HIGHER EDUCATION BUBBLE UPDATE: Colleges Face a Financial Reckoning. The University of Chicago Is Exhibit A. Decades of big spending, new federal funding cuts and a changing view of higher education created a perfect storm; ‘Spending Your Tuition On Its Mistakes.’
The school that produced Milton Friedman and 34 other Nobel Prize-winning economists is struggling to manage its pocketbook.
The University of Chicago ran budget deficits for 14 years straight, spending big on new labs, dorms and technology to raise its profile and enrollment. Now it’s facing a financial reckoning.
Over the summer, university leaders said they needed to cut $100 million in expenses. They decided to slow tenure-track hiring, scale back new construction and pause admissions to nearly 20 Ph.D. programs for a year. They’ve been aggressively fundraising and soft launched a new capital campaign.
By the time freshmen arrived in September with their minifridges and extra-long sheets, disgruntled faculty and graduate students had printed up flyers. Families—many paying $71,000 a year—were handed a paper that read “UChicago: Spending Your Tuition On Its Mistakes.”The university is an acute example of the financial woes plaguing higher education. . . . Ando thinks all research universities need to come to terms with what they’re selling and whether it still makes sense.
If only there had been some sort of warning.