University of Colorado Needs to Get Serious About Spending Cuts

When the late Clayton Christensen prophesied in 2011 that disruptive innovation would cause half of America’s colleges and universities to merge or close within 15 years, higher education leaders and associations listened but largely ignored him. Now a pandemic has deepened their self-inflicted wounds and exploded their comfortable status quo.

CU-Boulder must wake up.

In 2012, Boulder Chancellor Phil DiStefano got a $49,000 raise, and the following year, CU’s administration attempted to raise tuition by 15.7%. Between 2010 and 2019, the Chancellor’s compensation rose by 49%, coming to $505,987 last year. Meanwhile, between 2010 and 2019, Boulder’s sticker price tuition rose from $9,452 to $12,759, inflation adjusted. And current CU system President Mark Kennedy, along with several regents, recently cheered the hire of a VP at a compensation package over $500,000 — in the midst of this crisis. This is out of touch with reality. The nation is in trouble and CU keeps spending.

Colleges expecting to substitute distance education at the same price as classes on campus are wildly optimistic. Sixty percent of high school seniors do not want an online college experience.  Boulder expects strong fall enrollment, but what happens if a second wave of COVID-19 hits. CU already faces a class action suit for a refund of tuition payments, along with NYU, Columbia, Penn, Brown, Cornell, Vanderbilt, University of Miami, Liberty University, Pace, and Drexel.

Nationwide, according to the latest available federal data, non-instructional spending rose by 35%, or $34 billion, from 2010 to 2017, adjusted for inflation. During that time, CU Boulder’s non-instructional spending rose by $171,411,936 or 65%, adjusted for inflation. Private institutions are equally complicit in misplaced priorities.  At prestigious University of Pennsylvania, for example, president Amy Gutmann’s total compensation rose from $956,040 in 2009 to $2,930,315 in 2017, an increase of 307%. This means that in 2017 her compensation was more than 19 times higher than the average salary of full-time instructional staff members (who made $151,164).  All of this will stink, as Lincoln once said, in the nostrils of the American people.

The way forward has been clear for a long time: lower expenses. Leaders without the courage to reform must leave. Everything outside of the college’s core educational and research missions must go: Eliminate bloated and often ridiculous course offerings, reduce administrative overhead and slash student services that do not directly support learning.

Boulder fluff courses like “America Through Baseball” and “Horror Films and American Culture” are absurdities schools can no longer afford, not that they ever did any good for students. More than ever, a college education focused on an efficient core curriculum is needed, not pop culture pabulum.

At Boulder, “standard” teaching load for tenured or tenure-track faculty is four courses or less per year, even before calculating sabbaticals and other exemptions. A precious resource is under-utilized.

Finally, colleges must stop building. How many new classrooms should be built to gratify students who refuse classes starting before 10 a.m.? College classrooms on a Monday morning or Friday afternoon are dead zones. CU is no exception to the national trend. The classrooms and labs at CU Boulder are only being used on average 28 hours per week. So, why are there over $120 million worth of capital construction projects aimed at new building construction and expansion for 2020?”

The productive models are already known. At Purdue, Mitch Daniels saved $61 million on capital projects through better construction management. Under his leadership, inflation-adjusted tuition has decreased by almost 8% since 2012. Meanwhile, Arizona State University eliminated unnecessary administrative overhead by merging or re-organizing academic departments, saving a recurring $13 million annually.

The pandemic is an opportunity for rebirth. Trustees must stop runaway spending. Alumni must make giving contingent upon commonsense reforms. And students and parents must demand curricular rigor and return on investment. American higher education was once the envy of the world, let’s get it back.

Tom Lucero served as a regent of the University of Colorado from 1999-2011.

Paul S. Levy, founder and managing partner of JLL Partners, served on the University of Pennsylvania Board of Trustees from 2004 to 2018 and is now on the Board of Directors of the American Council of Trustees and Alumni.

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