Faculty Spending the Larger Source of Growing Costs at Yale

A common explanation for the growing cost of college is the growth in administrators. More high-paid, non-faculty staff are being employed, driving up the cost of college on average, which has more than doubled over the last 20 years, outpacing inflation.

A 2021 story in the Yale Daily News noted that the school’s administration increased nearly 50 percent over the last two decades, three times faster than the school student body. Yale “had the highest manager-to-student ratio of any Ivy League university, and the fifth highest in the nation among four-year private colleges.”

But spending on administration as a percentage of operating costs hasn’t changed in almost twenty years. In 2003 it was 7 percent, and in 2021 it was 7 percent according to the school’s financial reports.

In total, rather than by percentage, administrative costs have gone up, but not as much as faculty costs—even more so if employee benefits are included.

Since 2003, faculty spending went from 45.4 percent to 52.8 percent of salaries. The total number of faculty went from 3,200 to 4,937—a 54.2 percent increase despite little change in student body size. Non-faculty spending declined from 55 percent to 47 percent of salary spending despite the additional employees.

Not just the number of faculty, but the average salary of faculty doubled, going from $102,000 per-person to $218,000 per-person—a 114 percent increase. If the average faculty salary were pinned to inflation it would be $150,000 today—a 48 percent increase. Non-faculty salaries did also grow above inflation, but it was only by 79 percent.

While the data doesn’t distinguish between benefits for faculty versus non-faculty, total employee benefits per employee, such as retirement plan spending, have tripled.

All operating expenses increased substantially over that time period, but personnel spending is regularly the largest category, consisting of around 50 percent of costs.

The growth in faculty is mentioned in the article, but the overall emphasis is on the growth of administration and the negative effects it has:

According to eight members of the Yale faculty, this administration size imposes unnecessary costs, interferes with students’ lives and faculty’s teaching, spreads the burden of leadership and adds excessive regulation.

New Federal Regulations Requires Administrators

Some of the new administrative staff come from the need to adhere to new federal regulations on schools on a number of different topics according to a report from the American Council on Education. This includes ensuring correct payments and refunds related to federal student aid and loans—described as the most common problems by the Department of Education—but also includes other non-education issues like Selective Service registration, voter registration, peer-to-peer file sharing on campus, and foreign gift reporting.

Another recent regulation requires reporting on what schools deem “gainful employment” when providing statistics on their graduates and whether they can repay their student loan debt using the jobs they've earned.

The publication Inside Higher Ed reported that in 2017 about one-tenth of jobs reported by schools would not have qualified as “gainful employment” under the new rules. The more schools were likely to have graduates with jobs that failed the new test, the more likely the schools themselves would fail.

For-profit certificate programs were more likely to fail the test. For those institutions, 51.1 percent of gainful employment credentials were awarded for post-graduate jobs that would fail the new gainful employment test.

Law schools saw similar scrutiny back in 2011 as several class action lawsuits were levied against schools for publishing overly optimistic employment data for their graduates. The American Bar Association would censure Villanova for what it termed reprehensible admissions data fraud, and the industry was deemed an “unsustainable bubble” by critics.

Private for-profit schools have gotten increased scrutiny in recent years with the collapse of Corinthian Colleges in 2015. Some of them were leaning heavily on student aid while also leaving students unemployed and heavily in debt.

In August of 2022, the Department of Education dropped Corinthian’s accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS), from its list of approved organizations. ACICS also accredited numerous other for-profit colleges, like ITT.

ACICS was previously removed under the Obama administration but then reinstated under the Trump administration.