The Growth of Higher Ed Administration, Part II

A little while back, I wrote a blog about the cost of administration in higher education - and how a lot of forces drive it. Undoubtedly heartening to all of my Republican friends, one of those forces is clearly government regulation. When governments create new regulations for the higher ed community, administrative costs go up to comply with those regs.

I came face-to-face with a real-life example of this just a couple of days ago. My institution, and likely every other university larger than a small college, has been forced to add at least one full-time staff person to its academic affairs division - not because we like hiring more administrators, but because the world just got more complicated.

The background to this new regulation has been widely covered. The number of for-profit universities has skyrocketed in recent years, most of them relying heavily on online education. A few, like the University of Phoenix, actually put a physical presence in places where they teach; many do not. And in that sector, there have been some serious abuses - universities enrolling very poor students who could get large, federally-subsidized loans and then delivering substandard education in return. A few of the most egregious cases likely crossed the line into outright fraud.

To combat this problem, the federal Department of Education created a new set of rules regarding on-line education. Of course, when you create a rule about something you affect everybody who engages in that something. On-line education has been growing in the non-profit sector, too, especially in certain fields like nursing and business. Much of this activity is quite legitimate, high-quality education. But the law is the law, and we all have to follow it.

The crux of the new rule is that universities have to have permission to do business (that is, to teach students) in every state in which their students reside. So if I, at an Ohio institution, want to enroll a student from Arizona in my on-line program, I have to get permission from the state of Arizona. So far, this seems reasonable.

The problem comes in actually complying with the rule. No matter where you are, there are 49 other states that you could potentially have to seek permission from. Every one of those states defines "education" a little differently. Every one requires a different paperwork process to file for permission, some of them quite lengthy. Many of them charge fees - some of them quite hefty fees, $15,000 or more. Some of them require permission by program, with a separate fee (up to $5000) for each program you want to offer to the residents of that state.

Now imagine the task of looking up all of those laws and regulations; contacting the relevant state officials in all 49 states that aren't yours; re-contacting them when they don't get back to you in a timely fashion; filing out the necessary paperwork; tracking down which programs within your own institution have students in which states; arranging payments to each state as needed; and then tracking all of this going forward in time, because many states require re-registration after a given period. That, in and of itself, is a full-time job for a professional staff person, even if your university only has a dozen or so online programs. If you're a really big university with a lot of online programs, you might employ two or three people doing this.

The momentum of regulation, of course, is always forward and upward. Governments almost never take rules away; they just add more. So the addition of each new rule will add another few staff to every university. It's a sort of back-door jobs program for university administration. And over time, it does tend to tilt the proportion of resources away from the delivery of academic programs and towards the administration of them. Just don't blame it on the greedy, evil administrators. Blame the folks in Washington, and the 50 state capitols, who are telling your universities how to spend their money.