How many different ways are there for colleges to cut costs? A lot. At the Center for College Affordability and Productivity, we have identified 25 such ways in a book-length study. In Part 1, focusing on Using Lower Cost Alternatives, released Wednesday, we offered the following 5 suggestions for college and university administrators and public policy leaders:
1. Encourage more students to attend community college: Too many students whose high school grades and test scores indicate they would have difficulty with four-year schools enroll anyhow, accruing not only large personal debts but also imposing a burden on taxpayers in the form of federal financial assistance and unwarranted state subsidies. Four-year schools should be discouraged from accepting many of these students, and instead encourage them to enroll in two-year colleges; those who succeed academically can then move on to four-year schools. Given the cost differential between two- and four-year schools and high attrition rates among students, encouraging more students to begin their postsecondary education at a community college is a sensible policy goal.
2. Promote Dual Enrollment Programs: There are certainly numerous bright and ambitious high school students capable of doing college level work while in high school—sometimes in the junior or even sophomore year. Students who earn a good deal of college credit in high school (through AP classes, CLEP credit, dual enrollment, etc.) can sometimes reduce their college baccalaureate years to three—saving nearly 25 percent in direct costs and, just as importantly, giving an additional year of productive full-time labor. The key is to incentivize students, and schools must encourage alternative ways of obtaining college credit.
3. Reform Academic Employment Policies: Costs for adjunct faculty are relatively low, but senior tenure-track faculty are very expensive; at a few universities, salaries for full professors (including fringe benefits) rise to as high as an average of $200,000 annually. Many faculty receive tenure, the equivalent of a lifetime employment contract, meaning that the decision to award tenure often is a financial commitment with a discounted present value of two million dollars or more. Hardly any other occupation offers such an extraordinary employment arrangement. Perhaps schools should initiate post-tenure review procedures that make it easier to dismiss marginal faculty members, replace tenure with a system of renewable long-term employment contracts, or make tenure more explicitly a fringe benefit with an explicit monetary value.
4. Offer Three Year Bachelor’s Degrees: There is little basis for the conventional wisdom that four years is the optimal period of collegiate study. Instead, American schools (like their European counterparts have done) should offer bachelor’s degrees which can be completed within three years. A three-year program can simply be a condensed version of the current four-year program (achieved, in part, by eliminating vacation periods). Alternatively, the bachelor’s degree could be redefined by removing up to a year of the coursework currently required. Either way, such a program could potentially save students tuition costs and provide them an additional year for productive employment.
5. Outsource More Services: Colleges and universities are supposedly in the business of producing and distributing knowledge. Yet universities devote significant resources to other things: food and lodging operations, hospitals, recreational centers, building maintenance, high school education (remedial education), entertainment operations (intercollegiate sports), information technology services, etc. Many of these operations could be more efficiently provided by specialists in those activities, and, although many colleges have made some progress in this area, vastly more can be done. In some cases, for instance, schools should consider the sale or long-term lease of capital assets, including dormitories and dining halls. Done adroitly, colleges can rid themselves of money-losing auxiliary operations and actually earn revenues from leasing campus facilities to private entrepreneurs. Perhaps universities should even weigh the option of completely cutting off highly commercial intercollegiate athletic activities from the normal operations of academic institutions.
Each of these chapters is available from our website (in pdf). We are releasing the next four parts of this study in the coming weeks, with Part 2 due out November 17.