Efficient Education

With the cost of education rising, many critics say that the problem is that higher education is just too wasteful. Colleges need to get more efficient to save money and get more people with college degrees.

In Texas, for instance, Republican legislator Dan Branch proposed a series of reforms designed to increase performance, explaining that,

The times call for it. I think there’s a real sentiment that, in higher education, costs have risen too high for too long. Now we need to have higher ed send a message that they can be more efficient and focus more on outcomes.

But efficiency doesn’t always mean improvement. According to a piece by John Morgan in the Oak Ridger:

It’s time to emphasize an important point about public higher education in Tennessee: While price is going up, cost has gone down. Then why is tuition increasing? The answer is simple: the state over time has reduced the amount it allocates for public higher education, forcing students to pay a higher price. State funding for our public colleges, universities and technology centers decreased by some 30 percent for the 46 Tennessee Board of Regents institutions since 2008, shifting more of the funding burden to our students.

The Board of Regents institutions have become more efficient and effective in delivering services. On average, the cost (outlay of expenses) per student at our universities in 2011 was 4 percent less than in 2008. The impact at our community colleges was even greater, averaging almost 9 percent less than in 2008.

And tuition keeps rising. In June the Tennessee Board of Regents approved increased tuition and fee rates amounting to hikes of between $150 and $250 a semester at state colleges

See that’s the thing with efficiency. If you starve public colleges, they’ll surely operate more efficiently. They’ll find ways to cut costs and they’ll deliver their services without waste.

But the other part of this cost starving is that colleges also pass some of this education cost onto students. Sure the balance sheet might show greater intake and less expenditure, but who’s winning here? Who’s better off?

“The new rates will generate 9.5 percent revenue increases at all of the state’s community colleges and Tennessee Technology Centers,” said one newspaper article about the board’s decision to increase tuition. More revenue could be a sign of greater efficiency. But students are also just paying more.

Such efficiency, unconstrained by other factors, won’t really do any good. As Morgan explains it, Tennessee’s public institutions have actually become dramatically more efficient from a pure cost perspective; it’s just that it doesn’t really help. Students have to pay more money and there’s no evidence that the institutions are themselves delivering a superior education.

In many ways higher education in Tennessee is very innovate and reformers often point to it as a potential model for the rest of the country.

Maybe, but this efficiency plan has some serious drawbacks.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer