Why Tuition Is Skyrocketing: An Inconvenient Truth
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The costs of college tuition have perennially risen nationwide at rates higher than inflation, saddling millions of millennials and Generation Z’ers with exorbitant debts ranging from tens to hundreds of thousands of dollars. Vignettes about Generation X’ers paying student loans for decades are not uncommon and will likely continue for the younger generations. As if to mask the reality of the national student loan crisis, colleges and universities have downplayed the burdens they impose on students by pointing to lavish increases in financial aid. Yet seldom has such largess extended to all or even most students, at least not to the extent of paying for most of their education. America’s student-loan crisis demands analysis about the sources of burgeoning tuition costs and demands corresponding solutions. Universities often claim that tuition hikes are necessary to cover rising administrative, academic, and operational costs. The inconvenient truth behind redressing the student loan crisis, then, lies in chipping away at the bureaucratic leviathan that universities have created and reducing the number of nonacademic services universities provide students.
For instance, Harvard boasts 22,273 students and over 18,000 total employees but only a comparatively meager 2,259 professors and instructors. Thus, whereas the Ivy League school staggeringly compensates an often-salaried employee for every 1.1 students enrolled, only a tiny fraction of those employees are even involved in teaching or research. The lion’s share are instead such employees as administrators, career counselors, secretaries, academic assistants, health-care practitioners, chefs, financial specialists, computer engineers, building-maintenance specialists, librarians, on-campus-housing coordinators, registrars, cleaning technicians, sexual-harassment experts, equal-opportunity coordinators, Title IX specialists, bookstore clerks, security, admissions officials, human-resources specialists, grounds crew, academic advisers, fundraisers, accountants, attorneys, personal trainers, coaches, mental-health professionals, and so on. This list is but a small sampling of the dizzying array of jobs increasingly emerging on American campuses in recent decades. Many of the jobs are, of course, essential for universities to operate. But not all of them are.
Some services are the necessary sort that universities should retain but whose staff should be curtailed. Citing Harvard as an example again, the institution employs 700 staff in its libraries, a veritable army indeed. Even in the unlikely scenario that many of the esteemed school’s staff earned just the median librarian income of $60,820, they would cost the university tens of millions of dollars before benefits. Although librarians and their support staff are indispensable to a university, Harvard could almost certainly operate efficiently with far fewer than 700 of them. Harvard’s library is dwarfed in size by the Boston Public Library (“Boston”), yet Boston manages to employ only 435 librarian staff or just over half as many as Harvard. If Harvard were to reduce its library staff and allocate the cost savings towards students’ tuition, many students could receive much-needed financial relief.
Universities could slash costs in various other staff categories by implementing similar austerity measures. One measure is eliminating duplicative jobs. As the past glut of administrative assistants at UTSA illustrates, some universities employ far more receptionists and secretaries than necessary. Curtailing duplicative staff alone might enable universities to shell out millions of dollars in additional financial aid to impecunious students.
Many university presidents and deans are seemingly apathetic towards staff redundancies due to a perverse academic culture that rewards its leaders with accolades for adding new academic positions but never for eliminating them. Deans seldom act like CEOs, who tirelessly cut operational costs to pass savings on to consumers. In the university context, the end consumer is the student, and universities have become at least unconsciously ambivalent towards operational costs. To be sure, beyond students, universities pass on the costs to the state and federal governments, to endowment funds, and to wealthy benefactors. But the revenue from such sources nearly always pales in comparison to the often-staggering revenues extracted from thousands of hapless students. For-profit universities generate 94% of their revenues from tuition fees, and nonprofit private universities generate a plurality of their revenues from the same.
It is unclear that the current educational system with added frills, services, and administrators leads to better educational outcomes for students. For decades, many universities abstained from offering a number of services at today’s universities, yet still managed to grant students a world-class education. And the universities did so for a fraction of today’s inflation-adjusted costs. For perspective, whereas the annual undergraduate tuition at Harvard now costs $49,653, the tuition in 1980 was only $6,490. Adjusted for inflation, the 1980 tuition would be $20,509 in today’s dollars, or only 41% of the current cost. Unfortunately, tuition hikes have corresponded not so much with more professorships and the corollary of smaller class sizes as with more administrators and staff.
With educational outcomes largely stagnating despite skyrocketing tuition, several politicians have proposed legal remedies to alleviate students’ financial burdens. Senator Bernie Sanders has audaciously proposed cancelling all student debt, both public and private. Similarly, Elizabeth Warren has suggested cancelling 95% of students’ debt based on income caps. While such legal remedies would of course aid the student burdened with debt, they are unrealistic given the astronomical deficits the United States incurs each year and would alleviate merely the symptom and not the cause of skyrocketing tuition. President Joe Biden’s proposal for Congress to pass legislation eliminating $10,000 in all students’ federal loans would certainly aid students but would likewise not address the long-term cause of soaring tuition.
As at least an initial effort to address the cause of out-of-control tuition, Congress should pass legislation requiring all universities to publicly post the percentage of their revenue they spend on each of various categories of university stakeholders, including the students, professors, and non-professorial staff. The legislation should further require universities to expressly disclose the same information to all donors of material amounts (e.g., anything more than $5,000). Such legislation could incentivize institutional frugality because when wealthy benefactors would notice that only a tiny fraction of their largesse reaches students or the resources and professors involved in teaching the students, some of the benefactors may be motivated to donate to a different college, such as one that prioritizes education quality over student frills. Even some garden-variety alumni donors may consider withholding their periodic donation to their alma matter until it reforms its bureaucratic waste.
The mandatory disclosures would give universities a binary choice: (1) continue to treat administration as a sprawling end unto itself and thus bedevil the university with poor publicity and a diminished applicant pool or (2) slash spending on staff and resources only remotely connected to research and to students’ learning and thus bolster the university’s applicant pool and academic image. For some universities, preserving the administrative status quo despite enactment of the proposed legislation could prove institutionally fatal if a large portion of prospective applicants and parents balk at paying a fortune for tuition that is publicly known to finance primarily non-professorial staff. Among colleges and universities, the proposed legislation would separate the bureaucratic from the scholarly.
About the Author: Mike Oaks is a JD/MBA candidate at Cornell for the class of 2022. Before attending Cornell, Mike earned a bachelor’s degree in English Language from Brigham Young University and worked as an operations analyst at Morgan Stanley, account executive at Qualtrics, and congressional intern for House Representative Mia Love. Mike is currently an associate on the Cornell Journal of Law and Public Policy.
Suggested Citation: Mike Oaks, Why Tuition Is Skyrocketing: An Inconvenient Truth, Cornell J.L. & Pub. Pol’y, The Issue Spotter (May 10, 2021), https://live-journal-of-law-and-public-policy.pantheonsite.io/why-tuition-is-skyrocketing-an-inconvenient-truth.