College Guide

Blog

July 22, 2013 3:00 PM Colleges Are Consolidating, Just Like Businesses

By Daniel Luzer

Despite widespread criticism that American institutions of higher learning have little incentive to “cut costs” and should “live within their means” it turns out many colleges seem to be totally consolidating to cut costs, just like private businesses.

According to a piece at the Hechinger Report by Jon Marcus:

There have been a few mergers of colleges and universities in the past; the University of Colorado at Denver combined with the University of Colorado Health Sciences Center in 2004, for example, and the Medical University of Ohio merged with the University of Toledo in 2006.
The pace of such consolidations is picking up. In addition to Augusta State and Georgia Health Sciences University, Georgia has fused six other institutions into three, reducing the total number in its public system to 31. An earlier reorganization of 15 of the state’s technical-college campuses is already saving an estimated $6.7 million a year on overhead, having done away with highly paid presidents and administrators at campuses with as few as 500 students, and instead consolidated them.

The bond-rating agency Moody’s, which generally doesn’t look so positively on the business model used by American institutions of higher learning, earlier this year said the consolidation plans were part of “bolder actions by universities leaders” that could “foster operating efficiencies and reduce overhead costs amid declining state support.”

How this impacts students, however, remains to be seen.

Even actual business consolidations aren’t designed to improve product quality. “Business practices” that result in bigger institutions with bigger classes and greater economies of scale might improve efficiency, but if such innovations make learning more impersonal (and no cheaper) for students, that’ll result in learning problems, and lower completion rates for problems. That’s not really much of an improvement.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer