Note To Colleges: Change Or Be Changed

by Dr. Dean Skarlis on March 19, 2013

I saw an article a year or two ago about Hamilton College explaining that although their full sticker price was $55,000, the actual cost to educate one student was more like $64,000.  My response to that is:  Really?  It almost seemed like a typo, and I find it very hard to believe.  If I ran my business like that, I would be forced to cut costs immediately, or I would not be in business much longer. 

This morning, NBC News did a story on the fact that George Washington University and other schools are suing their alumni who are defaulting on their student loans.  One student is working two jobs and cannot afford the $600/month payment so GW took him to court.  I think GW and other schools costing more than $60,000/year should be taken to court themselves for charging such exorbitant fees. 

In lieu of a massive, class action lawsuit, I thought I would provide some advice to my colleagues in higher education on how to cut costs:

1.  Tenure/productivity.  We can’t keep paying faculty $95,000/year to teach 3 classes when they’re 78 years old, or even when they’re 38.  That path is unsustainable.  They must be more productive.  Despite the fact that tenure track positions are diminishing, we need to begin treating faculty like employees rather than sacred cows.  The entire concept of tenure needs to be eliminated.  In addition, colleges cannot and should not be run by committee.  Eliminate committee assignments for faculty – they need to teach, and that’s it. 

2.  Eliminate research from teaching colleges.  If a faculty member would like to do research, she should seek employment at a think tank or large research university.  And large research universities should get out of the business of undergraduate education.  In short, teaching and research should be completely separated.  To the those who argue “my research informs my teaching,” I say Poppycock!  Doctors, CEOs, pilots, engineers, and college counselors, don’t do original research, and they are all still experts in their fields.  Most of these professionals simply read articles in their respective fields, and that serves them well.  Of course, the reward systems need to be changed as well, so that research is off the table completely.

3.  Use endowment monies.  If there is a need for a million dollar expenditure, use part of the hundreds of millions that are sitting there!  In this way, colleges are worse than retired people who are attempting to conserve all of their money:  they NEVER touch the endowment principal.  It flies in the face of common sense to let hundreds of millions of dollars sit and gain 5%, or lose money, as they did several years ago, but not use that money for necessary projects.

4.  Dramatically improve retention efforts.  There is a huge cost savings in this area.  We’ve been talking about retention for 40 years, but it hasn’t improved at all since then, which is astonishing.  We know how to spend millions on recruitment, but we have few effective, targeted retention programs – or employees with actual resources (staff, dollars, etc) to attack the problem.  In my opinion, this is a huge challenge that needs to be addressed at almost every school.  Much of it has to do with a larger issue of “don’t admit them if they have little chance of graduating.”  Too many schools admit students who are unlikely to succeed, and then do little to help them succeed.  It also touches on the idea of “access.”  We admit too many high risk kids who cannot finish for many reasons, the chief of which is they cannot continue to afford the costs.  And if they do squeak by with loans, they are burdened with them for decades.  The second reason most low income or “under-represented students” don’t succeed is they simply can’t handle the rigors of college.  The vast majority of lower income kids don’t complete college which doesn’t help anyone.  But even the “average” or “above average” student needs help graduating, and little is done for them as well.  Colleges need to focus on retention precisely as much as they do on admission. 

5.  Increase Merit Scholarships.  Some assert that the current merit scholarship system actually helps high performing students.  I don’t think it does.  As I wr0te in a previous post, it’s those kids who are attracted to the Villanovas, the Hamiltons, Emorys, etc of the world, and they get little if any money at those schools.  So the only option is to take on debt – a lot of it.  I see this every day.  But even if they attend sticker price bargain schools like Siena College, Le Moyne or Allegheny with a $15K scholarship, their net total cost is still $30,000-35,000/year.  That’s $150,000 plus travel, tuition increases and other expenses.  For a family with two kids, that’s more than $325,000 with tuition increases, and that’s still a very tall order for most families – even those making $200,000/year.  Increasing merit scholarships will help attract talented kids at all levels.

6.  Enhance Career Services/Internship Offerings.  Return on investment is huge, and most colleges do not do a good enough job helping kids find well paying jobs.  Liberal arts or not, families need to be assured that college will yield a decent job with a good starting salary.  This is another area to which they give lip service, but don’t expend enough resources, staff, etc.  Career service offices should have as many staff as the admissions office.  How’s that for a radical idea?

By posting this I’m not only advocating for my clients and millions like them, I’m also advocating for hundreds of colleges as well.  Many schools will not survive – or will die a slow death – unless radical changes are implemented relatively soon.  I’m not the only voice on this crisis.  Jeff Selingo, former Executive Editor of the Chronicle of Higher Education compares higher education to the newspaper industry.  In fact, there are many comparisons, and this does not bode well for academe.  With the advent of “MOOCs,” Massive Online Open Courses, that serve hundreds of thousands of students for free, or very little charge, many colleges face a big decision:  Change or be changed.

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