ACTA is an independent, non-profit organization committed to academic freedom, excellence, and accountability at America's colleges and universities.

ACTA is an independent, non-profit organization committed to academic freedom, excellence, and accountability at America's colleges and universities.

ACTA is an independent, non-profit organization committed to academic freedom, excellence, and accountability at America's colleges and universities.

How Much is Too Much?

Controlling Administrative Costs through Effective Oversight

July 2017 by ACTA

With recent research from the Institute for Higher Education Policy showing that college is unaffordable for as many as 70% of working- and middle-class students, concerns about college costs are mounting. The cost of operating an institution of higher education, with very few exceptions, is reflected in the price of attendance that students, their families, and taxpayers face. While Americans make untold personal and financial sacrifices in order to access the value of a college credential, administrative expenses and overhead continue to rise on campuses. This new guide from ACTA’s Institute for Effective Governance takes a deeper look at the way that administrative costs are reported and the challenge that trustees face in balancing the cost of administration with their core mission—teaching and learning. The guide provides trustees with at-a-glance, national benchmarks for median levels of administrative spending, while issuing an action plan for trustees who are ready to take on the challenge of controlling costs and achieving greater financial efficiency and transparency.


SELECTED FINDINGS

FOREWORD: The price of college and how colleges use their money have, for good reason, been top public concerns. Exploding prices can stop students right at the gates to our schools, keeping them from even applying to our colleges and universities. Steep tuition bills are one of the most common obstacles in the path of timely graduation. As a former member of the University System of Maryland’s Board of Regents, like you, I know the extent of the challenge we face in making our schools as cost-effective as possible.

Every member of a governing board needs to focus on cost control. Yet boards often lack the timely, relevant, and high-quality information we need. Now more than ever, trustees need financial metrics that allow them accurately and clearly to benchmark their institutions against others and determine how they can be leaner while still keeping tuition low and quality high.

To aid trustees with this complex and delicate task, the American Council of Trustees and Alumni (ACTA) developed this guide to encourage discourse between trustees and institutional leadership about their college or university’s financial priorities. Using publicly available data that was self-reported to the U.S. Department of Education by over 1,200 Title IV-participating, four-year institutions, this guide enables trustees to ask these questions: How does our institution’s spending on administration—compared to what we spend on our number-one priority, namely, teaching and learning—measure up against similar institutions? Can our school, with existing resources, do more for students?

American higher education, the most diverse and accessible system in the world, performs an indispensable duty in the formation of future citizens, leaders, thinkers, and entrepreneurs. As our communities—students, parents, and taxpayers—make crucial investments in higher education, we need resources like this one to analyze the context and impact of our spending decisions. ACTA continues to help boards hold their universities accountable to the public trust through this brief guide.

C. Thomas McMillen
former regent, University of Maryland System
and former U.S. Representative, 4th District of Maryland

Press

Letter to the Editor: NIU expenses and reserves misrepresented

Northern Star
October 19, 2017 by Lisa Freeman |

As the President and Chief Academic Officer of NIU, we value financial transparency and responsible stewardship of public funds. In this context, we want to comment on the information presented in Monday’s… Continue Reading >>

Bureaucratic costs at some colleges are twice what’s spent on instruction

Hechinger Report
July 25, 2017 by Jon Marcus |

Some small private colleges are spending almost twice as much on administration as on academics, according to a study… Continue Reading >>

On Administrative Spending, Which Colleges Get the Most Bang for the Buck?

Chronicle of Higher Education
July 25, 2017 by Eric Kelderman |

Administrative costs are a popular target for groups concerned about the rising price of college. A new report puts that spending in context and finds that large, public research universities are the… Continue Reading >>