Reducing College Costs

Published by Financial Aid Consulting on Sunday, 10th June 2018 - 12:00PM in Howard's Commentaries

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This is an updated article I wrote for Diverse Issues in Higher Education. It still raises many interesting and thought-provoking questions as to why and how colleges should reduce costs to stay afloat and provide more affordable ways to make college educations possible.    

Reducing College Costs Starts From Within

by Howard Freedman

Copyright 2019 Financial Aid Consulting. All rights reserved. No portion of this article may be reproduced mechanically, electronically, by photocopying or by any other means without expressed written permission of the author.

Howard can be reached at finaidguy@gmail.com

College costs have outpaced the rates of inflation for many reasons. One way to curb these costs is to find better and more cost-efficient ways to do things.

The paradox is that despite economic volatility the cost of a college education has steadily increased, affecting those least able to afford one. At some point, this bubble will burst especially because costs have consistently outpaced the annual rate of inflation. This is not a startling revelation. It is time to take action and follow the advice of Winston Churchill: “It is no use saying, ‘We are doing our best.’ You have got to succeed in doing what is necessary.”

We cannot blame everything on the government, the economy or fiscal or monetary policies. The economic cycle does not focus on college costs as much as it does on controlling the overall interest rates and the speed of growth. 

As the Consumer Price Index changes each year, the 2017 U.S. Bureau of Labor Statistics reported the inflation rate of around 2%, yet for 2017,  the increase in average tuition and fees charged by public and private colleges rose between 2.9% and 3.6% this year, according to The College Board's annual report. 

The good news is that a college education is available to those willing to forgo the more expensive schools and opt for a less expensive university. Why should students, especially from middle class or poor families, be denied a quality education because it is beyond their financial means to pay for it?

Before becoming a financial aid consultant I held a variety of senior positions in financial management and consulting from which I learned many valuable lessons. One of the most valuable lessons I learned was from Dr. W. Edwards Deming, a leader known for his methodologies that helped organizations improve efficiency and quality while reducing costs. After reading his book Out of the Crisis and attending his seminar, I gained a stronger understanding of how to use his tools to make meaningful process improvements that literally saved my employers millions in operating costs. This training along with external networking and feedback made constant process improvement an effective management tool.

Furthermore, changes typically were made internally at minimal costs. The following approaches are worth considering:

• Set realistic short- and long-term goals. As a short-term strategy, eliminate non-value-added expenses. As a long-term goal, limit annual tuition increases to less than 1 percent over three years.

• Use surveys and focus groups to gather feedback from students, parents, and administrators regarding needs and services.

• Establish overall project leadership. Many faculty members and graduate students may be willing to participate. This is where staffers who do the work and are familiar with the process can share their ideas.

 • Prioritize suggestions.

• Determine whether problems are the result of common causes that are recurring and require a major fix or if they are the result of special causes. Special causes are those that occur occasionally because someone is not doing a job properly as a result of inadequate training or staffing.

• Establish deadlines and resources to resolve the problems.

 • Prioritize needs, from quick fixes (special causes) to procedural changes, and measure results.

• Keep simple statistics on each activity to define the severity of the problem. For instance, measure how many times a document is touched, length of phone calls, questions that are frequently asked, data errors, etc.

• Track progress and next actions.

• Give recognition to those who help solve the problems. Results should be positive, productive and not impede the quality of the services provided.

This is an ongoing process; therefore, additional questions and option are worth consideration:  

 Use buildings and facilities that are idle when classes are not in session to reduce fixed costs?

  •  How can data on cost reductions be shared or processed with other institutions?
  • Can the school partner with local businesses and encourage more educational reimbursement programs?
  • How can alumni do more extensive networking within their companies and communities? 
  • What can be done to reduce energy costs on campus?
  • What would it take to lower interest charges on all student loans?
  • How can institutions broaden their scholarship and grant programs to reduce student debt? 
  • What lease versus buy options available for all expenses?
  • What would it take operate on a year-round basis to reduce fixed costs?
  • Can adjunct faculty be used to a greater extent?
  • Can distance or online learning be promoted more to lower college costs?
  • Can budget review standards be established to allocate a higher percentage of scholarships and financial aid to reducing college cost of attendance?
  • Can used textbooks without planned obsolescence from faculty authors be the norm versus the exception?

These are just the tip of the iceberg. 

The next steps are brainstorming these issues with academians, students, parents, financiers, and possibly consultant facilitators to put these issues on the table to create viable solutions.

Unless costs are reduced, many institutions may be forced to find other ways to pursue careers.

That is why it's about time for institutions to take a more serious look at what it will take to exist


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