University Bloat
The Wall Street Journal had a mostly-nothingburger of a story in it on Christmas Eve titled ‘Elite Colleges Have a Looming Money Problem’. This is about Harvard, Yale, Princeton and that lot, and I will suggest that the headline is b.s. Nothing in the article suggests those places have any financial issues looming. Princeton, leader of the pack in this dimension, has an endowment that is equal to $3.8million per student. That means that at a shitty 3% net return, they can generate almost $110,000 in revenue per year per enrolled student, and never touch the assets in said endowment. They could cut their tuition by half and still make ends meet. I think they’re going to be ok.
Harvard has a mere $2million per student, but I think they’re ok, too. If any institution should worry according to this article, it is the U of Texas, which has the highest per student endowment of any public university, but that is only some $250,000/student. And, the Texas legislature could (and probably has) cut funding to U of T over the years, and could also forbid them from raising tuition. Ontario has done that for years to its universities. So, Texas might have something to worry about. Princeton and Harvard, not really. The only solid thing the article seems to point out is that these places have been getting below-market returns on their massive endowments. Tsk-tsk.
That all being said, I did learn some surprising things from the article. Here’s an interesting quote:
“Despite a booming stock market, Harvard said alumni donations fell by 15% last fiscal year amid outrage over the university’s handling of campus antisemitism. Fellow Ivies Columbia and the University of Pennsylvania experienced even steeper drops.”
Apparently, having your Prez look bad in front of Congress is hard on donations. Whodathought?
The article also says this about Harvard:
“Last year the university relied on the endowment for 37% of its budget, up from about a fifth of the budget 20 years ago and far higher than the average across private, not-for-profit colleges. “
The change from 20% to 37% is certainly a notable increase. It is not clear that this involved actually selling assets in which the endowment is invested, and I rather doubt that it did. Still, maybe Harvard is feeling a little less bullet-proof.
The other interesting things all came from a policy paper written by Paul Weinstein Jr for The Progressive Policy Institute. There was a link to it in the WSJ article, and you can read it here if you like. The paper is titled ‘’How to Cut Administrative Bloat at US Colleges’, and I don’t see that it offers much useful or novel advice in that regard, but it does provide some careful documentation of said bloat. Weinstein provides data on 50 US universities, so he goes well beyond the ‘elite’, all of it gathered from the universities themselves. It turns out that 21st century universities have almost as many employees as students, and in some cases they have more, and the majority of their employees are not faculty.
Think about that in comparison to other service providers. Can you think of any other such org, a full service hotel, a hospital, a police department, in which that is the case? One needs to be careful about such comparisons, a hospital might have nearly as many employees working in at as it has patients at times, and a police or fire service has as ‘customers’ an entire city, but they rarely all need service at once.
Anyway, I plan to think about reasonable comparisons some more, but here are some of the numbers for universities .
Princeton has 6300 employees, only 1285 of which are faculty, and 8705 students.
Duke University has 3,983 faculty members, 25,873 non-faculty employees (that is not a typo) and 17,155 students. Yes, Duke has more non-faculty employees than students (all student numbers include both grad and undergrad).
Notre Dame, on the other hand, is a relatively lean machine, having 1,243 faculty, 4,467 non-faculty employees, and 12,809 students. Still, more than twice as many non-faculty as faculty employees.
The University of Texas at Austin has only 3,519 faculty and 11,645 non-faculty employees to deal with 52,384 students. I don’t know how they handle the strain…..
The Weinstein paper says without hesitation that the increase in the cost of university education is the result of administrative bloat, but to make that case we would need to see the same numbers for the same universities from 20 or more years ago. Those are not provided, and good luck getting them. I believe it is true that university non-academic staff have grown faster than faculty or student numbers over the last 20 years, based on my time as a professor, but what I believe is insufficient to make that case.
None the less, Weinstein is happy to give a recommendation for how to fix this, and his idea is pretty much what one expects from an academic; have the government fix it. I can do no better than quote from the paper:
“The federal government should shift its focus from increasing financial aid to using its significant leverage to encourage colleges and universities to reduce costs and cut the price of earning a degree. To do this, the government should be given the authority to negotiate the cost of tuition and fees with any post-secondary institution that accepts students who have received grants, loans, or tax incentives from the federal government. Schools could opt-out, but by doing so would not be allowed to enroll students who need to pay a portion of their tuition with federal aid or loans. Schools found in violation of this policy would be subject to fines in an amount equivalent to the aid provided by the government.”
Can you just imagine the size of the bureaucracy – both in universities and in government – needed to insure that all universities and students were playing by these new rules? And….negotiations between The US Federal Government and billion dollar universities over tuition? What could possibly go wrong?
Yes, a solution that only an academic could embrace. Or a budding, university-trained government bureaucrat, I suppose.
Coda
This all made me curious as to how my former employer stacks up against these 50 US universities on these dimensions, so I went to the UWO data book to find out. I cannot be sure that these numbers are calculated in exactly the same way as in the US schools, but then it is not clear that all the US schools calculate them the same way, either.
So, Western says it has 37,875 full-time students enrolled during this current academic year, under-grad and grad. It also employs 1,338 regular full-time faculty and 2,789 full-time staff. That puts it right up there with Notre Dame as a lean machine, although it does have more than twice as many staff as faculty.
The student-to-faculty ratio, one (highly imperfect) way rating orgs measure the quality of education in a post-secondary institution, is an eye-popping 28.3 to 1. Exactly one of the 50 US places in the Weinstein paper is higher than that – Georgia Tech at 37.3 to one. The paper claims GT has gone big-time into online education, which may explain that number partly. U of Texas, as huge as it is, has a student/faculty ratio of only 13.3, and U of Wisconsin, which is about the same size as UWO, is at 8.9.
PSE in Ontario is cheap, and you get what you pay for.