Purdue University tries consolidating and streamlining to cut costs

by Grace

Purdue University president Mitch Daniels has been taking an aggressive stance in addressing high college costs, using “a combination of systemic cuts, organizational realignments and cash incentives”.  Of course, it is not an easy undertaking.

… criticism has come from both directions. Some think he is moving too fast, others not fast enough when it comes to cutting student costs.

Daniels faces many of the same challenges experienced by most other university presidents.

  1. Diminishing state funding, some of which was initiated while Daniels was governor of Indiana
  2. Administrative bloat. which has grown 75% over the last 13 years at Purdue

Consolidating and cost-shifting

Mr. Daniels says he is consolidating administrative jobs where prudent and leaving jobs unfilled where the duplication of effort makes that possible. He has jettisoned 10 university cars, consolidated hundreds of thousands of feet of off-campus rental storage and introduced a higher-deductible health-care plan.

Incentives to develop a three-year degree

He has also created two, half-million-dollar prizes for the first department that devises a three-year degree or a degree based on what a student already knows, not the number of hours he or she sits in a class. This summer, the school offered 200 more classes than last year in an effort to speed time to degree and generate more income for the school.

According to Daniels, there are ‘lots of opportunities” to cut costs’.

The problems are obvious and the ideas for solutions are plentiful, but can Purdue’s president lead the university to a successful implementation?

J. Paul Robinson, a former president of the faculty senate, said Mr. Daniels’s worth as a leader will be tied to his ability to prune that administrative bloat. “Let me put it this way,” Mr. Robinson said: “A blind man on a galloping horse at midnight with sunglasses on can see the problem. The question is, What can he do about it?”

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Douglas Belkin, “At Purdue, a Case Study in Cost Cuts”, Wall Street Journal, July 25, 2014 .

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