Bret Devereaux

I want to dispel some myths here: first, this is not the kind of budget-cuts that the federal government does where 'budget cut' means 'goes up slightly slower.' These are cuts, in most states, that exceed inflation - they are reductions in the absolute number of dollars. 5/x

Almost all states pay less inflation-adjusted money to their public universities on a per-student basis now (or more correctly, in 2018/9 when the economy was good) than they did in '08 before the Great Recession. Basically the recession emergency cuts were made permanent. 6/x

This isn't just a blue-state/red-state thing. While the cuts are worst in some red-states where legislatures have gone to war on their universities, most blue states *also* cut or stagnated university funding. That leads directly into exploding tuition costs. 7/x

Now you might ask - why focus on big state schools that get public funding? Because those big state systems are so big, they set the tempo for everyone else (so do the Ivies, but I'll complain about them another day; Harvard is an investment bank pretending to be a school) 8/x

The best professors can still only teach so many students at once. If you want to teach more students, you need more instructors, which means you need to pay more instructors, which means costs go up in the aggregate. This also works out the same on a per-student basis...10/x

...because as you pull in more profs, you start with the most eager and work your way down towards less effective, less eager, more expensive ones. Those rising costs have led to a quest for solutions to the productivity problem and you will hear all sorts of cure-alls. 11/xx

Online courses, or massively online courses or self-directed learning being the standard examples. They work for a tiny set of self-motivated people and no one else. There isn't a way around Baumol's Cost Disease because personal interaction is the thing on offer 12/xx

But that quest for solutions leads to our third horseman: 'The Business Model of Education.' That doesn't mean a university's financial plan; instead it is the term for efforts to import business-style management systems into the university. It has been a disaster. 13/xx

The key traditional marker is treating students like customers and looking to compete with other universities on the basis of those customers. Which in turn leads to amenities inflation - the rock-climbing walls and other fancy student amenities you hear complained about. 14/xx

See, universities don't compete on academics - those aren't really measured by US News or whatever. And only a handful of nationally known big schools can compete on raw prestige. But you can try to draw in the best students by promising a fun student life... 15/xx

...in place of an educational one. The problem is that it leads to a Red Queen Effect - if *everyone* invests in fancy student amenities, costs go up, tuition goes up, but no university wins. 16/xx

Meanwhile, business-style management imposes all new administrative overhead as admin. functions are moved out of the faculty departments and into big centralized administrations that look more like companies. The thing is, there's no effective cost control...17/xx

...because the Pale Horse of the Business Model is federally subsidized student debt. 18-year-olds are not great at calculating long-term cost-benefit; offer them a fun time now for money paid in the future and most will take it. So more admin, more amenities, more debt. 18/xx

To be clear, basically none of this massive increase in tuition - and it is *massive* - goes to professors. Let me repeat that: BASICALLY NONE OF THIS MONEY GOES TO ANYONE WHO TEACHES. (rip your ears, I know). 19/xx

Instead - it's hard to get good data - but instructor pay has probably gone *down* over the same period. Not because professor pay has been cut, but because the teachers have been adjunctified under the business-model imperative to cut costs. 20/xx

75% - SEVENTY FIVE PERCENT - of university instructors are non-tenure track and more than half - *more*than*half* are adjuncts! (https://www.newfacultymajority.info/facts-about-adjuncts/ …). So the average *teacher* - not professor because most aren't anymore - gets paid LESS. 21/xx

Now you might ask - why the Business Model of Education? Well the answer is it goes back to our first horseman - legislatures looking to cut back on universities demanded this model as a way to cut costs and have continued to demand it even after the economy improved. 22/xx

Here's the thing: it's all a false economy. No, not that the economy is fake - it's fake savings. Like when you overbuy at the grocery store because everything is on sale - you haven't 'saved' anything - you've spent more. It's that kind of false economy. 23/xx

Not only does the amenities-admin-tuition inflation turn into a treadmill going nowhere, but adjunctification is just as bad for the core mission of the university. Because you are burning these adjuncts out at a fearful rate; overloaded and underpaid...24/xx

They often can't teach as intensively as TT faculty and they don't stay in the job long enough to get excellent at it. Teachers get better over time - so burning them out wastes experience. The result is inferior teaching, even though most adjuncts work hard! 25/-continues-

In essence, the 'business model of education' ends up diverting university funds away from the *education* part of the university's mission. It also imposes larger and larger fixed operation costs, compensated for by higher and higher tuition...26/41

Which then finally brings us to our last horseman, Pestilence. Because if you are running one of these universities, you have massive problems - you can't simply say "we'll do the courses online and charge full freight"...27/x

...because you've been competing on everything *but* the education for the last twenty years! Moreover, the cost of all of those other things is paid for by fees - if you waive the fees, you still have to do the upkeep and the whole thing crumbles. 28/41

And even in normal years, the public funding has slowed to a trickle - in a pandemic, it might as well stop. Calling a halt to university operations, or doing everything online and waiving the on-campus living fees is financial suicide. It was the *right* course...29/41

...and at the same time, one that the reckless, ruinous system could *never* take. At the same time, even without Pestilence, the system is still broken. Demanding that universities 'run like businesses' to save the public money just doesn't work. 30/41

Now don't get me wrong, I am an ardent capitalist. Like, really very much so. Like - it irritates my colleagues. But just because markets work in *some* things doesn't mean markets work in *everything*...31/41

Almost no one suggests, for instance, we should have for-profit fire departments (M. Licinius Crassus not withstanding). Or for-profit churches. And here's the thing: there is a large for-profit college sector in the United States. And it is *terrible* 32/41

Default rates on student loans at for-profits are 3-4 times higher than traditional colleges; the quality of the education there is well known to be garbage - and despite basically being sham-schools, many of them still run out of money and fail. 33/41