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Wed Jun 27, 2012, 05:55 PM

Bloated Payrolls And Land Grabs Are Pushing College Costs Through The Roof

In a recent interview with NPR's Fresh Air, Carey pointed out two things that are causing this spike: a push for prestige and putting too many people on payroll.

Colleges are "always building things" to expand their campus, explained Carey, noting how they constantly make pricey grabs for land and revamp old buildings. As far as payroll goes, today's colleges employ more deans, assistant deans, and provosts than he ever saw them do 20 or 30 years ago.

"I'm sure that most of those people are working hard at real jobs," he said, but "the more the prices go up, the more that these students who are squeezed out of opportunity are middle-income students, low-income students, and the net effect over time is to make our college and university system no longer the engine of economic mobility that it once was."

High tuition costs aren't the only issue facing college students these days. A fascinating report in The New York Times recently argued that misleading marketing and admissions letters lure bright-eyed students into debt by assuring them their return on investment will outweigh the cost.


Read more: http://www.businessinsider.com/two-unexpected-things-are-pushing-college-costs-through-the-roof-2012-6

17 replies, 1381 views

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Reply Bloated Payrolls And Land Grabs Are Pushing College Costs Through The Roof (Original post)
FarCenter Jun 2012 OP
Tom Ripley Jun 2012 #1
FarCenter Jun 2012 #4
n2doc Jun 2012 #2
FarCenter Jun 2012 #5
n2doc Jun 2012 #6
FarCenter Jun 2012 #15
AtomicKitten Jun 2012 #3
spanone Jun 2012 #7
Southerner Jun 2012 #8
msongs Jun 2012 #9
SammyWinstonJack Jun 2012 #10
dionysus Jun 2012 #11
coalition_unwilling Jun 2012 #13
Southerner Jun 2012 #16
coalition_unwilling Jun 2012 #17
bemildred Jun 2012 #12
mmonk Jun 2012 #14

Response to FarCenter (Original post)

Wed Jun 27, 2012, 06:03 PM

1. That is indeed the case with Michael Adams and the University of Georgia. Build! Build! Build!

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Response to Tom Ripley (Reply #1)

Wed Jun 27, 2012, 06:19 PM

4. And it is at a time when information technology is going to reduce the need for buildings.

Commercial office building vacancy rates remain high, partly because information technology allows more efficient mobile operations such as having salespeople on the road enter sales instead of faxing them back to an office for keying, or loading dock personnel scanning or using rfid to input receipt of goods instead of that being done from paper by a clerk.

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Response to FarCenter (Original post)

Wed Jun 27, 2012, 06:13 PM

2. No the biggest issue is the decreasing amount of state support

The UC system in California used to get 78% if their budget from the state as recently as 1990. Now it is closer to 50%
http://www.universityofcalifornia.edu/news/budgetmyths.pdf

Some schools, like the University of Virginia, get less than 10% of their budget through state funding. That money has to be replaced by another source, and that source is tuition. Not disagreeing entirely with the points made in the OP article, but declining state support is the real issue, and one that no one talks about because it doesn't put the Universities in a bad light.

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Response to n2doc (Reply #2)

Wed Jun 27, 2012, 06:27 PM

5. How much did UC Merced cost?

http://en.wikipedia.org/wiki/University_of_California,_Merced

The result is institutions like the new University of California—Merced, which is located in the Central Valley, where the vast majority of Californians do not live. In April the U.C. Board of Regents approved a 10-year building plan for Merced. It will cost $1.1-billion, on top of hundreds of millions already spent, and over $100-million in annual operating costs. The dorms alone are slated at $131-million. Where California will find this money, given its banana-republic budget, is unclear.

This is madness. If California decides to invest a few billion dollars on upgrading its higher education infrastructure—and to be clear, I think it absolutely should—why not spend it in Los Angeles, where people who want to go to college actually live. When new businesses enter a market, they don’t say “Let’s find a place where nobody is offering our services.” They say, “Let’s find a place where lots of people are offering our services, because that’s where the customers are.”


http://chronicle.com/blogs/brainstorm/the-case-for-building-new-public-universities/26609

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Response to FarCenter (Reply #5)

Wed Jun 27, 2012, 06:35 PM

6. 2 things

1. Do you think not expanding is a good idea when demand is increasing at a rapid pace?

2. Do you understand that building budgets are separate from those funding operations? One could argue that they should not be, but they are. And construction is one of the biggest political donor industries. Construction costs are not part of the rising tuition problem.

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Response to n2doc (Reply #6)

Wed Jun 27, 2012, 10:20 PM

15. Another Round of UC Construction Bonds Backed By Tuition Hikes

UC continues to benefit from one of the most diverse revenue streams in higher education, and Fitch notes positively its low and declining reliance on state aid as a revenue source (12.1% in fiscal 2011). The university's other significant funding sources include revenue derived from the operation of its five medical centers (27.1%), grants and contracts generated by its substantial sponsored research activities (24.5%), and student-generated revenues, including tuition, fees, and auxiliary receipts (16.6%).


http://reclaimuc.blogspot.com/2012/02/another-round-of-uc-construction-bonds.html

So even though construction funds come from a capital budget obtained by borrowing, the bonds and the interest are paid off using the revenue stream that includes tuition. At least that is what Fitch, the bond rating agency, thinks is the case.

And why expand in Merced. There is little chance of attracting top students to a city that "In the 2007 version of the book "Cities Ranked & Rated" by authors Bert Sperling and Peter Sander, Merced was ranked 370th of 373 cities nationwide."

http://en.wikipedia.org/wiki/Merced,_California

When students that do come graduate, they are going to flee the area rather than being hired by local businesses (since there aren't any, and no student smart enough to start one would try to start it in Merced.)

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Response to FarCenter (Original post)


Response to FarCenter (Original post)

Wed Jun 27, 2012, 06:39 PM

7. absolutely the case in nashville with vanderbilt and belmont colleges....

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Response to FarCenter (Original post)

Wed Jun 27, 2012, 06:41 PM

8. IMHO the biggest thing driving up college tuition costs...

...is the massive amounts of government dollars available via Pell grants and loans we have now.

It drives up demand. When demand goes up, the price goes up.

Simple.

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Response to Southerner (Reply #8)

Wed Jun 27, 2012, 06:58 PM

9. like the massive amounts of government $$ available for the welfare military nt

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Response to msongs (Reply #9)

Wed Jun 27, 2012, 07:13 PM

10. +1.

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Response to Southerner (Reply #8)

Wed Jun 27, 2012, 07:15 PM

11. ROFL

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Response to Southerner (Reply #8)

Wed Jun 27, 2012, 07:21 PM

13. So your solution to the problem, one presumes, is to restrict

 

higher education only to children of the financial elite and prevent everyone else from attending by reducing financial aid programs? That will solve the demand problem, by God.

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Response to coalition_unwilling (Reply #13)

Thu Jun 28, 2012, 09:27 AM

16. I didn't offer a solution.

Nor do I think it would be best for only the kids of the wealthy be allowed to go to college. I am only stating what I believe to be the reason why college costs have skyrocketed. The amount of federal money being inserted into higher education via grants and loans has gone up exponentially in recent years. It's over a $100 billion a year now. The universities have ZERO incentive to be efficient and actually find themselves with lots of extra money to put up new buildings and higher more staff.

The same has happened with the defense industry. Tons more money being inserted into it and the price of tanks and aircraft keeps going up and up.

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Response to Southerner (Reply #16)

Thu Jun 28, 2012, 09:33 AM

17. N.B. "hire" (not "higher") - n/t

 

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Response to FarCenter (Original post)

Wed Jun 27, 2012, 07:17 PM

12. One can hardly wait for the outsourcing and education insurance to come.

Although we already have education saving accounts, so insurance cannot be far behind.

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Response to FarCenter (Original post)

Wed Jun 27, 2012, 07:23 PM

14. The problems are funding related.

There is a direct relationship with budget cuts and tuition increases.

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