08/13/2010 10:42 am ET Updated May 25, 2011

Higher Education? Everything You Know Is Wrong (about Research Universities)

Higher Education?: How Colleges are Wasting our Money and Failing Our Kids - And What We Can Do About It by Andrew Hacker and Claudia Dreifus shows how a little knowledge can be a dangerous thing. While the authors do touch on many important topics concerning the current state of American universities and colleges, their book suffers from a misunderstanding of how budgets work at research universities. In fact, the first major problem is that they want to totally dismiss the importance of the research function of these schools; however without research, it makes no sense to have research universities.

As I have argued elsewhere, the problem is not that the universities have taken on many different functions; the issue is that these institutions engage in false and misleading accounting practices that result in escalating costs and decreased educational quality. For example, most schools argue that they lose money on each student because the true cost of education is much higher than the price of admission; however, when universities make this claim, they are secretly arguing that everything a university does should be paid for by each undergraduate student. For example, Hacker and Dreifus write that Harvard budgets $125,680 per student per year (77), yet these authors also show that many of the undergraduate courses at Harvard are taught by relatively inexpensive graduate students and non-tenured faculty (49). I have estimated that true instructional cost at Harvard is closer to $15,000, and what undergraduates students are really paying for is unrelated administration, research, and graduate education.

By concentrating on the true instructional cost, I have argued that universities could easily freeze tuition and increase enrollments and still turn a nice profit, but in order to do this, schools have to be honest about how they spend their money. I have also warned that if universities do not embrace a more transparent form of budgeting, they will suffer a public backlash that is now gaining steam. In fact, Hacker and Dreifus's book is an example of what happens when universities fail to reveal how they really spend their money. The result is that these well-intentioned authors end up calling for the end of tenure and the spinning off of the research mission.

Since the authors do not see any value in schools spending money on important research projects, they argue that schools should put all of their time and money into teaching. Moreover, since there appears to be no direct connection between research and quality instruction, Hacker and Dreifus have no problem calling for the end of academic job security. While I am sympathetic to many of their claims about how tenure does not help improve instruction, I do feel that these writers fundamentally misunderstand the value of research universities.

Without American research universities, we probably would not have the internet, cell phones, and most cures for life-threatening diseases. Furthermore, without these institutions, we would not be able to map the human genome, nor would we understand how the brain functions and why it is important to have a diverse social environment. The simple fact of the matter is that American research universities are the foundations of social innovation and technological experimentation. Yet, the problem is that universities hide their essential role because they do not want to discuss how they actually fund their research projects.

Since schools do not want to acknowledge that undergraduate students subsidize external research, they end of secretly stealing money from instruction to pay for research and administration. For instance, the University of California currently receives $10,000 from each undergrad and $14,000 from the state for each student, but only $5,000 of this amount goes to instructional costs. This means that the majority of undergraduate funds goes to pay for research, administration, and other activities that are not directly related to undergraduate education. In other words, undergraduate students and the state are unknowingly subsidizing the research mission.

As Hacker and Dreifus rightly point out, research funded by outside sources, like the federal government and corporations, rarely covers the full cost (122). The reason for this discrepancy is that in order to perform research, universities have to build new facilities, hire more administrators, buy more equipment, and increase the staff. Unfortunately, schools rarely admit that research loses money, so they have to secretly take money from the undergraduates. Likewise, as Hacker and Dreifus highlight, most athletic programs lose money, and so students end up subsidizing these nonacademic departments (157).

One of the results of this covert subsidization is that schools continue to reduce their instructional budgets by increasing the sizes of classes and augmenting the number of non-tenured faculty. Furthermore, since universities put so much emphasis on their research mission, they tend to disregard the poor teaching quality of many of their professors. The result is that you have the most expensive faculty with life-time job security concentrating on research, while the non-tenured faculty usually have no job security and very low pay, but they are the ones who do most of the undergraduate teaching.

Hacker and Dreifus' solution to these issues is to simply get rid of tenure and put everyone on multi-year contracts. However, the problem with this resolution is that the authors under-estimate the importance of research and the power of administrators. In fact, Hacker and Dreifus argue falsely that "the professorial class controls what happens on many a campus . . . " Yet, the same authors later point out that the number of administrators has continued to out-pace the number of professors, and that the new administrative classes has taken over the control of most administrations (30, 108). The reason for this contradiction is that the authors want to blame professors for all of the problems instead of seeing how there are many different contributing factors.

The central way that professors are demonized is that Hacker and Dreifus take the average salaries of full professors and then divide them by the hours the professors spend in the classroom (24). This very misleading statistic only looks at the highest paid professors and also disregards most of the activities that dominate a full professors day. Since these authors do not recognize the value of research, shared governance, and class preparation, they are able to reinforce the popular idea that professors make a lot of money to do very little.

Once again, the reason why this cynical analysis may gain some traction is that universities have done very little to disabuse the public of these popular stereotypes, and the main reason why schools have not done a better job at telling the truth is that they lie about how they spend their money. Instead of defending the research mission and the need for students and states to fund these important projects, universities covertly make undergraduate students pay for everything else.

My simple solution is to have three types of professors: research professors, teaching professors, and hybrids. One result of this system is that professors who mostly do research and are forced to teach can concentrate on what they do best, while the people who are expert teachers can be given job security for their excellence in instruction. Moreover, the professors who are able to combine research and instruction should be rewarded for doing both. Implicit in this structure is the idea that there is no inherent connection between being a great researcher and a great teacher.

If we developed this tripartite system, we would also be able to have more accurate budgets, and people would see where the money really goes. It would also be possible to move to the type of contract system that Hacker and Dreifus propose as long as long-term contracts were protected by due process and academic freedom. Another possible result of separating research from teaching is that universities could be examined and ranked for the quality of their instruction and not just their research and funding levels.