It always bugged me that both universities I graduated from took in large numbers of high paying international students, in order to prop up huge salaries for administrators.
I read my public university's annual finance reports, and there's been a shift away from steady general funds towards less secure non-general funds.
My take-away is that as the formerly safe and relatively simple general state funds dried up, universities invested more in securing funding through various creative means. Which requires more and better administration.
International student tuition is a big source of general funds. But attracting and supporting them takes some investment. So universities grow and they pay more for people who can better balance the books.
University finance is very diversified now. You can't directly see most of it. But you can see a bunch of foreigners walking around campus, and you can look up state employee salaries online. They're symptoms.
The problem is that finance is getting more complicated.
My alma mater, the University of Illinois, made a uniquely astute and prophetic move in 2017: it purchased a 3-year $60m policy to insure against a drop in Chinese student enrolment in case of a political or health event. They foresaw trouble and hubris from the current administration. Lo and behold...
So, slightly more specifically it was the College of Business and College of Engineering only that did this. And since the policy expires June 1st of 2020 unless it got extended (couldn’t find any announcement that it did), I don’t know if the impact will have hit yet.
Just to point out what may not be so obvious, the vast majority of the non instructional staff are not what many of us would consider to be "administrators".
For instance, at the University of Wisconsin, there is an VERY large, extremely expensive bureaucracy called DoIT. It stands for "Division of Information Technology". Basically, it's the department for all of the IT people at the University. It's enormously expensive because of the nature of the work they do. And that's just one of the operations level bureaucracies required to pull off something like a University of Wisconsin. There's Facilities. There's Campus Police, which are very important at a place like UW these days. Student Housing. Health Services. The list goes on and on.
These sorts of costs are not cheap, but they are necessary. (Or were necessary prior to covid, now? who knows?) Be that as it may, honest people can debate whether or not operational arms like DoIT are functioning as efficiently as they could be. My main point here was only to shed light on operational costs that many universities have which tend to be overlooked in conversations like these. Especially as those expenses are most likely the key contributors to the overall cost structure being discussed. At Wisconsin, due to a multi year campaign of cuts we have gotten the ratio of academic staff to non academic staff down to about 1:8 at one point. But at most large universities you'll find it in the range of 1:12 - 1:20.
Just pointing out that if you want to bring costs under control, getting rid of some dean and a professor is not gonna get you there when you have 20 or 30 systems analysts, programmers, db admins, or campus cops on that same payroll.
the vast majority of the non instructional staff are not what many of us would consider to be "administrators".
Stanford has a bureaucracy so big that it has its own campus, in Redwood City. 35 acres, 2700 staff, a gym, a pool, a bus line, an auditorium, and an art collection. That's only Phase I. It's growing.
This campus has no students. No professors. No labs. It's all support staff.
I asked a friend about this stat last year. He was a graduate student at Stanford, and was surprised. A few days later, he came back saying that it appears that a big chunk of the non-faculty staff are researchers.
I'm not sure I believe that's the whole story, but I kind of want to see a more detailed breakdown to be sure it's not just a matter of silly categories for reasonable jobs.
Your link [1] seems to suggest that
the campus does not just house administration but also
clinical departments of the School of Medicine. This may be School of Medicine administration, I am not sure.
> These sorts of costs are not cheap, but they are necessary.
If tomorrow the government decided that every university would have to fund itself on half its current budget would universities cease to exist or would they just be different.
I'd say the latter. I'd agree they're necessary to how a college functions today, but not necessary to what we think of as the core functions that make a university a university.
Yeah I think it's true that some institution are reliant on incredibly high tuition costs, and wouldn't be able to survive. But I don't think that's true of the majority, especially when weighted by number of students. ( Imagine it's smaller colleges that are more expensive to operate per student due to a lack of efficiencies of scale. )
> campaign of cuts we have gotten the ratio of academic staff to non academic staff down to about 1:8 at one point. But at most large universities you'll find it in the range of 1:12 - 1:20
8 admin workers for each faculty member? Yeah that's a ridiculous number.
Maybe why US universities have ridiculous tuition as well.
But hey, you gotta convince the students that the 6 figures tuition and the "campus life" is worth it right? Oh and don't forget parking is not included nor are the "books" that require a "code" for you to pass the class.
Most large US university have large medical centers attached to them, so at my school our staffing numbers were 1/3 for the university (teaching + admin) and 2/3 medical center. These are not small hospitals.
There's like five comments with this "huge salaries for administrators" theme. Is that some political party's talking point? Did it feature in some Netflix hit?
Because I can't quite see how it's an actual factor? If we're talking deans and university presidents, the numbers are just too low to make a difference for universities with tens of thousands of students. Plus, obviously, some Dean of Harvard Law might be earning millions but would still be underpaid relative to what they could command in the private sector.
If it's "administrators" as in "lowly" bureaucrats, how do they have the power to be given salaries beyond what's needed to attract them in the marketplace? If we compare their relative level of education with your average San Francisco Javascript coder, are their salaries still too high?
Speaking of COBOL: University IT staff, which would seem to be among the categories of "administration", is almost stereotypically underpaid compared to the private sector. Staying within the PhD comics universe, graduate students, postdocs, and other non-tenured faculty often have to fudge the numbers to delude themselves into believing they make more than minimum wage. This would also seem to disprove any theory that universities are particularly generous or incompetent when it comes to labor exploitation.
Beyond that, it seems strange how you are linking these two issues, of administrative salaries and foreign students. There is absolutely no reason to believe that money coming in via these students is different in any way to, say, grants or patent royalties or donations from alumni or really any source of income.
Foreign students pay more than their relative share of costs. Thus, they lower costs for everyone else. They take nobody's spot, but allow for more (subsidised) US students to attend.
This holds as long as an additional $1,000 made from foreign students does not, on average, result in admin salaries rising >$1,000. That would seem to be a pretty safe assumption, and I doubt anyone can come up with a plausible mechanism for why it should not be the case.
It really seems to me like you have two rather specific grievances, the choice of which I can't really explain except that I have a tingling sense they might have distant roots within the same corner of the ideological spectrum. And because these are your associations when the topic of universities comes up, or because you believe it helps to validate each, you've drawn some connection between the two.
But since neither is particularly well-tethered in reality, they really don't have much support to offer each other.
Admin salaries aren't enough to raise tuition much for everyone. If a university president makes a megabuck, and the school has 5000 students, that's $200/student. If it's a dozen admins making a megabuck, and the president making a few megabucks, that's a couple thousand dollars per student.
But that's not the point. Megabuck salaries draw in the wrong people for the wrong reasons. That dean of HLS you talk about: Should it be someone who retired from a high-profile law firm or government job and took a pay cut to help make sure a new generation of lawyers get mentored RIGHT? Plenty of people would do that. Or should it be someone looking to maximize quarterly KPIs and find ways to leverage that position for personal political/career/financial growth? That's the change which happened in elite academia in the past 25 years, with megabuck salaries.
And yes, universities do try to attract foreign students, especially into Master's programs, as cash cows. I'm not sure what's wrong with that -- people need educations, immigrants of this type grow economies, and universities need money. It seems like a win-win-win all around.
But there does get to be a problem when that money is managed by admins of the type described in the previous paragraph. More money doesn't make for better schools if it goes into spending hundreds of millions on fancy buildings, faculty clubs, and similar. General funds don't come with even the minimal financial controls of grants and donations.
>If it's a dozen admins making a megabuck, and the president making a few megabucks, that's a couple thousand dollars per student.
Without having studied any university financial reports in detail lately, anecdotally one of the issues isn't so much megabuck salaries at the individual level but general administrative sprawl--which there have been complaints about for decades.
Some of this is just Parkinson's Law stuff. (As he originally wrote about the British Admiralty.) Bureaucracies tend to grow.
It's perhaps also the case the today universities need more administration to handle increased compliance and other requirements.
Australia is quite different, but there's tax payer funded unis here paying their Deans over 1 million a year who claim they can't afford to pay people more than $40/hour casually to record video lectures for first year business statistic classes to be delivered to over 600 students/year across multiple countries. They've also spent millions upon millions moving their campus in to the city when they already own a really good campus 10 minutes drive from the city with lots of decent free parking around even for undergrads. They also announced this year that they're so poor they're going to cut 75% of either the classes or courses next year (not sure which). People who run tax payer funded institutions like that should be thrown in jail.
> This holds as long as an additional $1,000 made from foreign students does not, on average, result in admin salaries rising >$1,000. That would seem to be a pretty safe assumption, and I doubt anyone can come up with a plausible mechanism for why it should not be the case.
That's exactly what is happening, and the mechanism is simple. It's the original bundle and upsell model. It doesn't take terribly much imagination to consider why this might be the case:
- second largest purchase (maybe single largest purchase) most Americans now make in their life
- purchased when prefrontal cortices haven't fully developed (~18yo in most cases)
- sold as an "investment" to parents (you "need a bachelor's degree to get a good job")
- purchased as an investment by students (I want a career after college) but also as an "experience" (I need to party, mingle, socialize with the opposite sex for the only 4 year span of your life where I will ever experience actual freedom)
- financed with debt products guaranteed by the government
- .. but which often cannot be discharged in bankruptcy (!!)
Why wouldn't such a "product" balloon in breadth, depth and average cost given that it's an enormous industry? The US student debt market alone is ~$1.6T. To give a benchmark for comparison, the US mortgage market is $11T, and those consists of bonds securitized by assets.
> There's like five comments with this "huge salaries for administrators" theme. Is that some political party's talking point? Did it feature in some Netflix hit?
Your argument boils down to "I can't haven't researched any of the details here and I can't come up with any off the top of my head so it must be the result of ideological astroturfing." In doing so, you completely ignore one of most insidious modern forms of legalized debt slavery. Don't reduce and flatten arguments you don't agree with. It's not just wrong, but it conditions you into ignorance and against engaging in a basic investigation of the details.
You wrote a lot of text, but I think you are speaking from a position of ignorance or emotion, to be honest, on the topic of high salaries.
You seem to be arguing that it's impossible for anyone to be paid too much, because of the simple existence of the free market system.
But that way of thinking completely ignores the outcomes of that tuition spent. If other countries produce graduates that are the same or better, for less tuition, then you should be looking at that as a flaw in our system. That means the free market is not working efficiently, and more competition in the sector would drive prices down without loss of quality.
As for the questions about international students, I decline to comment, as I agree it's specious.
> You seem to be arguing that it's impossible for anyone to be paid too much, because of the simple existence of the free market system.
That's sort of the definition of a salary subject to market forces, yes. But, as an alternative, I even suggested comparing administrators' salaries with education-matched employees in IT startups.
You're not offering any specific alternative, but OP's comment and yours seem to basically amount to "I know what people should earn, and 'administration' is useless anyway."
> If other countries produce graduates that are the same or better, for less tuition, then you should be looking at that as a flaw in our system.
Many countries produce many things cheaper than the US, often at the same quality. Foodstuffs are an obvious example, but there are many more: a pilot in China or South Africa earns far less than an American, even though they are trained to the same standard. Does this mean US pilots are overpaid? Taxi drivers the world over provide pretty much equal service, but does that mean US taxi drivers should earn $1.20/day (average Iraqi daily income for taxis)?
But even assuming US universities are too expensive, which I would tend to agree with, I was specifically challenging the idea that high salaries are as dominant a part of the explanation as the relative number of comments here focussing on it suggests. And because "administrators" was and remains ill-defined, I offered specific reasons why that is unlikely for a number of groups that people might be referring to.
While you've devoted a paragraph to reading the emotional subtext of my comment, you neglected my rather plain request to be a bit more specific: by "administrator", are you referring to the Dean of the Law School, the Quinnipiac Polling Call Center Temp, the Executive Assistant to the Greenkeeper, the Physics Postdoc,...?
Anyway, here's four alternative explanations that make more sense, IMO:
- US universities spend more on research, and use tuition money to (partially) fund these activities.
- US undergrad programs spent far more on student life, such as luxurious dormitories or sports centres
- US tuition includes medical care, doesn't it? US medical care is famously inefficient.
- US universities, even public ones, rely far more on tuition than universities in other countries, that get comparably higher government subsidies
I think you missed his point, which is that both the Iraqi and US taxi driver provide about the same amount of value, yet while one gets paid more than the other (despite provide equal value). He implies that people don't see this as a problem, and suggests that maybe the salaries of the administrators are something similar.
More broadly, there seems to be a lot of money coming in as student fees, and very little going out in academics' salaries. If things in-classroom are so profitable, there must be a heck of a lot of out-of-classroom expenses going on.
I feel like that Forbes article is concentrating on the wrong things because it makes for better copy. I calculated estimates based on the numbers they gave.
For the 1980-81 school year, $20.7B at 41% for instruction and $13.0B at 26% for administration yields $16.6B at 33% for other than instruction/administration.
For the 2014-15 school year, $148.0B at 24% for instruction and $122.3B at 29% for administration yields $239.7BB at 47% for other than instruction/administration.
That means, for approximate multiples, instruction increased 7.15x, administration increased 9.41x, and other than instruction/administration increased 14.44x. When I recalculate what the 2014-15 expenses would have been had they all increased at the same rate as instruction, I get $29.35B excess for administration and $121.02B excess for other than instruction/administration.
It seems to me, based on those estimates, that the elephant in costs is somewhere in that "other than instruction/administration" category. Overpaid administrators are certainly a problem, but they appear to be a relatively minor problem.
It also subsidizes largess such as unnecessary buildings and retreats. University department managers treat budgets as signs of status, and try to build as large of org chart pyramids as possible.
Source: I worked at a top 5 US university as an employee, on both the business and academic sides, for 7 years.
Gee, this is what subsidized looks like? Must be a lot cheaper than the tuition in other countries that don't have nearly as many international students :)
The key difference is: our universities do not run expensive world-class sports teams (while there are amateur things such as racing, these do have an educational focus as they tend to be a side gig of the mechanics courses) and at the same time are properly financed by the state.
That sounds like a great system. From purely selfish motives, the state will reap more taxes from college educated citizens than they would otherwise, so literally investing in public colleges makes financial sense. America chose to invest in education debt (and modern day indentured servitude) instead.
> From purely selfish motives, the state will reap more taxes from college educated citizens than they would otherwise, so literally investing in public colleges makes financial sense.
On the other hand, college educated citizens are less likely to enter the army out of desperation (so no more cheap replaceable cannon fodder for the endless wars) or to agree to usurious 20%+ APR payday loans or end up in private prisons or work as replaceable cogs in Amazon warehouses, "gig economy", farming, meatpacking or whatever else exploitative labor market. This costs the rich elite donating to politicians actual money in profits.
Incentives for politicians are not aligned with the targets for a better society, that is the core issue.
Most German universities also don’t have dorms, on campus amenities, erm, or often even campuses. German courses don’t have TAs, and many only have grades based on one final. It isn’t a bad system, but you get what you pay for.
> Most German universities also don’t have dorms, on campus amenities, erm, or often even campuses.
Most universities have some form of dorms, however they're usually wildly inadequate in numbers - but as most students come from the town or nearer region of the university and don't move across half the country they can live at their parents' houses.
As for amenities: who needs special "college amenities" here? Sports is provided by the town (public sports training grounds), its clubs (for team sports) and for really niche stuff sometimes by the universities themselves, drinking is allowed both in public and in a number of bars, discos and other venues... so what is missing? (Honest question, my knowledge about US campus culture is based upon more or less shitty comedy movies)
As for TAs: yes we absolutely have higher-grade students doing teaching or scientific assistance at university, source: many friends have done this.
I'm not arguing that the German system is bad, just that it is a very different product from what American universities sell. It might actually be a better model for America to provide higher education to more people at a better cost.
> As for TAs: yes we absolutely have higher-grade students doing teaching or scientific assistance at university, source: many friends have done this.
Neither of those are called TAs. The first kind is a graduate student lecturer, the second is called an RA (research assistant). One or more TAs for a large course typically helps the professor in running sections and grading homework, those two things being missing from most German courses (from my understand being told by my friend about his college experience in Germany; they might have homework, but it wasn't graded).
Is complete ignorance of the economics of US collegiate sports a European thing? Those big sports teams are money-makers, not cost centers. Everyone bitches and whines about a college football coach being paid more than anyone else at the university, but that same coach's team actually provides funding to the rest of the university. The sports teams are not expenses, they are revenue.
They may be revenue generators indeed, but anyway I see this as yet another symptom of a failed setup in the core: research and education should be fully funded by the taxpayer directly instead of indirectly via saddling youth with decades of debt or by sports activities that have nothing to do with academia.
Academia should be academia and only dedicated to further scientific knowledge and teaching, not to spend boatloads of time and resources to hunt for half year grant money or sports revenue. Just imagine all the management time of what is consumed by sports go to helping the professors deal with grants/funding issues - that would be a major boost for science if scientists could actually do science things instead of management things!
> Those big sports teams are money-makers, not cost centers.
Are they actually, when all's said and done? (Genuinely asking, I've no idea). In particular, after the facilities are paid for? Non-education-related sports facilities (stadiums and such) are notoriously nearly always net costs to the government who subsidise them.
As a simple example, a school with a division 1 football team like Ohio State will spend approximately $100 million per year on athletics but that will be less than the athletics programs bring in. The mens football and basketball teams will bring in almost all of the revenue, and will support all other athletic programs (and athletic scholarships) at the university. The Ohio State football stadium seats more than 100K, and the minimum ticket price is $22 so you are looking at more than $2M in gate revenue for games, plus TV contract revenue, plus merchandise it sells all over the state, plus donors and alums who will pay far more than $22/seat for corporate boxes or to attach their name to some aspect of the program for commercial purposes.
Stadiums can sometimes look for public subsidy when being replaced or re-built, but they can equally make a claim that their presence brings in millions of dollars of revenue to the local area over the course of a season and that the cost of the stadium can easily be amortized over decades (something that is actually easier for a collegiate program in a mid-sized city to claim than a pro team in a major urban center.) The ancillary facilities like practice space, offices for coaching staff and other infrastructure are almost always paid for by the athletic programs to the best of my knowledge.
My alma mater built a second stadium for their tier 3 football team that just got kicked out of their league for poor performance. I must be very ignorant of where this magical revenue comes from.
No, the point was that administrator salaries are not the primary reason for tuition increases.
Running a college is expensive. Everything costs more, including the blue-collar work force, so tuition correspondingly costs more. Public schools must also deal with drastic cuts in state support--the UC system, for example, only receives 10% of its budget from the state of CA (but used to receive more than 90% of its budget from the state).
I teach part-time in a private for-profit college in Germany (in which German-citizen students get up to half their tuition paid by the government) & tuition is comparable to the least expensive public state universities in the US.
I don't know how the numbers work out but I suspect you could run a private college in the US for less than the mid to high 5-figure $ per student per year they seem to charge.
But then the school would be ranked as a low cost institution, and carry a stigma that many parents and students would want to avoid. There's a reason USC is raising tuition right now. Signaling that it's worth it...
My daughter is going to school in the fall, and I ran into this pricing strategy immediately. Her choice of college started tuition at over $50k/year, but offers "scholarships." These aren't Pell Grant etc, but scholarships that apply only to this institution. You get a scholarship for touring the campus. You get another scholarship for being a state resident. Eventually, you're effective tuition rate is cut in half.
This strategy is brilliant because it works on 3 axis; first, the parents feel like they're getting a good deal (since the effect of anchoring the tuition at $50k is hard to resist). Second, the school can appear elite since it charges a high tuition. Third, the student (and parents) feel good because their kid "earned" scholarships.
