Tag Archives: high tuition

The Seven Deadly Sins of Higher Education

About 15 years ago I began writing extensively about the rising cost of higher education, even starting a research center (the Center for College Affordability and Productivity) focused on that topic. I am now convinced that rising costs are NOT the dominant problem facing our universities. There are at least seven deadly sins –not precisely the original Christian deadly sins of pride, greed, lust, envy, gluttony, wrath and sloth—but pretty close.

Let’s start with greed. The first deadly sin is that colleges are outrageously expensive. It takes a larger proportion of the income of the typical citizen of New Jersey to pay the listed tuition fee of Princeton University today than it did in 1840. Whereby the cost of virtually everything else has risen less than our incomes, thereby making them more affordable, college is the unique exception.

The federal government has contributed mightily to the problem: tuition growth has accelerated rapidly since the late 1970s –when federal student loan and grant programs were vastly expanded to the bulk of the college population. In 1987 Education Secretary Bill Bennett claimed federal aid programs enabled colleges to raise fees dramatically, and recent research at both the New York Federal Reserve and the National Bureau of Economic Research confirms it. Higher tuition fees have funded a vast unproductive university bureaucracy (the sin of gluttony) that detracts from teaching and research.

Related: How Students Intimidate Professors and Stymie Learning

Not only are costs rising, benefits are falling. The second deadly sin is that there is far too little “good” learning going on in America’s universities. By good learning, I mean learning that entails the transmission of the knowledge and wisdom of previous generations to the current one and enables us to add to this past cultural and intellectual capital. Today’s college students, typically spending less than 30 hours weekly for 32 weeks a year on academics, are remarkably ignorant about our own past, giving them the impression that they are the Superior Generation, possessing an extraordinary fount of knowledge and moral virtues.

Thus historical and wrathful ignoramuses at Yale insisted that John C. Calhoun’s name be taken off a college, despite the fact he served as Vice-President of the United States under two presidents, was in Congress (elected by the people or the state legislature) for over two decades, and held major cabinet appointments under two other presidents.  Like many others of his generation, he strongly defended slavery, becoming a strong believer of state rights. Times change, and the notion of today’s faux Superior Generation that “only our values are morally sound” denigrates those responsible for America’s exceptionalism.

This sin in not limited to historical illiteracy. For example, I suspect one-third of my students use the word “compliment” when they mean “complement.” A federal Adult Literacy Surveyed some years ago showed declining literacy among college students, an undoubtedly continuing trend. I doubt most college students could name one of John Milton’s works and are clueless on what Aristotle or Rousseau contributed to our culture. Contrary to the contemporary zeitgeist, an appreciation of the contributions of some “dead white men” strengthens the greatest civilization ever created.

There are not only sins of omission (failure to teach the Western canon) but also of commission –the third deadly sin is that political correctness has led to the suppression of many ideas and freedom of expression, robbing students of the vitality associated with questioning conventional wisdom. We increasingly preach ideology –universities often appear to be secular theocracies, with campus bullies – 21st-century Torquemadas–suppressing free expression.  Scientists, for example, are increasingly afraid to suggest that global warming is possibly not quite the threat the establishment believes –the Spanish Inquisition redux.

Why aren’t university presidents asserting their authority to put an end to this foolishness, especially the suppression of First Amendment rights and free expression? To be fair, some do, but far too many let the campus crazies intimidate them. The fourth deadly sin is one of feckless non-leadership –sloth if you will –that enables the barbarians to storm the gates and dramatically diminish the vitality and good coming from the campus experience.

Related: Crime but No Punishment at Middlebury?

Yet the presidents are not alone in consenting to the gradual deterioration of the campus learning environment. A fifth sin emanates from a faculty that too often fiddles with its often non-consequential research while letting Rome (or Berkeley, Missouri, Claremont McKenna, Middlebury or Yale) burn. After all, the faculty do the teaching and usually control the curriculum. It is the faculty that removed required courses in history, language and other foundational subjects while implementing all sorts of politically correct courses devoid of intellectual content to appease vocal minorities.

Also, the governing boards of universities are typically made up largely of excessively prideful folks who combine their lust for recognition with a slothful inattention to what really is happening on campus—a sixth sin, one of neglect. To be sure, the information they receive comes typically from the president, who often fails to inform trustees of wasteful spending and campus scandals.  When trustees occasionally try to fulfill their oversight role by seeking delicate information, they are sometimes ostracized and even sued —witness the sad spectacle of Wallace Hall, a regent at the University of Texas, a man who exposed an admissions scandal– and consequently faced impeachment and vindictive legal proceedings.

Or how about governance in North Carolina’s Research Triangle, where Duke University trustees protected the university president as his administration savagely and unjustly punished the lacrosse team, or where North Carolina’s trustees were either sinfully unaware of a major athletic scandal or hid it from the public they allegedly served. Trustees, indeed,   too often serve as administration cheerleaders rather than overseers.

Related: Troubling News from North Carolina

That brings me to the seventh deadly sin: a lack of transparency, combined with obfuscation, and deception. Universities go to great lengths to hide important information about themselves –the amount students learn or earn (after college), salaries of key employees, or morally questionable activity (remember Jerry Sandusky?) They bury the bad news, exaggerate and promote the good news. They suppress competition and innovation through their accreditation agencies that they claim promote integrity and high quality. I would be very hesitant to buy a used car from a senior university official in today’s America.

To be fair, not all universities are highly sinful, and there are many good people in America’s colleges. But the seven deadly sins mentioned above are prevalent enough to erode public confidence in our universities (as recent New America polling confirms), ultimately leading to reduced support and declining enrollments.

Why Not Use Endowments to Lower Tuition Costs?

Connecticut is going through the motions of trying to tax Yale’s $25.6 billion endowment to help relieve the state’s $266 million shortfall. That effort will fail, but public opinion is starting to question the appropriateness of government-conferred tax benefits for university endowment funds. At Harvard, alumni as politically diverse as conservative Ron Unz and progressive Ralph Nader are running for the Board of Overseers on a “make tuition free” platform.

What legitimate public purpose do endowments serve? The co-authors of this article spent several months exploring this question, looking at roughly 800 university endowment funds on which good data are available and concluding that, with some exceptions, endowments do little to make colleges cheaper and more accessible to students.  Suppose a wealthy donor gives a school funds to endow $100,000 annually in scholarships. Our research shows that probably on net $100,000 in endowment income leads to a student tuition fee decline of only about $13,000. As more endowed scholarship money flows in, universities typically either raise tuition fees more aggressively, or allocate less of their own resources to scholarships.

Related: Endowments Are Still Massive, So Spend

Princeton University had more than $2.8 million in endowment per student as of last June 30-enough to generate $112,000 in spending per student if four percent of the endowment were spent annually.  Princeton’s tuition fee for this year is $43,450. More typical schools have modest endowments generating at most $1,000 in per-student annual revenues.

Yet the more typical school likely has a sticker price at least $25,000 a year less than the highly endowed institutions. The average amount students actually pay after taking account of scholarships is only $3000 lower at the 20 highest endowment schools, compared with schools with more typical modest endowments. That is despite the fact that the high endowment schools have over $20,000 more endowment income per student.

If endowments only modestly make college more affordable, where does endowment income go? A goodly portion (we estimate about 37 percent) goes to support instruction, both by hiring lots more professors and by paying them a lot more. While there are about 12 professors for every 100 students at highly endowed schools, there are only half as many (6) at more typically endowed institutions. Similarly, while full professors at the poorer school average about $90,000 a year in salary, at the highly endowed schools, the figure is more than $155,000.

Related: Is an Endowment a Nest Egg or a Gambler’s Stake?

Some of this increased instructional money probably leads to smaller classes and more contact between students and professors, some of whom are both well-known scholars and fine teachers. Yet as any keen observer of higher education knows (one of us has been a professor for more than 50 years), the highly endowed school faculty mostly have very low teaching loads so they can write papers on often obscure academic specialties, and the more highly paid teachers not only live quite well (particularly when consulting and other income is considered), but often avoid undergraduate students like the plague. As Adam Smith said of professors 240 years ago after Oxford started paying them from endowments, they had “given up altogether the pretense of teaching.” Additionally, the statistical evidence also says about 25 percent of endowment income goes directly for research.

Not all schools behave the same way. Berea College, in relatively poor Appalachian Kentucky, uses its endowment to essentially make college free, foregoing high salaries and extremely low teaching loads to promote student access. A few other schools (College of the Ozarks in Missouri, and, historically, Cooper Union in New York City (now charging tuition) have done the same.

Do big endowments promote prestige and perceptions of high quality? Looking at the relationship between endowment size and rankings on the Forbes Best College list (which we help compile), we find some positive relationship between endowment size and rank, but it is not the dominant determinant.

Still, the five schools with the highest per student endowments (Princeton, Yale, Stanford, Pomona College and Harvard) are all very highly ranked.

Related: Another Bad Idea-Mandatory Endowment Spending

Universities argue endowment allocations are determined by the intent of thousands of donors, many of whom wish to promote things other than low tuition. Yet the Berea example demonstrates that colleges poorer than the Ivy League schools can use alumni support to make college free. Why hasn’t Harvard, Yale or Princeton ever mounted a capital campaign with a-goal of providing no-cost undergraduate education? A no-cost Harvard would set a powerful example and encourage other schools to forego the expensive university arms race in order to reduce financial burdens of attending college.

As tuition fees and student debt loads soar, and as doubts grow about the true return to students of a college education (total enrollments have actually fallen over the past four years), scrutiny of endowments is likely to grow. Pell Grant data reveals that highly endowed schools typically have a much smaller proportion of low-income students. Should they continue to be incentivized to strengthen their academic gated communities for the affluent by accumulating ever larger endowments, largely financed through special tax breaks to donors and capital gains tax exclusions? There are arguments for doing so, but our research suggests that if special tax privileges for endowments are curtailed by Washington policymakers, the colleges have only themselves to blame.