Administrative Costs Keep Tuition High
The Goldwater Institute puts higher education on the spot in a new study entitled: Administrative Bloat at American Universities, authored by Jay Greene. The study finds university administration costs growing dramatically, despite only a 15% enrollment increase between 1993 and 2007.
The number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent. Inflation-adjusted spending on administration per student increased by 61 percent during the same period, while instructional spending per student rose 39 percent.
Penn State University is a perfect example of this phenomenon. Full-time administrators, per 100 students, grew by 71%, compared to 5.3% for other staff and faculty. Today, administrators outnumber teachers, researchers, and service providers.
|Change, 1993 to 2007|
|School||Admin. Staff per 100 Students||Instruction & Research Staff per 100 Students||Tuition|
|Pennsylvania State University||70.8%||5.3%||83.6%|
|University of Pittsburgh||54.7%||61.7%||71.9%|
|University of Pennsylvania||97.3%||77.0%||41.4%|
|Source: Administrative Bloat at American Universities|
Another case in point is the rising administrative costs at Indiana University of Pennsylvania (IUP), where former President Tony Atwater set a new PA State System of Higher Education spending record on food, travel, and residential costs (over $400,000 in 5 years).
Typically, growing industries become more efficient, but not so with higher education. Tuition has skyrocketed in recent years. Inflation adjusted, tuition increased by 66.7% at the nation’s 198 leading public and private universities from 1993 to 2007.
So why the bloat? The study notes the surge in administrative costs can be traced to growing federal and state subsidies, as well as gifts and fees for non-educational services. As a result, students are insulated from the actual costs of their education, and there is no customer pressure to keep down tuition bills.
In the end, Greene reaches the same conclusion as CF’s study on higher education — reducing government subsidies to institutions would do much to make universities more efficient and affordable.