Average college tuition has more than doubled since 1970 when adjusted for inflation, yet most of this increased funding doesn't go toward academic instruction, according to a new report from Pioneer Institute. The analysis reveals that universities now employ more administrative staff than professors, with federal taxpayers contributing $124 billion annually in financial aid as costs continue to climb. The report examines how regulatory burdens and competitive pressures have driven schools to spend tuition revenue on administrative growth rather than teaching.
The numbers paint a stark picture of where college money actually goes. Most universities now have more administrative staff than professors, with administrative roles including management, business and financial operations, office support, and student affairs positions. A 2015 Vanderbilt University study found that colleges spend $27 billion cumulatively each year just complying with federal regulations, representing 3 to 11 percent of non-hospital operating expenses per school. Meanwhile, the U.S. spent $6 billion on accreditation in 2015 alone, a figure that has only grown with inflation. More than 100 private accreditation organizations now evaluate everything from culinary arts to healthcare, and while participation is technically voluntary, colleges chase these credentials to stay competitive.
The report identifies two main drivers behind the administrative explosion: enriching the college experience and meeting regulatory requirements. According to the analysis, Bowen's principle explains much of the first category, with the central idea being that colleges spend all their revenue to stay competitive, creating a cycle where rising tuition funds unnecessary administrative positions. The Progressive Policy Institute research cited in the report shows these excess administrators fit into the two overarching categories, with regulatory oversight proving particularly costly. The report notes that the federal government, under both Democratic and Republican administrations, has increased the number of requirements colleges must comply with, forcing schools to hire administrators specifically to cut through red tape and ensure compliance.
Why does this matter? The report explains that overregulation persists because regulators don't bear the cost of implementing the rules they create. If regulators shared the expense, they'd have a better understanding of which requirements are actually necessary and could delegate some standards back to schools. The current admissions environment makes things worse—a strong labor market, declining enrollment, and rising student expectations push colleges to compete for students in new ways that encourage more spending. A 2024 Israeli study showed that student satisfaction scores dropped when teaching faculty had to take on administrative duties, suggesting that professors' time being pulled away from teaching hurts the educational experience. While defenders of expansive college administrations claim these services ease the burden on faculty, the data shows the real problem is the regulatory framework forcing schools to hire in the first place.
The report recommends that legislators address the root of the problem by cutting the regulation and accreditation that drive excess hiring rather than blindly slashing administrative positions. Author Samuel Klein argues that having the government share compliance costs or conduct a comprehensive review of current regulatory standards could slow or even stop the climb in tuition. But for any review to work, unnecessary standards must be genuinely slashed—simply rebranding and consolidating them will only cover up the problem. Until regulators feel the financial weight of their requirements, American colleges will keep hiring administrators instead of professors, and students will keep footing the bill.