still majoring in mismanagement

Last fall, I blogged about possible ways to disrupt and improve our vastly overpriced and underachieving higher education system. One of my bright ideas went as follows:

[T]here’s no reason [Harvard] shouldn’t build more campuses in other locations, increasing enrollment even more. If its product is so great, why not scale it out?

Fast forward to this week when I opened the latest Barron’s and discovered that Harvard’s biggest rival is already doing just that:

Yale University has done something that no other Ivy League school has attempted: built a new version of itself halfway around the world, in Singapore.

I believe we’ve got things backwards in this country when it comes to higher education. In my opinion, a university’s reputation shouldn’t be based on how exclusive and expensive it is–that is, how much it costs and how few young people it educates. I think we should reverse that equation and judge our elite institutions by how many quality educations they provide, and at what value. Yale’s experiment in Singapore is a good first step in the right direction (even if it is in China), but it’s not addressing the biggest problem in higher education today:

It costs too damn much!

Students, past and present, are choking on almost $1.2 trillion in loans now. That is not only shameful, it’s counterproductive. Many economists believe this massive burden has prevented recent college graduates from buying homes, starting new businesses, and marrying. That’s not how you grow an economy. It also happens to be terribly unfair. Past generations enjoyed lower tuitions, especially for public schools. Why should young people today pay out the nose and take on onerous credit obligations when their parents were able to pay for school with little more than summer jobs?

Far too few pundits have zeroed in on the real culprits in this cost-explosion: there are too many damn people at our universities drawing paychecks and not delivering value. Study after study shows that the headcount of university employees that do not teach (administrators, coaches , etc) has ballooned in the last few decades. To pay for this largesse, students have been coerced into borrowing more to fund non-educational initiatives like sports stadiums, new facilities and myriad administrative “services.”  Suggested solutions focus on reducing the interest on student loans or increasing the dollar amount of loans available to them. But neither of those ideas get at the root causes of the issue: mismanagement and the enormously bloated cost structure that has resulted from it.

How about this idea:  any university that charges more than a reasonable amount for tuition and other costs like room and board should have its 501c(3) status revoked. That would end tax deductions for all donations to those schools and force every university to focus on streamlining its operations. Why should schools enjoying massive de facto public subsidies through government-backed loans be allowed to bilk their customers and then turn around and solicit tax-deductible donations on top of it?


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