October 29, 2013

RICHARD VEDDER: Why Colleges Get An ‘F’ For Cost Control. “While sticker prices at universities now are growing at a slower rate than historically typical, they still are rising after inflation adjustment – annually about one percent (public schools) or two (private schools). The actual decline in enrollments last year (and possibly this year) has softened demand, but universities are very reluctant to slow their reliance on tuition revenues. That may be changing -a few schools have announced rare tuition reductions for next year. To really do that, though, schools are going to have to really cut costs – not merely reduce the rate of increase. The pressure to ax administrators, increase teaching loads, get rid of low enrollment majors, etc., is growing.”

In my new book, I suggest that U.S. News should reward colleges for lean administration by giving them more points the better the faculty/administrator ratio is. I also suggest that maybe administration should be outsourced to low-paid, benefitless contract workers, the way teaching already is. . . .