Jay Schalin writes about the phenomenon of entities that live off taxpayer money using some of that money to lobby for still more money. Specifically, he’s looking at the University of North Carolina, which pays out a lot of money every year to hire people to plead its case in the halls of the General Assembly.
So goes one of the standard explanations for the continual rise in the cost of going to college. In this Cato@Liberty post, Neal McCluskey tears it apart. Until recently, college and university leaders found it fairly easy to get money from politicians and donors and they delighted in spending it. As Thomas Sowell has observed, when college leaders spend more money, they claim that their costs have increased, thus justifying still more appropriations and requiring yet more giving and higher tuition. With state budgets deep in the red, family portfolios down, and increased skepticism that college is such a good "investment" for everyone, the easy livin' is over.
In this week's Pope Center Clarion Call, I take a critical look at a proposal made in the Nov. 23 Wall Street Journal by University of Oregon president Richard Lariviere. He repeats the usual lines about how the US is becoming less well educated since fewer young people are obtaining college degrees, rapidly rising tuition, and falling state appropriations to conjure up a scenario meant to alarm Oregonians. He wants them to "save" the University of Oregon through a plan whereby the legislature would borrow half of the endowment he thinks is needed to "stabilize" funding. My contention is that this is a bad deal for taxpayers. It only saves U of O officials from having to compete for tax dollars, along with many other possible uses of money. Everyone would like to have guaranteed revenues and escape the need to persuade people to buy or donate. We get better results, however --more efficient use of resources--when decision makers have to worry that if they aren't doing a good job, people will say "no."
Here's the next installment (chapters 6-12) from our CCAP friends in their report, “25 Ways to Reduce the Cost of College.” We at NAS especially appreciate #6. And we recently published a major article on #10 in Academic Questions. 6. Reduce Administrative Staff 7. Cut Unnecessary Programs 8. End the “Athletics Arms Race” 9. Overhaul the FAFSA 10. Eliminate Excessive Academic Research 11. Streamline Redundant Programs at the State Level 12. Promote Collaborative Purchasing
In this week's Pope Center Clarion Call, I discuss the recent study done by the Center for College Affordability and Productivity on higher ed accreditation. The authors conclude that college accreditation served some useful purposes back in the day when it was voluntary, but now that federal policy has made it almost mandatory (schools aren't able to accept federal student aid money unless they have been given the stamp of approval by a "recognized" accrediting body), its value is questionable. I think they're correct. Accreditation does virtually nothing to ensure educational quality, but it does impose substantial costs, more implicit than explicit. It also raises a significant barrier to entry into higher education by new and innovative providers. Until we cut the Gordian Knot and get the feds out of financing education, we ought to find a better means of keeping people from using Pell Grants to purchase bogus degrees from colleges that only offer a pretense of education. Accreditation is a poor tool for accomplishing that.
That, anyway, is an explanation we sometimes hear from the higher education establishment. Colleges are supposedly helpless victims of rising costs, particular because rising productivity elsewhere in the economy increases the opportunity costs of faculty members to remain in the education sector. In today's Pope Center Clarion Call, economics professor Robert Martin takes a very dim view of a new book that sets forth that exculpatory argument. Martin refutes it, then gives his own explanation for rising costs, which implicates administrative bloat and declining faculty productivity. Martin's own book on this subject will be published early next year by Edward Elgar.
In today's Pope Center Clarion Call, I write about the recent study released by the Goldwater Institute on administrative bloat in higher education. Almost everyone laments the increasing cost of going to college, but they usually ask next, "How can we help students afford it" when the question should be, "Are resources being spent wisely?" Is the profusion of new administrators (generally paid quite nicely to boot) doing much to better educate students? Or is it more the case that they're hired because non-profit institutions must spend all the revenue that comes in and the decision-makers are inclined to spend it in ways that makes life better for them? The Goldwater study introduces a "public choice" element into the analysis of higher education and that's welcome.
The Chronicle of Higher Education reports that an anonymous, 117-pound, 87-year-old donor has struck a deal with Stevens College. She'll donate $1 million to her alma mater if the college's 200 employees lose 250 pounds collectively by January 1, 2011, "and if the president, Dianne M. Lynch, sheds at least 25 pounds, the donor will add $100,000 to her gift." Lynch is taking the challenge in stride: "It's about investing in the people who work at this college." And so employees at the Missouri women's college are starting their diets. According to the Chronicle, President Lynch said, "Sometimes you just need that extra push, and a million dollars is one giant push." It's one giant push alright. What if the employees lose a mere 249 pounds? If they fall short and forfeit the million, there will be finger-pointing. I keep imagining that one employee who couldn't seem to do her part. Just think, not only are you not losing weight, but everyone you work with also hates you. And you cost your college a million dollars. Talk about a miserable life in store for the curvy among the Stevens staff. In the end, everyone loses--either pounds or a million dollars. This could get interesting.
The Chronicle of Higher Education reports that 150 colleges have failed the Department of Education's test of financial responsibility this year. That means these colleges could be in danger of either closing or being bought by for-profit entities. Last year 114 colleges were on this list, and at least one - Dana College - did not survive.
Click on the chart below to see the Chronicle's interactive map of failing institutions for the last three years.
Carol Iannone, the Editor-at-Large of our journal Academic Questions, writes in:
Recently I just happened upon the DVDs of Yes, Minister, an absolutely superb British comedy series from the 1980s about a Cabinet Minister and his canny civil servant undersecretary. Each episode is funny and amazingly intelligent and well written, satirizing some aspect of British government bureaucracy and its darkly comical failure to fulfill the public's needs. One episode concerned higher education, with lots of amusing details about the way it works in Britain. (Oxford seems to be the alma mater of the greater part of the senior civil service, although not necessarily of the elected officials.) One of the Oxford colleges is running out of money because the government has withdrawn the allowance for foreign students, a considerable 4000 pounds. When asked why they don't take more British students, the dons express disdain at the mere 500 pounds that British natives get for attendance at Oxford. This reminded me that an interested friend informed me not long ago that American community colleges take foreign students. He pointed out how irregular that is. When you think about it, there is nothing in the stated aims and mission of the community college network, not to mention in the meaning of the word "community," that should entail accepting foreign students. Could it also have something to do with the money, as in Yes, Minister? Government money? Or the money paid straight out by the foreign students themselves, or perhaps by their governments?
North Carolina is one of three states with a government-run fine arts education institution. The UNC School of the Arts was created back in 1965 by politicians who thought it would be a good thing to somehow change the state's stereotype as a "good old boy" cultural wasteland and bring cultural uplift to large numbers of North Carolinians. The Pope Center is releasing (tomorrow, officially) a new paper that takes a critical look at the school and concludes that it ought to be privatized, thereby saving taxpayer money for other things and probably improving its operations to boot. In this week's Clarion Call, I comment on the paper.
Barbara Bowen, the president of the Professional Staff Congress (PSC), the faculty union of the City University of New York (CUNY), circulated an e-mail asking union members to protest creation of a fifth pension tier that would reduce pension accruals for future New York State workers. The bill might reduce CUNY's and SUNY's competitiveness in attracting new faculty. Two flies in President Bowen's ointment are the state's parlous economic condition and current benefit structure. CUNY retirees still receive retiree health benefits, unlike two-thirds of the 2005 American workforce, according to the Kaiser Foundation, with a lower percentage today. But between 2000 and 2007 1.5 million New Yorkers exited the State as tax increases made $1,000 per month burdens on homeowners common and jobs fled. Stock market bubbles have subsidized New York. Even if the stock market does return, the St. Louis Fed reports potentially inflationary increases in the money supply. The State's Constitution forbids reduction of accrued retirement benefits. However, it does not require a crystal ball to consider that pension and health insurance bills may lead to bankruptcy. This occurred in the mid-1970s. The State has been resuscitated by a 30-year long Wall Street bubble, but the public will protest the bubbly monetary expansion should inflation accelerate. At that point, retiree health insurance and other future and non-funded benefits are likely to become a thing of the past. If the state does not get costs under control, collapse is possible. If so, CUNY faculty will say goodbye to retiree health insurance.