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Message
Why Colleges Are So Expensive
Posted on 6/24/21 at 10:45 am
Posted on 6/24/21 at 10:45 am
First off, let's look at the problem:
These two charts give solid visuals to the fact that the issue is happening but why is it happening, what are the drivers?
Administrative Expansion
To me the largest reason for the rise in costs also results in the explosive costs: more management positions being created. According to Dept. of Ed. data ( LINK), the sheer number of these positions grew by 60% from 1993-2009. This is ~10x the growth rate of tenured faculty positions. An analysis by one California Polytechnic University, Pomona professor found the number of administrators increased by an insane amount between 1975 and 2008 when compared to that of full-time faculty members.
Earlier I mentioned that "the largest reason for the rise in costs is also the result in such explosive costs," this is because of how and why these positions have been created. For instance, if you're going to create a student behavior policy which makes it an infraction to offend someone by calling the wrong pronoun then you're going to need someone for those students to complain to. That someone will need at least a secretary to start with, eventually getting a student worker or two as well. Those positions can end up with hefty compensation packages.
According to the Delta Cost Project many four-year institutions spent more on administration, student services (see the aforementioned person to complain to about mis-gendering) and academic support than they did on their teaching staff.
The Ease of Getting Financial Aid
The other big issue seems to be the flood of government-backed money into the colleges and universities through loans and grants.
These have far more than doubled since the 1980s, and that's adjusted for Inflation.
As more money has become easier to get, these school systems have raised their rates in order to gain that extra funding (which is normal) but they haven't been doing it because they need to (as referenced above with the disproportionate management expansion) but rather simply because they can.
Let's say you're about to buy a new car for $20k. You might haggle with the dealer a bit and even negotiate a little better price but it's probably not going to be too far off from that advertised $20k. Now what if the government created a program which would add $10k to your pocket explicitly for buying a new car? If you walk into the dealer once this program is underway do you think the dealership is going to sell you that car for only $10k out of your pocket?
No, they're going to raise their prices by as much as $10k if they know the government is going to toss in up to an extra $10k. Now your new car costs closer to $30k.
This is what happens with so much "free" government grant and student loan money rushing into colleges and universities.
Another aspect of this is that as colleges have this glut of students and funding, they can use that extra cost as an inducement to recruiting students who may be seen as more desirable for socio-political reasons.
Imagine a college has created diversity goals.
If they have too many of a certain demographic but a dearth of another, they can then create scenarios to lower the inflated costs of tuition which target their intended demographic. In essence, the higher the tuition, the easier it is for the school to recruit the type of student they want by lowering it for only those groups they want more of on their campus(es). LINK
To go back to the car analogy, let's say a new Denali costs $70k. Let's say Chevy has decided it wants more people in Montana to buy Denalis because no one there owns one. They might then drop the price to $30k for legal residents of the state. Or if they decided too many Asians drive Denalis and they want more Italians driving them they would charge full price to Asians while giving significant cuts to Italians. Those outside of these more desired groups would essentially be paying for the difference so those target groups could be made into customers.
Other Stuff
Along with these we have the factors of how the increase in enrollment also means a larger number of dropouts (around 1/3 of college students drop out, most during/after their first year) which is basically "free money" for that semester.
This has also increased the proliferation of "fluff degrees" with dubious utility like a Masters in Foresight from the University of Houston, a Bachelors of Science in Packaging Science from Clemson, a Bachelor's in Ecogastronomy from the University of New Hampshire, a Masters of Puppet Arts from the University of Connecticut, or even a Doctorate in Gender Studies from UCLA. The main problem here being the high costs in obtaining these degrees compared to their low value in the market (aside from some rare and very specific instances).
In conclusion, what we have now is a college system which has grown fat and greedy off of a steady diet of easy money. This greed exacerbates costs while the "fat" is expressed by the expansion of useless middle management and projects designed to accommodate "feel good" philosophies and curricula rather than keeping costs down and/or expanding courses which provide a positive, measurable economic return to not just society but (and more importantly) to the students who pursue these degrees.
These two charts give solid visuals to the fact that the issue is happening but why is it happening, what are the drivers?
Administrative Expansion
To me the largest reason for the rise in costs also results in the explosive costs: more management positions being created. According to Dept. of Ed. data ( LINK), the sheer number of these positions grew by 60% from 1993-2009. This is ~10x the growth rate of tenured faculty positions. An analysis by one California Polytechnic University, Pomona professor found the number of administrators increased by an insane amount between 1975 and 2008 when compared to that of full-time faculty members.
quote:
For example, based on data in the California State University Statistical Abstract, the number of full-time faculty in the whole CSU system rose from 11,614 to 12,019 between 1975 and 2008, an increase of only 3.5 percent. In the same time period the total number of administrators rose 221 percent, from 3,800 to 12,183. In 1975, there were three full time faculty members per administrator, but now there are actually slightly more administrators than full-time faculty.
quote:
In 1984 we had 90 "Management Personnel Plan" employees, but in 2010 there were 132. Based on data provided by the chief financial officer, the total compensation of those employees, including fringe benefits, was $20.6 million in 2010.
To put this total into perspective, if the administrators were reduced by 42 to return to the same level as in 1984, the university could hire over 50 full-time faculty (who are typically paid less than administrators). These additional faculty could teach over 300 additional classes per year, which would make it easier for students to graduate in a more timely fashion.
Earlier I mentioned that "the largest reason for the rise in costs is also the result in such explosive costs," this is because of how and why these positions have been created. For instance, if you're going to create a student behavior policy which makes it an infraction to offend someone by calling the wrong pronoun then you're going to need someone for those students to complain to. That someone will need at least a secretary to start with, eventually getting a student worker or two as well. Those positions can end up with hefty compensation packages.
According to the Delta Cost Project many four-year institutions spent more on administration, student services (see the aforementioned person to complain to about mis-gendering) and academic support than they did on their teaching staff.
The Ease of Getting Financial Aid
The other big issue seems to be the flood of government-backed money into the colleges and universities through loans and grants.
These have far more than doubled since the 1980s, and that's adjusted for Inflation.
As more money has become easier to get, these school systems have raised their rates in order to gain that extra funding (which is normal) but they haven't been doing it because they need to (as referenced above with the disproportionate management expansion) but rather simply because they can.
Let's say you're about to buy a new car for $20k. You might haggle with the dealer a bit and even negotiate a little better price but it's probably not going to be too far off from that advertised $20k. Now what if the government created a program which would add $10k to your pocket explicitly for buying a new car? If you walk into the dealer once this program is underway do you think the dealership is going to sell you that car for only $10k out of your pocket?
No, they're going to raise their prices by as much as $10k if they know the government is going to toss in up to an extra $10k. Now your new car costs closer to $30k.
This is what happens with so much "free" government grant and student loan money rushing into colleges and universities.
Another aspect of this is that as colleges have this glut of students and funding, they can use that extra cost as an inducement to recruiting students who may be seen as more desirable for socio-political reasons.
Imagine a college has created diversity goals.
If they have too many of a certain demographic but a dearth of another, they can then create scenarios to lower the inflated costs of tuition which target their intended demographic. In essence, the higher the tuition, the easier it is for the school to recruit the type of student they want by lowering it for only those groups they want more of on their campus(es). LINK
To go back to the car analogy, let's say a new Denali costs $70k. Let's say Chevy has decided it wants more people in Montana to buy Denalis because no one there owns one. They might then drop the price to $30k for legal residents of the state. Or if they decided too many Asians drive Denalis and they want more Italians driving them they would charge full price to Asians while giving significant cuts to Italians. Those outside of these more desired groups would essentially be paying for the difference so those target groups could be made into customers.
Other Stuff
Along with these we have the factors of how the increase in enrollment also means a larger number of dropouts (around 1/3 of college students drop out, most during/after their first year) which is basically "free money" for that semester.
This has also increased the proliferation of "fluff degrees" with dubious utility like a Masters in Foresight from the University of Houston, a Bachelors of Science in Packaging Science from Clemson, a Bachelor's in Ecogastronomy from the University of New Hampshire, a Masters of Puppet Arts from the University of Connecticut, or even a Doctorate in Gender Studies from UCLA. The main problem here being the high costs in obtaining these degrees compared to their low value in the market (aside from some rare and very specific instances).
In conclusion, what we have now is a college system which has grown fat and greedy off of a steady diet of easy money. This greed exacerbates costs while the "fat" is expressed by the expansion of useless middle management and projects designed to accommodate "feel good" philosophies and curricula rather than keeping costs down and/or expanding courses which provide a positive, measurable economic return to not just society but (and more importantly) to the students who pursue these degrees.
20
Posted on 6/24/21 at 10:46 am to Bard
because Post high school education turned into a business at some point. You could say, "they went the corporate model".
Posted on 6/24/21 at 10:49 am to Bard
Federally Guaranteed Student Loans.
Posted on 6/24/21 at 10:50 am to CarRamrod
quote:
because Post high school education turned into a business at some point. You could say, "they went the corporate model".
They would have to actually compete on costs if that were the case.
Posted on 6/24/21 at 10:53 am to Bard
Packaging science seems reasonable.
Someone has to design all the fricking styrofoam and shite
That being said, any information on why there is so much growth in the admin departments?
Someone has to design all the fricking styrofoam and shite
That being said, any information on why there is so much growth in the admin departments?
Posted on 6/24/21 at 10:53 am to Bard
quote:
The Ease of Getting Financial Aid
This is the main reason as without students being able to get $100k to pay for a degree that will pay them $35k/yr, if they graduate, then all of rest would not happen.
Easy money is the problem.
Posted on 6/24/21 at 10:56 am to Y.A. Tittle
quote:
They would have to actually compete on costs if that were the case.
If the consumer were behaving normally, sure. In this instance though the consumer is actually the government coffers providing these grants and loans. The government is acting more like a gambler with limitless resources at a casino than a conscientious consumer.
Posted on 6/24/21 at 10:58 am to Bard
quote:
Why Colleges Are So Expensive
Posted on 6/24/21 at 10:58 am to Bard
For the price that people pay they should be advising every student how to make money money with what they are studying. Sometimes that’s not the ultimate goal but without it your degree is potentially worthless. Crazy how little this addressed.
Posted on 6/24/21 at 10:59 am to SammyTiger
quote:
Packaging science seems reasonable.
Yeah, as an engineering elective course, not a damn major.
Posted on 6/24/21 at 11:00 am to Bard
The biggest issue to the rising costs if tuition is states and federal budgets no longer subsidized it. If they stop receiving external funding the only other place the revenue comes from is tuition.
Then compound that with the fact that there is a constant stream of new social and equality requirements from those same state and federal entities that are driving the bloat at the admin level.
It doesn’t take much investigation to realize the growth areas in academic administration are not at the individual college areas, and instead are in the D and I, Student Equality, and the like.
The true discipline specific admin is not seeing the pay bump.
Then combine that with easier to get financial assistance, abysmal student preparedness, unethical advisors overstating both a students chance to get into a specific program and likelihood of getting a job afterwards, and we then now get the student debt bubble.
You want to fix higher Ed, then get the politicians to refund it and stop adding new money pits that universities have to pay for with no offset in their funding. That would help stop the tuition increases…
Then compound that with the fact that there is a constant stream of new social and equality requirements from those same state and federal entities that are driving the bloat at the admin level.
It doesn’t take much investigation to realize the growth areas in academic administration are not at the individual college areas, and instead are in the D and I, Student Equality, and the like.
The true discipline specific admin is not seeing the pay bump.
Then combine that with easier to get financial assistance, abysmal student preparedness, unethical advisors overstating both a students chance to get into a specific program and likelihood of getting a job afterwards, and we then now get the student debt bubble.
You want to fix higher Ed, then get the politicians to refund it and stop adding new money pits that universities have to pay for with no offset in their funding. That would help stop the tuition increases…
This post was edited on 6/24/21 at 11:02 am
Posted on 6/24/21 at 11:00 am to Bard
Great OP and all, but you don’t really need charts and all to realize that once the govt basically guaranteed financial aid to everyone, prices increased exponentially because of simple economics.
Posted on 6/24/21 at 11:04 am to Flats
It’s a graduate program, but it also depends on how many such programs there are.
If you graduate at one of like 100 people doing this and it has an actual application than it’s worthwhile.
If you graduate at one of like 100 people doing this and it has an actual application than it’s worthwhile.
Posted on 6/24/21 at 11:07 am to Bard
Notwithstanding the graduation parties and Senior trips, I remember when graduating high school was actually a big fricking deal.
Back "in the day," a lot of people stopped there and went out into the working world. Of course, back then, the USA had a fairly robust manufacturing sector that provided good pay (and careers) to "blue collar" workers.
Going to college was not necessarily the "exception," but it was a pretty big deal and required a lot of consideration by families because it was expensive and unless you were cut out to do the coursework to become a professional (and, back then, being a teacher was considered a profession in addition to doctor, lawyer, accountant, engineer, etc.), you likely didn't go to college.
Of course, with the decline of manufacturing making jobs immediately out of high school more scarce, college became a "delay" to getting into the "real world" and the easy money loans made it affordable for those who would normally have been priced out (or concerned about the debt after the fact).
Now, with few exceptions, outside of professional degrees, colleges are paper mills spewing out over "educated" 24 year olds saddled with debt, which is why the screaming for forgiveness is so loud.
Someone mentioned a bubble, and it is - financially, and socially.
Back "in the day," a lot of people stopped there and went out into the working world. Of course, back then, the USA had a fairly robust manufacturing sector that provided good pay (and careers) to "blue collar" workers.
Going to college was not necessarily the "exception," but it was a pretty big deal and required a lot of consideration by families because it was expensive and unless you were cut out to do the coursework to become a professional (and, back then, being a teacher was considered a profession in addition to doctor, lawyer, accountant, engineer, etc.), you likely didn't go to college.
Of course, with the decline of manufacturing making jobs immediately out of high school more scarce, college became a "delay" to getting into the "real world" and the easy money loans made it affordable for those who would normally have been priced out (or concerned about the debt after the fact).
Now, with few exceptions, outside of professional degrees, colleges are paper mills spewing out over "educated" 24 year olds saddled with debt, which is why the screaming for forgiveness is so loud.
Someone mentioned a bubble, and it is - financially, and socially.
Posted on 6/24/21 at 11:14 am to TheFritz
quote:
For the price that people pay they should be advising every student how to make money money with what they are studying. Sometimes that’s not the ultimate goal but without it your degree is potentially worthless. Crazy how little this addressed.
While Liberal Arts degrees are on the decline, they are still fairly prevalent while also generally being the ones with the least value.
Even their own understand this...
If this information were mandated within each College, Liberal Arts degree paths like those mentioned above and in my opening post would dry up almost overnight. While some students might move into other fields, I can't help but believe others would simply leave higher education altogether (thus removing their tuition money from the system). They aren't going to hamstring themselves when they can see this even through their own liberal-tinted glasses.
Posted on 6/24/21 at 11:16 am to SammyTiger
Easiest way to fix this is to tie funding to the potential ability to pay it back. And this needs to be a legitimate computation of potential earnings, not a skewed best case idea. That way if you can’t afford to pay off your loan in your chosen degree path then you aren’t getting federal financial aid..
It would have a pretty interesting impact on both the hierarchy and internal power structure inside of academia. Part of the issue is that internal policy is impacted by faculty voting, which has a significant bias away from the engineering and business schools. So many of these decisions are being made by people who represent disciplines that have low earning potential and goes against sound long term financial stability.
Butts in the seats and the number of tenure track faculty that are hired to teach them are what drives academia. Change the ratio of who is teaching what and a lot of this nonsense would fix itself.
It would have a pretty interesting impact on both the hierarchy and internal power structure inside of academia. Part of the issue is that internal policy is impacted by faculty voting, which has a significant bias away from the engineering and business schools. So many of these decisions are being made by people who represent disciplines that have low earning potential and goes against sound long term financial stability.
Butts in the seats and the number of tenure track faculty that are hired to teach them are what drives academia. Change the ratio of who is teaching what and a lot of this nonsense would fix itself.
Posted on 6/24/21 at 11:17 am to Flats
quote:
Yeah, as an engineering elective course, not a damn major.
Exactly. This would be no different than offering a Bachelor's in Bowling.
Posted on 6/24/21 at 11:17 am to Animal
quote:
Federally Guaranteed Student Loans.
Cheap money and Government interference
Posted on 6/24/21 at 11:25 am to Bard
Because colleges figured out young adults were guaranteed money for student loans and decided to keep pushing the limits as to how much they could charge.
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