NY Times: Public Discontent With Colleges Rising

College Search & Selection
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<p>Interesting study data shows rising tuitions are taking their toll on public perception of colleges and universities:</p>

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Most Americans believe that colleges today operate like businesses, concerned more with their bottom line than with the educational experience of students, according to a new study. And the proportion of people who hold that view has increased to 60 percent, from 52 percent in 2007...</p>

<p>“One of the really disturbing things about this, for those of us who work in higher education,” said Patrick Callan, president of the National Center for Public Policy and Higher Education, “is the vote of no confidence we’re getting from the public. They think college is important, but they’re really losing trust in the management and leadership.”

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<p>From Study</a> Finds Public Discontent With Colleges - NYTimes.com by Tamar Lewin.</p>

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<p>My greatest concern is that “operate like businesses” is used as a pejorative. It reveals a lot about the attitudes of both the writer and academia in general towards business.</p>

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<p>I’ll offer one possible explanation for these survey results:</p>

<p>For three decades, the cost of attending college has risen faster than consumer inflation every year. I’m not sure if even health care costs have a streak like this. In the long run (and I would have thought that even ten or 15 years would be a long run), this pace of cost increases isn’t sustainable.</p>

<p>As with health care, there hasn’t been a consumer rebellion in these thirty years because “third party payers” have masked a significant portion of the cost for many consumers:

  • Financial aid, both merit-based and need-based.
  • Student loans.
  • State subsidies for public universities.
  • Philanthropy.</p>

<p>Today, as with health care, costs are still increasing and the third-party payers are starting to hit the wall. Colleges have in general been unsuccessful in reining in faculty and staff expenses, state budgets and private donations are under pressure from the poor economy, and often the magnitude of student loans can’t be justified by expected earnings.</p>

<p>As all these forces come together - rising costs and reduced revenue - colleges DO have to start thinking like businesses in order to survive. Arguably, had colleges been thinking like businesses in the past few decades, they would have done a lot better job of keeping costs in line with other consumer expenses.</p>

<p>The real question is what kind of business each college will emulate: will a school focus on creating a highly desirable educational and social experience in a cost effective way (as successful consumer-oriented firms do), or will it lurch about like a declining industrial dinosaur, cutting services indiscriminately while raising prices in order to stay solvent?</p>

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<p>I didn’t see your post until I posted mine, USMC_Jim - I think we are on the same wavelength.</p>

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<p>Most universities are not run like profitable private businesses. Public universities depend on the support of tax payers. However, many administrators, including those running public schools, are compensated like the CEOs of billion dollar businesses. In general, the salary increases for university administrators have outpaced that of faculty by several folds over last two decades. Some of these administrators even unabashedly justify their million (or 800k) dollar salaries by comparing themselves to CEOs of private businesses.</p>

<p>I am not surprised at all about the public discontent with universities. When public universities lose the trust and support of the public, they have nowhere to go but down.</p>

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<p>Yeah, I really don’t see how a focus on providing high quality education even begins to come into conflict with ensuring the university is run profitably. There’s no reason why the two couldn’t exist together.</p>

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<p>I wonder what percentage of tuition/fees/housing at any given school is dedicated to paying for physical plant upgrades made in the last 20 years - newer, fancy buildings and such. With loan money relatively easy to obtain by ‘customers’, the cost pressures on colleges weren’t high enough to prevent spending to make the schools attractive in non-academic ways.</p>

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<p>So schools are run nothing like a (real) business, they’re run like government agencies. My concern was that the NY Times and the administrators they talked to seem to think running like a business is a bad thing. Given the red ink at the Times, it’s obvious that they don’t know what a well-run business looks like, so I’ll help them out. Provide the best product you can, at the lowest price you can, in response to the wants and needs of your customers.</p>

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<p>At least for University of California system, the money for building construction comes from different pots. And over the last 20 years, the cost of educating each student has not changed by much ( I believe there is even a small decrease in cost). What has changed is the amount of state support for UC, which has dropped by more than 50%. Therefore tuition and fees have been going up year after year.</p>

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<p>colleges today operate like businesses, concerned more with their bottom line than with the educational experience of students,</p>

<p>Oh good heavens…Gee, would we rather colleges act like the major newspapers who seem to ignore their bottom lines and are going out of business?</p>

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<p>I think colleges have too many obligations (especially public ones) to simply act like a business. I do agree that they are all trying to make money and they are competing with other colleges for students.</p>

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<p>And here I was wishing colleges were run more like businesses! As a full-pay parent, there is no way I would spend $50K per year on the perceived “product” I am getting, if it were simply a commercial transaction in the free-market. $50K for 2-3 hours of class time per day, 8 months per year, decrepit shared housing, and food to sustain the life of a 105 lb female. I could get all of that for a fraction of the cost if I were shopping in a business marketplace. Cognitive dissonance forces me to rationalize that the sum of a parts amounts to <em>so much more</em> in value, way surpassing the $50K price tag. (Not!)</p>

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<p>NCL makes an excellent point, and one that is very germane from my perspective. (For example, my son attends University of Michigan, for which the state of Michigan only supplies less than 7% of the funding for its operations budget, which nets very high OOS tuition that is disproportionate to the level of state funding…)</p>

<p>But I believe the problem is even bigger than that. Universities have been allowed to/ or elected to spiral out of control in terms of delivery cost, without much apparent mind to cost containment. While this reflects – to my mind – poor management, I also wonder if the “market” would actually tolerate the alternative, such as universities where I hail from. I was educated in the Canadian university system, which for Canadians, bears about a $7k tuition cost today overall, about double for International students. (In general, I believe on average profs are in the same approximate pay range.) I have no qualms about the quality of education I received – and that quality was pretty much uniform across all Canadian universities, though there are some clear leaders (eg. McGill, U of T, Queens, UBC etc.) Federal and provincial aid, which totals up to $12,000 of a possible $15k - $17k COA, makes education accessible for just about anyone, although families who earn more are not eligible for grant.
Yet, without disrespect to any of those institutions, touring US colleges with my son the prior two years was an eye-opening experience. Even second tier regional universities boasted gleaming and ridiculously lovely infrastructure with unbelievably well-equipped facililties, infinite curriculae selections, exceptionally aesthetic dining/lecture/arts/stages/ environments that all look (comparatively) high end…construction on just about every campus…
Who is all this for? 18-year-olds that need to read, study, excel, manage themselves in the world around them and who don’t need to be living beyond their means out of the gate. Socrates was able to educate them with a piece of papyrus and a rock for a bench.
Yet to “get” the best crop of freshmen each year, these institutions woo and wine and dine and otherwise stimulate the imaginations of our scholars with a plethora of gleaming infrastructure and student-centered services because at the end of they day, they’re in competition with one another. And at the end of the day, they’re trading on their prestige and “impression” or “good looks” to those with the pocketbook – the parents.</p>

<p>Since we have chosen a government/free market model where there is little centralized federal funding for education; since we’ve elected to pit privates and publics against each other for the talent pool; since we aren’t willing to pay the taxes to support the infrastructure in its entirety or to equalize costs for students at even the state level and since the consumer seems to (understandably) want the latest greatest model in everything with oodles of merit money to sweeten the deal, we’re left with a system that is priced out of the market for many.</p>

<p>I can appreciate why the leadership at colleges and universities feel they must meet the demands of consumers in order to have their establishments prosper, which is not to say that I approve of the impact on the individual students in terms of fiscal access.</p>

<p>It just seems that we all want more for less, and that we contribute to the problem with our expectations. At some point or another, we have to pay for the infrastructure, whether it is by taxation or tuition. (BTW – Guilty as charged – the multimillion dollar multimedia center at UMich closed the deal for us, as did a merit scholarship plus the fact we were in-state for tuition ; )</p>

<p>At any rate, I have no answers, only observations. I am hopeful that the survey data will help communicate to administrators a shift in emphasis from the market, and I hope it makes a difference!</p>

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<p>The claim that Michigan funds just 7% of the UM operating budget is very misleading. The gross budget upon which that claim rests includes all the operating income of the UM’s vast hospitals which are very much separate stand alone business that actually nets a decent profit. Good for headlines but meaningless. The total education and related budget for UM for 2008-09 was 2.7 Billion of which about 330 Million came from the state. The other 2.4 Billion was for hospital operations all of which is offset by hospital revenues. So the actual contribution from the state is nearly double that 7% number.</p>

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<p>Completely agree with this and some of the other sentiments expressed here.</p>

<p>In fact, running a college profitably is not only not in conflict with providing a high quality education, it’s mandatory in the long run.</p>

<p>A college that’s losing money can address that in many ways, but with the same inevitable result - a reduction in quality.</p>

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<p>Barrons, even without the hospital, state funding made up 12% of Michigan’s operating budget and that percentage is declining steadily and rapidely. At this rate, state funding will decline to well under 10% in the next 2-3 years. UVa is in the same boat.</p>

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<p>My problem with the university system is that it does not do what it purports to do…educate the best minds to become even better minds. The “best” schools do not uniformly take the “best” students. The govt. and the universities themselves have decided to subsidize many lesser students at the detriment of better students. Hence, a 50,000/yr school for the strong student whose family has more affluence, and gets no tax deduction or subsidy ,receives a signicantly lesser value product than that student whose family pays $10,000/yr. and receives a tax deduction. We wouldn’t tolerate that in any other industry. When the middle and upper middle classes stop buying into this model, it will change. Everyone should pay fair market value…which, were it the case, would bring the cost down for everyone.</p>

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<p>How do you determine the “best” student? One with the best record or higher potential? Charging everyone the same would effectively block about half the population out of most privates and some publics. Is that wise use of human resources?</p>

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<p>Agree with a few posters above. Universities for the most part are not run like private enterprises, where cost cutting and efficiency are the gold standards. Universities have little incentive to reduce costs and provide the best education at the lowest cost possible. Why? The government is a big financier of most Universities. The more students they can enroll, the more government funds they can get. And to enroll more students, they build nice, but unnecessary facilities to attract them. It is a vicious cycle. </p>

<p>So in answer to the OP, it is option 2 for most Universities. </p>

<p>The Universities are not going after students pocketbooks, because their funds are limited. The government on the other hand, is a goldmine for Universities. </p>

<p>A good site to look at is Richard Vedder’s education blog. There is going to be a debate about college costs in a few days (21st?) on PBS.</p>

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<p>Which schools offer combined MSN and MBA programs.</p>