2009 8:57 AM, Anonymous Anonymous said...

If ALL full-time administrators are shown on the graph, shouldn't the graph show ALL full-time instructional faculty as well?

I believe the full-time, part-time, and non-tenure track trend is an entirely different discussion. Maybe what we are experiencing is a shift to less investment in tenured professors rather than an increase in administration, but the data in the report are not valid to analyze that trend.

At 12/22/2009 8:59 AM, Anonymous Anonymous said...

If reducing administrative expenses was good for the health business, then Congress ought get going on another 2000 page bill to fix the education business.

At 12/22/2009 9:15 AM, Blogger Mark J. Perry said...

Walt G: See new post on UM-Flint.

At 12/22/2009 11:51 AM, Anonymous Anonymous said...

This was inevitable. Government subsidies always end up in the hands of the provider, not the provider's customers. You should see the cost of air conditioning systems in Florida. Because of several thousand dollar government subsidies for new AC installations, vendors have rationally raised their prices to capture those subsidies.

At 12/23/2009 2:20 PM, Anonymous Anonymous said...

In today's world of internet access, a person who wants to learn almost ANYTHING, can learn it for free. Our kids are college grads already, but I would counsel our grandkids to decide what they want to learn and then, just learn it. Cost nothing.
The college experience is valuable for social reasons, so they could take certain course on a state campus for that part of it.

At 12/26/2009 11:00 PM, Anonymous Anonymous said...

The same thing is happening in my local school district. Drives me crazy!


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