A simple solution to the escalating tuition costs at Dartmouth College

by Grace

Joseph Asch of Dartblog offers some recommendations for solving the tuition inflation problem at Dartmouth College.

First, an illustration of the problem

20130116.HigherEdInflation1

One source of the problem is administrative bloat.

In 1999, the College had 2,408 non-faculty employees, including 75-80 at the Hanover Inn. Today Dartmouth has well over 3,200 employees (without the Inn’s staff). That’s a difference of approximately 900 employees — of whom, according to IP Folt, about 300 are in research. What are the remaining 600 new employees doing with their time? After all, Dartmouth was a fine school in 1999, the number of students has not changed materially since then, and the size of the faculty has increased by only about 60 members. I submit that they are not doing much of anything; they are just a manifestation of bad management, given that the number of College bureaucrats has increased in virtually every department. Here’s an excerpt from a column I wrote on the subject for The D in 2009:

In 1997, the President’s Office numbered 6.5 full-time employees; 10 years later there were 10. During that time period, the Dean of the Faculty Office went from 14 to 28 full-time employees. The Dean of the College Office went from 16 to 26; the Provost’s Office went from 6.5 to 11.5; and the combined headcount of the First-Year Office, the Office of Student Life and the Office of Residential Life went from 26.5 to 47.

Unrealistic wages contribute to the problem.

Beyond the bloat, as we have noted ad infinitum, the College’s compensation structure (wages, benefits, holidays) is totally out of line with that of the local labor market. In many cases, employees are paid twice what workers earn in similar occupations in the private sector in the Upper Valley.

The solution

The solution to the higher ed bubble in Hanover? That’s easy, as any management consultant could tell you. You trim 500 positions from the College’s bloated ranks, and cut compensation so that the College pays a generous 20% more than other Upper Valley employers — but not double. Not only would you save money, but the College would run better.

With the savings from these cuts, you could either reduce tuition to zero, or, better yet, trim it in half and use the remaining savings to fund the kind of academic programs and student pedagogical support that would make a Dartmouth education the envy of the world.

This scenario might sound too simple to work at Dartmouth or at the many schools where administrative bloat is pushing up costs.  Considering the crisis in escalating college costs, it certainly seems to be worth a try.

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5 Comments to “A simple solution to the escalating tuition costs at Dartmouth College”

  1. Thanks for the additional insight into this situation!

    The high wages seem to apply mainly to lower-level workers in Dartmouth’s case. He gives this illustration:

    Currently the College is advertising an opening for a Cook Helper. This union position is a Job Grade A category posting, meaning that after a year it will pay $15.82/hour ($33,905/year). In addition, Dartmouth will contribute an additional 10% of that amount into the worker’s pension fund. The College offers full health insurance for the worker’s entire family for only a modest contribution. And the worker, after being on staff for one year, will receive 15 days of paid vacation, 11 days of paid personal leave, and four days of break between Xmas and New Year’s (that’s a total of 30 days of paid time off: six weeks).

    Not bad. Not bad at all. Keep in mind that this is a Job Grade A hire — the lowest paid union position at the College.

    Now let’s look at what a Cook Helper might make at a local restaurant. A quick canvas of several local eateries reveals that employees with similar responsibilities would be paid only $10-13/hour ($20,800-$27,040/year); after 6-12 months on the job they would receive about a 50% contribution to their personal health insurance (and nothing for their families); they would get absolutely no pension contribution; and after their first year of employment they would earn 7-10 vacation days (one and a half to two weeks).

    http://www.dartblog.com/data/2010/09/009123.php

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  2. Interesting about research jobs being funded by outside grants, but I wonder if this still has a significant impact on higher spending because of related higher costs as suggested by this:

    All of these bureaucrats receive generous salaries, but their paychecks are only a fraction of the total cost of their presence. Beyond wages, one must take into account the cost of office space, technology and support, professional training and conferences. Additionally, the College’s astoundingly expensive benefits package adds about 45 cents onto each dollar of salary paid out to bureaucrats.

    http://thedartmouth.com/2009/02/10/opinion/asch

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  3. The fact that Dartmouth pays their lowest-paid workers a living wage, while the surrounding community does not is not likely to be the real problem. The real problem is the large number of unnecessary middle-level and higher “managers”.

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  4. Bonnie – I think the office space costs are probably a significant cost factor. As you expand the ranks of staff, of all types, you need offices and other facilities to accommodate them.

    I never realized before you pointed it out that faculty do not have most of their travel costs paid. But do administrative staff have to pay part of their travel costs? I doubt it. Of course even if only half of those costs are paid, as staff numbers grow those travel expenses contribute to these overall escalating costs.

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  5. gasstation – Yes, it’s probably true that there’s a bigger pot of money to be saved by cutting those managers/administrators than by cutting wages of lower paid staff. But I can see why the author included those lower-paid workers into the equation, even if they amount to only about 10% of the savings.

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