How Andrew Yang Would Tackle The Cost Of College

Entrepreneur Andrew Yang stands out in many ways from the field of Democratic presidential candidates. One of them is that he’s on the right track to understanding the true reason that college tuition is too high.

Politicians often respond to complaints about the price of college with proposals to spend more money, either by plowing more resources into federal student aid programs or simply writing a big check to institutions themselves. But high college tuition is the result of colleges’ out-of-control spending, not insufficient subsidies. American colleges spend more per student on college than virtually any other developed country. Moreover, even as governments have dropped more money into federal grant programs and direct subsidies, tuition hikes have not abated.

Enter Andrew Yang. In a Quora Q&A, Yang writes that “the cost of college is increasing at a rapid rate, and the quality certainly isn’t matching it.” On his website, Yang calls out the “limited incentives for schools to be more cost-efficient and student-directed.”

“The problem,” Yang continues, “is that colleges have a large amount of administrative bloat; the increase in the cost of tuition tracks with the increase in the number of administrators. As President, I would tie access to federal money (grants and loans) to getting the ratio of administrators to students down to levels from decades ago. I’m sure the schools will find a way to get costs down when they’re given an incentive to do so.”

Yang’s idea is a “gradual phase-in” of a requirement that colleges maintain an administrator-to-student ratio of 1 to 30, with an aspirational goal of returning to the 1 to 50 ratio that prevailed in the 1970s.

It’s an intriguing proposal, though not yet a compelling one. While a lower administrator-student ratio would undoubtedly lower the cost of college, it would also constitute a direct intervention into aid-dependent colleges’ structure and management. Such a policy should give pause to those of us who believe top-down regulations from bureaucrats in Washington tend to fail or at least carry serious unintended consequences.

Moreover, an analysis by Robert Kelchen shows that the primary driver of administrative bloat since 1990 is not top-level administrators or executives per se, but a nebulous category of college personnel called “other professional staff,” who are neither faculty nor administrator. Mandated administrator-student ratios would not address bloat at this level. Colleges might also reclassify some administrators as “other personnel” in order to flout Yang’s mandate.

Rather than directly micromanaging colleges’ organizational charts, a more promising strategy to lower the cost of college is to attack government policies that make spending increases so easy. That involves curtailing the unlimited student loans and generous tax breaks that enable colleges to boost expenditures year after year. (Yang’s policy shop also hints at some ideas along these lines.)

But those are quibbles. Andrew Yang is right to shift the conversation to the stratospheric underlying cost of college and ideas on how to reduce it. Let’s hope that we’ll hear more on this in the campaign’s coming months.