Across the nation, public universities are facing serious fiscal challenges amid statewide funding reductions and declining enrollments. Exorbitant tuition increases can no longer address the problem. At the University of Oklahoma, President James Gallogly recently announced that 50 staff and faculty positions will be cut to address a $15 million budget deficit. Will these significant measures be sufficient to put OU on sound financial footing for the future?
To deal with budget shortfalls, institutions must look closely at administrative costs, which include day-to-day operational support, executive direction, legal and fiscal operations, public relations and development, etc. At the same time, they must evaluate instructional spending.
On the administrative side at OU, spending increased by over $24 million (52 percent) between 2011 and 2016 — one of the highest surges among comparable institutions in its peer group. By comparison, Ohio State University and Purdue University only raised their administrative spending by 1 percent and 2 percent, respectively, during the same period. OU isn’t alone. Many colleges and universities nationwide suffer from administrative bloat: overspending on redundant admin-related services.
University leaders need to acutely monitor and compare expenditures to their peers. They need visibility into everything from building usage to the proportion of graduates from each department, in order to streamline operations and plan more effectively.
From 2011–2016, OU’s instructional spending — faculty salaries, academic deans, libraries, museums, galleries and other costs associated with supporting an institution’s primary academic mission — rose by almost $99 million (32 percent). This increase has been driven by the institution’s large course catalog and expansive program offerings.
This is part of a nationwide trend: From 1985–2012, public four-year institutions saw a 60 percent explosion in the number of disciplines offering degrees. OU provides more than 100 academic programs. Alarmingly, 46 of them only produce 10 graduates or fewer. Program prioritization is key to solving this problem. Through data gathering, university leadership can accurately assess the long-term sustainability of low-enrolled programs, which disproportionally increase spending and impose huge burdens on institutional budgets.
General education at colleges and universities has become an endless — and expensive — collection of narrow and specialized courses divided into buckets known as distributional requirements. Students often take one or two courses from each bucket to assemble their own curriculum as they prepare to select a major. At OU, students have access to more than 900 courses to fulfill their general education core.
Merging departments into larger interdisciplinary schools can substantially reduce costs and enhance educational quality. Arizona State University saved over $13 million by solely eliminating administrative redundancy — no faculty positions were eliminated. Consolidating majors and only teaching courses that fulfill general education and major requirements will streamline course offerings and could save up to 10 percent of instructional costs per semester. At most public four-year institutions, instructional spending on average equates to half of the budget; therefore, slimming course offerings will yield major savings.