Costly College Update

Just over a year ago, GG lamented the rather amazingly broad collection of suspects in driving the upward cost of a college education. The problem was in trying to sift through all the ideas for real facts. Now some aspects are pretty obvious: education is basically a personal service, and such purchases rise more rapidly than cost of living, which is balanced by our ability to make more and more stuff more and more cheaply. Public universities have been hit hard by budget cutting in state legislatures and essentially have passed on the burden by raising tuition. The net cost of college can be far lower than the sticker price owing to the moneys being spent on scholarships (see the “discount rate” plot for private schools). The current “crisis” in college affordability actually looks like a divergence in the rise in median household income (which stagnated some time ago) from the ongoing rise in tuition. [Sorry, have misplaced links to the sources for these]. Yet it feels like there is something more going on, and a couple recent things have provided a little bit of insight.

First, GG’s university proudly promoted a self-study showing that tuition isn’t going up because of the growth of administration (the message from the president seems to have wandered offline, but pointed to the information here); instead, the email said, tuition was rising because more students were majoring in the expensive STEM fields. And, rather amazingly, this apparently self-serving declaration was supported by a rather more convincing study by the Cleveland Fed (though another headline indicates that the top of the university totem pole is beginning to look a lot like the top of corporate totem poles). So shall we all now forgive administration and look elsewhere for higher costs?

Well, not so fast.  The CU study focused on 2011-2015, but near the start of that time there was controversy over large pay raises given to top administrators at the same time that tuition jumped. Also in that time former chief financial officer Rick Porreca was found to be getting paid as a retiree at a rather high salary; ending that arrangement (plus restraint after enduring severe scrutiny over the whole episode) probably helped drop the cost of administration (helping too is that the current President has refused any pay raises since being hired).  Whether CU overall is indeed running leaner than other schools, as the President’s message contended, would require a more careful look at the books than the campus summary provides. It is somewhat plausible as CU’s state funding is under 5% of the campus budget; even after cuts elsewhere, this is a pretty low fraction for a flagship public university.

How about the Cleveland Fed’s report?  Well, on one hand there is no attempt here to figure out the amount of money being paid in salaries (though the author promises to address that in a future report).  What is here, though, is an attempt to look at just who is employed by institutions of higher learning.  And, on the face of it, administration comes out fine: executives and administrators form something like 7% of the workforce over the nearly 25 years of data considered. Faculty as a percentage rose while clerical and service personnel dropped (we have seen this first hand at CU as office wastebaskets are no longer emptied and departmental front offices have grown smaller). So, the cause is a growing faculty–aha!

Oh wait, this is complex mess too. The percentage of employees who are full time faculty stayed nearly constant; it is a growth in part time faculty that is showing up. In most schools, this is in fact a cost-cutting move: increased numbers of students are taught by instructors more than tenure-track faculty. When you look only at full-time employees, faculty as a percentage has stayed constant; growth is in administration (a relatively paltry increase from ~8% to just under 10%) and in “other professionals”–a category that grew by more than 50%.  As of 2011, the group representing the largest fraction of full-time employees was “other professionals”. This looks promising: who are these folks?

In 2013, the Integrated Postsecondary Education Data System changed how employment is categorized (this is the dataset the Fed report uses).  “Other Professionals” went away.  It appears a lot of the “other Professionals” are in business and financial operations (8% of 2013 employees).  While not technically administrative, these are largely positions associated with running the university.  Accountants and grants officers and folks like that are in this bin.  Increased scrutiny of how grant money is spent, for instance, has created a niche for more accountants. The odd category of “Computer, Engineering and Science” probably includes some of the former other professionals. “Service occupations” might be another chunk.

Viewed another way, only 28% of full time employees at public universities are considered instructional staff. 10% are in this “computer, engineering and science” category which could cover everything from hiring a bunch of IT guys to keep reworking the website down to the fellow in the Chem stockroom. 14% are office and administrative support. Management, business/financial, and services are in the 8-9% range.

Basically, this report is alluding to a bloat in services outside the core of education, including in the conclusions “This growth is potentially related to a growth of amenities and other programs outside of the teaching and research that have been the traditional focus of colleges and universities, although this is difficult to ascertain due to the broad nature of this category.” It would take a lot more digging to really ferret this out, but some has got to be the increase in accounting and business folks associated with the increasing oversight of research moneys, and some has to do with the resurgence of campus-wide IT departments as internet, web, and email have become core elements of a university.  Some is probably related to the growth of amenities like expanded ala carte food service, computer labs, and recreational facilities. Some might be an increasing number of employees working on financial aid and advising. Finally, this doesn’t include non-personnel expenses: building or renovating campus spaces, contracting when outsourcing things like maintenance or security, etc.

So while administration sense stricto is maybe off the hook on numbers, there are a lot more professionals not in the classroom on the payrolls of universities. Maybe some of these are the object of scorn by the university title generator. It seems that as universities have ceased to act as in loco parentis that they have broadened their activities well beyond that of simply educating students. A good overview of who these folks are who are now on campus was in Inside Higher Ed in 2011 as a view from a community college dean, where the verdict was IT plus compliance plus some mission creep.  This feels pretty close to the mark being drawn by the statistics in the recent Fed report.


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