The cost of running a college has far outpaced inflation over the past 35 years. At Dartmouth here in New Hampshire, costs have gone up tenfold since 1981.

But Dartmouth’s president, Philip Hanlon, is trying to tackle the problem...

...Dartmouth, like most schools, keeps adding new programs but doesn’t eliminate old ones.

“We have not looked at our current spend and said, ‘OK, what’s the least effective 1 to 2 percent of that spend that we can stop doing so we can do these cool new innovations?’ ” Hanlon said.

A 1.5 Percent Cut

So Hanlon told each of the schools at Dartmouth — the college, the engineering school, the medical school and the business school — to reallocate 1.5 percent of its spending. Each school must cut 1.5 percent of its budget every year. It can then spend that money on something new. This poses a challenge, especially as Dartmouth looks to replace traditional, less expensive forms of education, such as lectures, with more expensive methods of teaching...

...“Think for a moment with me about developing the confidence to innovate and take risks,” Hanlon said. “You don’t get that by sitting in a lecture hall and having someone talk to you or by opening up a laptop and watching a lecture. You develop that confidence by trying, by doing, by failing, by being coached, by trying again.”

And coaching students requires more interaction between faculty and students than lecturing them. So it’s more expensive.

So far, reallocating 1.5 percent of the budget has been relatively easy. The engineering school, for example, has cut the positions of people who have retired from departments it wants to shrink and moved them to departments it wants to grow.

Dean Joseph Helble

“So if someone with expertise in a general computational area retires, for example, or someone with expertise in optics, what we’ll do is take that position and put them in these other areas — energy and the biomedical area — to be part of our long-term strategic growth,” said Joseph Helble, dean of the Thayer School of Engineering at Dartmouth, in an interview here...

...But Helble points out that soon, he’ll run out of retiring faculty positions to cut. Many of the rest will be tenure-track positions already filled with people not about to retire, and that will make it harder to make cuts.

“Once those costs are associated with a tenured faculty line, you don’t have the latitude to make changes there, and so the fraction of your total budget that can be reallocated is smaller than it would be in the private sector, but it’s trying to help us approach budgeting with the same kind of strategic decision making,” Helble said.

Helble welcomes the challenge.

“We’re trying to create a culture where all of us who are heading academic units are doing what we would normally do routinely in the private sector: look at your budget at the end of each year,” Helble said. “Ask yourself which investments, which activities are being productive in the way that you had intended and which aren’t core to your long-term mission and then make decisions to reallocate.”