In today’s era of absurdly high tuition, if all US colleges and universities really started running a tight financial ship, could they afford to cut their tuition rates in half and still get by?
Or are they really jacking up tuition out of necessity, not because of irresponsible, wasteful spending?
Well, Harvard’s endowment is worth $36.4 billion, so they could operate for quite a little bit with no tuition income at all.
Colleges waste absurd amounts of money on creature comforts and things that have little to do with education. So, probably not much.
A huge amount of Harvard’s endowment is restricted and can only be used for specific purposes–it cannot be used as general operating funds.
One are where costs have really exploded are for high priced administrators (compared say to the amount spent on faculty).
Services, like goods, are priced at a market rate. If people are willing to pay (for example) a 200% premium for something, why on earth would you lower the price?
So what if they could “get by” at a lower tuition rate? They set it at the point where the get the right number of applicants but still the cross section of applicants they want. Harvard could triple the price and film every place, but then they’d have a college full of nothing but rich kids.
“All US colleges and universities” covers an incredibly wide range of institutions, and of types of institutions. I think any answer would have to be on a case-by-case basis.
Well, since administrative costs have been outpacing faculty costs for a long, long time, and the growth in administrative staff has out-paced faculty by large ratios, I’m sure there’s plenty of fat to be cut. Just eliminating the various ‘diversity’ offices would be a good start.
But you can’t force this stuff. Unfortunately, the huge amount of student loan money that has flowed into the system has distorted the market and created the trends you see today where colleges provide luxurious dorms and facilities to attract students and their student loan golden eggs.
Get rid of government student loans, and work instead to figure out a way to provide more low-cost educational alternatives and signals that employers can use. Online education, apprenticeships, work co-ops, on the job training… Let the rich people go to Harvard and spend $200,000 studying their navels and grievances, and provide a path for poor people to find a way to develop skills that will give them good jobs without feeding more money into the current higher-ed racket.
Over time, the market will sort itself out and colleges will re-adjust or they’ll die and new ones will take their place.
You’re forgetting monopolies and immaterial things like reputation. They are worth what people are willing to pay regardless of their return on investment.
I’d like to see a citation on this. I’ve tried to pay attention to this issue for about a decade now, and this is repeated every so often - but I haven’t found anything to either support OR deny it. You very well may be right - I’m just wondering what you’ve seen.
Harvard is a poor example, I would say a lot of the top major universities provide ample research and educational opportunities to make their high cost at least (partially) understandable.
A better example would be the myriad of small private liberal arts colleges. Those are where I may expect more people “studying their navels and grievances”, although I can see a case for some of them at least to continue.
I would prefer a decrease in some administrative and non-faculty staff (some of the sports programs that do not generate money, some of the dean/chancellor/principal/board of trustees salaries). I think some of that is wasteful spending, more so than courses taught or some of the “perks” (halls, dining facilities, gym).
I would also prefer an overhaul of student loans, and amongst many things, more accountability for the institutions that accept the student loan money. This is happening already, affecting some for-profit and private universities. It should have happened decades ago, but at least it is a start.
Personally, I think it’s like asking why Michael Jordan deserved to be paid so much. Bottom line: because he put butts in seats.
Colleges spend a lot of money on prestigious faculty and fringe benefits like career centers and campus medical clinics. While these things are not strictly necessary to a college education, as long as people will pay for them they’ll continue to be important.
For that matter, we could also list athletics… though the truth is that some sports are net money-makers for the university. Again, not really related to the actual college education, but something that people eagerly pay for.
It’s a little hard to describe any of this as irresponsible or wasteful when the most expensive universities are still turning away more students than they accept.
To get things done, it’s always important to focus on the things that various political factions can agree on, and I think this is one of them. Too many colleges are turning out uneducated, unemployable ‘graduates’, or pushing programs that have poor job prospects on people who clearly cannot afford the loans required to gain those degrees. Holding them accountable is a good idea that’s supported by people from Obama to a bunch of the Republican nominees.
Of course, the devil is in the details. Just how do you hold colleges responsible for the economic outcome of their students, while trying to force colleges to accept students that really have no business in college in the first place? If colleges stop accepting loans for ‘studies’ programs that have no employability prospects, and those programs start to collapse, won’t we see a hue-and-cry from the left?
So long as trillions of dollars in fiat money are flowing into the system, I think it will be pretty hard to avoid major distortions.
The thing is, there’s a vicious spiral. It’s worth paying that kind of money to attract students, because the student loan system ensures that A) the students can pay the inflated rates, and B) they don’t have much incentive for cost control, because everyone else is doing it and because to an 18 year old, the liability of a student loan can seem a long, long way into the future.
If students didn’t have money to pay the high tuition, the colleges would be forced to cut costs in order to attract anyone at all. The first things to go would be the fancy climbing walls, impressive student lounges, luxurious condo residences, etc.
When I went to college in the 1980’s, residence was a 117 sq ft room with two desks and two cots - you shared a room if you had to. Food was served cafeteria style with hard plastic chairs and tables. Study spaces were cheap wooden tables separated by acoustic dividers in large areas. The place basically felt like a huge high school, except for a few big lecture halls and a nice grassy ‘quad’ in between the buildings where most of the students hung out on summer days. The only administrative staff we had were people directly involved in managing the resources - secretaries, accountants, etc.
That type of education is cheap. My tuition back then was $2100 for the year. Residence cost $199/mo, or $99/mo if you shared the room. A meal plan cost an extra $150. The price was such that a kid could make it through with a bit of help from the parents and a part-time job, or if like me with no parental help, by working part-time during school and taking a summer job. The maximum student loan you could get was around $4,000 per year, so at worst you’d come out of college owing the equivalent of a cheap car payment.
This is a common perception, but it’s a lot more complicated than that. The schools installing the massage-parlor-climbing-wall absurdities are large squishy middle of mid-tier schools. These schools are in desperate competition for the most precious thing of all- the full tuition student. A single full tuition student can subsidize a number of bright, high-achieving students who will raise the overall stats of the school (and thus lead to better students, better faculty, better research, and better everything.)
Now, bright rich people have basically everything in the world in front of them, and they aren’t really going to be attracted to a mid-tier school with only a regional reputation. So they are out. Who is left? Rich kids that want to go someplace “nice” but aren’t particularly academically engaged. Cutting edge research and world renown faculty is a bit lost on them. They are looking at the lifestyle and amenenities, and their parents (perhaps the most important people in this equation) are looking for someplace that feels safe, prestigious and comfortable.
So, schools often consider the climbing wall to be a necessary evil. It brings in the people who bring in the money to bring in the scholars.
I’ll ignore your next post, which is absurd to me and outdated to say the least.
This post also has problems like “How do you define programs without employability prospects?” Things like that can vary year by year, decade by decade. Note: I have no undergraduate student debt. My student debt comes from a graduate program that many people don’t think when they spout the nonsense of “useless degrees”.
I have read, at least based on my area of study, that the standard they’re trying to use for accountability is post-graduation employment or placement of their graduates. So if they do not make a good job placing their graduates in decent study-related careers, they’ll have problems. Also, I don’t think many of the “for-profits” (the main issue with student loans) push for “basketweaving 101” type of degrees (or so called that), but many of the ones I know focus on the business and medical fields (DeVry for example).
Comments like “let the market sort it out” ignore the extent to which government policies subsidize and drive up the price of college education. Most notably, government subsidized student loans artificially drive down the price students pay for college while increasing the sticker price, creating a self-fulfilling prophecy wherein more money is needed for college and the price continues to rise.
By far, the best and simplest way to reduce the price of college would be to overturn or otherwise repeal Griggs v. Duke Power Co., which greatly limited the use of IQ tests in hiring. Empirical evidence strongly suggests both that human population groups differ in innate intelligence and that intelligence is positively correlated with job performance for all studied occupations. It’s time to remove the color of law from the blank slate fallacy and faulty psychometrics. In response to Griggs v. Duke Power Co., employers have continued to use IQ as a factor in hiring but have instead outsourced the testing to colleges, which grant admission based on highly g-loaded criteria like GPA and standardized test scores. Empirical evidence indicates that higher education in America doesn’t actually improve ability but instead solely serves as a screener that grades graduates on innate quality.
Allowing employers to directly screen for intelligence would strongly reduce the rationale for college attendance, improve economic performance, and deal a crippling blow to anti-American academics.
There isn’t a monopoly, so there isn’t anything to forget there and I specifically mentioned people paying a premium.
Note that none of this is actually true as stated.
The amount of administrators needs to be heavily cut down, and the ones who remain need their salaries severely cut. Students shouldn’t be going into debt to make millionaires out of useless paper pushers who do no real work.
You don’t think that the government providing aid to college students drives up tuition? That is, by providing more funds than would otherwise be available, colleges don’t take advantage of that by charging more? Do you think colleges are immune from the law of supply and demand?