Today, we learned that what the Association has hypothesized about six years ago finally has been confirmed by the college administrators. After denying or silently agreed with AAEA’s econometric study, the US College presidents admit that they have operated inefficiently in the past.  After AAEA revealed how poor the operational cost has been managed.  As results, the American public has lost their confidence to support some of the institutions.  Declining financial support has a significant bite on the ability of them to operate.  Like a circle, any good or bad decisions will finally have the cause and effect chains.

No one can make her or his own decision without affecting others in the system.  After so many years of BAU, finally their past policy hunt them down.  According to the article, the first item that the public asks, when the institution asks for more funding or donation is to show that they, the institutions, have operated efficiently as shared below:

1. Demonstrate efficiency
Before university leaders ask for more state support, they must demonstrate that they are being more efficient with the funding they currently get. Those universities leading the way on this front – including exemplars such as the University of Wisconsin system and The Ohio State University – are directly connecting savings gained from lower operational costs with noticeable reductions in the cost of attending college. In fact, Ohio and Wisconsin were ranked No. 1 and No. 9, respectively, in lowest tuition increases over the last decade.

While a lower tuition may be one indicator, there are other more important measurement metrics on efficiency.  AAEA has proposed to apply revenue to cost ratio as an ultimate institutional metrics to manage operational expenses.