This commentary originally appeared in Forbes on January 13, 2015.
A new book by Frank Mussano, former dean of York College of Pennsylvania,and Robert V. Iosue takes on the crisis of tuition hyperinflation. The book’s title conveys its conclusion: College Tuition: Four Decades of Financial Deception. Summarizing their work in a recent article, Mussano and Iosue argue that “colleges need a business productivity audit” if we are to address what they identify as the primary drivers of the historic tuition and student-loan debt increases over the past forty years—“professors are teaching less while administrators proliferate.”
Mussano and Iosue find that, over the past four decades tuition has surged “more than 1000 percent, while the consumer-price index has risen only 240 percent.” Stated in terms that hit home for average college students (and their parents), they find that, whereas in 1970 the percentage of annual household income needed to pay for the average private four-year school was 16 percent, by 2010 the percentage had risen to 36 percent.
Mussano and Iosue demonstrate that roughly 75 percent of average university costs consist of personnel expenses and benefits. However, university professors spend on average “much less time” teaching in the classroom than they did 20 years ago. Citing statistics compiled by UCLA’s Higher Education Research Institute, Mussano and Iosue find that 60 percent of professors surveyed in 1989 reported that they spent nine or more hours weekly in the classroom. But, by 2010, this percentage had fallen to 44 percent. “The traditional 12-15 hours a week teaching load is changing into a six-to-nine-hour workweek, a significant decrease in productivity.”
The authors are less-than impressed with what they call the “typical defense” offered for this significant reduction in faculty teaching workloads. Only a “handful of elite researchers,” they argue, face “increased research demands, more extensive classroom preparation and committee work, as well as additional administrative and student-counseling responsibilities.” Moreover, high-school teachers spend 20-30 hours a week in the classroom, “while also facing increased administrative responsibilities.” Nor should we forget that, given the constraints on the American economy in the last few years, “some parents work longer hours or perhaps even two jobs to defray a child’s college expenses.”
Add to declining faculty teaching the trend commonly referred to as “administrative bloat.” Mussano and Iosue point to U.S. Department of Education statistics showing that “the number of college administrators has increased 50 percent faster than the number of instructors since 2001.” They cite some of the more glaring examples of recent bloat: The University of Minnesota, through adding 1,000 administrators over the past decade, has now reached a “ratio of one administrator for every 3.5 students.” Not to be outdone, the University of Pennsylvania increased its “nonteaching staff” by 83 percent, despite the fact student enrollments as well as instructional expenditures “did not grow anywhere near those rates.”
What Mussano and Iosue label a “prestige arms race” also has contributed to tuition hyperinflation. Spending on construction for new campus buildings has “doubled since 1994, with a peak of $15 billion in 2006 that has leveled off at $11 billion in recent years.” Spending on student services and facilities, “even if the funds are wasted,” helps schools rise in the rankings provided by a number of popular magazines. The result? “Campuses have everything from lazy rivers to climbing walls to luxury dormitories.”
How have students and their parents been able to cope with these historic price hikes? Through taking on historic debt, which today stands at $1.2 trillion, a sum that for the first time now exceeds total national credit-card debt. Here Mussano and Iosue concur with former Secretary of Education Bill Bennett. The “Bennett Hypothesis,” accordingto one higher-education expert, consists in “the theory that as long as the government ensures the bills will be paid, colleges will raise tuition.” With students enjoying easy access to federal student loan dollars, colleges have been given “license to boost tuition with no motivation to keep costs down,” argue Mussano and Iosue, who go so far as to add that “college counselors encourage incoming freshmen to take on unconscionably large loans that ultimately fatten school coffers.” As a consequence, student-loan default rates have reached 14 percent—“higher than for mortgages, autos or credit cards.” But colleges and universities “know they will not be held liable for missed loan payments.”
Given the disastrous consequences, why, then, do colleges and universities continue to spend so much on non-instructional ventures? Mussano and Iosue’s answer is blunt: “Because they can.” Can they be stopped? Here the authors offer a “simple idea”—“audits” of colleges and universities. If “defense plants, hospitals, social agencies, and other businesses that benefit from tax dollars” undergo audits, why, they ask, should not higher education be made to do likewise?
Their question is acute. Comparing faculty teaching workloads, campus space utilization, and personnel expenses to university revenues would bring needed sunlight to the now-murky terrain of university finances, forcing schools to “reconcile sloppy and obscure bookkeeping methodologies to report statistics in a format consistent with government-defined metrics.”
But Mussano and Iosue go further, suggesting that the U.S. Education Department’s “new college rating system could also collect and present cost-income productivity ratios that consider credit hours completed compared with labor costs and other expenses per student.” They add, “Wouldn’t it be helpful to know which colleges are most productive with their tuition dollars?”
It would indeed be helpful to know this information, but a reservation I have with Mussano and Iosue’s thoughtful manifesto is their apparent confidence in the proposition that bringing the federal government further into higher education will help to solve a crisis that the authors themselves acknowledge is in no small part a product of past federal involvement. Related to the prior point, evaluating four-year colleges based on future earnings of graduates—what is termed, “gainful employment”— would unfairly hold these institutions hostage to the vagaries of the business cycle. Should they be evaluated? Of course, but judge them based on how much students learn, not on the jobs they subsequently receive. I have in mind here the Collegiate Learning Assessment (CLA), which roughly 200 colleges and universities employed last year to measure how much students increase in fundamental academic skills—critical thinking, complex reasoning, and writing skills—after four years invested in college. In the Information Age, graduates who master these skills should do best in the job market, regardless of where we are in the business cycle in this year or that.
Finally, although Mussano and Iosue are doubtless correct that the federal government must have a role in acquiring this needed national data, the implementation of performance-based funding formulas based on these data should be left to the states, not to the federal government, which has shown itself to be less than reliable in this area.
These reservations notwithstanding, Mussano and Iosue have done well to clarify for us why college is so expensive, and what might be done about it. None can disagree with their contention that, even if their proposed audit of schools produced only “recommendations, and not mandates, the scrutiny would open many eyes to inefficient practices.”