Dubai residents looking to enjoy a taste of winter in the Arabian climate can frequent an indoor ski hill. University of Missouri students looking for a bit of summer during the long Midwest winters can frequent the campus’s indoor beach.
Indoor beaches are but one embodiment of college excess in the 21st century. The University of Akron, for instance, boasts a 56 foot climbing wall, the University of South Florida has its own disc golf course, and Temple University has an indoor driving range. Similar luxurious amenities, traditionally more suited for country clubs or resorts, have popped up at public colleges throughout the country over the past decade, driving up the price of college for both students and taxpayers.
College is rapidly becoming unaffordable — a preserve for the wealthy or those willing to become massively indebted. To reverse this trend, colleges should halt spending on such superfluous amenities and pass the savings on to the students and taxpayers. Meanwhile, governments should curtail the funding that allows such excess to take place and perversely drives up cost.
Costs are taking their toll on students. Michigan State University is just one of a number of colleges across the country that have set up emergency task forces to help students deal with the financial pressures that accompany skyrocketing tuitions. Across the U.S., approximately half of all enrolled students, and a quarter of all freshmen, will drop out of school. Of those who drop out, half cite the fact they “can’t afford college” as the reason.
Costs, not academics, are now the biggest reason why students are dropping out.
But it’s not only these needless amenities that are driving up college tuitions but also the addition to the college payroll of an army of “non-faculty administrators.” Defined as those with jobs “not central to the college’s mission of instruction and research,” these non-faculty administrators, who often command exorbitant salaries, are bureaucrats in the worst sense of the word. For example, Ball State’s student center director makes $95,000 a year; Purdue’s Chief Diversity Officer $198 thousand; and University of Illinois’s Associate Dean of Multicultural Affairs $179 thousand.
The ratio of non-faculty administrators-to-students has increased by 23 percent since 1995, according to data from the National Center for Education Statistics, a startling amount considering that student enrollment has increased 50 percent over the same period. Though faculty-, staff-, and graduate assistant-to-student ratios have also increased by double digits, it’s these non-faculty administrators who are the flesh-and-blood version of the indoor beaches.
However, the college-superfluity-to-tuition-increase relationship is more symbiotic than it first appears. Though there is no doubt that such excess drives up tuition, it is not the whole story. Just as Apple couldn’t sell iPhones if it were to make its circuit boards from diamond and pass the costs on to the consumer, colleges shouldn’t be able sell classes if they hire chief diversity officers and pass the costs on to the students.
In other words, why does the market bear superfluity in college but not in other sectors of the economy? Because the college market is inundated with government funding to pay for it. This funding paradoxically drives up the cost of college.
Public U.S. colleges receive about three-quarters of their funding from the taxpayer, split between direct and indirect (through student grants) funding. In 2012, U.S. colleges received $78.4 billion in state and local funds and $55.8 billion in federal funds, an increase from $33.3 billion and $17.6 billion in 1987, respectively. This funding hides the true costs of amenities, administrators, and tuition from students because it pays for a significant portion of them. This artificially increases demand, which then increases price.
Though many college administrators claim increased costs are due to a lack of funding (for which they are forced to compensate by raising tuition), in fact the opposite is true: It is precisely because of government funding that tuition has skyrocketed. How? Aren’t government subsidies like these supposed to lower prices for the user by paying for part of their cost? Sure – in the immediate-term. But over the medium- to long-term this funding raises prices beyond where they would otherwise be because it hides college’s true cost, artificially increasing its demand and in turn its price.
Just as if the government were to pay for three-quarters of everyone’s coffee at Dunkin Donuts then demand would go up and so would price, the same goes for college.
Structural demand growth would have caused some enrollment and tuition increases even without taxpayer funding. The Millennial and X Generations have increasingly been pushed into college for both societal and economic reasons. The recession only exacerbated this trend. But record government funding has put it on steroids — the average cost of a year of college from a four year institution was over $23,000 in 2012, up from just over $3,000 in 1980, exceeding the inflation rate of even healthcare costs.
In this scenario, colleges are the clear winners, living high off the hog with record revenues, expansions, and jobs. The taxpayers are the clear losers paying ever-increasing billions of dollars each year to finance them. The story is more nuanced for students. At first glance, it seems that they benefit from having the taxpayer pick up such a huge proportion of their tuition tab, but when you see that these gains are ephemeral, that this system is responsible for inflating their tuition at record rates because it artificially increases demand, it’s clear that they are ultimately losers as well.
For generations millions of Americans from poor and disadvantaged backgrounds have found college to be a modestly priced ticket into the middle class. Taxpayer funding of colleges, a well-intended policy to make this ticket cheaper and more available, is perversely driving up its cost making it a preserve only for the elite and those who don’t mind taking on a lifetime of debt. And of course the bureaucrats. It should be reined in.