Colleges Must Cut Administrative Costs to Survive This Crisis
In 1628 the Swedish warship Vasa set sail on its maiden voyage—and promptly sank in Stockholm harbor. The ship was grotesquely top-heavy and foundered as soon as it began to take on water.
American higher education is also grotesquely top-heavy. Deans and Provosts have multiplied like rabbits. In the past forty years, the growth rate in the number of administrative staff has been five times that of professors. For a generation and more, American higher education has been sinking slowly beneath the burden of administrative costs.
Our colleges and universities, weighed down at the top, were never likely to do well in heavy weather. Now comes the coronavirus gale, wreaking economic devastation across America, and hundreds of colleges may go bankrupt. A decade’s worth of hard times may be compressed into the next two years.
We must take emergency action to save our colleges. The absolute priority is to jettison as many administrators as necessary, lest they sink their host institutions. Since administrators make spending decisions, policymakers outside of higher education must set rules that create strong incentives for colleges to chuck the bureaucrats. The bureaucrats themselves will cling to their jobs and hope the colleges somehow survive despite their dead weight. They shouldn’t be allowed to endanger the survival of our colleges and universities.
Vast numbers of administrators can’t be fired now, because colleges and universities are forced to employ them to satisfy regulatory requirements imposed by the Department of Education and the accrediting organizations. I’ve argued elsewhere that the Department of Education should declare an immediate “regulatory holiday,” to free colleges and universities to fire any employee without worrying about these external regulatory requirements. The regulatory holiday should be fast-tracked for every college on the brink of bankruptcy. Any college that declares itself in financial distress should be allowed an emergency application for a regulatory holiday, and that application should be approved within five business days.
If there are any legal challenges to the regulatory holiday, the Department of Education should also fast-track a resolution agreement with an individual college that provides an immediate plan to put the regulatory holiday into practice. This resolution agreement, which should allow maximum freedom to colleges and universities, would provide a model for every other college and university to follow.
Large numbers of administrators, especially at the large research universities, also process research grants from other branches of the federal government — the Defense Department, the Environmental Protection Agency, and more.
The federal government needs to assemble an interdepartmental committee to devise a plan to relieve universities of as many as possible of the administrative requirements required for processing research grants. It makes no sense to limit the regulatory holiday to the Department of Education, when so large a proportion of higher education administration is tied to grants from other federal departments.
Federal and state governments should consider providing substantial tax relief to all professors teaching full-time in the classroom — but not to any higher education administrators. This targeted tax relief should allow colleges and universities to hire professors at a lower salary than administrators, and thus encourage colleges and universities to shed administrative jobs rather than professorial ones.
State governments must also engage in immediate oversight to make sure that the public university systems target all necessary spending cuts so as to reduce the number of higher education administrators and preserve the number of teaching faculty. In recent years, states such as Alaska and Wyoming have responded to drastic economic downturns by imposing strict budget cuts on their higher education systems. State legislators and governors around the country should seek advice from their peers in Alaska and Wyoming about how to legislate such budget cuts. Boards of Regents, chancellors, university presidents, and deans in the public university systems should likewise seek advice from their Alaska and Wyoming peers about how to implement substantial cuts in state spending.
The Department of Education, federal departments disbursing research dollars, accrediting agencies, and state governments have all tolerated or contributed to higher education’s administrative bloat. All of them now must provide strong medicine to higher education to reduce its bloat.
Our colleges and universities will not survive this crisis without a healing purge of their bureaucracies.