I don't know the situation at MIT in particular but overall creating some budgetary pressures for universities is probably a good thing. Every since it became near impossible to discharge student debt due to legislation in the Bush presidency that was designed to make student loans more easily available, the money spigot has been opened far too wide and this is largely funded by debt taken on by 18 year olds who aren…
At universities like MIT, Stanford and others, many undergraduates do not pay anything close to sticker price. Students from lower and middle income families often receive major aid, and in some cases pay no tuition at all. Full tuition is paid mostly by wealthy families and international students. I myself went to the most expensive university in the country circa 2005, but paid less than state school because they gave me a bunch of grants (not mere loans). For this reason, undergraduate education is mostly break even or a loss leader at many institutions.
Tuition inflation is also tied to inequality. If very wealthy families can pay $60k-$90k a year out of pocket, elite universities can set prices at that level, acting as upward price pressure in the broader market. That's just the magic of the market dynamics at work.
> I went to the college directory of my own college and was amazed at the number of administrative staff relative to teaching staff.
Some bureaucracy may be wasteful, but some exists because modern research universities are genuinely complex institutions. Yes, fewer administrators are tied to teaching, but a professor's job is only about 30% teaching, and classes are not in session 25% of the year. I never understand this idea that all or most of the administrative staff at a university must go toward teaching or else something is wrong / broken.
Large universities are small research communities verging on city status, not mere schools. If you want mere schools we have those in various forms (SLACs, community colleges, trade schools, etc.), but it seems to me people also want all the advanced stuff coming out of the research output these universities produce. The higher the tower of knowledge, the more it's going to cost to build on and maintain it, and the costs don't go up linearly.
> And you have universities complaining about how they don't have enough funding for research and they need MOOAAR.
Research is also and expensive loss leader. Labs, buildings, equipment, safety systems, compliance, grant administration all cost a lot of money, to the point that research is also a loss leader. At my institution we charge about 65% overhead on research grants, but for every research dollar we bring in, it costs 70 more cents for the university to support said research.
The upside is that these universities produce enormous value in the form of scientific discoveries, medical advances, new startups, an educated workforce, and regional economic growth. They bring in foreign and nonlocal money and spend much of it locally. Many of them are economic engines in places that otherwise would be considered "flyover country", acting as an anchor for educators and their families, students, and that attracts hospitals, other schools, restaurants, and suddenly a local economy is formed. You think there would be any economic activity at State College, PA if it weren't for Penn State University? It'd just be another part of Pennsyltucky. Instead there's a whole thriving town there; per capita, State College is in the top 5 economic regions in PA, and Penn State as a whole accounts for 10% of employment in PA (it's not a coincidence the other top 4 economic regions in PA are full of colleges and universities).
https://www.statecollege.com/centre-county-gazette/penn-stat...
So yes, universities should control costs, reduce administrative excess, and protect students from bad debt like you said. But simply starving them of funding risks damaging one of America’s most productive assets. The better goal is a funding model that reduces student debt, preserves world-class research, demands accountability, and recognizes that valuable institutions are not cheap to run. But that's not what's happening, not even close.