No Concept of Death

If you asked most college and university presidents where does a dollar of tuition go in their school's budget - how is it partitioned and used - they would be very hard pressed to tell you. It actually is not such an easy question, but it suggests that leaders of these great educational institutions are often less than stellar experts on finances and consequently are not terribly adapt at how to cut costs to limit the growth of tuition and fees at their universities. I have known many presidents and provosts of top tier universities and colleges, some who are actually quite able leaders, who are virtually innumerate - many cannot read a balance sheet, analyze a budget with any sophistication, or understand a spreadsheet. And many have little interest in learning to do so. At their peril, they leave these "dirty" - non-academic - matters to their financial green eyeshade lieutenants¹. This should not altogether surprise us since most academic leaders were not selected because of the financial or budgetary skills.

What, then, are some of the reasons for the rising costs of higher education that lead to increases in tuition beyond the level of inflation? Let me provide you with a blueprint of some of the cost factors, concentrating here on two structural features of universities: the increasingly complexity of the institutions and demands made on them by parents, students, and the larger American society; and their "company of equals" governance structures.

More...