Duke: $60,000 A Year For College Is Actually A Discount

Parents Forum
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<p>Another morning spent yelling at my radio! ;-)</p>

<p>Lots of fun graphs in the online version of the story.</p>

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In 1984, it cost $10,000 a year to go to Duke University. Today, it's $60,000 a year. "It's staggering," says Duke freshman Max Duncan, "especially considering that for four years."</p>

<p>But according to Jim Roberts, executive vice provost at Duke, that's actually a discount. "We're investing on average about $90,000 in the education of each student," he says. Roberts is not alone in making the claim. In fact, it's one most elite research institutions point to when asked about rising tuition.</p>

<p>But just where, exactly, is all that money going? Michael Schoenfeld, Duke's vice president of public affairs, says for part of that answer, you need to look up. "For the first time in probably anybody's memory there will be two cranes hovering over the main campus quad." Duke is in the process of renovating its library and dining hall. $8,000 of the $90,000 Duke spends on each student goes into building and maintaining physical infrastructure on campus.</p>

<p>Another $14,000 goes to pay a share of administrative and academic support salaries, which in Duke's case includes more than $1 million in total compensation to the university president, Richard Brodhead, and more than $500,000 to the provost, Peter Lange, according to 2011 tax filings. $14,000 goes to dorms, food and health services. $7,000 goes to staff salaries for deans and faculty. Miscellaneous costs take up another $5,000.

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<p><a href="http://www.npr.org/blogs/money/2014/02/14/277015271/duke-60-000-a-year-for-college-is-actually-a-discount"&gt;http://www.npr.org/blogs/money/2014/02/14/277015271/duke-60-000-a-year-for-college-is-actually-a-discount&lt;/a&gt;&lt;/p>

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<p>Out of 90K, 7K goes to deans and faculty, but 14K to administration. Nice. </p>

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<p>I found it! I found the problem! This number is supposed to be $0, not $14,000. </p>

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<p>Yep, that’s totally convincing. $5000 per student per year goes somewhere, we just don’t know where. </p>

<p>Either way, that adds up to $55,000, where’s the other $35,000? </p>

<p>And “dorms, food, and health services” at a cost of $14,000? Why can I RENT (I don’t even own it, I don’t own the land, building, nothing) an apartment and feed myself far better than they can do for students for FAR less. </p>

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<p>$7,000 is for pay of the staff of faculty and deans. Faculty pay is $21,000 of it.</p>

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<p>No large organization gets away with $0 administrative costs, although that does not preclude the possibility of inefficient or wasteful administrative costs being in there. But note that increasing demands for non-educational student services are probably driving some of these costs.</p>

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<p>$20,000 to financial aid.</p>

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<p>That’s just money that goes elsewhere. Financial aid isn’t a cost, it’s a lost revenue on the part of the person getting the financial aid. For every person where that 20K is counted as part of the cost there’s another person whose cost is only 70K then. </p>

<p>Either way, there’s still 15K missing. </p>

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<p>Either way, the college is in the business of supporting the faculty and allowing them to work so they can provide the service. For instance, at my company, 92.4% of employees are directly creating value for customers either through development or support. While this 92.4% includes some people who do some administrative work, they do mostly productive work for customers. This company also does not outsource any support staff, so janitors and cooks and the like are all employed directly by the company. And wages are about 80% of the costs of the company. Obviously a university is different, but when only $7000 out of $76,000 (I removed room and board from the $90,000) of costs produces value to the customer, things don’t seem right. </p>

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<p>Vlad, when a student visits the career development office for advice and help on resume prep and interviewing- that’s administrative costs. When a student works with the disabilities office to find a note-taker or tutor- that’s administrative costs. When a student sues the university for slipping on a patch of ice outside the cafeteria, that’s an administrative cost. When a student meets with the head of nutritional services for a gluten free diet, that’s an administrative cost. When students attend a workshop on sexual abuse and “no means no”, that’s an administrative cost.</p>

<p>If families stopped demanding ancillary services, colleges would stop providing them (except those required by law… all those employees filling out forms to certify that the monkeys in the psych lab are being handled according to regulations, etc.) It’s silly to look at the costs and pull out the faculty salaries and say, “oh yes, this impacts the student experience and everything else is overhead.”</p>

<p>Just read the posts on this board from parents after visiting university A and describing it as a “dump” because the student center (overhead) didn’t look like a Hyatt hotel. Or that university B isn’t on their son’s list because he wasn’t impressed with the weight room and the gym. (overhead- all those free towels). Or that university C only has a salad bar at dinner and the coffee shop closes at 9 pm forcing the kids (horror) to go to a diner in town (nobody knows how to make coffee in a dorm any more, apparently.)</p>

<p>We are a nation of consumers, and by golly, we like to consume. Things should be fancy. Things should be open all the time. Things should be clearly marked “vegan” and “gluten free” and the wi-fi should be everywhere. Laundry facilities should be everywhere. </p>

<p>This costs money, sorry to tell you.</p>

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<p>The article says that faculty pay is $21,000, not $7,000, which is the pay of the staff of the faculty and deans. (It is a separate question as to whether such amount of support stuff is appropriate or excessive.)</p>

<p>The article has a pie chart listing percentages to each category:</p>

<p>25% faculty compensation
24% financial aid
11% sponsored direct activity
10% administrative support
8% staff compensation
8% facilities
7% other
6% academic support</p>

<p>However, these categories do not line up exactly with the categories mentioned in the article (e.g. dorm costs are probably distributed among more than one of the above categories like staff compensation and facilities).</p>

<p>The $14,000 in dorm, food, and health service costs is slightly higher than the approximately $12,000 that Duke nominally charges students for room and board, but the health services included in the former number probably account for the difference.</p>

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<p>We are low maintenance type of people who handle their own problems. We don’t need administrators for much of anything, except producing that transcript when needed. Will handle our own food, legal, medical, and other issues.</p>

<p>Can we get a discount for that? Yeah, I didn’t think so.</p>

<p>Administrative bloat is ridiculous. </p>