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The National university competition

The current debt-driven model of higher education is unsustainable. Students often accrue significant individual debt to attend a four-year college. This has culminated in a nation which has more outstanding student loans than credit card debt.

Where is the revenue generated by these tuition hikes going? Not to your college professor! College instructors face a shrinking number of opportunities as tenured positions are replaced by associate professorships. Instead, major cash outlays are dedicated to fund a growing number of non-academic administrators. Another huge expense goes to fund large-scale infrastructure projects.

While it is easy to point to the eye-popping salaries of these well-heeled college administrators, we should take care to understand that this is only a symptom of the problem. After all, these administrators are ultimately only job seekers who, like millions of others, seek the most attractive salary and benefits.

The real problem is the game of one-upmanship colleges and universities play against each other. The annual rankings conducted by American universities are a familiar resource to any family with a college-bound child. Although many college administrators have decried these rankings, they participate and compete in them nonetheless. Many colleges aim to stimulate future growth, and to do this, more buildings must be built and more administrators hired to oversee those efforts.

These actions involve both the academic and sports operations on campus. If the flagship university of a state system builds a medical school, it is not unusual for a second-tier school in the same system to construct their own medical school – all with the goal to “stay competitive.” If a private university seeks to build a satellite campus in China, a peer institution will soon break ground on a campus in South Korea.

Huge projects, requiring huge budgets, requiring more administrators to oversee them, has become the norm in college education. Colleges and universities are engaged in a zero-sum game where superior academic and athletic prowess is the aim. This is why college is so expensive.

The college sports arms race taking on campus has been clear for many years. Although billed as revenue-generating by supporters, too often the question of whether a college should even host semi-pro athletic programs goes unasked. As Bill Friday, former president of the University of North Carolina system once said: “We are trying to superimpose an entertainment industry on top of an academic structure, and it won’t work. It has never worked.”

Dazzled by these monumental undertakings, many high school graduates naturally gravitate to them. As a result, their college choice is often driven more by perceived prestige at attending a “top tier school” instead of a college that might be a better fit for individual goals.

While the competitive spirit between universities is unlikely to ever disappear completely, perhaps the aim of that competition can be redirected. Instead of focusing on “prestige-builders” like new facilities and high-octane sports teams, universities can take the opposite tact: serve more students by providing a cheaper college education. Through the use of distance education and other non-traditional instruction methods, the university can avoid many of the capital expenditures that fuel the need for higher revenues.

The age of huge expenditures is now producing diminishing returns. What does offer a unique value to the market is lower tuition for students. The time has come for universities to break the cycle of assuming more debt to pay off past debt. The focus must return to educational quality instead of perceptions of prestige.

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