Self-inflicted Problems of Higher Education: Part 4

In parts 1-3 of this series of columns, I noted the long-term rapidly rising costs of tuition and fees at U.S. public colleges and universities: 225 percent increases in real terms from 1984 to 2014, versus 25 percent in median family income, which measures folks’ ability to pay.

These hikes caused huge increases in student debt.  As federal student aid rises, colleges raise their charges to absorb the new money available.  Student debt now totals $1.67-trillion, a large part of our total public and private national debt, which long ago passed sustainable levels.

The money goes to administrative bloat, emphasis on research over teaching, and excessive compensation all across campus.  National numbers of university administrators rose by 2012 to almost one per faculty member.  And they are paid better than folks in comparable positions outside academe.

For faculty, research tends to crowd out excellence in teaching.  And university professors’ pay is as bloated as for administrators.  Compensation bloat is not a problem in our community colleges, nor among graduate teaching, grading and research assistants and adjunct faculty.  They are part-time and poorly paid.  As a Nevada Regent, I observed all these phenomena here.

The key problem of higher education is the same as for K-12 public education and all the public sector: The enterprises are run for benefit of the employees, not for benefit of students, other clientele, taxpayers and families paying the bills, nor for the public interest.

Twelve years ago, in a major article for the Chronicle of Higher Education, I pointed out that higher education – and all education, health care and the whole public sector – exhibit “cost disease”.  That’s the problem of showing few gains in productivity over long periods of time and little business model innovation because they do not really embrace opportunities made possible by technological progress and operational innovation – as competitive businesses do.

In the article, I attributed the problem to the public sector’s cost-plus budgeting approach.  Twelve years later, I realize it’s due more to the predatory special-interest providers, bureaucrats and politicians who run things by taking an ever-larger share of our economy, contrary to the public interest.

So, what is higher ed’s future in view of these problems?

In my article, I pointed out that technological progress and business innovation leads to “bypass” by new entrants of incumbents in regulated and public-sector enterprises that don’t embrace such changes.  This had already happened in communications, energy utilities and transportation.

“Education at all levels could experience the same upheaval in coming decades.  We have already seen signs with the rise of for-profit colleges and in certification alternatives to traditional undergraduate degrees,” I wrote.

Nevada regents, administrators, faculty and students had already begun discussing these issues.  However, administrators assured us adoption of new instructional paradigms, including distance learning and other digital methods, would lead to cost increases, not decreases.

This is an example showing it’s the people more than the budgetary system that’s the problem.  Instead of using the changes to cut costs and reduce outmoded offerings and methods, they continued to increase those in their budget requests and treat innovation merely as an optional add-on.

The UNLV president assured me that, despite predictions of experts, bypass would not dent the current system, and the status quo would continue.  In the twelve years since then, the wolf was already at the door before the Covid pandemic arose.  Some private colleges had already closed, and nearly all institutions were scrambling to fight off challenges from bypass entrepreneurs and to incorporate new technology such as distance learning and competency certificates.

The pandemic, the unduly harsh responses of mostly Democrat governors, and the economic swoon they have caused have led our institutions to clumsily embrace digital distance learning and other changes to a huge extent that now almost fully displaces in-person instruction.  This has sped up the needed progress hugely.

But unless our public institutions do these things right and add value that bypass institutions such as for-profit colleges and certificate-oriented schools cannot, many will not survive.  The pandemic, shutdowns and economic collapse will require administrators, faculty and politicians to promptly and effectively change or public institutions will die.

Final installment next time: specific changes to make.