Penn to reduce graduate admissions, rescind acceptances amid research cuts

> "I could build product XYZ in a weekend, why do they have so many employees?"

Unlike product XYZ*, there was a time in very recent history when these same schools ran successfully with much smaller administrations. At some point you have to ask - do you want to save the cancer, or the patient?

*I am humoring your hypothetical, but there are in fact many cases where a small team outperforms bloated, ossified companies, e.g. the Britten V1000 motorcycle, or the recent article about wedding planning software (https://news.ycombinator.com/item?id=43133174), or the older article on the windows terminal (https://news.ycombinator.com/item?id=27725133)

Compliance industry has gone from $0 to $90B in twenty years. It does not produce anything real, except lobbying for more compliance needing more compliance services, software and lawyers.

Here is a book about it:

https://www.amazon.com/Compliance-Industrial-Complex-Operati...

As a fellow academic at a major research institution, I agree that the regulatory aspect (IRB, grant money auditing, etc) is a huge financial burden requiring many staff. This is not something that universities can easily reduce without loosening requirements at the Federal level

The numbers in the post that you respond to are picturing a different situation: there are almost 3 admins per professor. That means the universities are not teaching places, but administrative places with some teaching as a secondary activity.

I think people overcomplicated universities and that is what makes admins needed. Taking a step back, we need to make universities teaching places again, with 1 admin for 3 professors, not the other way around. Imagine savings, needing less grant money, less audits, less funding that comes with strings attached.

In the end I think people make up too much irrelevant work. And that needs to go away.

Bureaucracies are masters at creating work that justifies their own existence and growth.

But historically universities DID deliver the same product in a weekend. It really feels lika a lot of the extra admin burden was generated itnernally and self-imposed. Each piece of DEI is small and well-meaning, and now we have these massive institutions that have to cut PhD students of all things to balance the books.

>Sure, but building the product isn't the hard part, it's sales, marketing, customer support, regulatory compliance, HR, data scientists, UX designers, and all the other functions needed to transform it from a product to a business.

Most of those are not needed or are needed in drastically lower quantities. UX designers in many companies are very obviously just redesigning things for the sake of justifying their salaries.

> one clear driver is continually increasing rules, regulations, and compliance, along with fears of audits and lawsuits

I think this a gap that can be easily and fittingly addressed by explainable AI (XAI) hopefully with much cheaper cost using automation, reasoning and decision making with minimum number of expert staff in the loop for verification and validation.

I've got the feeling that Elon proposed DOGE as a trojan horse for doing this sneakily:

1) Reduced the budget to make govt more efficient so staff number reduction is inevitable

2) Sell and provide XAI based solutions for regulatory compliance, etc (accidentally his AI company name is xAI)

3) Repeat these with many govt's organization, research, academic institutions

4) Profit!

But apparently the US research universities like UPenn did not get the memo and cut the number of graduate research students instead of the admin staff.

I recently saw a term for this -- "hostage puppy", which I think is an excellent description. I think [1] is the original source for the definition.

[1] https://x.com/perrymetzger/status/1887896797575520673

The literal worst thing Penn could do for students at this point is to take more on they aren't sure they will be able to support through their Ph.D. They are protecting and looking our for the students they have by not accepting more.

this is the same reason wealthy donors want a building with their name on it, but don't want to fund the janitors who will keep it clean.

> If there are regulations governing what the university is allowed to do with federal money, the university needs administrators to ensure and report compliance

I have a friend who’s a fairly established scientist in his field. The promised cuts to NIH indirect funding would have exactly the effect you’re describing by requiring them to spend time calculating everything as direct costs for every shared resource precisely enough to survive an audit. Trying to save money there will cost more than it’s worth because most of the shared people, equipment, and resources are paid for by NIH but they’d have to add accounting staff to document which fraction gets billed to which grant at that level of precision.

> If a tech company has to make rapid cuts, it will lay off engineers.

In my experience, they'll try find literally anyone else they can before laying off engineers. Both times I've been a part of it was like 10-20% of laid off employees were engineering. 80-90% recruiting, support, admin, HR, middle management, design, etc, etc. As much as possible leave sales, marketing, engineering functions alone.

>If students expect that the university will provide accommodation, the university needs enough staff to run a small city and all associated services.

No doubt you need admin to help accommodate students learning needs but I've come around to thinking that they should change the parameters around testing and give every student the opportunity to use "accommodations" rather than making them prove their disability. Everyone is being granted the same degree, if a significant number of the students in your program need accommodations, like extra time on the exam, why not grant it to everybody who asks? Or better yet, just give everyone the time they need. It seems silly to me that you need to prove your need before you can get things like extra time - I think it should be opened up to everybody

> If a tech company has to make rapid cuts, it will lay off engineers. This is basically the same situation.

Eh, maybe. Part of me thinks this is making a spectacle out of having to tighten up the finances.

I’m reminded of when I was in school many years ago at a state university. The state called for a 2% budget cut. Or in other words, going back to what the budget was a year or two prior. The administration went on and on about how there was absolutely no fat to cut and started making loud public statements about how they would “need” to do ridiculous things like cut the number of offered sections for undergrad mathematics courses by 15%, eliminate the music department, etc. They whipped the students into a frenzy and the whole thing culminated with a protest march down to the capitol building, and the state relented.

So why not just use the endowment, why does the tax payer need to fund this? 22.3 Billion isn't enough?

Then how did the universities operate before the increases? How come digitalization is not able to reduce the admin numbers. You are the one to justify why you need this additional overhead and not the other way around.

The EO in question literally just reduces the amount that can be spent on overhead. Maybe they should try reducing overhead?

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May I suggest a fifth possibility: your core assumption is flawed and your professor hasn’t been paying attention.

Unless your college is failing, it is hard to believe that the student population hasn’t changed significantly over the last 30 years, when the US population has almost grown by 30%.

I attended UCI over 25 years ago. The student population has since more than doubled. Tuition rates, interestingly have also almost doubled.

Those 4 aren't really adding much overhead.

For instance, I can tell you right now with certainty that at any large university the number of software devs or database admins in the IT department far outpace the number of financial analysts working in foundation/endowment. Pick any large university at random, and I'll wager that without even knowing the spread.

But here's the thing, universities need IT divisions. They also need the other large operations level bureaucracies they typically have put in place. Facilities and plant, university police, housing, etc etc. You can't pull off a large university without these divisions nowadays. So saying, "Oh we can cut them" is very shortsighted.

When I was a kid my mom dropped my dad off for his college classes. When I went to school I took my car. We should micromanage college administration from the outside because of that.

I think its likely students having more money and therefore a car plus there being more students overall. Tons of colleges now most students have a car and parking pass even if they live 3 blocks off campus.

If the lot and garage were full, it's impossible to know what unserved population was taking the bus in either era. Let alone many other statistical questions here...

Incredible.

You seem to be unfamiliar with how indirect rates work.

First some basic math: if a project is budgeted at a direct cost of $500,000, the indirect rate of 60% applies to the $500,000, i.e. $300,000.

The total grant is thus $500K + $300K = $800K. The $300K indirect costs are thus 37.5% of the total. This is an upper limit, as many direct costs such as equipment do not get indirect rates applied to them.

Second, these rates are painstakingly negotiated with the NSF and NIH. Yearly audits to ensure compliance must be passed if funding is to continue.

Third, these indirect cost go towards to items such as electricity, heat, building maintenance, safety training and compliance, chemical disposal, and last by not least laboratory support services such as histology labs, proteomics core, compute infrastructure, and some full time staff scientific staff. Only a relatively small portion goes to administration.

Finally, scientists generally would welcome review and reform of indirect costs to ensure they get the maximize benefit from the indirect rates. However, DOGE is not interested in reform. They are interested in raze and burn destruction.

If DOGE gets its way, it will knock the Unites States off its perch as the world’s technological leader.

> Also, what would be illegal about the change? Are the overhead rates in a statute somewhere? The grants certainly aren’t individually appropriated by Congress.

2024 appropriations (and it showed in many years before then-- Public Law 118-47. Statutes at Large 138 (2024): 677.

SEC. 224. In making Federal financial assistance, the provisions relating to indirect costs in part 75 of title 45, Code of Federal Regulations, including with respect to the approval of deviations from negotiated rates, shall continue to apply to the National Institutes of Health to the same extent and in the same manner as such provisions were applied in the third quarter of fiscal year 2017. None of the funds appropriated in this or prior Acts or otherwise made available to the Department of Health and Human Services or to any department or agency may be used to develop or implement a modified approach to such provisions, or to intentionally or substantially expand the fiscal effect of the approval of such deviations from negotiated rates beyond the proportional effect of such approvals in such quarter.

> Also, what would be illegal about the change?

At the *very* least you should be following the administrative rules act (requiring you to solicit 45 days for comments by effected parties) before making such a dramatic change in policy.

Courts absolutely love striking down EOs (of both Dems and Reps Admins) when they should have been following the administrative rules act.

The “overhead” isn’t even overhead as most people understand it.

But the real question is why does the general public think 59% is too high? Irs an arbitrary number. Maybe an appropriate level of “overhead” is 1000%.

In reality the people who actually know anything about how this is calculated, across the board and across the political spectrum, do not think this is a major concern at all.

The only people who are complaining about it are the ones who hear the word overhead, have no concept of what it means other than taking a lay persons understanding that all overhead is unnecessary and are coming with the idea that anything above 0% is bad.

1. Why should the public believe that they can fix it. Perhaps they can't, that's not entirely my point. My point is that if the government firmly believes that a change is necessary there are _simple_ ways of acheiving such a change without causing such chaos, waste, and hardship. Perhaps a phased in approach, or other mechanisms. Overnight shock therapy offers very little economic benefits while having very harsh personal and insitutional cost.

2. What is illegal about the change. The NIH overhead rate is actually negotiated directly between the institution and the NIH, following a process put into law. This is why a federal judge has blocked this order [1]. I'm far from a lawyer, but my read of this is that this is a change that would need to come through congress or a re-negotiation of the rates through the mandated process.

[1]: https://www.aamc.org/news/press-releases/aamc-lawsuit-result...

If they can’t be trusted to fix the problem themselves with a 5 year phase in period they most definitely can’t be trusted to fix the problem immediately…so I don’t get your point.

>Also, what would be illegal about the change?

Besides the president screwing with the budget agreed upon by Congress that kicked all this off?

I’m not convinced that the rate, per se, is actually a problem. What is a problem is the structure. If a contract said “you get $1M to do X and your university gets $590k, paid pro rata by time until completion”, fine, and one could quibble about the rates.

Instead, the grant is for $1.59M, and each individual charge to the grant pays an extra 59% to the university, conditionally, depending on the type of charge and the unbelievably messed up rules set by the university in concert with the government. Buying a $4000 laptop? Probably costs your grant balance $6360. Buying a $5000 laptop? Probably costs $5000 becuase it’s “capital equipment” or “major equipment” and is thus exempt. Guess who deliberately wastes their own and this also the university’s and government’s money by deliberately buying unnecessarily expensive stuff? It gets extra fun when the same research group has grants from different sources with different overhead rates: costs are allocated based on whether they are exempt from overhead!

And cost-plus disease is in full effect, too. If the research group doesn’t use all their awarded money because the finish the project early or below estimated cost, the university doesn’t get paid their share of the unspent money. This likely contributes to grantees never wanting to leave money unspent.

Of course, DOGE isn’t trying to fix any of the above.

The big question is how should the government allocate the funding for basic research between career stages to maximize the benefit to the society.

If you focus on training PhDs, which is the American way, you get a steady stream of new people with fresh ideas. But then most PhDs must leave the academia after graduating.

If you focus on postdocs, you get more value from the PhDs you have trained. Most will still have to leave the academia, but it happens in a later career stage.

If you focus on long-term jobs, you have more experienced researchers working on longer-term projects. But then you are stuck with the people you chose before you had a good idea of their ability to contribute.

We aren't really. We are guiding people to get college degrees. However, undergraduate education and professional research are both done by the same institution. Further, that institution likes to have those professional and apprentice professional researchers work as teachers. The result of this is that undergraduates get a lot of exposure to professional Academia, so they naturally have a tendency to develop an interest in that profession. Given how small the profession actually is, even a small tendency here saturates the job market.

You can also get a job in the private sector after a PhD. It's not necessarily a waste of time for those we don't get to work in Academia.

Again please read my post carefully. There is a valid critique of overhead rates, but simply doing it suddenly in this manner has little added economic benefit in the long run, while ruining lives and creating waste/chaos in the short run.

You can make a strong argument these institutions require reform, but such reform should be done not overnight, and not through such broad strokes.

Spurious. Football coaches are not paid by overhead dollars. but mainly by alumni that like football wins.

No, when a major for-profit company outsources research they pay way more than a 50% “markup”. Unless they go to a research university: then they pay much less, and just like the federal government they are getting a fine deal.

Yes, some rich foundations (Gates, Ellison etc) exploit the situation and do not pay full overhead costs: They are essentially mooching on the research institutions and the federal government.

Doesn’t the football stuff fund itself through tickets, licensing, etc? It seems hard to believe research overhead grants are going to the football coach.

Football program spends big because it rakes in huge amounts. In order to keep making all that money though they need a good team which costs money.

Let’s ask ourselves what happens when the story doesn’t end well and it’s a service that government has been providing. The answer may be lives are lost, the economy breaks, enemies win victories, etc.

Move fast and break things is fine in a competitive marketplace. It’s asinine for the government to do.

The answer is to elect better politicians who can nominate better heads and those department heads can drive the necessary change without succumbing to the old guard.

The federal workforce, as a percentage of all jobs in the U.S. was 4% in the 50's, decreased steadily to 2% in 2000 and has held roughly steady since then. (The source is https://usafacts.org/articles/how-many-people-work-for-the-f... second figure, and I'm taking total jobs as a proxy for the population that the workforce serves.)

The end of that period of reduction was Clinton's Presidency. Clinton's National Performance Review (NPR) started at the beginning his term in '93. It had goals very similar to the stated goals of this efficiency effort, but it was organized completely differently. He said, "I'll ask every member of our Cabinet to assign their best people to this project, managers, auditors, and frontline workers as well."

GPT4o: The NPR's initial report, released in September 1993, contained 384 recommendations focused on cutting red tape, empowering employees, and enhancing customer service. Implementation of these recommendations involved presidential directives, congressional actions, and agency-specific initiatives. Notably, the NPR led to the passage of the Government Performance and Results Act (GPRA) of 1993, which required federal agencies to develop strategic plans and measure performance outcomes. Additionally, the NPR contributed to a reduction of over 377,000 federal jobs during the 1990s, primarily through buyouts, early retirements, natural attrition and some layoffs (reductions-in-force or RIFs).

Source: https://govinfo.library.unt.edu/npr/library/papers/bkgrd/bri...):

The recommendations that involved changes to law, the GPRA, were passed in both houses of Congress by unanimous voice vote.

I don't think the stated goals of the current efficiency drive are controversial. The problem is the method. I want to understand the basis for people supporting those methods, the "we've got to break some eggs" crowd, when the example of the NPR exists. In my opinion, it didn't cause conflicts between branches of government, didn't disrupt markets, and was wildly successful. It also caused much less disruption in people's lives, because the changes were implemented over several years with much more warning.

I, personally, don't think the real goals of this effort are the stated goals, but that's a different issue.

It worked during Clinton's administration, and didn't involve a wrecking ball. It's possible when people actually commmunicate with each other.

In theory it is less at risk, but in practice there may be fewer TAships due to general budget shortfalls and also more students competing for those spots.

I am on fellowship, but have already been warned where I am that TAships might be cut. New rules have been put in place for maximum number of years one can teach, whereas it used to be a requirement that we TA a certain amount of time at all because of the high need (not sure if it is, maybe this hasn't been removed, just to emphasize that this is despite a need for TAs).

Why not offer a doctorate with the doctoral students paying tuition like we do in Turkish private universites?

TA salaries come out of the university overhead on grants.

It's a different budgetary item. Unlike a household budget where people are given a general income and then asked to decide to spend it on housing, gas, groceries, etc. It's far more like SNAP, where the money given to you is legally bound to very specific things-- you can buy baby food but not diapers for your baby.

Cutting admin people might mean more paperwork for professors and researches, which can lead to less grants and funding because you can’t do science while doing paperwork. Not that easy to be efficient without losing productivity.

defense, yes

social security and medicaid, absolutely not (scrutiny, fine; cuts, no)

Hearth doesn’t set the defense budget, Congress does. His cuts are to drop spending in some Areas and increase it in others like border security.

What's going to happen is another pandemic. Millions will die, and this is what opportunity cost looks like. We recovered from the last one due to mRNA research from NIH grants (NIAID, one of my clients) and DARPA blue sky funding, almost certain to be cut. These people are literally cutting the funding that saved millions of lives from the last pandemic. Full stop. They don't wanna hear about your facts.

Where's the pharma lobby? Pharma is the only industrial science left in the country!

The US graduates too many PHDs, not too few

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Will wronged parties who decide to sue, sue the department, or the university?

Well that makes it sound worse than I thought. Why should it be any higher than the pro rata allocation of the project’s actual use of university facilities (lab space, equipment, etc)?

Even in the defense industry, a cost-plus contract with a 10% margin is a lot. And it’s a federal crime to include costs in the overhead amount that aren’t traceable to the actual project.

If I understand you correctly, what you're claiming is:

University 1 gets $100. $10 of it goes to admin, $90 to researcher. Researcher spends $60 on supplies and equipment. This is accounted for as 10% administrative overhead.

University 2 gets $100. $20 of it goes to admin, $40 to researcher, $40 to supplies and equipment. This is accounted for as 60% administrative overhead.

Is this an accurate characterization of your claim?

I am trying to follow this...

if a grant is the same $1M and Bozo University gets to spend all million on the actual research at hand, but UCSF only gets 200K, how is UCSF more efficient?

Wouldn't the LN2 be traceable to the project either way as direct non-overhead cost, but UCSF efficiency makes that cost lower, achieving the same overhead ratio but either a lower grant cost or more researcher stipend?

It’s worth clarifying that the 59% overhead rate doesnt mean 59% of the funds go to overhead. If you have a $1m grant, you add on $590k for overhead. Then the total grant is $1.59m, so actually 37% of the total funds are for overhead.

I'm curious, why do you find this so high?

Take the army for example, it's estimated 30~40% of the workforce is dedicated to logistics. This is equivalent to 42~66% overhead (in the same sense that overhead is discussed in the context of academia, as +% cost) if you were to count only combat personnel as the direct costs.

This is was universities do, they only count research expenses as the direct costs. Yet it's quite obvious a university can't run just on scientists.

This 59% overhead is equivalent to 37% of the expenses. So, unlike you, I'm positively surprised that 63% of expenses go directly to the core mission with only 37% "waste" (which is necessary to ensure the scientists can actually work, and work efficiently).

The Salk Institute's overhead rate, IIRC, is 90%. Yet, they keep getting funds, so they're doing something right.

FYI, Overhead don't include everything. Even in remaining 49% there are many overheads :)

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What are they for then?

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Oh I should try that one.

Penn's budget is $4.7 billion (just the university, not including the hospitals). Even with a $22 billion endowment, they can only fund a fraction of that off of investment income.

And what are you even talking about "coming back to the taxpayers"? This isn't like a sports team holding a city hostage to get a new stadium. They apply for competitive grants to do particular research projects, then they do those projects. They aren't asking for a handout, they are being paid to provide a much-needed service (health research).

Penn has a $22B endowment, and pulls around 5% out of that annually. That seems to be a reasonably safe number that will give them a good chance of at worst keeping the endowment's size constant. Sure, they can take out more every year (they'd have to take out more than 4x that to match Penn's current budget), but then their endowment would reduce in value every year and eventually run out. That would not be a good outcome.

What is an "activist degree"? (Is activism bad?)

The administrators, athletic coaches, and non-productive tenured professors all cost a lot, and their hands were in the pie before these students' were. By the way, the students in question are for the "activist degrees" you mentioned - they seem to all be in the humanities.