Sunday, August 10, 2014

Yes, A University Education Used to Be Affordable.

Curmie has been thinking a lot recently about the costs of university attendance—being married to a financial aid director does that to one, but so does being an advisor, both officially and unofficially, to undergraduate students. I’m technically on vacation, despite which I’ve received e-mails, Facebook messages, texts, or in-person visits in the last two weeks from four different advisees who wonder if they’ll have to go (deeper) into debt to continue their educations. This quartet of students, all in good standing, I assure you, Gentle Reader, represents only the tip of the iceberg.

There’s also one of those ubiquitous internet memes, this one declaring that “In 1978, a student who worked a minimum-wage summer job could afford to pay a year's full tuition at the 4-year public university of their choice.” The meme has been around a while but came back to prominence this week when PolitiFact declared it “mostly true,” demurring only in that the phrase “of their choice” over-states the case.

As you probably know, Gentle Reader, the PolitiFact folks are often horrible in deciding which of their labels—true, mostly true, half true, mostly false, false, pants on fire—to apply to a particular case (Curmie has ranted about PolitiFact’s incompetence in this regard here, here, and here, for example), but their research per se, at least in terms of pointing the inquisitive reader to useful, objective information, is actually quite good.

Well, it turns out that this time they earned their reputation, both good and bad. They linked to a useful chart published by the National Center for Education Statistics and then proceeded to misread it. The $1389 figure they originally cited was the average tuition cost for all 4-year universities, including private schools (!), in 1978-79. (They’ve fixed it now, although they haven’t changed their final “mostly true” verdict.)

So… what are the real figures? Well, that summer job: 13 weeks, 40 hours a week, minimum wage ($2.65 at the time) would generate $1378 in income (before taxes). A year’s tuition and fees at the average four-year public university at in-state rates in 1978-79: $688. The summer job, in other words, would pay for tuition and about half of room and board at the average four-year state university, where the total year’s bill would be $2145. That’s 200% of the cost of tuition, or 64% of the total cost of attendance. Yeah, yeah, sure. Some flagship state universities would have cost more. Students still had to buy books and other supplies. The occasional late-night beer and pizza was de rigeur. And that wages figure was before taxes. [Please note: all figures below exclude taxes. Curmie isn’t so naïve that he thinks they don’t matter, but inserting a qualifier every time I cite a statistic is going to get really old for both of us. Please consider it stipulated throughout.]

But those figures also don’t count scholarships, and they don’t count additional income from part-time jobs during the school year. In fact, a 10-hour-a-week, minimum wage, job during the academic year would completely close the gap. That is, a student who worked 40 hours a week for 13 weeks in the summer and 10 hours a week for 30 weeks during the school year, all at minimum wage, would earn $2173, or 101% of the total cost of attendance at a four-year state university. And whereas some flagships would have cost more, this is an average figure, meaning that some would have cost even less.

Flash forward to today. That summer job would now generate $3770 in pre-tax income. Tuition and fees at a four-year public university in 2011-12, the last year for which we have figures (and trust me, costs have gone up considerably since then): $7701. Total cost of attendance: $16,789. The student who works full time for 13 weeks in the summer and 10 hours a week during the school year now makes $5945, or only 35.4% of the cost of attendance. Indeed, even if a student worked full time, 52 weeks a year, at a minimum wage job, that wouldn’t cover the cost of going to the average four-year school now.

So those of Curmie’s generation aren’t necessarily heartless when they scoff at the financial woes of today’s undergraduates. They just remember when times were fundamentally different, and many would be shocked to learn of the figures cited above. Ignorance does often lead to arrogance.

Why, then, are state universities increasing out of the reach of far too many students? I’d suggest four reasons. First, the minimum wage hasn’t kept up with the cost of living. If you plug the years 1978 and 2012 into the calculator at the Bureau of Labor Statistics website, you’ll find that it took $3.52 in 2012 to equal the buying power of $1 in 1978. But the minimum wage has increased only by a factor of 2.74. Translating those numbers into our scenario: if the minimum wage had kept pace with inflation, it would now be at $9.33, and our hypothetical student working 820 hours for the year (full time for 13 weeks, 10 hours a week for 30 weeks) at minimum wage would have an extra $1700 and change in earnings. That’s a little over 10% of the total cost of attendance. Looked at differently, it’s pretty close to another $7000 in debt today’s student will have to pay off because politicians would rather pad the bottom line of campaign donors banks than actually serve the citizenry.

Second: the proliferation of expenses. When Curmie entered college in 1973, his dorm had no kitchen for 130+ residents, there was no cable TV access, and there were four pay phones—not even the option for a phone in your room. If you needed to use a computer, you walked to the computer center. (Here Curmie resists the temptation to say “Uphill. Both ways. In a blizzard.”) And so on. Now dorm rooms have not only phone jacks and cable connections, they’re wired for internet and wi-fi accessible. There’s a kitchen for every handful of students (except perhaps in freshman dorms), there are computers and printers everywhere… you get the idea. These things cost money.

So does the significant increase in non-faculty personnel. There’s now an assistant to the associate dean for about everything under the sun, and student affairs jobs are proliferating faster than zits on prom night. There’s a lot of literature on this—here’s an article from the Chronicle of Higher Education a few months ago, for example. All the research shows the same thing: faculty positions have been essentially stagnant relative to the student population, but administrative jobs are burgeoning.

Indeed, Benjamin Ginsberg wrote in the Washington Monthly in 2011 that:
In 1975, colleges employed one administrator for every eighty-four students and one professional staffer—admissions officers, information technology specialists, and the like—for every fifty students. By 2005, the administrator-to-student ratio had dropped to one administrator for every sixty-eight students while the ratio of professional staffers had dropped to one for every twenty-one students.
Again, the trend is only getting worse.

Moreover, whereas faculty salaries pretty much follow inflation; administrative salaries outpace it. When I was a teenager, my father was president of one of the campuses in the State University of New York system. While he was technically the highest paid employee of the college, in point of fact there were several faculty members who, if they chose to work summer school, actually pulled down higher salaries than he did. We did live in a house owned by the college, but it was actually rented (albeit at below market value). And my mother was expected to do a host of community service activities, all gratis, of course.

Today, the president at my school makes about five times my salary as a full professor. His house is completely provided by the university. And his predecessor’s wife, doing no more than my mom did in terms of enhancing the college’s image in the community, got paid more than a full-time assistant professor for her explicitly part-time service. (Note: an assistant professor, for those of you who don’t know academic parlance, is a tenure-track [occasionally tenured] faculty member, generally in the early stages of his/her career. These people almost invariably have a terminal degree—PhD, MBA, EdD, MFA, JD, etc.—in their chosen field.)

These two factors taken together mean that a lot of money is being eaten up by the salaries of people who do not directly affect the education of students. This isn’t to say that some of these folks aren’t valuable, even indispensable, contributors to the university’s mission, but after 35 years in the classroom I can tell you that a goodly number of these people are far more interested in proclaiming their own significance than in actually… you know… doing anything.

But, according to Robert E. Martin, professor emeritus of economics at Centre College,
The balance between people who are actually in the trenches and those who are overseeing that work has gotten grossly out of line. That imbalance is one of the primary reasons for why costs grew so out of control over the last three decades.
There’s a political element here, too, of course. Democrats like bureaucracies and hierarchies (while pretending the opposite, to be sure); Republicans like managers to be paid a lot more than academics, who, in GOP-think, would be managers if they were really as smart as they pretend to be. And both rally ‘round the flag—nay, the altar—of “accountability.” And that means regulations and self-studies and forms and reports and similar exercises only tangentially relevant (on a good day) to the educational mission. Needless to say, the Assistant to the Executive Paper Shuffler for Assessment is paid more than some mere full professor of physics with a list of publications as long as your arm and a boatload of teaching awards.

Third, universities (and legislatures) have taken to the insidious practice of pretending that required fees are somehow different from tuition costs. At Curmie’s own university, in-state “tuition” for a 15-hour load is $3315 a semester. But, and as they say in the burlesque shows, it’s a big but, there’s another $1141 per semester in additional expenses. Remember when, say, library usage was a presumptive part of tuition expenses? Not any more: $13 per credit hour. But that’s not the worst part of all these fees. No, that honor would go to passing construction costs for new buildings on to current and future students. Thus, students are often paying hundreds of dollars a year for future construction of buildings they’ll never see except as visiting alumni.

This very conscious deception is propagated by virtually every university administration and every state legislature in the country, all of whom cheerfully abrogate their responsibilities and place the expense not where it belongs, with the states and the universities, but with the segment of the population in the worst possible position to pay for it: the generation of students not yet established in the workplace. Of course, this makes it look as if tuition figures are manageable and state budgets are balanced: mortgaging the future has never been so pervasive.

But a figure that at first glance seems to deflate much of the foregoing is in fact the most damning statistic of all: spending per student in constant dollars is virtually unchanged in the last 25 years. So what’s the problem, right? Well, what that figures really demonstrates, however, is that state universities are cutting essential resources to provide the fluff. All those extra administrative jobs? They mean less money for financial aid, less money for facilities maintenance, less money for libraries… you get the picture. Moreover, the lazy rivers and climbing walls and similar fripperies, even if not funded by the taxpayers per se, make the universities’ job in convincing state legislatures that educating the next generation might really be more valuable than providing yet another tax break for their millionaire cronies just that much more difficult.

From Arnie Levin of The New Yorker
All of which leads us to state funding. An article on the Dēmos website shows that over half the states in the country have cut spending on public universities by more than 25% since the so-called “great recession,” and every state except North Dakota has cut at least some. Those figures, by the way, don’t include the steady erosion of state support throughout the last two or three decades. Thus, all six of even North Dakota’s state universities currently receive a lower percentage of their total revenues from the state now (which is to say 2012, the last year for which we have figures) than a quarter century ago. The drop-off has ranged from a relatively modest 5.8 point drop at Dickinson State to a substantial 27.7 falloff at Mayville State. Every state university in Curmie’s native state of New Hampshire also receives less state funding as a function of total budget than in 1987; the same is true of his adopted state of Kansas. His “home” (where he went to high school) state of New York shows 35 of 39 schools experiencing drops of up to 30.2 points; the median is a 13.9 point difference, from 70.8 to 56.9%, at SUNY Oswego. Curmie’s current home is in Texas, where 39 of 40 universities draw less of their income from the state now than a generation ago; Curmie’s own institution is down from 66.9 to 43.3%, meaning the university has had to find a way to replace about a quarter of its income. And the cuts keep coming. (It doesn’t help that idiots like Rick Perry are trying to convince the public that a $10,000 degree exists anywhere but Cloudcuckooland.)

Let’s look at the practical application of those numbers. My own university runs an annual budget of about $240 million. 23.6% of that figure—the difference between what used to be paid by the state and what is now—means the administration needs to find a different way to come up with a little over $56 million annually, because making sure oil companies don’t have to pay taxes is important. We have about 11,500 full time equivalent students. That shortfall amounts to a little over $4900 per full time student per year. Want to know why our tuition has increased?

So there are the reasons—or at least some of them—for why the average student today leaves even a public university well into five figures of debt, whereas the average student in my day had little or none. Just having the minimum wage keep up with inflation and state funding remain steady as a function of the entire university budget would have made the difference of a little over $6600 a year, or somewhere in the neighborhood of $26-27,000 over four years for students at my university. Their average debt at graduation: a little under $22,000. The more perspicacious of Curmiphiles might notice a certain general correlation between these two figures.

Whereas student expectations and the universities themselves play a role, the majority of the problem can be blamed on politicians who have theirs, whose kids go to private schools, and above all who give no thought to anyone or anything else, including the future of their state and their nation. Imagine Curmie’s surprise.


Anonymous said...

Curmie, you are a little late on this. Glenn Reynolds (among others) identified administrative bloat as the principal force behind cost increases many years ago. Also, the increasing number of mandates, student fees (the college where my son goes to school has many similar sounding but separate fees) as well as the costs of operating the buildings keep driving up college costs. CW

manjushri924 said...

I don't claim any new insights here, only the identification of what I see as the four major causes of student debt that weren't the case a generation ago.

Seth Kahn said...

And, just in case anybody is going to make the claim that faculty salaries are in the mix too, not nationally they're not. I'm in the PA State System (I'm guessing Curmie is too), where we have a contractual cap on how much adjunct labor we can steal, but across the country the growth of low-paid, insecure, often benefit-free adjunct faculty positions has been explosive.