"All of those trends add to the cost of college, but not by that much. At most, about a quarter of the increase in college tuition since 2000 can be attributed to rising faculty salaries, improved amenities and administrative bloat. By comparison, the decline in state support accounts for about three-quarters of the rising cost of college."
a) they've increased their spending on amenities and salaries by about 25%
b) they're taking in less money than before (apparently they're receiving 3x less money than they are increasing the budget? So budget increase is 25% of extra costs while funding decrease is 75%?)
I suppose it depends what metric we should be judging by. If university generates measurable value for the public (it probably does; having lots of smart people walking around isn't necessarily a bad thing), the next question is "how much money must be spent per unit of said public good?" Of course, no one can really agree on the goal of university or any metrics by which to judge (other than you have to go if you care about your future!), so it's kind of fubar.
I'd be willing to bet that they could get away with spending less money. I've been saying this for a while, but sooner or later student debt will lead to a major re-balancing of balance sheets. I'm a big believer in learning for free via the internet; if you have internet access, you've got everything you need to learn anything and contact anybody. Let the university system die a natural death and let's massively lower the cost and expand the reach of education.
At my university, 'working effectively in groups' usually meant one smart kid at the computer in the computer lab doing all the work while 7 other kids swarmed around them and copying what they did as close as possible without triggering the 'plagiarizing' senses of the teacher.
I worked alone (in the same computer lab) so I could actually learn and internalize what I was taught, but I'd look around and that was a common sight.
A university is not required (and in fact, I'd argue that classwork and grades isn't a good structure for it) in order to figure out how to be effective in a group. Working a single job in fast food taught me more about working in a group than any group project at school or the 'Small Group Communications' class I was required to take for my major.
Have lab space then, have the government pay for it and schedule times for people who want to use it. Should not be limited to a university's chosen student body; it should be open to anyone that wants to learn.
You get much more than that and it gets superfluous. US universities are superfluous to the point of wastefulness.
I still say defund them and let them figure it out or shut down. But yes, I understand why this sounds extreme, particularly if you don't share my views of college being a super shit deal for most people (and universities--peddling such shit deals and responding to criticism with moral indignation--are no better than timeshare salesmen).
anything, that is, which doesn't need a lab. So much for physics, chemistry, biology, everything that depends on them...
How much does music school cost btw? Probably way more than most violinists make right? Going into debt for education is a crap deal, that's what I'm saying. You can get the same result cheaper.
Doable? Maybe. Effective for the general population? Unlikely.
Am self taught at computing too.
In many university courses the tuition you pay is to access the network of alumni, faculty. These are(still) vital for Phd to collaborate and MBAs to find work. I am not sure the internet is actually even a partially workable substitute for this important aspect.
Almost all of the building budget has been paid for through our endowment and donations from wealthy families so all the building activity hasn't really touched our bottom line at all. However, year after year the state has cut our funding which has directly led to the rise in tuition. The University already runs as lean as possible with staff-our total compensation is a joke (even factoring in generous retirement bonuses) because of this many years long death by a thousand cuts that the federal and state government has pushed on us. EVERYONE has to justify their jobs every year-and this includes faculty. If a faculty member isn't publishing, teaching, and doing community outreach on behalf of the University they won't be getting tenured.
Also, that money would, in theory, be available for scholarships or other programs if it wasn't being wasted on unnecessary things.
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Total operating revenues in 2016 were $4.8B (up 6%):
- $1.7B endowment disbursement (36% of revenues, up 7%)
- $1.0B tuition/room/board revenue (21% of revenues, up 7%)
- $0.6B federal funding (11% of revenues, up 3%)
- $0.3B non-federal funding (5% of revenues, up 9%)
- $0.4B donations for 2016 use (9% of revenues)
- $0.8B other revenue (17% of revenues)
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Total operating costs in 2016 were $4.7B (up 5%):
- $2.3B in salaries and wages (50% of costs, up 6%)
- $2.0B in services, space & occupancy, depreciation, equipment (42% of costs)
- $0.2B in interest payments (5% of costs)
- $0.1B in scholarships (3 % of costs)
Harvard used 4% of its endowment to fund operations, up 7% from 2015. In normal years, the endowment fund would see returns that would cover the 4% withdrawal, but in 2016 the fund lost $626m for a -2.0% investment return (3% below benchmark of +1.0%). Real estate returned +13.8%, but public equity returned -10.2% (4.1% below benchmark) and natural resources returned -10.2% (11.6% below benchmark).
Over 50% of the real estate investment portfolio is "direct investment" - the actual purchase and management of property, as opposed to indirect investment in real estate funds. This direct investment returned 20.2% in 2016, probably one of the most lucrative asset classes for HMC. You can be sure that the university will be making a lot more land purchases in the Cambridge area in the near future...
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This is all to say that purchasing real estate is a huge source of returns for colleges like Harvard, and that building facilities and updating old ones will continue as colleges look to increase the value of their purchased land. Salaries and wages at 50% of cost seem slightly high for a largely human asset-based company (compare with 48% for Facebook, 46% for HCA Holdings the largest hospital conglomerate) and will probably continue to be trimmed if returns on the rest of the endowment portfolio don't increase.
[1] http://finance.harvard.edu/files/fad/files/harvard_ar_11_120...
My dorm was modelled on a Swedish prison, had a single plug socket per room, and two toilets between 20 of us. The kitchen was barely big enough for 6 people, and couldn't support more than 4 people cooking at once.
That wretched hall was demolished and replaced by something a lot nicer - because when students are paying thousands of pounds per year, they expect something a little more salubrious for their cash.
The same was true of teaching. I remember a bunch of us complaining about the poor quality of lectures from one particular professor. The head of our department was genuinely shocked when I said "I don't think I'm receiving value for money". Students were now expecting a guarantee of quality for the debt they accumulated.
Better facilities cost money - but capitalism demands that students (as rational consumers) should seek value for money. If you have a choice between UCLA and NYU - it makes sense for your to spend your money on something that is attractive to you.
A truly rational student might forgo comfort in exchange for excellent teaching. But I suspect the majority will spend their money on something which looks nice, rather than is actually effective.
The flip side of this is that student loans are guaranteed by the federal government, and when tuition goes up, so does loan availability. If financing is guaranteed no matter the cost, then no one should be shocked when customers lose their price sensitivity.
It's also important to keep in mind that the graduates coming out of college in the time period mentioned have entered the most challenging job market for new job seekers in 70 years. It's hardly fair to expect them to be able to live up to promises they made in the mid 2000s when everyone running the economy promised it was in great shape, while those same people were building the house of cards that collapsed on the millenial generation. There's lots of blame to go around, but very little of it should land on the students who took out these loans.
What you want and what you can afford can be two very different things. Just because you can get a big loan does not mean you can afford it. For myself, the purpose of going to college was to get a piece of paper to get my first software development job. I didn't care if the college looked nice, offered all sorts of amenities, etc. I went to a local state university and commuted.
Too many people have been brainwashed into going college for the non-education part of the 'college experience' without understanding the long-term implications of coming out of school with an enormous debt load. Continuing to allow 17-21 year old kids to sign up for these loans is just a scam.
This is not true. Federal student loans have an annual cap and overall cap, anything above that has to be financed with private student loans, which are not guaranteed by the government and have much higher interest rates. They are generally co-signed for by a parent, who is on the hook if the student cant pay.
edit: this is further broken down into subsidized and unsubsidized loans (the former the government pays the interest on while you are in school, the latter they dont): https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsid...
Part of this is economics. It's easy to build and subsidize accommodation knowing that you can make the subsidy back on private hire conference guests if you're an Oxford or Cambridge. Less so if you're Bath or Coventry.
Students who used to have reasonable, subsidized accommodation now have a choice between the relatively unregulated and unsubsidized private rental market and these overpriced palaces with flat screen TVs etc.
All TVs are flatscreen. The TV license costs more than a TV.
I'm sure the new student accomodation is overpriced, but that's market effects not the presence of TVs. The real culprit is the government trying to run universities as profit centres. The policy isn't "joined-up": we're probably going to see further crackdowns on student visas at the same time as European funding is withdrawn. I'm waiting for the first redbrick university to go bankrupt..
When was the last time you saw a CRT?
The highest-paid public employee in 39 US states is either a football or men's basketball coach
http://www.businessinsider.com/us-states-highest-paid-public...
But it doesn't say how much their salaries are compared to the overall budget or how much the team facilities cost.
Football at any SEC school or basketball at Duke generate a significant amount of money for the school—sometimes in the hundreds of millions. This revenue may subsidizes other sports programs entirely.
http://www.cheatsheet.com/sports/the-5-most-valuable-college...
If schools want to generate revenue from their sports programs, then winning is very important. What's the key to winning? Hiring the best coaches.
Edit: There is a Forbes article with more information and teams, I just hate linking to Forbes.
UMD would like to disagree. The facilities look nice on the outside, but on the inside they just stick two students into a space smaller than the average apartment living room. Bathrooms are floor shared, no kitchen appliances, laundry is in another building. No AC. $700 per-student. The commercial housing right next to the college, which is the highest cost/quality in the area, is $1400 for two bedroom, bathroom, kitchen, balcony, a full gym, pool, laundry, its a nice living.
nice facilities are easy to see and judge.
There is also an argument that the accommodation has a direct impact on students' education: if students are worrying about dodgy landlords, ongoing issues with heating or mould or leaking pipes, then they'd lose potential study-time in having to address the issues, have less mental capacity to channel to their education, and have an environment less suited to studying.
So good quality accommodation is a net asset for educational services, but in some places the cost is substantially higher than the private-sector rental market.
My brother's just finished at Columbia, and he was living in a slum apartment in NYC. Not nice at all.
Has someone got pics of these amazing college facilities?
I studied in the UK
It seems to me (anecdata), that shortly after tuition fees were introduced (1998/1999), the trend for better (and correspondingly more expensive) student accommodation began, kicking off development of purpose-build accommodation.
There's some interesting numbers in a real-estate report from GVA [2], which shows a reduction in university-owned student halls, and an increase in privately-owned purpose-built student halls.
[1] https://en.wikipedia.org/wiki/The_Young_Ones_(TV_series)
[2] http://www.gva.co.uk/research/student-housing-market-overvie... [PDF]
Some of my friends in London were indeed living like in The Young Ones.
Is there a waiting list?
When you are interested in an apartment you apply for it, and if you are the one with most points you get it. It's all very structured.
I certainly don't think students should be living and studying in squalor or unsafe conditions but I wonder how much of the increased costs in education are a result of the kind of spending that goes into some of these facilities. Have universities, particularly public universities, always spent this lavishly on their campuses or is this a more recent thing?
And have any studies been done on how much of the increased costs are due to increased administration numbers and nicer buildings?