This isn't physics, but it's still something that might be of interest to some readers. There is still a great deal of mystery among many about how university research is funded and supported. Five years ago I wrote a bit about "indirect costs", more properly called facilities and administrative costs (F&A). I recently had the opportunity to learn more about this, and I came across a very helpful document from the Council on Governmental Relations. COGR is an association of organizations (universities, med centers, research institutes) who help to advocate to government policymakers about research administration and finances.
The document explains a lot about the history of how research finances are handled in the US. One thing that struck me as I was reading this is the fact that the actual administrative costs that can be charged to grants (which pay for things like running the grants and contracts offices and the accountants who track the money) has been capped only for universities at 26% since 1991, even though there have been more and more reporting and administrative requirements placed on universities ever since. (If you want to know what happened in 1991 that led to this cap, you can read this [that might be paywalled] or this wiki article whose detailed accuracy I cannot confirm.)
As I wrote before, vice provosts/presidents/chancellors for research at major US universities would be happy to explain at length that F&A cost recovery doesn't come close to covering the actual costs associated with doing university-based research. ("Universities lose money doing research.") Obviously this is an oversimplification - if research was truly a large net financial negative, universities wouldn't do it. Successful research universities accrue benefits from research in terms of stature and reputation that are worth enough to make the enterprise worthwhile. Of course, the danger is that the balance will shift enough that only the wealthiest, most prestigious universities will be able to afford groundbreaking research in expensive fields (typically the physical sciences and engineering).
Anyway, if you want to understand the issues better, I encourage reading that document. I'll write more about physics soon.
I think that a lot of the tuition cost spiral at many universities could be ameliorated if they were required to fully recover their indirect costs. Compared to private industry, it is incredibly cheap to do research at universities because excess indirect costs are absorbed by tuition-paying students. The standard overhead and G&A rates are simply unsustainably low.
ReplyDeleteThe biggest culprit (I think) is the irresponsible way student loans have been given out. Since students can "afford" to pay higher tuition, universities can make use of that. I wonder how things would change if universities worked out a "percentage" agreement instead. Where universities take zero tuition during study, but take some percent cut of graduates income after they graduate for a set number of years. That would certainly shift priorities towards getting students a good future, and probably would make more money anyways.
ReplyDelete