Higher education insiders sometimes point to the increasing cost of auxiliary services like student housing and bigtime athletics as a major cause of large tuition increases. This is a red herring. Yes, over the years dorms have become nicer and food more abundant and edible, and as a result, room and board charges are higher. But higher room and board charges are not a major culprit in the drastic increases in the cost to students of attending college; it is the massive run-up in tuition. Similarly, football coaches make a lot of money and the costs of these athletic programs can be high. But football at many universities generates so much revenue that it can pay its own way, plus covers the cost of the minor sports and women‟s athletics. Football, good food, and hot tubs are not the reason for runaway college spending. Rather, the root cause is high E&G [education and general] costs.
As part of his new study,Opportunities for Efficiency and Innovation: A Primer on How to Cut College Costs, Vance Fried created a hypothetical college to find more efficient ways to run institutions of higher learning.
The College of Entrepreneurial Leadership & Society was created on paper as part of an earlier study to determine what a high quality education would cost if a college‟s operations and management were designed with a focus on efficiency and effectiveness. In the earlier study, I first designed a hypothetical college complete with students, faculty, curriculum, and buildings. Then I created a detailed pro forma E&G budget for the college. To make CELS more applicable to a wider range of school comparisons, I designed two institutions: CELS 3.2 and CELS 1.2. CELS 3.2 corresponds to a top of-the-line, comprehensive undergraduate college with 3,200 students, while CELS 1.2 is for a similar college with only 1,200 students….
My guiding design principle for CELS was never spend money unless the resulting additional student benefit is clearly greater than the additional cost….
The Most Obvious Cuts: Research and Public Service
Since CELS‟s primary focus is on undergraduate education, the most obvious spending cuts built into the hypothetical budget are to eliminate spending on research and public service. While these may be worthwhile activities in their own right, they add little, if any, to undergraduate education.
Research cost are actually underreported in this table because industry accounting convention allocates most faculty salaries to instruction even though some faculty spend much time doing research. Consequently, about 40% of instruction costs at research universities are actually research costs.
Fried recognizes that research is a worthwhile mission of some universities, but it should not be subsidized by students in the form of higher tuition costs.
Other recommended cost-cutting strategies from this study:
- Optimize class size
- Eliminate or consolidate low-enrollment programs
- Eliminate administrator bloat
- Downsize extracurricular student activity programs
Found at The College Puzzle
Cost of College 