Overcoming Administrative Bloat in Higher Education

Overcoming Administrative Bloat in Higher Education

College is expensive. Stop me if you’ve heard this before. Stories about the insane cost of college are a dime a dozen. But where is all this money going? Who’s reaping the benefits of skyrocketing tuition? Spoiler alert—it’s neither the students nor the faculty. So who’s left? Well, if professors occupy the stage, and students inhabit the theatre, the backstage area is actually a hulking nebulous structure of executives, consultants, bureaucrats and functionaries that we call administration. This structure consumes roughly half of all payroll expenses at the average non-profit college or university. You’re paying for top-quality instruction, state-of-the-art facilities, and dynamic educational communities, but at least part of what you’re getting is administrative bloat.

The optimistic take is that students are getting more bang for their buck, right?

Well, sure—students in elite colleges are paying for rock-star professors, state-of-the-art performance centers, and advanced robotics labs. And if you’re into the perks, you’re probably willing to pay extra for a luxury condo dormitory, a crystalline student center, and an Olympic-sized swimming pool. If you have your heart set on going to a school with a rock-climbing wall and a lazy river, you probably realize that you won’t be getting it on the cheap.

You could make the argument that today’s college student expects more, gets more, and logically, therefore, pays more. But there are costs hidden beneath this sunny conclusion. And in the face of stagnant post-graduate wages, declining enrollment, and the COVID crisis we must necessarily ask what these hidden costs are and why students are paying them. Most importantly, we need to ask ourselves if we could be doing better. At the core, administrative bloat implies that we’re spending all of this money the wrong way.

For schools that have actually taken meaningful steps to minimize cost and maximize value, check out our rankings of the Most Affordable Colleges and Universities in every state.

Otherwise read on to find out what administrative bloat means, and how reversing this trend might actually be the key to lowering the cost of college.

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The Cost of College in a Time of Reckoning

To reiterate a well-worn point, college is way more expensive than it used to be. Let’s review quickly, shall we?

According to U.S. News & World Report (USNWR), tuition for private U.S. colleges has risen by 144% over the last 20 years while out-of-state public school tuition is up 165%. In-state public school tuition is up 212% over the same period. This inflationary pattern has persisted for decades. In the face of mounting criticism, America’s universities have plundered onward and upward (at least in price).

But today, higher education is facing a reckoning long in the making. We’ve experienced a startling 2.6 million student drop-off in enrollment over the last decade. Big schools are looking for ways to tighten the pursestrings. Smaller schools are merging, or shuttering their doors altogether.

Between 2017 and 2021, 579 institutions of higher learning have ceased to exist. On the brightside, three-quarters of those were for-profit schools felled by stricter regulations and their own organizational toxicity.

Between 2017 and 2021, 579 institutions of higher learning have ceased to exist.”

On the down side, we lost nearly 150 legitimate public and private four- and two-year colleges in less than ten years. Many of these schools were hastened toward collapse by the impact of the COVID crisis. Others remain on life support thanks to federal emergency rescue dollars. But be assured that in most cases, these are schools that have been grappling with declining enrollment for years. As with its human victims, COVID preys on schools with pre-existing conditions.

Simply stated, the time is upon colleges and universities to look within. For many, mere survival may depend upon this introspection. It can’t be disputed that today’s university is far more complex and dynamic than the campus once inhabited by Baby Boomers, or even Millennials. Student services are more varied and nuanced. Colleges are beholden to more rules. Competition for bodies is fierce. Addressing these needs demands administrative expenditure. But how well do these needs justify the cost? Are they really furthering the true mission of colleges—to educate?

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What is administrative bloat?

Administrative bloat is what occurs when the cost and scale of a university’s administrative structure either fails to contribute to the institution’s core educational mission or actually detracts from that educational mission.

But let’s dig a little deeper by first distinguishing between necessary administration and administrative bloat. Naturally, human capital is essential to running any organization. Somebody must fill out the infrastructure that provides a foundation for the experience of both educators and learners. From talented university presidents and dedicated academic advisors to mental health support and the pencil pushers in the registrar’s office, administrative personnel are obviously a necessity.

But when is it too much?

According to University Research Professor Emeritus at the University of Kentucky, J. David Johnson, “the essential mission of any university [is] teaching. If an administrative element of the university supports this mission efficiently, then bloat is not present. However, if it supplants, diminishes, or encumbers this central mission, then one can begin to question if bloat is occurring.”

So the fundamental question then—to what degree is the current scale of administrative investment either advancing or expanding the mission of individual universities and to what degree is the scale of this administration actually impeding that mission?

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Is administrative bloat actually happening?

Administrative bloat is a real problem that many universities are grappling with, and the evidence is in the sharp increase in administrative costs for schools over the last several decades, especially relative to stagnating expenditures in other areas such as instruction.

Whether it qualifies as bloat or not, the overall cost of college administration has gone up dramatically in direct proportion to the decades-long upward trend in college tuition. An article from the American Council of Trustees and Alumni (ACTA) reports that, across the entire higher education landscape, spending on administration per student increased by 61% between 1993 and 2007.

The pace of increase has only accelerated in the years since. And what’s more, this expense has grown dramatically in proportion to spending on actual classroom instruction. The National Association of Scholars reports that today, more than half of payroll expenses at the average American university are earmarked for non-instructional roles. In fact, there is some evidence that the rise in college costs has done little to benefit actual instructors, whose wages are stagnant relative to those of administrative personnel.

Using data from the National Center for Education Statistics (NCES), ACTA reports that, between 2016 and 2018, spending per student on administrative costs has increased by 1.4%, while spending on instruction went down by .7% during the same span.

...between 2016 and 2018, spending per student on administrative costs has increased by 1.4%, while spending on instruction went down by .7% during the same span.”

This points to a continuing pattern across roughly four decades. An article in Forbes notes that “during the 1980-1981 school year, public and private institutions spent $20.7 billion in total on instruction, and $13 billion on academic support, student services, and institutional support combined, according to data from the National Center for Educational Statistics. By the 2014-2015 school year, total instructional costs had climbed to $148 billion, while the same grouping of administrative expenses had risen to $122.3 billion.”

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Does this hulking administrative structure benefit students?

The growth in administrative scale and costs is, to an extent, designed to benefit students by fulfilling an expanding set of needs and satisfying growing expectations about what the college experience should be.

That said, it’s not always entirely clear what every administrative hire actually does. An article in Forbes points to hazy titles like Health Promotion Specialist, Student Success Manager and Senior Coordinator, Student Accountability. Without getting into the weeds about the actual value added by each of these roles, there are some reasonable explanations for their presence.

Forbes notes that colleges, all at once, are grappling with a growing spectrum of student needs, heightened recruitment competition, and a surge in government regulations. Let’s examine each of these areas a little more closely.

Student Needs

The continued proliferation of federal financial aid has created new pathways to higher education for first-generation college students, students from non-English speaking households, and those who come from at-risk families or communities. Inevitably, these demographics require more support and a wider array of student services in order to acclimate to their new environment. This, in turn, requires all manner of non-instructional personnel with specialized training in a wide range of administrative areas.

Forbes also points to a growing set of public expectations about what a college should provide to students. From career assistance and mental health services to internship placement and diversity assurance, students are now demanding, and paying for, a great deal more than simple classroom instruction. These and other roles that were once performed by faculty, or else not at all, are now performed by administrators.

If we believe that college is meant to prepare students for the next professional and personal steps in their lives, it is reasonable to expect that such services will be provided in exchange for tuition, housing, fees, and expenses.

Heightened Competition

On the subject of student expectations, colleges who fall short face very real, even existential, consequences. While students may not have a lot of leverage when it comes to the cost of college, they do have options. There are countless ways you could structure your education, from research universities, liberal arts colleges and small private schools to fully online colleges, community colleges, and vocational institutes.

It depends on the type of experience and education you seek, but generally speaking, there are likely dozens of schools that meet your criteria. As competitive as the admissions landscape is for students attempting access to the nation’s most elite colleges, the competition is equally fierce between mid-tier colleges clamoring for the interest of prospective students.

The point is that many schools really are under intense pressure to court, recruit, and retain students.”

Meeting the competition head on means building out specialized departments, offering innovative programs, and creating exciting opportunities for students. For the smaller institutions that have taken the brunt of the declining enrollment numbers, failure to offer these things could be tantamount to failure altogether. The point is that many schools really are under intense pressure to court, recruit, and retain students. Doing so requires competitive offerings, and these offerings require administrative personnel.

Government Regulations

Beyond the bottom line, colleges and universities do have a greater set of responsibilities than ever before. In recent decades, growing awareness of the risk factors lurking on our college campuses has spawned a new era of regulatory oversight. Schools are now beholden to a wider spectrum of laws concerning the handling of sexual assault, gun violence, mental health, diversity, and more.

In most cases, achieving compliance with these laws demands the right type of personnel. Meeting the challenge of regulatory adherence for functions such as student case management, community threat assessment, and sexual assault reporting demands the hiring of skilled and competent administrators.

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Does this administrative growth serve the core educational mission?

Administrative growth has served the core educational mission of schools by expanding what that mission is to include, however, evidence suggests that we’ve gone too far to the end of investing in administrative functions, often at the expense of both affordability and instructional excellence.

In other words, it’s not enough to simply argue that colleges are flabby with unneeded personnel. The imperatives above are real, and some schools must follow these imperatives simply for their own survival.

The real question regarding these administrative expenses must center around the core mission of higher education—to serve the student. How have rising administrative costs served to improve student learning and educational outcomes?

A closer look suggests that the problem isn’t inherently in who universities are hiring, but in how much they’re paying them, and in how much they are paying to accommodate them. In actuality, the salaries for administrative personnel at public universities are comparatively much higher than those of administrative personnel performing the same duties in the broader public sector.

Forbes points to a high-profile case involving financial irregularities within the massive public University of California system, reporting that “Even though the duties of the executives and administrators in the Office of the President were similar to those of other public employees – for example, agency workers in human resources or accounting – their salaries were far higher. The Office of the President employees also received employee benefits rarely seen in the public sector, such as paying over $2 million for business meetings and entertainment over the five-year period reviewed by the state.”

Because the traditional higher education sector is not profit-driven, many schools have operated with few incentives to control costs. But it goes deeper than that. Forbes points to a troubling—arguably even insidious—layer in the matter of cost. To an extent, the article notes, rising expenses are a good thing for colleges and universities. In a contest of reputations, cost is actually one factor that consumers instinctively reference when judging quality. So as schools increase their expenditures on administrators, and pass that cost along to students, they do so to the benefit of their own public image.

When colleges do make cost-cutting decisions, they occur far too often at the classroom level. Inside Scholar reports that today, a startling 75% of college classroom instructors are non-tenure track educators or adjunct professors. Just over 20% of college classes are taught by full-time or tenure-track professors. This is an exact reversal of the ratio reported in 1969.

Because the traditional higher education sector is not profit-driven, many schools have operated with few incentives to control costs.”

That means colleges can pay their instructors substantially less while students gain access to educators who may have less experience, expertise, and influence than from prior generations. When you consider that students are paying so much more for a far lower likelihood of studying with a full-time, tenured professor, it’s hard to overlook the dramatic rise in administrative payroll costs.

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How is COVID-19 changing the math around administrative expenses?

The COVID-19 crisis is forcing many universities to reconsider the way their expenses are being invested, and both the growth in the administrative structure and the salaries commanded by administrative personnel are two likely areas where expenses could be minimized.

Indeed, enrollment trends have been down for several years now. There are many reasons for this and not all of them have to do with internal mismanagement. Fluctuating birth rates are a major factor in the declining size of the college-aged population. But it cannot be denied that some would-be students are simply reexamining the value proposition of higher education. As costs rise and post-graduate wages remain stagnant, more students are reconsidering the true return on this investment.

COVID-19 may have been a tipping point, a crisis that has either sidetracked or altogether ended the pursuit of a college degree for countless prospective or returning students. And the loss of paying consumers may be just enough to finally stimulate some real change. If higher education finds itself at a crossroads, internal soul-searching would likely reveal an administrative structure that is simply too dense and reactionary to be sustainable.

The good news is that this is a manageable problem. While colleges are beset by many economic and practical challenges that go far beyond the scope of higher education, this is an internal challenge that individual colleges can repair by:

  • Lowering administrative salaries
  • Reducing personnel redundancies
  • Auditing administrative function for value added
  • Reinvesting in classroom instruction
  • Incentivizing administrative cost-cutting measures at the policy level.

Colleges should be willing to show the same level of fiscal conservatism toward their administrators that they show their instructional faculty. No. Strike that. Colleges should demonstrate greater fiscal conservatism toward administrative salaries and perks so that they can reinvest in full-time, tenure-track personnel, the kind that can actually fulfill the value proposition of a college education. There are still colleges and universities that do this, and do it well. Finding them is the challenge.

Fortunately, the unique algorithm we use here at Academic Influence actually cuts directly through the soft underbelly of administrative bloat by emphasizing the central role that instructors, alumni, and students play in shaping a school’s excellence. By ranking schools according to the influence of professors and alumni, we ensure that only those schools that have sufficiently invested in professorial excellence can scale to the top of the list.

Those whose investments have been overwhelmingly dedicated to further bloating at the expense of their own educational mission have, simply by the nature of our algorithm, been exposed and penalized in the final ranking. And that’s not because we’re actively punishing schools that are guilty of administrative bloat. It’s simply that the proof is in the pudding—those that truly invest in instruction will naturally rise to the top, leaving behind those that over-invest in bureaucracy.

Within this distribution of outcomes, there may be a lesson for all of higher education as it stands at the crossroads and contemplates which way to turn next.

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