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State of the U, restated

The level of administrative costs is one area where the U cannot afford to be average.

On March 1 the president of the University of Minnesota gave a superlative-saturated State of the University Address. The university described in this speech is not the one I am familiar with. My own perception is that the U is a pretty average large public university. I do not see mediocrity in itself as a bad thing. Most of the people I know are quite average. And most of the things that make our society possible are produced by normal people. By its very nature being average is, well, average.

But, given the dysfunctional state of the “higher education industry” as a whole, a typical university ruins the lives of many of its students, and threatens the economic well-being of the entire nation. The cost of higher education has long been increasing much faster than our ability to afford it. Last year saw a new record in the number of defaulted student loans. The current amount of government-backed student loans exceeds $1.3 trillion. Much of this debt will not be repaid, but will add to the looming federal debt crisis. In 2011 the Wall Street Journal printed a story that identified the growth in administrative costs as the major source of this problem. The article identified the U as a prime example of this trend: It added 1,000 administrators in 10 years. The level of administrative costs is one area where the U cannot afford to be average.

Actions over words

It seems that university presidents periodically feel compelled to engage in hyperbolic speechifying. Our natural response is to smile indulgently, applaud politely, and then promptly discount everything that was said. The problem with this is that words influence actions, and actions shape the true state of the university. This line of causation is apparent in the response of the leadership at the U to the excessive increase in administrative costs.

What the U’s leadership have had to say about this issue has undergone a dramatic reversal since President Eric Kaler began his tenure here seven years ago. At that time, in his first address as president, he was fired with zeal to tackle the problem: “Today, I’m committing to you that while I am president, we will reduce costs of administration of this university every single year.” But only a few months later this enthusiasm had all but evaporated. In a Star Tribune interview he complained, "I have been, frankly, tired of the charges that we don't do things efficiently, that we are fat and bloated." And just this past year the head of the finance committee of the Regents stated: “My own view is that administrative bloat is an urban myth as it relates to the University.”

Despite appearances to the contrary, the actions of the administration have been quite consistent with these statements.

According to the U’s Office of Institutional Research, in 2014 there were 2,211 administrative employees at the U. Just one year later this number had been slashed by 496. This energetic and decisive action hardly seems the work of a “tired” leadership. But in that same year the number of employees in the class labeled Professional went up by 585. The administrative “cuts” were accomplished by the simple expedient of relabeling certain employees — just the sort of strategy to be expected from an enervated bureaucracy.

'Mythical' problem, illusory solution

This was not the U’s only action on this front. In 2013 it began an initiative to reduce administrative costs by $90 million over six years. This plan is now nearing its “successful” completion. On its face, it seems odd that so much effort would be expended on combating what is only an “urban myth.” But looking in the U’s financial reports at the amount spent on Institutional Support (what we would call administrative costs), we see that from 2013 to 2017 this amount has not gone down, but has actually increased by $100 million. In addition, while in 2012 there were 189 administrators at the U with salaries over $150,000, as of last year that number was over 30 percent greater. From the leadership’s point of view a mythical problem has, quite properly, been met with an illusory solution.

The result is that the average tuition paid by students at the U has continued to increase well beyond the rate of inflation.

While the U’s behavior has been typical, it would be a mistake to conclude that it was inevitable. At about the same time that the U’s new leadership came on the scene, Purdue University also brought in a new president. But Purdue has taken a very different path when it comes to cost containment. While operating expenses increased at nearly double the rate of inflation at the U, at Purdue they barely changed in real terms. At the U the number of employees per student increased by 5 percent from 2012 to 2016. Purdue has been able to decrease this ratio. The bottom line is that Purdue has been able to reduce average tuition in real terms.

What is the actual state of the U? Fairly typical, extremely dire, in need of change, not without hope.

Robert Katz is an employee of the University of Minnesota libraries.

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Comments (6)

We can share this writer's

We can share this writer's concern at proliferation in the number of administrative staff at the U of MN while still asking for detail that might separate out student-related staffing (like more advisers and teaching professionals, many of whom have been, in the past at least, counted as administrative staff) and administrators at the top who seldom cross paths with a student or a classroom or a lab.

Also: Much of the tuition-increase/student debt problem lies in the decision made at the state level to severely decrease state funding of our flagship university. In the late 1960s the Legislative funding amounted to more than 32% of U of MN expenses. It is now less than 18%. Where to get what was lost? Students.

Unfortunate

Such a devastating article. So unfortunate that leadership continues down this path to failure.

Much of the problem...

Is that since 1970, adjusted for inflation, tuition has gone up over 370% at the U. Pretty difficult to blame all that on a lack of taxpayer “investment”. And I don’t see how the University can justify such an insane increase.

Not really

"In 2015 dollars, 1960 tuition at the University of Minnesota was $1,704.80. That’s seven times smaller than the $12,060 tuition today."
From a blog by David Montgomery in the pipress. It has charts and links.
What is the source for your claim?

Comparing to Purdue

A comparison to Purdue is not the best one to be made as it lacks both a law school and a medical school - other than a 2 year feed-in of a handful of students who then matriculate at IUPUI for their 3rd and 4th year of medical school. When you consider both professional schools you must consider the immense number of professionals therein and their accompanying administrative structure/bureaucracies. The changes under Kaler's tenure may have been in fact related to investment into the medical school to increase new faculty as well as supportive personnel in order to address the dwindling medical school rankings since the mid 1990s. Medical Schools unfortunately are immensely complicated entities as they include undergraduate and graduate medical education as well as the professionals themselves. If you can figure out these budgets and the administrative oversights needed to meet federal guidelines or professional requirements you deserve a Nobel. But until then reselling the flawed WSJ 2011 article seems simplistic at best.

Babbitry of the Annual Report

What you describe is an unaccountable bureaucracy adept at budgetary gamesmanship and shape shifting its message to whatever straw is blowing in the Legislative wind. That actually makes it a pretty good professional operation, worthy of any state government or East European motor vehicles department. They probably can't get better at what they do, because what I have just described is what they do; and they do it well. The question is: are customers being misled, or harmed? On balance I would say no. Ambitious people already know they have to leave, or shouldn't go there in the first place. And as you say, most people are not ambitious. For technical degrees where the benchmark is complacent competence, I would say it serves the customer quite well.