Operational Efficiency in Higher Education

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As we see evidence in some states of high costs driving public university students out of state, it can be easy to point fingers when considering the quandary of college affordability. This is the first in a series of messages I’ll share with you analyzing UW-Milwaukee and the higher education landscape.

Across the nation there are fair questions about tuition levels and the cost of administration. Findings from a recent Public Agenda survey show that 44 percent of Americans say colleges are wasteful and inefficient. This sentiment is likely based in part on a perception of “administrative bloat” – a public university employing too many pricey and questionably-necessary administrators.

Let me assure you that this is not the case at the University of Wisconsin-Milwaukee (UWM), which is administratively lean. Administrative expenses per student at UW System institutions like UWM are well under those in the Midwest and nationally. At UWM, they are 34% below the median of our national peers as measured by the National Center for Education Statistics.

While each public university’s circumstances are unique, we share several of the same cost drivers: state investment levels, aging buildings and infrastructure, technology changes, talent, growing need for student services, increased compliance, and mandated programming.

UWM has some additional, unique cost drivers. We are Wisconsin’s ONLY public urban research university and are distinguished by our access mission, serving the largest urban population in the state. Our dual mission is a great strength – we have produced 178,000 alumni of which 76% remain in Wisconsin to live and work, providing Wisconsin with highly-skilled critical thinking employees. However, the reality is that our dual mission costs more to educate and graduate students.

So what makes up UWM’s $532 million operational budget? Instruction, student services, scholarships and academic support account for 64% of our expenses. Administration accounts for 7.2%. Other categories include research, public service, facilities, and auxiliary operations like our Student Union, housing, bookstore and campus restaurants.


Our funding has been declining. There have been zero tuition increases for resident undergraduate students over the past four years due to state freezes (2013-17). In the 12 years preceding the freezes, UW-System institutions averaged 7 percent tuition increases. While this level of tuition increase would not have been sustainable for students in the long run, they were approved due to sharp declines in state funding. Overall, at UWM, the combination of state funding and tuition per student has grown less than the consumer price index since 1990.

In addition, the cuts of state appropriations to UWM in 2013-15 and 2015-17 were the largest in UW System history. We are making solid progress on reductions. Initial estimates for the 2015-16 fiscal year indicate that we have cut expenditures by over $31 million in one year. This includes a reduction of 212 full-time positions, with this trend continuing. Through a unified effort, we will continue work to balance our budget.

There have been suggestions that the tuition freeze be continued. Understandably, this is politically popular. College affordability is critical and we support keeping costs down for students. There are other cost ramifications and false economies we must consider, however, when discussing consecutive freezes. When freezes are not offset with state aid there are potentially higher overall costs at graduation due to fewer course offerings and longer time to degree completion.

In 1985, the state of Wisconsin paid about 42% of the cost of university operations and students paid about 14%. As of 2015, state funding accounts for about 18% of UWM’s 2016-17 $667 million operating budget, while students pay over 27% of the cost.

UWM is absolutely committed to keeping higher education affordable and accessible – our administrative leanness demonstrates that. At the same time, we face factors outside of our control and know that success requires strategic investments focused on our students, research and talent base – those individuals and enterprises that are the nexus of UW-Milwaukee and the Wisconsin economy.

There is much work – and promise – ahead as we continue to identify efficiencies and I will keep you updated on our progress. Next month I’ll share with you the value of higher education and what UW-Milwaukee alumni contribute to Wisconsin and further afield.

Best regards,

Mark A. Mone
University of Wisconsin-Milwaukee