Feb. 3 (Bloomberg) -- Put 50 randomly selected U.S. professors in a room. Within 10 minutes they will be complaining about the growing number of administrators in their universities. Professors aren’t right about everything, yet they have a point in this case.
An examination of federal data on the explosion in college costs reveals how far colleges have gotten away from their original mission of providing “higher” education.
The National Center for Education Statistics reported that in 2010-11, nonprofit colleges and universities spent $449 billion. Less than 29 percent of that -- $129 billion -- went for instruction, and part of that amount went for expenses other than professors’ salaries. Yes, the $449 billion includes money spent on auxiliary enterprises (food and housing operations, for example), hospitals and “independent operations” (whatever they are). Suppose we subtract the $85 billion that pays for all of that from the total. That leaves $364 billion. The $129 billion for instruction of students is still only 35 percent of that.
So for every $1 spent on instruction, $1.82 is spent on non-instructional things such as “academic support, student services, institutional support, public service” and a catchall category called “other.”
In 2010-11, private colleges and universities received more than $22 billion in gifts, grants and contracts, according to the National Center for Education Statistics, and more than $53 billion in investment income (including capital gains on investments). Together, this $75 billion far exceeded the cost of instruction at these institutions ($50 billion), and was enough to also cover significant research spending. One could argue the $60 billion in tuition fees collected by private colleges actually paid for the plethora of administrators (“institutional support”), and student recreational facilities and athletic subsidies (“student services”).
What about public universities? NCES says they received $73 billion in revenue from state and local government appropriations, and billions more in private gifts and investment income, enough to cover their $79.4 billion total instructional costs. Again, the $60 billion in tuition money (paid by students or as part of financial-aid packages) could be viewed as paying for university administrators, for research largely tangential to the student’s education, for “public service” and so on.
A look at the shift in public university staffing confirms this view. If the ratio of non-teaching professional staff (roughly speaking, administrators and bureaucrats) to instructors (faculty and graduate assistants) in 2010 was the same as it was in 1976, there would have been 381,456 fewer of these non-instructional staff -- the “deanlets,” as political scientist Benjamin Ginsburg calls them in his book “The Fall of the Faculty.”
If the average salary and fringe benefits of these workers is $75,000 a year (and many “deanlets” make vastly more than that), the costs of this increased staffing add up to about one-fourth of all tuition fees paid in 2010. No wonder tuition increases far outstrip the general inflation rate.
College presidents say this expansion has helped make higher education more efficient and is therefore in students’ interests. They say vast new staffs have been required in information technology, for example. Curiously, in the private business sector, computers and technology are viewed as means of lowering costs through labor saving; in higher education, technology somehow enhances costs.
University leaders further argue that federal research-grant rules require armies of administrators. And they point to the role that affirmative action and safety rules have played in increasing personnel and research costs.
These claims are overblown, and a cursory examination of college websites demonstrates the bureaucratic explosion. Take the University of Texas at Austin, for example. President Bill Powers has 17 administrators on his staff, including two “deputies,” an “executive assistant” and multiple assistants to the assistants. The provost has 10 “vice provosts” working for him (each with staff); the “director of diversity and community engagement” had 14 “key” administrators and an unknown number of lesser workers; the development office listed 118 employees; 32 worked in university communications (not counting communications specialists at subunits of UT).
Overseeing all this is a “University of Texas System office,” run by a chancellor with “seven executive offices,” each with large staffs. That isn’t all: Above the UT system is a Texas Higher Education Coordinating Board with more than 230 employees. Other universities and states have similar bloated staffs.
Colleges won’t change until they have incentives to do so. They won’t listen to their professors. But they will listen to parents and politicians who stop paying the bill.
(Richard Vedder, an economist, directs the Center for College Affordability and Productivity and teaches at Ohio University. He is an adjunct scholar at the American Enterprise Institute.)
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