Blame it on the Dorms?

Kevin Kiley’s article in today’s Inside Higher Ed examines a major new study of college cost sponsored by Virginia’s ¬†Joint Legislative Audit and Review Commission (JLARC). Over the next two years, the commission will study how expenses at Virginia’s public universities have evolved. The goal, of course, is to stimulate thinking about new ways to control costs and tuition (two things that are quite different). The results could also be useful in the national discussion of college cost.

Here is the article in full: Blame it on the Dorms?

I post this here because the study promises to contribute to the public debate, and because at this point it is not at all clear that it will contribute more light than heat. Bob and I are quoted extensively in the story, so that’s another reason for me to blog about it as well.

Cost accounting, which is the breaking apart of the cost structure with an eye to identifying the source of potential problems, is itself a problematic exercise. As David Breneman has argued, separating out the individual strands of cost at a multi-product university is a questionable exercise, and one that is very easily politicized.

In the initial report, rising costs of auxiliary enterprises — things like dorms and food plans — seem to take up a bigger fraction of cost at some universities. To quote Captain Renault in Casablanca, “I’m shocked, shocked” to find that educational costs are a smaller share of overall cost at schools that are more residential in nature. I worry that simple numbers like this will feed the usual legislative tendency to try to set rules to govern maximum or minimum allowable percentages on particular types of cost. likewise, certain “costs” may add “revenues” that cover those costs. So an eagle-eye on a cost line item that rises “too fast” may focus on a non-problem.

On the other hand, there may indeed be some mileage in examining how different schools within the system operate. Sharing information among the state’s universities can offer opportunities for self-examination, and some of these numbers may not be widely known to the stakeholders at the state’s public higher education institutions.