As far as I can tell, most of the “regulatory costs” they’re griping about are conditions attached to federal subsidies, intended to ensure that the federal money is going to its intended purpose and not siphoned off for some other purpose. These are accountability measures, not “regulations.” If the colleges and universities don’t want these costs, they can simply turn down the federal subsidies. Problem solved.
They won’t do that, of course, because the subsidies they get from the federal government are worth far more than the costs of complying with the conditions attached to those subsidies. So in effect they’re saying, “Just give us the money, and don’t ask any questions.” Not going to happen.
Example: the study finds that “colleges nationwide spent $2 billion on compliance with federal financial aid regulations, which govern the roughly $130 billion the Education Department doles out in student loans and grants each year.” OK, $2 billion is a lot of money. Don’t want to absorb that cost? Then don’t accept the $130 billion you’re getting in federal student loans and grants. But if you think the federal government is going to hand over $130 billion in FA grants and loans without getting assurances in writing that it’s being used for its intended purpose, you’re living in a dream world.
Example: the study found that $10.2 billion of the annual total of $27 billion in compliance costs was “related to research activities.” But the federal government generally doesn’t regulate research that it doesn’t fund, except for certain environmental regulations that apply to everyone, not just educational institutions. The federal government does, however, place a lot of conditions on the research grants and contracts it gives out. So, for example, there are conflict-of-interest rules and reporting requirements. There are accounting and reporting requirements, designed to ensure that the money is actually spent for its intended purpose, including requirements that the principal grantee monitor and report on any sub-grantees. There are federal rules governing research on human subjects, and required procedures to ensure that those rules are enforced, because the federal government doesn’t want to fund research that causes actual harm to the people who are participating as research subjects. Not surprisingly, the study finds these costs are highest in universities that conduct biomedical research, which is largely supported by federal grants and contracts. Don’t want to absorb those “regulatory compliance costs”? Fine, then don’t apply for or accept federal research grants and contracts.
Final example: the study lumps in all college and university accreditation costs as “regulatory costs” and attributes them 100% to federal requirements. Accreditation is a complicated, expensive, and clunky process, but attributing it all to federal requirements is a real stretch. It’s true that to be eligible for certain federal programs, including federal student financial aid, a school must be accredited by an accrediting organization recognized by the US Dept of Education, and that’s one important reason colleges and universities seek accreditation. But that’s not the only reason schools seek accreditation, either for the overall institution or for particular programs offered by the institution. Accreditation signals to prospective students that the school is legit, not some sleazy, fly-by-night outfit that will only promise you an education, take your money, and hand you a worthless sheepskin at the end of the process. Some accredited schools may not recognize credits earned or degrees awarded at non-accredited schools. Many employers will place a premium on a degree from an accredited school or an accredited program, or simply not hire applicants whose credentials are from unaccredited institutions.