Why are college costs soaring?

Over the weekend I got asked the question: "Why are college costs soaring?". It's a concern for nearly every college student who is paying his/her own way, taking on huge debts and worrying about running out of money before graduation. Colleges and universities are very complex organizations with many connections to governmental agencies, state legislatures, private businesses and philanthropic foundations. The causes for soaring costs are equally complicated. This same problem is facing health care costs and the cost of governments. As I thought about all the reasons I've consider reasonable, I came up with over a dozen. During the next few weeks, I share those explanations with you.

The first explanation for soaring costs involves an understanding of open and closed systems. Every college and university with soaring costs functions as a closed system. They cannot switch to functioning as open systems without starting over from scratch. The changes required to open up run very deep and appear very threatening to people in power and people with pride in their institutions.

Open systems are capable of controlling costs, making changes to stay within budgets, and inventing more efficient ways to get things done which saves money in the long run. Closed systems cannot make these improvements or realize these outcomes. They are like the bus the movie Speed that could not slow down or stop without blowing up. Closed systems are also like closed minded people who can't change an opinion they've formed or a decision they've made without going to pieces. They are like Bernie Madoff running a worldwide Ponzi scheme for two decades without getting really challenged or caught.

Systems close when they are convinced they are right, successful and headed in a good direction. They no longer burn up time and energy getting disturbing feedback on how they're doing, what effect they're having or what to look out for in the future. They eliminate the negative feedback and lock into a cycle of positive feedback. If a closed system could talk, it would constantly tell itself things like: "you go girl", "keep up the good work", "right on" or "you can never do too much of a good thing". Closed systems don't self regulate. They self congratulate, self replicate and self perpetuate. They keep on doing what they're doing without question.

Controlling and reducing costs requires tons of negative feedback. The system has to stop some of what it does and slow down other processes. The system has to learn how to prioritize, delay, re-sequence and eliminate many facets of it's operations. It has to utilize negative feedback to discover where it's making the most difference and doing the most good. The only way a system can do this is to switch from being closed to being open to contrary evidence, contradictory viewpoints and confusing indicators.

Closed systems usually "hit a wall before they hit the brakes". They learn in the school of hard knocks that they've been closed to negative feedback while they thought they were certainly doing great. They dismiss evidence of their failures until they get dismissed for failing to serve and satisfy those who rely on the system. It appears colleges with soaring costs are headed for a collision with an economic reality they cannot face.