Growing Federal Regulations Increase Education Costs

May 19, 2014

Higher education costs are rising, and tuition and fees have increased 28 percent over the last decade. There are countless factors driving the spike in education costs, but increasingly, legislators and universities have pointed to regulations as the primary reason for rising costs. In fact, Sam Batkins, Director of Regulatory Policy at the American Action Forum, Chad Miller, Director of Education Policy, and Ben Gitis, Policy Analyst, note that the Department of Education imposes a total of 85 million hours of paperwork and more than 465 federal education forms each year, at a cost of $2.7 billion annually. This figure includes 129 federal education forms for postsecondary education.

A comparison of total college costs to total administrative costs reveals that the cost to attend college rises as administrative costs rise. Indeed, the amount of administrative staff at colleges has grown significantly over the last several years:

  • General administrative staff at postsecondary institutions, including business and financial operations, grew 31.5 percent during the last decade.
  • Between 2003 and 2012, institutions added to their books $4.4 billion in administrative costs alone, rising from $7.1 billion to $11.5 billion.
  • The number of compliance officers, who ensure conformity with laws and regulations, has also grown, increasing 32.8 percent over the last 10 years. Eighteen percent of that growth occurred from 2010 to 2012.

While the Department of Education has made some attempts to solve regulatory barriers, the agency lacks real reform. In its most recent retrospective regulatory update, the agency identified a mere 13 rulemakings that could reduce burdens or streamline the regulatory process. Currently, the agency has 303 reporting requirements.

To solve these unnecessary burdens, Batkins, Miller, and Gitis offer a series of policy recommendations to reduce paperwork burdens and consequently temper the rise in tuition costs. The Department of Education, they explain, has a number of onerous rules in place that have no impact on outcomes and which are in serious need of modernization.

Source: Sam Batkins, Chad Miller and Ben Gitis, "Rising Tide of Education Rules Increase Costs," American Action Forum, April 30, 2014.

 

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