Higher education is bilking taxpayers

[Crookshanks]

For all you on this board who are screaming about the need for increased funding for student loans and grants - this article is for you!
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Fat Cat Universities Don’t Need Any More Money
By Jason Mattera
Thursday, January 4, 2007

College affordability is a problem, with tuition, room & board averaging above $31,000 a year. Reason to boost government aid, as the incoming Speaker says she will? Nope: That “solution” will only make things worse. Here’s why:

Colleges charge outrageous prices knowing that Washington always deflects cost. Consider that qualified students are eligible to receive $4,050 in Pell Grants per year and up to $23,000 per undergrad degree in Stafford Loans (the two main sources of federal student aid). That means there is at least $16,200 in Pell Grants and $23,000 in federal loans currently set aside to offset costs. That’s a whole lot of green college administrators can play with—$39,200 to be exact—when calculating the sticker price. What incentives do schools have to be price-friendly and economically resourceful when the opposite behavior will multiply its piggybank? The government’s “helping hand” gives colleges a perverse market incentive to inflate costs.

Think that’s far-fetched? Consider that congressional spending for higher education jumped 686 percent between 1973 and 2005, the Office of Postsecondary Education tells us. Taxpayers s ed out $72.4 billion in 2005 compared to just $9.2 billion (in 2005 dollars) in 1973. Outlays rose 95 percent from 1995 to 2005 alone. Yet this soaring spending has not brought prices down—instead, it’s goosed them up. Tuition’s grown more than twice as fast as inflation over the last 30 years, indeed, faster than the costs of food, clothing, and shelter.

Here’s the ironic part. Whenever tuition prices climb, we don’t get angry at the ones actually jacking them up. Politicians don’t probe college presidents over college affordability. Instead, they just whip out Uncle Sam’s (our) checkbook. What assurances have we been given by the new Congress that increasing aid this time around will do what’s been long promised and lower cost? You’d think from the Left’s rhetoric that there’s a direct relationship between more aid and lower prices. Not so. Every time aid increases, tuition increases. The College Board—which tracks all these figures— reports that since Congress ratified the Higher Education Act in 1965, tuition has escalated 44 percent.

It’s not like colleges and universities are short on cash, either. The endowments of the nation’s top 50 schools all tower above one billion dollars and sport return on investments (ROI) that would make Morgan Stanley jealous. The big players, reports The Chronicle of Higher Education, contain gigantic investment accounts. Harvard’s endowment is more than $25 billion with a 19.2 percent ROI. Yale’s $15 billion endowment raises the bar with its 22.3 percent ROI, and Princeton scrapes by with an $11 billion endowment backed by a 17 percent ROI. Harvard’s endowment, in fact, is bigger than the gross domestic product of some Latin American countries.

The nation’s top 50 colleges and universities are not the only ones sitting on huge investment portfolios. Two hundred and twenty-seven colleges and universities have endowments ranging from $100 million to $900 million. And an additional 141 have endowments that surpass $50 million.

Why is it that when ExxonMobil posts record billion-dollar profits amidst soaring oil prices, liberals demand price controls and government investigations? But when colleges post record endowments despite soaring tuition prices, liberals demand more federal funding? It’s just as outlandish for the government to subsidize ExxonMobil as it is for the government to subsidize academic establishments with abnormally deep pockets. Don’t look for Pelosi to probe any college presidents over “windfall” endowments or swelling tuition prices or demand that they pay their “fair share.”

At least the extra aid goes toward instruction, right? Wrong! Ohio University Professor Richard Vedder saliently noted that from 1977 to 2000 only twenty-one cents out of each increased dollar spent per student actually covered teaching. So where’s the money being squandered? Administrative salaries and fringe benefits, for starters. Those two categories jumped 26- and 31 percent respectively over the past 5 years, even though the consumer price index only increased by 14 percent. Another reason: bloated staffs and needless vice presidents, deans, provosts, and campus life directors—many of whom are pocketing salaries that average $195,000 a year and controlling six- and seven-figure budgets, reports the Chronicle.

Boston University’s administration, for example, includes one president, two provosts, and 11 vice presidents. There’s a vice president for government and community affairs, a vice president for operations, a vice president for auxiliary services, a vice president for information services, and a vice president for enrollment and student affairs, to name a few. Many colleges and universities are administered the same way, clogging staff with too many deans and chief diversity officers who carry out politically correct agendas. We often complain about government bureaucracy growing out of control. The same has been occurring in higher education.

As taxpayers, we should demand that Congress review the real reasons behind skyrocketing tuition: federal funding and explosive bureaucratic growth. Pelosi and her liberal allies in Congress do not plan on addressing these concerns. Instead, their sights are set on dumping even more of our money into higher education—a move that will only expand the problem of affordability while allowing schools to amass even larger fortunes on the backs of beleaguered American taxpayers.



Jason Mattera is the Spokesman for Young America's Foundation

[Crookshanks]

reducing federal aid will not reduce tuition. raising federal aid does not increase tuition. to insinuate this reveals how stupid you are.

Did you even read the article? I didn't say it - the author of the article did!

Consider that congressional spending for higher education jumped 686 percent between 1973 and 2005, the Office of Postsecondary Education tells us. Taxpayers s ed out $72.4 billion in 2005 compared to just $9.2 billion (in 2005 dollars) in 1973. Outlays rose 95 percent from 1995 to 2005 alone. Yet this soaring spending has not brought prices down—instead, it’s goosed them up. Tuition’s grown more than twice as fast as inflation over the last 30 years, indeed, faster than the costs of food, clothing, and shelter

[ChumpDumper]

So what is to be done? Not this "investigating" crap because the author already claims to know what is going on.

Educational price controls?

Slashing student loans?

[PixelPusher]

U.S. colleges are the creme de la creme of higher education around the world, thus they can compete globally for student dollars, which is part of the reason they can continue to raise tuition, federal aid or not. I'm not sure there is a government solution to this one way or the other.

[Clandestino]

as soon as texas tuition was deregulated prices skyrocketed... the quality of education worsened with more students per teachers, but the price sure went up..

[Crookshanks]

I've heard there is a movement trying to get new legislation passed that will regulate Texas tuitions again. A college education is fast becoming out of reach for many middle class families.

[boutons_]

So here we have conservatives and radical right trashing universities for charging whatever prices the market will bear, optimizing their profits in a "free market??

Calling for regulation of university tuition?

But super-profitable energcos, drug companies, doctors, hospitals, insurance companies are untouchably, sacredly free to extort $Bs every year ?

[Crookshanks]

So here we have conservatives and radical right trashing universities for charging whatever prices the market will bear, optimizing their profits in a "free market??

Calling for regulation of university tuition?

But super-profitable energcos, drug companies, doctors, hospitals, insurance companies are untouchably, sacredly free to extort $Bs every year ?

Again, you show that reading comprehension is not one of your strong suits! Nowhere in the article does the author call for regulation of tuition - he just says that the government should look into WHY the costs are so high.

His point is that the LIBERALS scream bloody murder about the oil company's profits, but show absolutely NO interest in universities who are doing the same thing.

Leave it to you to blame it on the conservatives!

[MaNuMaNiAc]

...double post

[MaNuMaNiAc]

Again, you show that reading comprehension is not one of your strong suits! Nowhere in the article does the author call for regulation of tuition - he just says that the government should look into WHY the costs are so high.

His point is that the LIBERALS scream bloody murder about the oil company's profits, but show absolutely NO interest in universities who are doing the same thing.

Leave it to you to blame it on the conservatives!

yes, god knows you shouldn't overcompensate the people that educate your children

[johnsmith]

yes, god knows you shouldn't overcompensate the people that educate your children

Let's not get into the compensation levels of college professors. It's up for debate on how useful they are in the first place. Anyone that has at least a bachelor's will argue that one.

[101A]

My wife is a professor - she educates our children (those that can hang w/Bicohemistry)!.

SHE is not the one getting all the money, trust me.

However, the President holds multiple black tie events each year- usually to anounce the hiring of a new Dean or VP, ironically.

[boutons_]

"Every time aid increases, tuition increases."

ergo, increases aid directly CAUSES increased tution. got it.

The Repugs protect/increase the energycos' profits with subsidies and royalties not reclaimed. head's Nat Energy Policy flat out gifted $15B to the oilcos for "research". Anybody ever heard if that $15B had strings attached or was ever accounted or produced any research results, benefits? NONE of this tax money EVER comes back to the US Govt.

Subsidizing interest on students LOANS that students REPAY (and the are tracked down and hassled) is quite a different.

This is just a right-winger trashing the overwhelmingly liberal universities.

yawn.

[Crookshanks]

AGAIN boutons - you clearly didn't READ the entire article. The author states:

It’s just as outlandish for the government to subsidize ExxonMobil as it is for the government to subsidize academic establishments with abnormally deep pockets.

See, this "right-winger" doesn't advocate subsidies for the oil companies. AGAIN - the point of the article is to show the double standard of liberals. They have a fit about the subsidies for oil, but could care less about the subsidies for Universities. BOTH are wrong!!!

[boutons_]

at least liberals have double standards

the Repugs have one standard: protect/enrich corps+super-rich

[johnsmith]

at least liberals have double standards

the Repugs have one standard: protect/enrich corps+super-rich

[Crookshanks]

at least liberals have double standards

the Repugs have one standard: protect/enrich corps+super-rich

Considering that many of the wealthiest members in Congress are Democrats - I'd say they've profited quite well from that "repug standard".

[ChumpDumper]

The right-wingers here just turned into anti-market, price controlling socialists.

Nice move.

[johnsmith]

The right-wingers here just turned into anti-market, price controlling socialists.

Nice move.

How?

[Crookshanks]

The right-wingers here just turned into anti-market, price controlling socialists.

Nice move.

There is no free market when it comes to Universities and Colleges. ALL of them have raised tuition - where are you supposed to go if you want to become a teacher, doctor, lawyer, accountant, etc. Is everyone supposed to go to colleges in other countries?

As with the oil companies - we have no choice but to buy gasoline and heating oil. We can cut our consumption, but we can't stop buying it altogether - so they know they've "got us"!

[ChumpDumper]

There is no free market when it comes to Universities and Colleges. ALL of them have raised tuition

Do they all cost the same? Are you accusing them of collusion?

As with the oil companies - we have no choice but to buy gasoline and heating oil. We can cut our consumption, but we can't stop buying it altogether - so they know they've "got us"!

Also a free market.

[johnsmith]

You can't possibly think that the always and constant raising of college tuition is a good thing can you?

[ChumpDumper]

What do you want to be done about it?

[johnsmith]

What do you want to be done about it?

I have absolutely no answer to that question. I think it's just one of those things that we'll have to live with because they can get away with it (obviously). It is something I've complained about since I got done with college though.

Kind of like complaining about the weather.