It is purely administrative bloat. This is not speculation. It is DOE facts. This year, in four year education, there are now more administrators than full time faculty. I just left a college of 2000 students and 23 vice presidents. And all of them view themselves as equivalent to business executives and want to be paid accordingly. The president of those 2000 students got $600,000 salary AND bonuses that were pretty much guaranteed. The DOE also cites explosive growth of administrative costs as far and away the biggest factor in college inflation.
Physical plant is not a serious issue. Most of that has been retrofitted and is pretty up to date. Administrators do see the need to spend money on buildings and grounds because it allows them to sell naming rights, to list easily digestible items on their resumes, and to wow the board and prospective students, while cautioning them to ignore that person behind the curtain.
If it were possible for anyone to get a $200,000 car loan with little or no guarantee of creditworthiness, and if the government were to guarantee that the banks making those loans would be made whole for any defaults, it would not be long before Toyotas and Chevys were all priced up into six figures.
This happened to houses in the early 2000s, and itâs happening to college educations now.
Meanwhile, in Germany college tuition is free, even for international students.
Iâm old enough to remember when you could make enough working while in school to pay for your education, with just some bank debt to deal with after graduation. Why does this country hate the concept of an educated workforce so much? If nothing else, just think of the practicality: engineers pay higher taxes than fast food employees. Itâs so short-sighted, and so un-American.
This is what I never understood. I was always told how much more money Iâd make over a lifetime with a university degree - surely that would translate into more taxes paid back in, and a greater contribution to society? Isnât that why we (should) subsidise students?
If there is to be a graduate tax, it should be retrospective - but a well arrange progressive tax system should catch the people benefitting financially from their education - and those that arenât donât have any money for you to get back from them anyway.
My dad is a union member in what I can only say is an excellent union, the IBEW. He was employed as an electrician for 30 years before the great recession when he lost his job. He went into early retirement, went back to school and looked for a job and wasnât able to find one for 5 years. The thing is, if you take early retirement, the money is much better than if you got a job anywhere outside the union anyway. Being a walmart greeter would have meant that he couldnât draw on his very good pension. Sot thatâs one reason why someone might choose not to accept a shitty job designed to bilk you out of all your time and income.
Although being the president or whatever of a company isnât likely to have any kind of union benefits, seeing as youâre the bossman.
This is getting a little off-track, but the Delta Cost Project (who uses the same DOE/IPEDS numbers you mention) has tracked administrative increase at around 37% over the decade 2000-2010, while tuition nearly doubled over the same period. Since administration is typically no more than 25% of a campusâs budget (it is just over 10% at U. Michigan, which documents all such expenses carefully and publicly), it can hardly be primarily responsible for the increase, except in the indirect sense that they can and should be held responsible for poor management decisions and a criminal unwillingness to control profligate institutional spending on things unrelated to the primary mission.
The idea that higher tuition is mainly due to administrative growth was hyped a few years ago by a Goldwater Institute study, and most news and blog stories that repeat this idea trace back to that report. However, that report had an agenda (further defunding of state universities), so should be taken with a big grain of salt. I think it distracts from the more immediate point that many senior administrators are self-important, overpaid, and not very good at their jobs.
Incidentally, utilities at U. Michigan were $105 million last year, or over 33% of the state appropriation, so not negligible.
But did they grow enough to make up for that doubling?
Personally at my school a lot of people blame sports. I donât know how much it accounts for our finances, but the powers that be are definitely valuing it highly, today, in fact, a school day, essentially all of campus was shut down at 2 pm so that we could have a football game that started at 8. The policy was rolled back slightly, but initially it was that there was no parking on campus for anyone but tailgaters and people attending the game with passes specifically for it, anywhere, any time.
Oh, that is such bullshit. They shouldnât legally allowed to be called an institution of higher learning when they go that far ever. Itâs an institution of free labor and concussions at that point. The NCAA is a racket and needs to either be shut down or actually give the âstudent athletesâ (football players majoring in communications) a fair cut of the profits theyâre generating.
I donât think we wouldâve minded so much collectively if they actually canceled classes on that day. They had a walkout at 2; I didnât have class today so I donât know how it went.
Sports are easy to blame, but at most large institutions where sports are important, they are a totally separate budget, almost a separate institution. The money they take in pays for all sports programs, is not transferred to the general institution, and is not drawn from the general institution either. It is more like a football team that lives next door to the university.
Also, your other link actually doesnât support your argument, there is no âtotalsâ there I can find. Increases year over year yes, but totals? No. âCommonfund Higher Education Price Index (HEPI) is an inflation indexâ An inflation index, not a cost index.
And the more expensive studying gets and the more wages donât rise, the more people have to rely on credit and the greater the proportion of the money that goes to banks rather than improving services. The next generation ends up with higher costs and less support from their parents, who are still paying off their own debts. Isnât capitalism wonderful?
Are you sure it goes away when you die? I mean, theyâd better close that loophole or people like this will just start taking out student loans in their childrenâs names and then dying to get out of paying them back!
Since you site UM and Iâm right down the streetâŚU of M pays the city of Ann Arbor for water and sanitary sewer and they have a lot of buildings on central and north campus that havenât had the HVAC systems renovated. That combination is likely a good chunk of their utility bills.
Theyâre tossing up new athletic buildings every couple months. They keep telling us (the tax payers) that theyâre relying only on funds generated from sports to pay for these things. Iâm not convinced, but Iâm also not sure how transparent theyâre required to be when spending from their $10B endowment.
Thereâs probably a ton of money going to legacy costs with universities right now in the form of pension pay outs and retiree health insurance.
