America’s Bloated Colleges

by Reihan Salam

Paul Campos, a law professor at the University of Colarado, Boulder, argues that contrary to popular belief, it is not in fact the case that declining public expenditures on higher education that are driving rising tuition. He points to other factors, including the “constant expansion of university administration.” But why do we see so much administrative bloat? Is it because of the costs associated with regulatory compliance? Is it because administrators are offering a wide array of valuable support services that a less affluent, more diverse student population requires, or more expensive amenities to attract fee-paying students? Or is it all of the above?

In December of 2012, Douglas Belkin and Scott Thurm of the Wall Street Journal reported on the growth in nonclassroom costs at the University of Minnesota, and the results were sobering. The most striking thing about the spending at the University of Minnesota is how absent-minded it all seems. Belkin and Thurm write that “[f]or decades, public universities were somewhat insulated from financial rigor by steadily increasing state funding,” which is if anything an understatement. As the economy recovers, however, we can expect that the mild turn towards “austerity” will be reversed. Why? Because the growth of administrative payrolls translates directly into the growth of political power. The more administrators, the more voters whose livelihood depends on higher education funding. Andrew Kelly of AEI has made this point on numerous occasions. Students, meanwhile, are socialized into the belief that their universities are the good guys, fighting the good fight against skinflints who want to impose spending discipline out of greed, narrow-mindedness, or an indifference to the interests of young people. It’s a neat little business model, and it will take a lot to do something about it.

Fortunately, it seems that Americans are growing more skeptical of the claims made by the higher-ed industrial complex, and that creates an opening. In “A Real Education Market,” Kelly outlined steps for how we could make higher education in America more cost-effective and more responsive to the interests of students and taxpayers alike. Others, including Richard Vedder of Ohio University, have offered thoughts on how we might rethink financial aid. And it seems that some elected officials, like Sen. Lamar Alexander (R., Tenn.), are willing to push at least some of these ideas forward. Call me crazy, but I’m cautiously optimistic. 

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