Vanderbilt report: Nation's colleges spend $27B per year on compliance

An estimated $10.2B goes to research administration

In its follow-up to a controversial study, Vanderbilt University estimates that higher education institutions spend billions annually to comply with federal regulations, Michael Stratford reports for Inside Higher Ed.

Vanderbilt's original report earlier this year concluded that it spent about $11,000 per student per year on compliance. Politicians pounced on the figure as evidence of government overreach.

But others questioned the statistic. And after Vanderbilt released more details, it was revealed that $117 million of Vanderbilt's $150 million in compliance costs go toward research administration. And about 57% of its research costs  are covered by special government funding—ultimately leading some to critique the school's $11,000 figure as misleading.

The latest report, released Monday, looks beyond Vanderbilt's own campus to analyze the cost of complying with regulation at 12 other colleges and universities of different sizes and missions. For example, participating institutions included:

  • De Anza College, public two-year;
  • Rice University, private nonprofit;
  • Rasmussen College, private for-profit; and
  • University of North Carolina-Charlotte, public four-year.

Based on the data from those institutions, the report estimates that colleges and universities nationwide spend about $27 billion on compliance. Of that, it calculates that $10.2 billion goes to research administration and $5.6 million is spent on compliance that all institutions must deal with, like immigration rules.

The report also estimates that colleges must spend about $11.1 billion on regulations specific to higher education, such as financial aid rules and accreditation.

This study could prove as controversial as its predecessors, Stratford notes. The report's sample may not be a sufficiently representative sample to appease critics. And some analysts worry that the report might be politically motivated.

Amy Laitinen, deputy director for higher education at New America, argues the report was "clearly intended to advance an antiregulatory agenda and paint a picture of an oppressive federal government role in higher education."

But Vanderbilt officials say they simply set out "to start a conversation at the national level of the cost of regulation and compliance at universities," Brett Sweet, Vanderbilt's CFO, told Inside Higher Ed.

"It's not to point fingers at regulatory bodies" (Stratford, Inside Higher Ed, 10/19).

Thoughts on the story? Tweet us at @eab_daily and let us know.

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