During a House Judiciary Committee hearing on Wednesday, Rep. Troy Nehls (R-TX) spoke about ‘administrative bloat’ at elite universities.
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00:00Thank you. I yield my five minutes to Mr. Neils from Texas.
00:06Thank you, Ms. Hageman. Thank you for our witnesses taking the time to be here.
00:11As we've already discussed, the tuition rates at self-proclaimed elite universities have ballooned over the years
00:18due to long-standing collusion between them, long-standing collusion.
00:22This has allowed these schools to accumulate the kind of severe administrative bloat
00:28rarely seen outside of our own federal government.
00:33As Dr. Cooper testified, Ivy League universities average one non-instructional staff per two students.
00:40How do you like that ratio?
00:42Yet the average private university gets by with one-third the administrative staff.
00:47And much like we see in the federal government at some point, bureaucracies, they get so big, fat, bloated
00:54that they serve no real purpose other than to justify their own existence.
01:01If these elite universities have one administrative employee for every two students,
01:05then what exactly are they employed to do?
01:08Well, one of our witnesses, Mr. Alex Hage, decided to ask.
01:12Great question, Alex.
01:14Pursuant to his work as a student journalist investigating administrative bloat at Brown,
01:19Mr. Hage emailed all 3,805 non-faculty employees of the university to inquire about what their
01:27job entail, right?
01:29Rather than simply respond to the inquiry, Brown chose to initiate disciplinary proceedings
01:34against Mr. Hage.
01:36I was so appalled when I heard about this that I wrote a letter to Brown urging them to reverse
01:41course.
01:41I believe our fearless leader, Chairman Jordan, in the committee, they wrote a letter.
01:45And Brown reversed course, and I'm glad they did.
01:49It's one thing to create a vast, useless administrative bureaucracy to justify an exorbitant tuition rate
01:56of $93,000.
01:59But to punish a student journalist for daring to ask a question about it is unacceptable.
02:04Mr. Hage, what first prompted you to make the inquiry?
02:08That's an excellent question.
02:09So Brown has a $46 million budget shortfall.
02:13Even while charging students the price of a luxury car.
02:17And it doesn't seem like they want to cut any administrators.
02:21They're having hiring freezes, but they're not willing to cut any jobs.
02:24So I thought this was something that needed to be looked into.
02:26Why do you think the employees at your email, they didn't answer your questions?
02:30Many of them didn't respond?
02:31Well, some of them answered, and the ones who answered seem to have pretty useful jobs.
02:34So I guess we can maybe infer that the ones who didn't have jobs that are not so important.
02:38The ones that didn't were too embarrassed.
02:40They were too embarrassed.
02:41They weren't going to respond to you.
02:43Why do you think elite schools like Brown might be more frugal in administrative spending
02:48if they had to pay the same 21% tax rate on their endowment profits as corporations?
02:54Certainly.
02:55I mean, when you have to pay higher taxes, there's less money floating around,
02:58and you've got to tighten the budget.
02:59Now, that's beautiful.
03:00We put it in reconciliation now.
03:02So these universities, it's 1.4.
03:04Now it's going to go to 21%.
03:0621%.
03:07I'm so excited that that legislation was in our reconciliation.
03:11How about you, Dr. Cooper?
03:13What do you think?
03:14I think that the 21% tax on endowments will probably induce some belt tightening among these
03:20Ivy League institutions.
03:21And I would also note that the tax is structured such that if you expand your enrollment, you
03:25face a lower tax rate.
03:27And that might be an inducement that some of these colleges need to actually admit more
03:30qualified students from middle-income backgrounds.
03:32Well, let me be clear.
03:33We're not actually taxing the endowment itself.
03:35It's the net profits, the earnings on their investments.
03:39And we're expecting $7 to $10 billion annually.
03:42$7 to $10 billion?
03:43It's a big deal.
03:45Mr. Cooper, the average four-year private university costs around $35,000 per student,
03:51while the Ivy Leagues average $126,000.
03:53To what degree is administrative bloat attributed to this?
03:57I can't imagine that most of that extra $126,000 in spending per student is really going to
04:03benefit students.
04:04What we see is much higher administrator-to-student ratios at Ivy League institutions than other
04:09private colleges.
04:11Thank you, Ms. Hageman.
04:12Mr. Chair, are you back?
04:13The gentleman yields back, and the gentleman from-