“Why don’t some universities compete by hiring teaching superstars? And why don’t others slash prices? The big problem is that high-status institutions such as universities tend to compete with each other on academic reputation (which is enhanced by star professors) and bling (luxurious dormitories and fancy sports stadiums) rather than value for money. This starts at the top: Yale would never dream of competing with Harvard on price.” – From the Schumpeter blog in The Economist
What’s wrong with America’s most prestigious institutions? According to “Declining by Degree,” a recent post on The Economist’s Schumpeter blog, they have simply forgotten about offering good value to students and their families. Here are some trends the blog cites . . .
- Top colleges are pricing themselves out of reach for a growing number of families, and could possibly go out of business. (We’ve been saying the same thing on this blog for many months now.)
- Professors are rewarded for publishing papers, not for teaching. This emphasis on research means that education comes in second.
- Between 1993 and 2007, many universities increased their spending on administration by 300% - a rate that far outpaces the increase in spending on teaching. At many schools, half of the employees are administrators, not teachers.
- Every regional politician wants to bring home Federal money for education in his or her state. The result? Available funds get spread around the country, not concentrated in excellent schools.
- People are about to realize that they can watch lectures by America’s top professors online, without paying a cent.
“America’s universities lost their way badly in the era of easy money,” Schumpeter writes. “If they do not find it again, they may go the way of GM.”
In other words, America’s top universities have become bloated, inefficient, and too expensive. Status is keeping them afloat for now – but how long can that last?
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