All That Money You’re Borrowing for College?
They’re Burning It
Chances are you’re worried about the never-ending rise in college tuition and the debt you’re racking up. The average college student will owe upon graduation nearly $27,000—and some 10 percent of students will owe more than $40,000.
College tuitions have risen much more quickly than inflation, your parents’ income, or the salaries for entry-level jobs in any profession apart from “international arms smuggler.” What accounts for the skyrocketing prices? The IR decided to take a look.
Too Many Useless Administrators and Staffers
Colleges have succumbed to bureaucratic bloat. As the Washington Monthly reported in October 2011, since 1970 the number of professors on American campuses has increased 50 percent, corresponding to the growth in the student population. At the same time, the number of administrators has shot up 85 percent—and the number of administrative staffers has risen 240 percent. The result? Today’s colleges have more administrative staff than full-time faculty members.
Consider the massive, financially struggling University of California system. As Bloomberg News recently noted, “The university’s bureaucracy is famously monumental, centralized, and costly.” The UC system’s central office alone employs more than two thousand people—and that doesn’t cover any of the ten campuses.
While UC officials were slashing academic programs, the San Diego campus invested in a new high-level administrator: “vice chancellor for equity, diversity, and inclusion.” The University of North Carolina at Wilmington did much the same, increasing funding for its five diversity-multicultural offices—and then merging two science departments to save money.
Meanwhile, you’re taking classes taught by nervous grad students and harried adjuncts.
But at least college presidents are feeling no pain. According to the Chronicle of Higher Education, the median compensation for presidents of public colleges was $441,392 in 2011–12. Four presidents earned more than $1 million that year, including Auburn’s Jay Gogue, who took home $2.5 million in total compensation.
And Gogue wasn’t even the top earner. That honor went to Penn State’s Graham Spanier—who was fired in 2011 after the child-sex-abuse scandal involving former assistant football coach Jerry Sandusky.
Who said that pay wasn’t based on performance?
Grandiose Expansions with Utopian Goals
In Los Angeles, the taxpayer-funded community college system decided a few years back to spend $6 billion rebuilding all its campuses. What was one of the central goals? Nice, green energy generated from solar, wind, and geothermal sources that would take the system “off the grid.” With motives that pure, what could possibly go wrong?
For starters, the executive director who led the rebuilding, Larry Eisenberg, “overestimated how much power the colleges could generate,” according to the Los Angeles Times. The goal was to be energy self-sufficient, but “some of the colleges wouldn’t come close to that goal even if solar panels, wind turbines, and other devices were wedged into every available space.”
Eisenberg also wasted millions of dollars on fanciful schemes, including, the Times reported, “at least $4 million [on] designs for solar and wind energy farms that would never get beyond blueprints.” Some projects that did get built didn’t work, including three solar power arrays that “had to be scrapped because the intended locations were atop seismic faults.” Such blunders “cost nearly $10 million that could have paid for new classrooms, laboratories, and other college facilities.”
None of it made economic sense anyway, the Times pointed out: “Given the cost of alternative energy technology, it would be more expensive for the district to generate all its own electricity than to continue paying utilities for power.”
Eisenberg was fired in March 2011, soon after the LA Times published its report. Three years later, the multibillion-dollar project trudges on, but the most fitting monument to the entire boondoggle was one the Times observed: despite the grand plans to generate wind power, only a single wind turbine was installed under Eisenberg—and it spun so slowly, it couldn’t power a sixty-watt lightbulb.
Sex Change Operations on Your Dime
Prominent psychiatrists are questioning whether “gender-reassignment” surgery is actually malpractice, maiming troubled people’s bodies to match their delusions. But that hasn’t stopped universities from funding these operations at the expense of other students. Duke University announced in May 2013 that it was joining some thirty-seven other colleges nationwide in paying for these controversial and irreversible procedures, and that it would be raising student fees to cover the cost. A university official boasted to the Duke Chronicle, “The addition of sexual reassignment surgery with a $50,000 cap makes Duke’s student health care plan one of the most, if not the most, transgender-inclusive plans in the country.” The University of Illinois is also joining in, while Campus Reform reports that “the University of California, Berkeley, added coverage of up to $75,000. . . . The university will fund 90 percent of the operation.”
Dorms That Put Spas to Shame
In 2012 the Fiscal Times did a rundown of the “Ten Public Colleges with the Most Luxurious Dorms.” Google it, because you really must see the slide show, but here are a few highlights of what taxpayers are offering eighteen-year-olds:
Georgia State University, University Commons: Even freshmen receive the perks. In this “gated-community complex” for underclassmen, each student gets “a fully furnished private room” that is “wired with high-speed Ethernet, a high-speed voice link, and cable TV,” in a location with “some of the best views in Atlanta.”
University of Cincinnati, Campus Recreation Center Housing: This dorm offers “a 40-foot climbing wall, a fitness center with more than 200 machines, an Olympic-sized lap pool . . . a suspended indoor track, and a six-court gym,” plus “a convenience store and a dining hall with seven taste stations.”
Purdue University, First Street Towers: This $52 million complex (whose architect called it “essentially a hotel”) offers “single air-conditioned rooms with private baths. . . . Two student lounges on each floor offer 47-inch flat-screen TVs, custom-designed entertainment centers, and ceramic-tiled kitchenettes.”
Bloated Athletic Programs
Too many universities have become life-support systems for sports teams, warned Buzz Bissinger, author of Friday Night Lights, in a Wall Street Journal op-ed. Football programs enjoy a reputation as cash cows for their universities. But Bissinger pointed out that “43 percent of the 120 schools in the Football Bowl Subdivision lost money on their programs.” He cited examples like the University of Alabama at Birmingham, whose athletic department dinged the university—and student fees—for $13 million in 2008–9, mainly “because the football program cost so much.” Similarly, New Mexico State University, which has an expensive but perennially lousy football team, gave a 70 percent subsidy to its athletic department. The University of Maryland cut eight varsity programs to save money—but spent more than $50 million to modernize its football stadium.
After an eighteen-month study, the blue-ribbon Knight Commission on Intercollegiate Athletics reported in 2010 that “expenditures in big-time college sports grew 38 percent—nearly twice as much as spending on academics—from 2005 to 2008.” There is no letup in sight, according to the commission: “The ten public institutions that spend the most on college sports are on pace to exceed $250 million annually in athletics expenses, on average, in 2020.”
As Bissinger asked: How does all this spending contribute to education?
Keep all that in mind as you’re still paying off your student loans twenty years from now.