Why Tuition Goes Up and Quality Goes Down at American Universities

The New York Times has recently reported that a record number of Americans think that universities are now being run like business: “Most Americans believe that colleges today operate like businesses, concerned more with their bottom line than with the educational experience of students, according to a new study. And the proportion of people who hold that view has increased to 60 percent, from 52 percent in 2007.” People not only feel that the corporate mentality is hurting higher education, but they also think that university’s could do more while spneding less: “colleges could admit a lot more students without lowering quality or raising prices, and that colleges could spend less and maintain a high quality of education.” In other words, people believe that the business people running universities are bad for business, and these schools should be able to increase enrollments and lower costs, while improving the quality of instruction.

In response to this popular sentiment about the failures of American universities and colleges, the Times cites administrators who argue that due to the labor-intensive nature of higher education, costs cannot be contained and quality will inevitably suffer as students are forced to take out huge loans to pay for escalating tuitions. Of course, what these administrators fail to mention is that a major reason for the constant increase in costs is the constant increase in administrators and staff.

As I have previously documented in this blog, what is really going on in higher education is that administrators and staff are receiving a larger part of the budget pie, while practically everyone else is being asked to do more for less. Moreover, while the number of non-faculty employees goes up, administrators demand larger compensation packages and more power to make crucial decisions that were once the purview of professors.

Instead of simply bemoaning this situation, we have asked the state to audit the UC system, and the state has now approved our request. One of our central concerns is to see how administrative positions are funded and what really happens with state funds and student fees. Without this type of budget transparency, it will be very difficult to control the expansion of the administrative class. After all, the only people who can begin to reduce the cost of administration are the administrators themselves. However, we can pressure these people to do the right thing.