Education

How to Make Higher Education More Affordable

February 5, 2015

Anthony Hennen, Richard Vedder

A new semester is under way, which means many college students (and their parents) are again worried about things like tuition costs and student debt.

In higher education, the key to containing and reducing costs is improved productivity, meaning “doing more with less.” Yet in a new report published by the Oklahoma Council of Public Affairs, we found that Oklahoma has done the opposite.

While productivity in the entire economy has risen (and possibly even somewhat in higher education), Oklahoma has avoided this trend.
Oklahoma higher education has become increasingly costly, and staff overload has led to less productivity than a decade ago. Oklahoma has over 10 percent more non-faculty staff than the national average, adjusting for enrollments.

Nationally, staffing per student declined about 10 percent from 1999 to 2011, suggesting probable productivity improvements. However, staffing per student rose about five percent in Oklahoma, suggesting possible productivity decline.

As for the faculty, it appears that a small proportion of instructors at the University of Oklahoma and Oklahoma State University, for example, are doing most of the work. Large numbers of faculty carry modest teaching loads yet also have modest research accomplishments.

If the bottom 80 percent of the faculty taught as much as the top 20 percent, these schools could operate with demonstrably fewer faculty members and reduce tuition fees and/or state appropriations.

As a longtime university professor, I (Vedder) know directly that higher education is extremely inefficient, and moving resources from that sector to the competitive market-driven private sector via tax reductions almost certainly will have positive economic effects.

We believe higher education in Oklahoma can be improved so as to enhance productivity and accountability.

For starters, our data collection convinced us that there is a need for more sunshine and transparency. Uniform reporting of personnel data across all Oklahoma state universities in a transparent fashion—posted on the Internet—would be useful in improving external oversight of university expenditures.

In addition, perhaps implicit state instructional subsidies should be sharply reduced for fifth- and sixth-year students.
Perhaps funding should be based on the number of graduates rather the number of attendees.

Perhaps the state should flatly prohibit duplicative, high-cost programs. Why, for example, does Oklahoma have two Ph.D. in finance programs located 80 miles apart? Is this sort of expensive duplication necessary, especially when neither is considered among the nation’s top 75 finance programs?

In any case, careful oversight from Oklahoma’s legislative and executive branches can lead to enhanced productivity and accountability in higher education.