Commentary: Reducing College Costs Starts From Within - Higher Education

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Commentary: Reducing College Costs Starts From Within

by Howard Freedman

College costs have outpaced the rates of inflation for many reasons. One way to curb these costs is to find better and more cost-efficient ways to do things.

The paradox is that, as the economy has worsened, the cost of a college education has steadily increased, affecting those least able to afford one. At some point this bubble will burst especially because costs have consistently outpaced the annual rate of inflation. This is not a startling revelation. It is time to take action and follow the advice of Winston Churchill: “It is no use saying, ‘We are doing our best.’ You have got to succeed in doing what is necessary.”

We cannot blame everything on the government, the economy or fiscal or monetary policies. The economic cycle will rebound at some point but not just yet.

As the Consumer Price Index increases each year, it has been far from the 5 percent annual increases in college costs that have prevailed over the same periods. For example, the U.S. Bureau of Labor Statistics reported that from 2000 to 2010 the annual inflation rate ranged from -0.4 percent to 1.6 percent.

The good news is that a college education is available to those willing to forgo the more expensive schools and opt for a less expensive university. Why should students, especially from middle class or poor families, be denied a quality education because it is beyond their financial means to pay for it?

Before becoming a financial aid consultant I held a variety of senior positions in financial management and consulting from which I learned many valuable lessons. One of the most valuable lessons was from Dr. W. Edwards Deming, a leader known for his methodologies that helped organizations improve efficiency and quality while reducing costs. After reading his book Out of the Crisis and attending his seminar, I gained a stronger understanding of how to use his tools to make meaningful process improvements that literally saved my employers millions in operating costs. This training along with external networking and feedback made constant process improvement an effective management tool.

Furthermore, changes typically were made internally at minimal costs. The following approaches are worth considering:

 

• Set realistic short- and long-term goals. As a short-term strategy, eliminate a non-value-added expense. As a long-term goal, limit annual tuition increases to less than 1 percent over three years.

 

• Use surveys and focus groups to gather feedback from students, parents and administrators regarding needs and services.

 

• Establish overall project leadership. Many faculty members and graduate students may be willing to participate. This is where staffers who do the work and are familiar with the process can share their ideas.

 

• Prioritize suggestions.

 

• Determine whether problems are the result of common causes that are recurring and require a major fix or if they are the result of special causes. Special causes are those that occur occasionally because someone is not doing a job properly as a result of inadequate training or staffing.

 

• Establish deadlines and resources to resolve the problems.

 

• Prioritize needs, from quick fixes (special causes) to procedural changes, and measure results.

 

• Keep simple statistics on each activity to define the severity of the problem. For instance, measure how many times a document is touched, length of phone calls, questions that are frequently asked, data errors, etc.

 

• Track progress and next actions.

 

• Give recognition to those who help solve the problems. Results should be positive, productive and not impede the quality of the services provided.

 

This is an ongoing process; therefore, additional options can be considered as well:

 

• Can using buildings and facilities that are idle when classes are not in session reduce fixed costs?

 

• Can data be shared or processed with other institutions?

 

• Can communications become more effective?

 

• Can the school partner with local businesses?

 

• Can alumni help with this process?

 

• What can be done to reduce energy costs?

 

• What in-house functions can be outsourced?

 

Good luck; let me know your results.

Howard Freedman is a financial aid consultant and president of Financial Aid Consulting. www.financialaidresults.com.

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