Friday, January 16, 2015

Higher Education: Supply Grossly Exceeds Demand

By Professor Doom

     It takes no effort to realize that the incredible building spree in higher education, combined with our new emphasis on “online education”, combined with class sizes going from 20 in the past to 1,000 today, has created a huge glut in higher education capacity. Even with the Federal student loan scam supporting anyone fool enough to go into debt for just  any degree, our institutions of higher education are finding that they just can’t all grow any more, and that any further growth can only come from taking students from other institutions.

     Now, in the real world, which an industry finds itself in this situation, the response of a competitor striving for success is either to increase quality or reduce price. Unfortunately, administration in higher education just doesn’t understand this. While most administrators still push  “growth at all costs, depend on growth!” because they have nothing, one administrator is willing to see what faculty realized over a decade ago, and is even willing to ask, and answer, the question:

      The obvious answer is “yes,” of course…not every single person needs to spend 4 to 6 years in so called higher education, but that’s the only plan Admin can come up with. Thanks to the easy loan money scam, institutions have enjoyed spectacular growth the last decade, many of them doubling, and doubling again.

      But that time is coming to an end. We already have around 88% of our high school graduates eventually going to college, it’s simply insane to keep expecting more growth when every institution already has huge surplus capacity as it is. The next question is “What do we do about it?” Administration has already awarded itself huge pay based on an expected future growth that simply cannot happen.

     That’s a real problem. Because higher education is incredibly bloated, with a massively overbuilt infrastructure and a grotesquely overpaid and overstaffed administration, there’s a real question now of how institutions can expect to pay. 

     Faculty, of course, know the obvious answer: scale back. Two words, and how to do it is pretty easy: simply revert to the structure higher education had 30 years ago, back when faculty were the primary employees on campus, and “administrator” and “faculty” were fully interchangeable…unlike today, where education-free administrators run campuses, and faculty are a small and shrinking minority. I have no idea what to do with all the extra buildings that litter campus, beyond the obvious “sell them.”

     That’s what any faculty member will tell you. But let’s see what the senior vice-dean would say:
If perpetual institutional growth is no longer sensible, is it time for many institutions to plan for right-sizing programmes, services, estate and hence staffing based on far more conservative revenue projections of a multi-year horizon?

     Now, absolutely, simply shrinking the institution is an answer…but I really want to emphasize: why not consider improving quality or reducing price? Maybe everyone could get a 4 year degree if it only cost a few thousand bucks, like a few generations ago. Maybe more people would be willing to pay for a degree if there were a legitimate promise of quality. Think of every fast food hamburger restaurant that opened after McDonald’s: was their business plan to “stay small”, or did they actually try to compete in a saturated market through superior price and quality? It’s weird how I never see an administrator consider anything that involves improving quality or price.

     Keep in mind, administrators in higher education have actual degrees in administration…degrees that honestly don’t seem to teach anything related to higher education, or to business. Having taken administrative graduate education courses, I know why that is: such degrees have nothing in them that apply to higher education, or business…or administration for that matter.

     Instead of trying the things successful enterprises try, the administrator wants to go the easy route: cut back so there’s just enough to support the administrative caste in luxury. Hey, it worked for the old Chinese and Roman emperors, right? Once expansion was no longer feasible, they just focused on keeping themselves in luxury, which is why the ancient Chinese and Roman empires are such models for glorious endurance and innovation today. Oh. Wait. Nevermind.

     I assure you, this administrator is exceptional in coming up with his well-above-average administrative plan.
     So, if an administrator doesn’t learn how to be successful, and certainly doesn’t learn anything about higher education, what do they learn? Mostly, administrators learn how to talk in corporate-speak. I’ve written of this before, and faculty often laugh as administrators use complicated high falutin’ language to express obvious, basic, concepts.

      The executive vice-dean, while well above average for an administrator, is no exception in this regard, in his use of corporate-speak in response to the obvious problem that higher education isn’t making enough to pay for all the expansion it bought the last few decades:

I am suggesting that the path to sustainability may be found by seeking the institution’s right size bounded by a realistic alignment of its recurring costs with a conservative assessment of probable revenue streams beyond the current year.

The process may take several years to implement fully. It will require courage and discipline.

     Allow me to translate the convoluted sentence and the two follow-up sentences into plain English: “We’s gonna have to get rid of the crap we can’t afford. Making them cuts is gonna take time and hard work by someone with balls. Not me.”

     Well said, but rather obvious on all counts. Already, of course, institutions are making those cuts, but not in an honest way. Instead, universities are gutting themselves, turning themselves even more into ghost towns, who sole residents, the administration, only come to campus to get their checks, even as faculty are fired and primary academic departments are shut down, while students are moved off campus via questionable online coursework.

     As long as nobody with appropriate leadership skills is in charge of higher education, “expensive ghost towns” will be the future of higher education…a few years from now, administrators will be standing around wondering why the overall student population is dropping, even with “great low interest student loans.” When that happens, I bet STILL none of them will guess that quality or price should be factors in education.


  1. Last night my son in law told me that his boss, with zero warning, fired 90% of the staff in his department. He told the two remaining workers (computer code experts both) they had to do the work of over a dozen people with zero pay and this was impossible anyways.

    So to the owner's horror, both coders quit on the spot and got new jobs within 24 hours. In the case of my own one, he got a pay hike, too.

    The owner then called one of the men who quit and begged him to come back but on a per-diem basis. The guy said yes and then named a price tag so high, it was many times higher than the original pay.

    Today Wall Street is circling the business like hungry wolves and are destroying its value fast. HAHAHA.

    The owner went to business school.

  2. Pardon the profanity but these scumbag administrators are going to get their comeuppance and I gloat with anticipation.