US colleges are cutting majors and slashing programs after years of delays(abcnews.go.com)
abcnews.go.com
US colleges are cutting majors and slashing programs after years of delays
https://abcnews.go.com/US/wireStory/us-colleges-cutting-majors-slashing-programs-after-years-112751740
15 comments
Can someone tell me how college can cost so much and still not have enough funds?
Most universities publish a high-level breakdown of their expenses through the government IPEDS database. For teaching-focused institutions like mine, a vast majority of the money is spent on salaries. We are committed to keeping class sizes to 20 students or less and hiring experts to keep teaching quality high. That means that there haven’t been any increases in efficiency other than extracting more labor from faculty.
This also seems to be true in other areas as well. Startups solve business process needs by purchasing services (e.g., Bamboo HR, expense reporting software, DocuSign, etc.). Universities still have people doing all of these things manually.
If that's true why does college cost an order of magnitude ($60k per year) more than a public high school in a top state (eg NJ/MA, $15k per year) with similar class size ratios, less class time per year, and only slightly higher pay?
Additionally, if professor pay is too high, there is probably room to cut it without much harm, considering there is an oversupply of grad students who would love to make tenure but don't have a chance due to so few slots available.
1 full time professor can provide an education to 20 students. You can pay this professor $100,000, and spend another $100,000 on taxes, overhead, etc. That's $10,000 per year. Where's the other $50k come in?
There is lots of waste. Replace these fancy campuses with a building like an inner city high school and replace the many administrators with a volunteer faculty committee and a couple of paid administrative assistants.
Run colleges like high schools but with higher paid, better educated teachers. The damn building and other luxuries don't matter. All a good teacher needs is 4 walls, paper, and a classroom of willing souls.
Additionally, if professor pay is too high, there is probably room to cut it without much harm, considering there is an oversupply of grad students who would love to make tenure but don't have a chance due to so few slots available.
1 full time professor can provide an education to 20 students. You can pay this professor $100,000, and spend another $100,000 on taxes, overhead, etc. That's $10,000 per year. Where's the other $50k come in?
There is lots of waste. Replace these fancy campuses with a building like an inner city high school and replace the many administrators with a volunteer faculty committee and a couple of paid administrative assistants.
Run colleges like high schools but with higher paid, better educated teachers. The damn building and other luxuries don't matter. All a good teacher needs is 4 walls, paper, and a classroom of willing souls.
Market bloat.
“univ of Solaris” just upgraded their facilities so “Solaris state” feels compelled to compete or risk losing out on attracting top talent. Over decades, this means basically every higher education facility has a ridiculous amount of space that’s completely under utilized or poorly utilized. Spaces that look great during admission tours, but don’t actually get used.
I went to a small, rather frugal private university. They largely escaped the “chasing the jones”. Even then, I could walk through dozens and dozens of labs that were only utilized 10 to 20 hours per week. The worst of these offenders were the “modern” labs that always got shown in the tours. Some of them might host a single class per week for a single semester per year.
At the big universities, it seems even worse.
These utilization rates would have any regular business questioning the need for their expense in it.
“univ of Solaris” just upgraded their facilities so “Solaris state” feels compelled to compete or risk losing out on attracting top talent. Over decades, this means basically every higher education facility has a ridiculous amount of space that’s completely under utilized or poorly utilized. Spaces that look great during admission tours, but don’t actually get used.
I went to a small, rather frugal private university. They largely escaped the “chasing the jones”. Even then, I could walk through dozens and dozens of labs that were only utilized 10 to 20 hours per week. The worst of these offenders were the “modern” labs that always got shown in the tours. Some of them might host a single class per week for a single semester per year.
At the big universities, it seems even worse.
These utilization rates would have any regular business questioning the need for their expense in it.
20 hours per week feels fine to me, at least there is some slack for unplanned experiments. I certainly do have rooms in my house which I actively use for less than 20 hours per week, and I don't consider them useless.
A single class per week is ridiculous, though.
A single class per week is ridiculous, though.
Easy money in the form of student loans is like throwing gasoline on a fire. Students’ debt to (projected) income is not weighed unlike any other loan. The debt cannot be discharged in bankruptcy. Colleges are happy to take all the money you can bring to bear.
Many businesses use a college degree as a blunt hiring filter. This increases demand for degrees if only to check a box.
Baumol’s Cost Disease. Anything that is done manually cannot be automated and therefore requires a lot of labor input. So services continuously rise in price unlike mass produced goods that get cheaper over time. The same phenomenon affects childcare, live performance art, non-prefab construction, crops that are picked by hand, and nursing homes.
State governments have decreased funding. So more money has to come directly from state college enrollees.
Many colleges are in a ranking arms race instead of truly prioritizing affordability. Recruiting star professors and building new facilities is expensive.
Community colleges cut out a lot of non-essential services. It’s how they’re able to offer instruction at a tenth of the tuition.
Many businesses use a college degree as a blunt hiring filter. This increases demand for degrees if only to check a box.
Baumol’s Cost Disease. Anything that is done manually cannot be automated and therefore requires a lot of labor input. So services continuously rise in price unlike mass produced goods that get cheaper over time. The same phenomenon affects childcare, live performance art, non-prefab construction, crops that are picked by hand, and nursing homes.
State governments have decreased funding. So more money has to come directly from state college enrollees.
Many colleges are in a ranking arms race instead of truly prioritizing affordability. Recruiting star professors and building new facilities is expensive.
Community colleges cut out a lot of non-essential services. It’s how they’re able to offer instruction at a tenth of the tuition.
Baumol’s Cost Disease or Baumol Effect [1]. Thanks for mentioning. I think it deserves more air time, especially looking at typical responses (raising price, reducing quality) and the consequences (raising prices raises expectations, triggering more investment causing prices to go up more). How to reduce consequences? Two models that seem to work are volunteer based organizations, such as AA[2] and education organizations coupled with technology, specifically AI, such as Khan Academy's Khanmigo[3]. What does this mean for universities? Lots of terrain to explore looking for sweet spots.
[1] There are the standard places to define like Wikipedia. The link I offer here is an A16Z podcast with Marc Andreesen and Vijay Pande where Marc gives an overview about 3 minutes in.
https://a16z.com/podcast/baumols-cost-disease-in-healthcare-...
[2] https://aa.org
[3] https://www.khanmigo.ai
[1] There are the standard places to define like Wikipedia. The link I offer here is an A16Z podcast with Marc Andreesen and Vijay Pande where Marc gives an overview about 3 minutes in.
https://a16z.com/podcast/baumols-cost-disease-in-healthcare-...
[2] https://aa.org
[3] https://www.khanmigo.ai
"Easy money in the form of student loans is like throwing gasoline on a fire. Students’ debt to (projected) income is not weighed unlike any other loan. The debt cannot be discharged in bankruptcy. Colleges are happy to take all the money you can bring to bear."
There is one more factor. People at 18 aren't really fit to make such huge financial decisions, most of them don't have experience handling even 0,1x that amount of money. They are still pushed to, and the other party is much more experienced and stronger than them.
It is a masterpiece of college politics that students tend to turn "anti-Capitalist" and attack greed of private corporations, while completely ignoring that they are being fleeced in a predatory way by their own schools. Academic institutional greed is the true 400 lb gorilla in the room that few are capable of acknowledging.
There is one more factor. People at 18 aren't really fit to make such huge financial decisions, most of them don't have experience handling even 0,1x that amount of money. They are still pushed to, and the other party is much more experienced and stronger than them.
It is a masterpiece of college politics that students tend to turn "anti-Capitalist" and attack greed of private corporations, while completely ignoring that they are being fleeced in a predatory way by their own schools. Academic institutional greed is the true 400 lb gorilla in the room that few are capable of acknowledging.
> Many businesses use a college degree as a blunt hiring filter. This increases demand for degrees if only to check a box.
That's what I've always read: that it's a simple and effective filter for going from a mountain of job applications to a hill of them.
That's what I've always read: that it's a simple and effective filter for going from a mountain of job applications to a hill of them.
Parkinson's law (humorously, but based on serious research) states that 'work expands so as to fill the available time' [0]. This just seems like a generalization to expenses and budgets.
[0] https://en.wikipedia.org/wiki/Parkinson%27s_law
[0] https://en.wikipedia.org/wiki/Parkinson%27s_law
Easy: because it costs a lot.
Average annual tuition at private 4 year colleges is $38k. Average faculty to student ratio among these schools is 10:1. Average salary for a professor at these schools is $134k.
In other words, about 35% of college tuition revenue is going to faculty paychecks. This does not include staff, who are lower paid but far more numerous. For context, in a for-profit business, typically 15-30% of revenue goes to payroll. Then you have overhead for all these employees.
And it's not like these people are being paid particularly lavish sums. If anything for their experience level they are typically underpaid. Education is just an incredibly labor intensive field. It doesn't help that having a low student:faculty ratio is seen as one of a university's most important metrics, so efforts to improve labor efficiency are disincentivized.
Throw in facility upkeep, insurance, costs of marketing and recruitment. These institutions are generally not printing money.
Yeah, the top few dozen schools with strong alumni networks and massive investment portfolios are flush with cash, but there are thousands of schools that aren't.
Average annual tuition at private 4 year colleges is $38k. Average faculty to student ratio among these schools is 10:1. Average salary for a professor at these schools is $134k.
In other words, about 35% of college tuition revenue is going to faculty paychecks. This does not include staff, who are lower paid but far more numerous. For context, in a for-profit business, typically 15-30% of revenue goes to payroll. Then you have overhead for all these employees.
And it's not like these people are being paid particularly lavish sums. If anything for their experience level they are typically underpaid. Education is just an incredibly labor intensive field. It doesn't help that having a low student:faculty ratio is seen as one of a university's most important metrics, so efforts to improve labor efficiency are disincentivized.
Throw in facility upkeep, insurance, costs of marketing and recruitment. These institutions are generally not printing money.
Yeah, the top few dozen schools with strong alumni networks and massive investment portfolios are flush with cash, but there are thousands of schools that aren't.